THE producer of Scotland ’s favourite soft drink has posted a year of rising sales as it shrugged off the impact of new legislation and supply shortages.
Revenue at AG Barr, which makes Irn-Bru as well as Rubicon and Tizer, grew by 5.6% to £279 million.
The company posted a pre-tax profit of £44.5m for the year to January 26, down from £44.9m. The figure takes into account a one-off pension service charge of £700,000.
Stripping out exceptional items, profits were up 2.5% to £45.2m.
AG Barr said the results were “all the more pleasing” considering that the UK Government has introduced the sugar tax, which has had an impact on the entire soft drinks industry.
READ MORE: Panic for Scots as Irn-Bru recipe change is confirmed
It also had to contend with carbon dioxide shortages during the summer heatwave, snow disruption caused by the Beast from the East, several business failures and ongoing customer credit risks.
The firm revamped Irn-Bru and other drinks ranges to reduce the sugar content ahead of the launch of the new UK soft drinks sugar levy last April.
AG Barr stopped making the original full-sugar version last January – but the move prompted a backlash among Irn-Bru loyalists.
The company incurred £1.4m of costs as part of its ongoing sugar reduction and reformulation programme, with Irn-Bru sugar-free variants now accounting for 40% of the total brand.
Boss Roger White said: “At the outset of 2018 we set out a clear strategy and specific actions which we believed were required to deliver continued financial success during what we forecast to be a year of significant changes across our industry.
“I am pleased to report we have delivered another strong financial performance having adapted well to both the circumstances we anticipated and those which were less expected.
“It is with this backdrop in mind that I emphasise the flexibility and strength of our business model, people and brands, all of which continue to deliver consistently.”
He added that while uncertainty across the UK economy is likely to prevail for the “foreseeable future”, the company is “fit for purpose and resilient”.
“The markets in which we operate are robust and provide us with continued opportunities to grow,” White said.
“We have exciting plans to deliver across the group and are confident of continuing to make further progress in the coming year.”
The report also showed that the firm has significantly increased its volume share of the UK soft drinks market.
Considering the impact of Brexit, AG Barr said it does not see “any immediate end to this extended period of uncertainty”.
However, the company reports that because most of its sales are made in the UK market, it does not predict that the withdrawal from the EU will have a “significant impact” on the business aside from changes to foreign exchange rates and the supply of certain raw materials.
“To mitigate these risks where possible we have exchange rate hedging cover in place at the top end of our treasury policy and we have secured both the required UK storage and materials to enable us to minimise any potential impact of operating difficulties around the time of the current Brexit exit date,” AG Barr said.
“Should this change in any way we will adapt our plans and actions as appropriate.”
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