AG Barr's (BAG) first-half revenue growth beat wider UK soft drinks market growth by 1.3 percentage points - that was driven by an impressive 4.2 per cent rise in volumes. Strip out £3.4m of exceptional charges related to the failed merger with Britvic (BVIC) and the construction of a new factory, and that helped boost underlying pre-tax profit by 12 per cent to £16.6m.
All of the drinks giant's brands did well, with particularly strong performances from Irn Bru, Rubicon, Rockstar and Barr. Margins improved, too, and AG Barr grew market share despite increasing prices and toning down promotions. During the period, the group also completed the first phase of a manufacturing facility in Milton Keynes - this which will increase capacity and cut costs as it's located closer to AG Barr's main clients and employs state-of-the-art machinery.
Chief executive Roger White says the company is "building a UK national brand". Accordingly, more will be spent on advertising this year as management focuses on organic growth through geographic expansion, rather than product development - particularly in England and Wales, which generates 59 per cent of group turnover.
Broker Numis Securities expects full-year pre-tax profit of £37.9m, giving EPS of 25.6p (from £35m and 24.7p in 2013).
| AG BARR (BAG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 533p | MARKET VALUE: | £623m | |
| TOUCH: | 532p-535p | 12-MONTH HIGH: | 589p | LOW: 427p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 126p* | NET DEBT: | 11% | |
| Half-year to 28 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 122 | 14.8 | 10.1 | 2.62 |
| 2013 | 129 | 13.2 | 8.72 | 2.83 |
| % change | +6 | -11 | -14 | +8 |
Ex-div: 2 Oct Payment: 18 Oct *Includes intangible assets of £74.2m, or 64p a share | ||||
