The 2.8 per cent fall in adjusted revenues at soft drinks maker AG Barr (BAG), even when including an acquisition, was attributed by Roger White to a "triumvirate" of challenges. Its sponsorship of last year's Commonwealth Games in Glasgow led to a record financial year for the group, meaning a difficult comparative from the start line. Add in the poor weather - which management says dampens Brits' enthusiasm for the pub - and the problems it has experienced in an overhaul of internal systems, and it's clear why sales fell.
But there are positive signs for the Irn-Bru maker. Its recent £5m investment in its Scottish Cumbernauld factory, which included installing high-speed glass-filling machinery, means greater product development will be possible. Meanwhile, the Milton Keynes factory, which inherited some equipment from the now defunct Tredegar site in Wales, is adding carton packaging capabilities and extended warehouse facilities. The group said it had also sought to purchase four adjoining acres of land for future expansion.
Mr White expects full-year numbers to be broadly similar to those achieved last year. This should be helped by its acquisition of the Funkin cocktail mixer business, which has opened up more opportunities for sales into pubs and bars.
Analysts at Shore Capital are expecting virtually flat pre-tax profits of £41.6m in the 2016 financial year, leading to EPS of 28.1p, compared with £41.9m and 28.1p in FY2015.
| AG BARR (BAG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 533p | MARKET VALUE: | £622m | |
| TOUCH: | 533-538p | 12-MONTH HIGH: | 692p | LOW: 530p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 139p* | NET DEBT: | 12% | |
| Half-year to 25 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 135.7 | 16.5 | 11.1 | 3.11 |
| 2015 | 130.3 | 16.9 | 11.6 | 3.36 |
| % change | -4 | +2 | +4 | +8 |
Ex-div: 1 Oct Payment: 16 Oct *Includes intangible assets of £108m, or 93p a share | ||||
