AG Barr (BAG) reported a solid set of full-year numbers, but the beverage maker also warned that deflationary pressures could make it harder to grow revenues this year. The group's Irn-Bru, Rubicon and Strathmore brands all outperformed the wider soft drinks market, pushing operating profits up 12 per cent to £38.8m.
Earnings were held back by £2.9m in post-tax exceptional items, the bulk of which were linked to the closure of Barr's Tredegar site and the move to new production facilities in Milton Keynes. But shareholders were still rewarded with another double-digit dividend hike, as underlying free cash flow increased by £2.9m to £40.6m. Margins were also on the rise as AG Barr focused on streamlining its supply chain and cutting overheads, while keeping input and distribution costs in check.
The group had moved into a net cash position by the year-end, but that was short-lived: in February it acquired Funkin Ltd for an initial consideration of £16.5m, plus up to £4.5m in contingent fees. The deal takes the group into a new market segment - cocktail mixers. Chief executive Roger White said the move would enhance Barr's position in the on-trade market, consisting of hotels, restaurants and cafes.
Investec Securities anticipates adjusted 2016 EPS of 30.6p, up from 28.1p in 2015.
| AG BARR (BAG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 662p | MARKET VALUE: | £773m | |
| TOUCH: | 653-664p | 12M HIGH / LOW: | 692p | 548p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 134p* | NET CASH: | £10.4m | |
| Year to 25 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 222 | 30.4 | 19.6 | 8.47 |
| 2012 | 223 | 35.4 | 24.5 | 9.31 |
| 2013 | 238 | 31.6 | 21.9 | 10.02 |
| 2014 | 254 | 34.3 | 24.4 | 11.02 |
| 2015 | 261 | 38.6 | 26.0 | 12.12 |
| % change | +3 | +13 | +7 | +10 |
Ex-div:07 May Payment:05 Jun *Includes intangible assets of £81m, or 69p a share. | ||||
