Beverages group AG Barr saw sales leap thanks to the £60m takeover of exotic fruit drink business Rubicon in August 2008 and a strong performance from it core carbonated drink brands, including Scottish favourite Irn Bru.
Rubicon added £12.8m of turnover and, according to chief executive Roger White, it's growing sales at 22 per cent a year. He says the integration process is complete, and that synergies have been achieved earlier than planned, offsetting increased oil-derived input costs experienced during the period.
Stripped of Rubicon's contribution, organic revenue growth was still an impressive 11.5 per cent, comfortably outstripping the wider soft drinks sector which suffered a marginal fall. Mr White says that sales have responded well to a substantial increase its advertising spend, while lower media rates meant that the company was also able to get more bang per marketing buck. "We've taken this as an opportunity not to save money but to spend incrementally more to build our brands," says Mr White. Improved distribution also played a part, helping Irn Bru to market share gains in England and Wales, although Mr White pointed out that its smaller regional brands had benefited, too.
Broker Investec Securities has upgraded its underlying full-year pre-tax profit forecast by £1m to £26m, giving EPS of 50p (£23.3m and 44.2p in 2008).
AG BARR (BAG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 760p | MARKET VALUE: | £296m | |
| TOUCH: | 751-770p | 12-MONTH HIGH: | 828p | LOW: 489p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 242p* | NET DEBT: | 27% | |
| Half-year to 1 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p)** | Dividend per share (p)** |
|---|---|---|---|---|
| 2008 | 82.4 | 11.3 | 22.1 | 5.8 |
| 2009 | 104.7 | 13.5 | 25.7 | 6.3 |
| % change | +27 | +20 | +16 | +8 |
Ex-div: 07 Oct Payment: 23 Oct *Includes intangible assets of £76.6m, or 197p a share **Adjusted for two-for-one share split | ||||
