Exotic drinks boost Barr

Chief executive Roger White said that input costs are expected to rise between 4 per cent and 5 per cent in 2012-13, driven by a robust sugar price. That follows a 5.5 per cent increase in costs in 2012, which meant gross margins slipped by 100 basis points, despite price increases, suppressing underlying pre-tax profits growth to 6.2 per cent. However, strong cash flows meant net debt more than halved to just £6.7m, and management remains committed to further capital investment, announcing more detail on a proposed new £20m manufacturing site in Milton Keynes to support further growth. Capex is expected to double to around £12m this year, although Mr White said that wouldn't limit the company's ability to invest in its brands, and support product innovations such as its new Rubicon ice cream range, which is expected to add £2m to sales in its first year.

Broker Numis expects underlying pre-tax profits of £35.6m and EPS of 69.7p in the year to January 2013 (from 66.5p last year).