Last year could easily have been a washout for soft drinks group A.G. Barr (BAG). Sugar prices spiked, wet weather dampened sales, consumer spending weakened and above all, merger talks with Britvic created an added distraction - and cost. Instead, the business continues to sparkle and underlying pre-tax profits - excluding £3.2m of exceptional costs related to the merger - rose 4.3 per cent to £35m.
All core brands, Irn Bru, Barr, Rubicon and Ka, grew strongly, and combined with franchise brand Rockstar, delivered sales growth of 8.6 per cent. Most revenue growth came from volume, instead of price - carbonates volumes rose 6 per cent and stills 4.1 per cent - helping to offset rising sugar prices. So, while higher input costs caused gross margins to fall 160 basis points to 45.5 per cent, tight cost control and pricing meant adjusted operating margins only fell 40 basis points to 14.7 per cent, while operating profits increased 3.7 per cent to £34.9m.
Asked about the rationale behind the Competition Commission's investigation into the merger, chief executive Roger White says it was "nonsense" and seemed confident that it will get the go-ahead.
Numis Securities expects current year pre-tax profit of £37.5m and EPS of 26.5p (£35m and 24.7p in 2013).
| AG BARR (BAG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 530p | MARKET VALUE: | £619m | |
| TOUCH: | 529-531p | 12-MONTH HIGH: | 568p | LOW: 344p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 112p* | NET DEBT: | 51% | |
| Year to 26 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 170 | 23.2 | 14.9 | 7.00 |
| 2010 | 201 | 24.5 | 15.6 | 7.70 |
| 2011 | 222 | 30.4 | 19.6 | 8.47 |
| 2012** | 223 | 35.4 | 24.5 | 9.31 |
| 2013 | 238 | 31.8 | 22.1 | 10.02 |
| % change | +7 | -10 | -10 | +8 |
*Includes intangible assets of £74m or 64p a share **Restated ***Second interim paid in January 2013 in lieu of final dividend | ||||
