Management at AG Barr (BAG) has been busy managing costs. Weak sterling has made input costs, such as packaging and some ingredients, more expensive, while close to £600,000 has been spent on reformulating drinks to contain less sugar and restructuring the business to make it more efficient. The aim is that 90 per cent of owned brands will contain less than 5g of total sugars per 100ml by the end of the financial year, ahead of the UK’s sugar tax due to come into force in April 2018. Along with the restructure, price increases across all products and channels helped to counter rising costs. Still, the operating margin before exceptional items fell from 13.9 per cent to 13.2 per cent over the period.
Chief executive Roger White said product innovation and growing distribution helped the company deliver 8.8 per cent sales growth, compared with a UK soft drinks market that grew 4.2 per cent. New products included Irn Bru Xtra, a low-sugar version of the original, and Rubicon Spring.
| AG BARR (BAG) | ||||
| ORD PRICE: | 618p | MARKET VALUE: | £718m | |
| TOUCH: | 616-619p | 12-MONTH HIGH: | 663p | LOW: 469p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 155p* | NET CASH: | £7.9m | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 126 | 21.1 | 14.3 | 3.53 |
| 2017 | 137 | 19.4 | 13.5 | 3.71 |
| % change | +9 | -8 | -6 | +5 |
| Ex-div: | 05 Oct | |||
| Payment: | 20 Oct | |||
| *Includes intangible assets of £105m or 91p per share | ||||
