AG Barr, the maker of Irn-Bru and Rubicon juices, posted revenue of £277.7 million in 2017, increasing by 8% compared to the previous year.
The soft drinks company saw profit before tax and exceptional items rise 4% to £44.1 million, as gross margin increased by 20 basis points to 47.1%.
AG Barr says that it saw strong trading in its core brands, with Funkin juices and cocktail mixers, in particular, achieving revenue growth of 25%.
Roger White, the group's chief executive, said that AG Barr delivered "consistent broad-based sales growth" across its portfolio, which was well ahead of the UK soft drinks market.
He warned that the business is set to face challenges in 2018, but remains confident in the group's outlook.
"The UK economic landscape is expected to remain uncertain for business as a whole, with regulation, changing customer dynamics and consumer preferences adding further volatility for the soft drinks industry," said White.
"We have a strong and flexible business model and a growing portfolio of brands, both established and nascent, which reflect the requirements of today's changing consumers. We remain confident in our ability to capitalise on the opportunities to grow our business and deliver long-term value to shareholders."
Sugar Tax
Phil Carroll of Shore Capital Stockbrokers described these as a "strong set" of results, highlighting "excellent broad-based revenue growth that has translated into robot growth in profits."
"This is especially notable when taking into account input cost inflation and management strategically investing in the business to ensure it is well-positioned for the challenges that FY2019 might bring," he added.
Specifically, Carroll noted that AG Barr is "well-placed" ahead of the introduction of a sugar tax on soft drinks in the UK, which is set to be introduced in April 2018.
"We believe Barr, with its strong management team, enters FY2019 with a robust platform operationally, an excellent brand portfolio that is predominantly exempt from the upcoming levy and a balance sheet with net cash that provides significant flexibility and optionality," said Carroll. "We believe this will enable management to drive further progress in the year ahead."
AG Barr has been preparing for the sugar tax for the past year, making the decision to move the majority of its drinks portfolio to a low or no sugar position - with less than 5% of total sugars per 100ml.
Through product reformulation, the company says that 99% of its portfolio, including the iconic Irn-Bru, is now out of scope of the soft drinks levy, and that 'strong innovation' is in the pipeline for the year ahead.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.
