AG Barr earnings up as on-trade recovers from pandemic

AG Barr reported a 16.7% improvement in first-half revenue on Tuesday, to £157.9m, with “strong sales” recorded in both of its business units.

The London-listed drinks maker said its reported profit before tax expanded by 1.2% year-on-year for the 26 weeks to 31 July, to £24.7m, as its adjusted profit before tax jumped 22.8% to £25.3m.

Its adjusted operating profit margin was stable at 16.2%.

Cash and cash equivalents at period end stood at £61.3m, down 6.6% year-on-year, while basic earnings per share surged 48.5% to 18.98p.

The board declared an interim dividend of 2.5p per share, up 25p from the 25% half-year distribution it made a year ago.

Operationally, Barr recorded “strong” sales momentum across both of its business units, with Barr Soft Drinks up 12.3%, and Funkin up 21.4%.

It said trading benefitted from the year-on-year Covid-19 recovery, particularly in the on-trade and out-of-home sectors, as well as good summer weather.

“We made a very strong start to the year and continue to see good momentum across our business and brands,” said chief executive officer Roger White.

“That said, the UK's high level of inflation has accelerated across the summer and is creating a well documented cost of living crisis for many consumers, alongside increasing challenges for industry.”

White said Barr was continuing to take action to mitigate the cost pressures it was facing, both in the short term across the balance of the current financial year, and where possible into 2023.

“We anticipate in the coming months that the current economic environment will impact consumer purchasing behaviour, however we currently remain confident that our strategy and actions will allow us to deliver a full-year profit performance ahead of the prior year.”

At 0850 BST, shares in AG Barr were down 0.3% at 496p.

Reporting by Josh White at Sharecast.com.