Irn Bru maker AG Barr announces profit rise
The maker of Irn Bru has announced an increase in its annual profit as it plans to cut the sugar content of many of its drinks.
Lanarkshire-based AG Barr reported pre-tax profits up 4% to £43m in the year to 31 January, on flat sales at £257m.
The firm said it had shed 100 staff in a cost-cutting drive, with a one-off cost of £3m but saving it a recurring £3m per year.
It now plans to restart glass bottling at its Moodiesburn base.
The plastic bottling capacity at its new Milton Keynes plant will also be extended.
AG Barr said it had held its share of a soft drinks market that faced falling retail prices in the first half of last year.
It cited industry figures showing the soft drinks market rising 1.2% by value in the past year and 1.6% in volume. This masked volatility over the year and between sub-sectors.
It faced rising costs in the second half of the year, resulting from the weaker pound affecting input prices.
Sales of Irn Bru were up 3.2% by value in the year to 31 January. Sales of Rubicon, the tropical fruit drinks, were up 4.9%. Funkin, the cocktail mixer brand which AG Barr bought recently, was up 27%.
There was a tougher time for Strathmore bottled water.
While the carbonated drinks market saw no increase in volume, there was a slight rise in the value. The reverse was true of non-fizzy drinks, with still water being the main driver of sales volume.
AG Barr has set a target, by this autumn, of 90% of brands having low or no sugar content.
It claimed this was in response to consumer demand. However, the target threshold of getting below 5g of sugar per 100ml is the same threshold being used by the UK government as it plans to introduce a tax on sugary soft drinks.
Chief executive Roger White said AG Barr had made "considerable progress, with a solid financial performance in volatile and uncertain market conditions".
"As consumer tastes and preferences continue to change, our recent announcement that 90% of company-owned brands will contain less than 5g of total sugars per 100ml by the autumn of 2017 is a positive demonstration of how the business is responding to consumers' needs with both pace and commitment," he said.
"The UK consumer environment remains uncertain. However, we are confident that our great brands, effective business model, clear strategy and strong team ensure we are well placed to realise the full potential of our business and to deliver consistent long-term shareholder value."