Irn-Bru-maker AG Barr weathers supply chain and Covid concerns to boost profit forecasts
- Trading since September results has been head of expectations
- It now forecasts pre-tax profits of £41m for the year to January 2022
- But AG Barr remains in ‘a challenging supply chain environment’
Soft drink manufacturer AG Barr shares are up 6 per cent this morning after the Irn-Bru-maker revealed it expects profits to come in ahead of expectations this year after a strong trading period.
The firm said on Monday that trading momentum has ‘continued and sales have grown ahead of…expectations’ across its soft drink and Funkin cocktail mixer businesses since it reported its interim results in September.
As a result, AG Barr now forecasts full-year revenue of around £264million and pre-tax profits of £41million for the 12 months to January 2022, up from £26million last year.
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The firm told investors it had seen ‘particularly strong’ performance in its ‘on the go’ and hospitality sector, while ‘recent innovation launches have exceeded our expectations’.
It follows the firm’s September interim results, which saw strong performance overshadowed by warnings about ‘increased challenges across the UK road haulage fleet, associated in part with the Covid-19 pandemic, impacting customer deliveries and inbound materials’.
Despite this, it saw profits in the six months to August rise 43 per cent to a record £24million.
The firm also reinstated its interim dividend at 2p per share in addition to a 10p special payout for investors. Shares fell 3.3 per cent, or 18p, to 521p.
While raising its forecasts, AG Barr cautioned on Monday that it remains in ‘a challenging supply chain environment’ but its ‘production and wider supply chain have maintained their resilience and supported the growth in volume we are experiencing’.
It added: ‘The fast moving situation in relation to the Covid-19 pandemic remains a risk however we expect our revenue momentum to continue into 2022 and we plan to provide a further trading update in early February 2022.’
AG Barr shares are up 6 per cent to 494.5p, brining losses year-to-date to 5.4 per cent. The stock price remains 18.3 per cent off its pre-Covid level.