Creator of Irn-Bru AG Barr claims last year’s pre-tax profits will be down 18% to just over Â£ 37million.
But the Cumbernauld-based group predicted that the result would be high on market expectations. Early in the session, stocks jumped nearly 14% to 619.8p.
Revenue for the fiscal year ended Jan. 25 is expected to be Â£ 255million, compared to Â£ 279million. This follows a year in which the group blamed a âtoughâ summer market on disappointing weather and recipe issues for its Rubicon and Rockstar products.
A summer trading update resulted in a 30% drop in the company’s shares.
But sales of its flagship product returned to growth in the fourth quarter – a period in which âoriginal recipeâ bottles were released in limited editions.
Last year, AG Barr abandoned the 2018 rebate campaign for a higher pricing policy in line with its competitors.
The company said, “Our Rockstar and Rubicon stimulus plans are now in action, Irn-Bru returned to growth in the last quarter and Funkin continues to perform well.”
The group said it has completed the first phase of its “business reengineering program” with one-off costs of Â£ 1.5-2million. It expects this to be offset by the removal of a wind turbine at its Cumbernauld site, which is to be replaced by a new wind power generation project.
The group, which will report its annual financial results on March 24, said: âOur business remains highly cash-generating and, as expected, our Â£ 30million share buyback program was completed during the year. period. Our balance sheet remains strong.
Managing Director Roger White said, âOur focus remains long-term value growth. We are taking steps to reset our business and enter the new fiscal year with confidence and a solid business plan.
John Moore, Senior Investment Director at Brewin Dolphin, said: âToday’s update from AG Barr should further reassure investors who were frightened by last year’s earnings warning. . The normally reliable company faces a tough market including tough comparators, the sugar tax and adverse weather conditions over the past year – but it still manages to deliver on its promises, helped by a very strong balance sheet.
âThe turnaround plans for its Rockstar and Rubicon brands are positive steps, as is the company’s reengineering program. advice – this suggests that last year could be a temporary mishap and the business is back on track. “