AG Barr, famous for making Irn Bru, has announced that it now expects more profits than it had previously anticipated this year as bars and restaurant stocked up on Scotland’s other favourite drink.
In an unexpected announcement to the London Stock Exchange this morning, the Cumbernauld-based drinks maker said that in addition to being in “strong financial health”, trading has been better than expected in the first half of the year.
As a result, AG Barr now expects full year profits for the year to the end of January 2022 will be “slightly ahead” of last year’s pre-tax profit, which was £37.4million.
Brokers at Shore Capital Markets raised a glass to the firm’s positive news.
In a note published shortly after AG Barr’s announcement, Clive Black, head of research at Shore Cap, said “the high quality British proprietary branded beverage business, has issued a surprise trading update; a pleasant surprise at that!”
The broker, which acts for the company and so does not offer buy or sell recommendations, said that it has upgraded its forecast on what it expects to see at AG Barr’s full year.
Shore Cap has upgraded expectation for full-year current pre-tax profit (CPTP) by 15%, from £33m to £38m.
It added forecast to the forecast that it expects earnings per share (EPS) of 27.5p which will result in Barr’s stock trading on a full year price/earnings ratio (PER) of 19.3x.
In its statement, AG Barr credited bars and restaurants restocking as restrictions on trading have lifted as well as “underlying brand momentum” for the profits boost.
The company said:
“At our full year results on 30 March 2021 we communicated that the business was in strong financial health, with our brands and business poised for growth on a like for like basis.
“Trading since then has been better than anticipated, driven by a combination of factors, some Covid related, including customer restocking, in the hospitality sector in particular, and some associated with underlying brand momentum, such as the positive performance of recent innovation launches.”
AG Barr said it will provide its official report on its first half performance on 3 August.
