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Irn-Bru boss says impact of axed Russian deal will be tiny

AG Barr chief executive Roger White.
AG Barr chief executive Roger White.

AG Barr boss Roger White dismissed the impact of lost trade in Russia as “tiny” after the Irn-Bru firm posted a 62.3% rise in profits.

The company said pre-tax profits rocketed to £42.2 million during the 53 weeks to January 30, thanks to a surge in sales of its iconic Irn-Bru and other core brands.

Revenue grew by 18.3% to £268.6m, compared with the previous 52 week accounting period.

Our business and brands have once again proven their resilience in uncertain and often challenging circumstances.”

Roger White, chief executive, AG Barr.

Mr White said the strong sales growth was generated in part by a recovery in the company’s hospitality and “on-the-go” markets, as well as “successful execution of our growth strategy” and ongoing brand investment and innovation.

Barr’s exports are mainly focused on expatriate or holidaying Scots who can’t bear to go long without their regular fix of this country’s famed “other national drink” – Irn-Bru.

But the orange fizzy drink has its fans in Russia too – it grew in popularity there during the 1990s and was reportedly the third best-selling soft drink in Moscow, after Coca Cola and Pepsi, by 2002.

In more recent times Russia accounted for less than 0.1% of Barr’s total revenue.

Mr White said Irn-Bru’s success in the country back then was most likely down to effective marketing by PepsiCo, which bottled the drink in Russia on Barr’s behalf.

The Russian market has been more recently served by Moscow Brewing Company (MBC), which bought in concentrate from Barr for production locally under a franchise deal.

Cumbernauld-based Barr said earlier this month it was severing ties with MBC due to the crisis in Ukraine.

Russia accounted for “only a tiny, tiny part of our business”, Mr White said today, adding: “Irn-Bru was really a very niche product in the Russian market.”

Barr’s other brands include Rubicon fruit drinks and Funkin cocktail mixers, while the company also has a 60% stake in breakfast cereal manufacturer Moma Foods.

All brands enjoyed sales growth in 2021-22, with the core offering now ahead of pre-Covid levels, said Barr, which also announced the restart of shareholder dividends.

The firm said its No Time To Waste environmental sustainability programme “continued at pace” and it now had science-based targets to guide it on its “net-zero journey”.

One-off special dividend

Mr White added: “Our business and brands have once again proven their resilience in uncertain and often challenging circumstances.

“We have accelerated our revenue growth and consequently delivered a strong financial performance.

“In the year we have recommenced our dividend, alongside paying a one-off special dividend (10p per share), and our balance sheet has continued to strengthen.”

He continued: “We enter the new financial year with good momentum and exciting brand and sales plans.

“Trading in the early weeks of the new financial year has been well ahead of the prior year and in line with our expectations.

“Like most companies we are facing significant inflationary pressures but we are well-placed as a group to deal with these and will continue to seek to manage our exposure proactively through mitigating actions across revenue management, pricing, procurement and cost control.”

Shares in Barr closed up more than 2% at £5.44.

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