Up­date: AG Barr

The Daily Telegraph - Business - - Business -

Rel­e­ga­tion from the FTSE 250 to the FTSE Small Cap index makes not a jot of dif­fer­ence to the day-to­day op­er­a­tions of soft drinks maker AG Barr, but it does un­for­tu­nately re­flect in­vestors’ lack of in­ter­est in the Scot­tish firm right now and this col­umn’s pos­i­tive view con­tin­ues to fall flat – we are now sat on a pa­per loss of some 37pc. How­ever, the last trad­ing up­date in late July of­fered enough to keep us in­ter­ested for now.

It was no sur­prise to learn that lock­down had been bad for busi­ness at the maker of the Irn-Bru, Ru­bi­con and Funkin drinks ranges. But firsthalf sales fell by just 8pc year-onyear as take-home pur­chases from ma­jor re­tail­ers held up well, even as sales in pubs, bars and restau­rants un­der­stand­ably col­lapsed.

More­over, there are ten­ta­tive signs of a pickup in de­mand as Bri­tain slowly emerges from spring’s na­tion­wide lock­down and, per­haps most re­as­sur­ingly of all, AG Barr con­tin­ues to gen­er­ate pos­i­tive cash flow. That fur­ther bol­sters a bal­ance sheet that had only a tiny net debt po­si­tion even when £7.9m of leases and a £10.5m pen­sion li­a­bil­ity were taken into ac­count. This is an­other one where pa­tience will be re­quired while the bal­ance sheet pro­vides pro­tec­tion against fur­ther falls. Hold.

Russ Mould is in­vest­ment di­rec­tor at AJ Bell, the stock­bro­ker

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