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AG Barr has shrugged off higher costs and posted a jump in full-year profits, but experts have cautioned that future performance will hinge on whether its sugar-free recipes keep customers sweet.

The Irn-Bru maker and owner of Forfar-based Strathmore Water reported a 4.2% rise in pre-tax profits to £44.9 million for the year to January 27, on an 8% rise in revenues to £277.7m.

That is despite the impact of the weak pound, which has driven up the costs of sugar and packaging that are priced in euros, and headwinds caused by economic volatility and B rex it uncertainty.

The company said the UK soft drinks market performed “reasonably well” over the past 12 months, with growth of 2.9% on a value basis and 0.5% in volume, in light of inflation and “individual brand pricing dynamics”.

AG Barr said it cut down on promotions for its carbonated drinks, leading to higher prices and lower volumes, though its market share grew overall.

Irn-Bru saw its biggest ever year of sales, up 8% over the period, while Rubicon sales rose 5.3% and Funkin increased 25%.

Chief executive Roger White said: “The UK economic landscape is expected to remain uncertain for business as a whole, with regulation, changing customer dynamics and consumer preferences adding further volatility for the soft drinks industry.

“We have a strong and flexible business model and a growing portfolio of brands, both established and nascent, which reflect the requirements of today’s changing consumers.

“We remain confident in our ability to capitalise on the opportunities to grow our business and deliver long-term value to shareholders.”

Irn-Bru sales were up 8% year on year.