AG Barr boss bows out as sales top £400m
◆ Departing CEO led Irn-bru from regional firm to ‘highly successful multi-beverage, branded company’ writes Scott Reid
Irn-bru maker AG Barr has seen its annual revenues top a record £400 million as its long-serving boss prepares to hand over the baton with the iconic soft drinks business in seemingly rude health. Overseeing his final set of results, Roger White said the firm was in “really good shape” as it battled rising costs, a consumer spending squeeze, strike action and, at times, unfavourable weather to serve up full-year numbers that were well received in the City.
White, who announced last summer that he would be standing down in due course after some 20 years in the top post, told The Scotsman: “I’m very happy that I can hand over the business in really good shape and once I finish up I can think about what I want to do next. It’s a great business, it’s good fun. I like the people, the brands and the sector. I’ve learnt a lot and worked with some brilliant people both internally and externally and I feel like I’ve been very privileged. It’s certainly been a huge part of my life for the past 20-odd years.”
The Cumbernauld-headquartered group unveiled succession plans at the start of February, alongside a full-year trading update flagging figures that have turned out to hit the mark. Fellow Scotsborn executive Euan Sutherland, who has held high office at the likes of Saga, Superdry and the Co-op Group, takes up the reins from the start of May. White, 58, had been the drink firm’s first CEO from outside the founding Barr family when he was appointed two decades ago. He will step down from the board at the end of April but remain available until the end of July to support a “smooth leadership transition”.
White is not elaborating on his future plans but has said he is “hoping to find some things that are interesting to do”.
The results for the year ended January 28 showed that revenues had hit £400m, a jump of 25.9 per cent and including the contribution from the Boost drinks business acquired in December 2022. Adjusted profit before tax came in at £50.5m, up 16.1 per cent year on year and marginally ahead of the figure flagged in the February update. Net cash at the bank nudged up 1.3 per cent to £53.6m while the full-year dividend of 15.05p per share, including a final recommended payout of 12.4p, is up by 14.9 per cent.
The group said strong brand momentum had delivered volume and value growth, with like-for-like revenue up 8 per cent, when the fullyear contribution from the Boost portfolio is stripped out. It successfully delivered year one of its margin rebuild programme, including an initial contribution from the first phase of Boost/rio production in-sourcing, which began in November.
It’s a great business, it’s good fun. I like the people, the brands and the sector Roger White
White said that it had been a “good outcome overall” for 2023, with revenues “bang on”, profit before tax slightly ahead of the previous forecast, dividend up and margins improving. He added: “We are still seeing inflation but it’s a bit more normalised now and mainly wage driven. We still expect some inflationary pressure for the balance of this year.”
The group, whose other brands include Strathmore water, Funkin cocktails and Moma oat drinks, has been doing its best to avoid passing all of its higher costs on to consumers during the cost-of-living crisis.
Chairman Mark Allen said: “Roger has led the transformation of AG Barr from a regional soft drinks business into the highly successful multi-beverage, branded company that it is today and he has been instrumental in delivering significant value to shareholders, stakeholders and employees. It has been a great pleasure to work with Roger and on behalf of the board I would like to thank him for the huge contribution he has made to Barr’s success over two decades as CEO and to wish him well for the future.
“I was delighted to communicate earlier this year that Euan Sutherland will join as the group’s CEO with effect from May 1. Euan has a wealth of consumer goods experience, an excellent track record in delivering sustainable growth and a history of improving efficiency and profitability through major transformation programmes.”
He added: “Looking ahead, while we
operate in what is likely to remain a volatile environment, I am confident that we have a group with growth momentum, market-leading brands, a strong margin rebuild plan which is well underway and a long-term strategy which will deliver superior shareholder returns.”
Matthew Webb, an analyst at investment firm Investec, said: “[The] results were 2 per cent ahead of its recent guidance at the [profit before tax] level. More importantly, the momentum behind its margin rebuild programme is increasingly clear, with year one successfully delivered, the in-sourcing of Boost and Rio accelerated, and significant business reorganisation in prospect.
“Rubicon was the standout performer, with sales +15 per cent. Irn-bru was +8 per cent. Funkin was flat, with growth in the UK (where its category share was broadly flat) led by the off-trade, offset by a challenging on-trade and lost distribution in Australia.”
Analysts at house brokerage Shore Capital noted: “The preliminary results make for very pleasant reading, with a modest beat to recently raised guidance confirming an excellent strategic and financial performance. There was much to like. We see scope for significant capital appreciation, highlighting a material discount to historic ten-year averages.”
The results also revealed that basic earnings per share were up 13.5 per cent to 34.59p. Shares were up about 6 per cent in post-lunch trading.