Irn-Bru maker is gaining strength

AG BARR has had a rough couple of years. In spring 2019, the stock was trading at more than £9.00. A profit warning sent the price tumbling, the pandemic compounded investor concerns and today shares in the Irn-Bru maker are just £5.20.

The price does not reflect AG Barr’s current value or its longterm prospects.

Best known for the edgy Scottish soft drink, Barr has a number of other well-known brands to its name, including Rubicon, Snapple tea and Strathmore water. The group also owns Funkin, a business that makes fruit purees, syrups, trendy mixers and ready-made cocktails, primarily for pubs, bars and restaurants.

The company initially suffered from coronavirus-related restrictions so sales and profits fell in the year to January 2021.

But they have since bounced back, so much so that interim figures to July included a 10p special dividend and last week chief executive Roger White said full-year profits would almost certainly exceed expectations.

Brokers now expect sales to grow 16 per cent to £264 million with profits up 25 per cent to £41million and a dividend of 14.7p (excluding the special), with rises pencilled in for next year.

White, based in Cumbernauld near Glasgow, is not an optimist by nature but he admits to being confident about the group’s brands and their position in the market. Brokers share this confidence, with Investec putting a target of £6.80 on the stock.