Companies: BAG   

Soft drinks-maker AG Barr has outstripped a growing market, which last year was troubled by a damp summer and increased competition.

Scotland-headquartered Barr – best known for being the producer of iconic Scottish thirst-quencher Irn Bru – acquired a number of products during the year to January, including sports drink Taut. The market still grew 3% in 2007 and Barr’s larger portfolio saw revenues fizz up 4.6% to £148m (2.7% on a like-for-like basis), pouring through to a 27% rise in pre-tax profits to £20.8m.

The group's cash performance was strong. Despite investment in the production line to cut costs, finance director Iain Greenock, who soon steps down after 33 years’ labour, managed to keep £17.9m on the balance sheet at year-end.

Barr makes the best of its assets with well-pitched marketing campaigns, growing most of its main brands by volume and value. Irn Bru grew market share 10% and remains the sixth best-selling brand in the UK, Orangina had an ‘excellent’ year, mineral water Strathmore outperformed a ‘poor market and Tizer had a good first half but disappointing second.

At the fringes of the portfolio, a number of products look well placed to advance, particularly a re-launched fruit drink for schools. Energy and sports drinks Irn Bru 32, Rockstar and Taut are in the fastest-growing segments and added-vitamin water Vitsmart has ‘significant development potential’ with a re-launch planned soon.

Dreaming of a summer ‘no worse’ than last year, house broker Investec foresees the larger portfolio boosting sales and a greater tax charge producing earnings of 81.9p. Growth Company Investor recommended the shares at 690p in September 2004 and taking partial profits at around 1,300p, but sees the present 1,180p as still offering potential for growth. Hold.

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AG Barr	LSE	£217.58m	1118.00p	13.00p
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