AG Barr – aims to double in size and expand thereafter, drinks maker‘s excellent results to push shares now 610p, TP 810p

26.03.2025

The results announced yesterday by AG Barr (LON:BAG), the IRN-BRU fizzy drinks maker, were excellent.

The year to end-January 2025 showed a 5.1% advance in group revenues from £400.0m to £420.4m, with adjusted pre-tax profits leaping forward 15.8% from £50.5m to £58.5m, lifting earnings 17.4% to 39.4p (33.6p), amply covering a 12% improved payment of 16.9p (15.1p) in dividends per share.

The branded multi-beverage group, whose market-leading brands, apart from IRN-BRU, also include Rubicon, Boost and FUNKIN, also expanded its net cash at bank by 19.2% to £63.9m (£53.6m) by its year-end.

The year marked another period of sales growth.

This was achieved despite the much-publicised economic headwinds and the financial pressures on consumers, which have continued to influence the markets in which the group operates.

Its Management navigated those challenges effectively across the year to deliver a strong set of results.

Outlook

The group noted that it entered the current 2025/26 financial year in a strong position, while stating that its current trading was in line with expectations.

The outlook for the business for the year is unchanged – still expecting to deliver another year of revenue growth and margin improvement.

Management Comment

The CEO, appointed in May 2024, Euan Sutherland stated that:

"2024/25 was a successful year for the company.

I would like to take the opportunity to thank my colleagues across the business who delivered these excellent financial results.

Looking forward, we have a refreshed strategy centred on growth and are committed to our long-term financial targets.

I am confident that successful execution of our plans will see another year of positive progress towards our long-term goals."

The Business

The Cumbernauld-based company is engaged in branded multi-beverage business.

It manufactures, distributes, and sell a range of beverages.

As brand owners and builders, it offers a diverse and differentiated portfolio of brands.

It operates through three segments: Soft drinks, Cocktail solutions and Other.

The Soft drinks segment comprises two business units: Barr Soft Drinks and Boost Drinks.

Barr Soft Drinks includes various brands such as IRN-BRU, Bundaberg, OMJ!, Rubicon, Simply Fruity, Rubicon RAW, Sun Exoti, and Tizer.

The Boost Drinks portfolio includes energy, sport, iced coffee, protein and including the franchise brand, Rio.

The Cocktail solutions segment consists of pre-mixed cocktails, syrups, mixers and purees.

The Other segment represents its MOMA business unit, comprising oat milk drinks and other oat-based products.

Its products include Cream Soda, Passion Fruit Martini Nitro Can, Citric Syrup, Mojito Mixer and others.

The Equity

There are some 112m shares in issue.

The larger holders include Lindsell Train (10.97%), Rathbones Investment Management (4.49%), The Vanguard Group (3.42%), Caledonia Investments (2.93%), Schroder Bank (2.84%), Royal London Asset Management (2.71%), Fidelity Management & Research (2.16%), FIL investment Advisors (1.72%) and BlackRock Investment Management (1.65%).

Broker’s View

Some eight analysts follow the group, seven with Buy ratings, one as a Hold.

The consensus average Target Price is 728p, the lowest 610p, the highest at 810p.

Analyst Darren Shirley, at Shore Capital Markets, considers that:

“We see much to like in AG Barr, with well-supported market-leading brands, increasingly well-invested manufacturing facilities, an increasingly vibrant management team whilst remaining relatively immature in what remain attractive long-term growth markets.”

His estimates for the current year to end-January 2026 are for revenues of £440.0m, with adjusted pre-tax profits of £65.0m, with earnings per share of 43.6p and a 19.5p dividend.

For the 2027 year, he sees £460.0m sales, £70.0m profits, 46.9p earnings and 21.0p per share dividend.

The analyst’s estimates for end-year cash balances are for £65.5m this year and then up to £77.1m for 2027.

My View

The dawn of Euan Sutherland at AG Barr is initially proving beneficial.

The work being done to re-strategise the group should see it moving forward, although I was surprised to see that it is closing its Strathmore water business – possibly because there are not enough bubbles to be seen.

An explanation of the group’s new growth strategy will be amplified on its Capital Markets Day on Tuesday 3rd June, and then more news come its Trading Update on Tuesday 29th July.

A rolling programme of positive corporate news always helps share prices.

At the current 610p I believe that the group’s shares are a strong hold.

Asterisk * denotes that Target Price has been achieved since Profile publication.