The maker of Irn-Bru has outpaced its peers in spite of having to pass on some of the £5m Brexit-induced cost rises to customers through higher prices.
Roger White, the chief executive of AG Barr, said sterling’s fall on the back of the outcome of the EU referendum had cost the business roughly £5m in increased import costs of items such as fruit and packaging.
The pound is still down 13pc against the euro at €1.13 in spite of a recent rally. The slump has made the cost of imported goods more expensive.
Mr White said the company had worked hard to cut costs but that roughly 1.5 percentage points of its 8.8pc rise in revenue to £136.6m came from price increases. The chief executive said this pace of sales growth was a “significant outperformance” of the total soft drinks market which grew value by 4.2pc in the 26 weeks to July 30, according to IRI Market Place data.
The company has been focused on reformulating its drink recipes though or launching new versions of existing brands in a bid to grab the attention of health-conscious consumers and also dodge the forthcoming sugar tax.
The levy, which will begin next year, will be 18p per litre for soft drinks with more than 5g of sugar per 100ml and a 24p per litre for drinks with more than 8g per 100ml.
But Mr White said roughly 90pc of its own portfolio of drinks – which excludes the likes of Snapple which AG Barr distributes in the UK – will not trigger the tax.
The company has spent roughly £300,000 redeveloping recipes, which it said “significantly exceed the level of expenditure that would ordinarily be incurred in the course of new product development or reformulation”. It added these costs were not expected to be repeated and so had been treated as one-off.
Pre-tax profits fell 8pc to £19.4m but this was predominantly because of an exceptional credit linked to the closure of its defined benefit pension scheme to future payments in 2016 which wasn’t repeated this year. Adjusted operating profits were up 3.4pc to £18m.
The company also now boasts a net cash position of £7.9m compared to a net debt of £6.6m in the same period last year. The dividend was raised by 5pc to 3.71p a share and Mr White said the business continued to buy back shares as part of its £30m repurchase programme.