IRN-BRU maker AG Barr has revealed a 15.5 per cent lift in sales in its third quarter, boosted by the recent acquisition of fruit juice range Rubicon.
The news came as the iconic fizzy drinks manufacturer said it had switched its corporate debt facility from HBOS to Royal Bank of Scotland in August – taking on a £40 million loan and £30m credit facility with the lender to fund the buyout.
Chief
executive Roger White told The Scotsman that 133-year-old Barr, which also makes St Clements and Tizer, was likely to weather the economic downturn due to its position as a low-cost "treat", but warned the market was unpredictable.
He said: "It is very hard to judge in any business how things will go. It has been a good, steady underlying performance in the core business.
"I would hope that sales will not be down over the Christmas period, but when you see how competitive the market is, it is hard to predict."
He refused to comment on which products were performing strongly, but added: "Irn-Bru is the heart of our business and if it wasn't doing well, we wouldn't be doing well."
The Cumbernauld-based company – which has been run by the Barr family since 1875 – said like-for-like sales for the nine months to 25 October were up 6.2 per cent on the same period last year and total sales were 8.9 per cent higher with the addition of Rubicon in September.
In the third quarter, sales were up 15.5 per cent on the same period last year and like-for-like sales grew 7 per cent when taken without the effect of the Rubicon acquisition.
Analyst Nicola Mallard said: "AG Barr offers a solid portfolio of brands and good margins which should stand it in good stead in this tougher climate."
Investec Securities said it planned to leave its forecasts unchanged following the update, predicting full-year profits before tax of £22.7m – up from £20.8m the previous year.
White said his firm had secured the RBS funding in August, adding: "When we arranged the funding, RBS was a prosperous, independent institution. Perhaps if we were to try and raise that debt now, it would be a different story. The reason we chose RBS was a market issue – they came up with the best deal."
He added that while he would not rule out further acquisitions, he had nothing in the pipeline for the near future.
Stuart Heslop, managing director of RBS's corporate & institutional banking team, said: "The Rubicon acquisition was a significant one for AG Barr and added a new and complementary product range to the firm's portfolio of soft drinks.
"We're very proud to have been able to support the growth of a famous Scottish plc and look forward to working closely with the team there."
