AG Barr PLC's (LSE:BAG) acquisitions of last year, Boost and MOMA, look to have put it in good shape to deal with changing trends in the drinks market, said analysts.
Soft drinks as a sector saw sales grow by 8.8% in 2022 despite volumes falling by 2.2%, Barr stated in its full-year results.
The decline in volume was heavily influenced by soft drinks such as lemonade, dilutes and fruit juice, but was propped up by increasing sales of sports and energy drinks.
“The Boost business had performed exceptionally well within the total soft drinks market across the past 12 months, with a double-digit increase in its value and volume share,” the Scottish company told investors.
MOMA, an oat milk brand Barr recently acquired, might require a slightly more refined palette for investors to enjoy.
The plant-based milk market dropped by 1.4% in value in the year to September 2022, despite the oat milk market totalling £166mln.
MOMA did much better than that, with revenue up by 41% annually, but cost and raw material inflation tightened its margins.
Profits from the diary alternative amounted to around 2% of the company’s full-year gross profit of £128mln, the firm's results revealed.
Pre-tax profits for the entire Barr operation grew by 13.3% on a yearly basis to reach £43.5mln, but management warned that rising costs would continue chipping away at its 13.6% operating margin.
The FTSE-250 constituent is also reaping the benefits of its cocktail-to-go brand, Funkin, which saw revenue and gross profit grow in 2022 by 16% and 10% respectively.
Robin Barr, great-grandson of Irn-Bru’s founder announced he would be stepping down from the board after 62 years at the company.
Shares are down 3.3% on Tuesday after the stock opened trading at 530p.