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Soft drinks group A.G. Barr PLC (LON:BAG) shrugged off the potential impact of a planned sugar tax on its business as annual profits fizzed up.
Barr said it believed the strength of its brands, product "reformulation" and innovation would help it to minimise the effects of the levy proposed in the Budget earlier this month.
When the plan was announced, shares in Barr and rival Britivic PLC (LON:BVIC) fell, although the stock of natural sweetener producer PureCircle Limited (LON:PURE) rose as analysts predicted it would benefit.
Barr, which makes Irn-Bru, Rubicon and Tizer, said pre-tax profits in the 53 weeks to January 30 rose 7% to £41.3mln.
Adjusted pre-tax profit before interest also increased 7% to £42.6mln with adjusted revenue lifting 0.9% to £257.4mln.
The group proposed a final dividend of 9.97p per share against 9.01p a year ago, giving a planned total dividend of 13.33p, up 10% versus a year ago.
It said it maintained market share of total soft drinks in a tough UK market, while international business volumes rose 40%.
Chief executive Roger White said: "Market conditions in the core UK soft drinks market are not expected to substantially change as we look forward.
"Top-line growth remains under pressure and changes in consumer preferences offer challenges and opportunities in equal measure."
House broker Shore Capital said it regarded the company's response to the news of the sugar tax as "both co-operative and proactive in nature."
"We are disappointed by the process of government surrounding the sugar tax, which we believe now sets a dangerous precedent for all industries," it said.
"Furthermore, we believe its introduction suggests other snack categories that contain high levels of sugar could also be at risk of a potential levy in the future."
Shore noted that Barr had said it expects at least two thirds of its portfolio will be lower or no sugar, and would therefore be levy-free at that time, up from about 40% currently, which in itself had already increased from 30% in 2011.
"Whilst the target for 2018 is clearly an acceleration from the pace of change historically, we believe the focus on sugar reduction has actually significantly increased in the past 12-24 months in line with consumer trends," Shore said.
Whitman Howard analyst Chris Wickham said: "We continue to like the overall outlook for UK soft drinks. Moreover, we argue that plans for a sugar tax may benefit the industry.
"First, specific taxes tend to benefit manufacturer pricing. Second, the majority of British soft-drink sales and close to the majority of carbonates are sugar-free."
Shares in Barr were flat at 519p in mid-morning London trading.