Beverage maker A.G. Barr PLC (LON:BAG) said it is on track to deliver 2019 profit growth but is cautious on the outlook due to Brexit uncertainty and a regulatory clampdown on the soft drinks industry.
The company, whose brands include Irn-Bru, Rubicon, Strathmore and Funkin, expects revenue for the year to January 26 to rise 5% year-on-year to £277mln as volumes rose 3%, shrugging off the impact of a sugar tax and a Co2 shortage during the period.
READ: AG Barr shrugs off sugar tax and Co2 shortage to deliver first-half revenue growth
Last year the group overhauled its range of drinks to reduce sugar content ahead of a new sugar tax on soft drinks in the UK, which came into effect in April.
A.G. Barr said its decision to invest in its brands supported growth and had a moderate impact on its operating margin as it kept tight control on costs.
The group sees further regulatory intervention on the horizon for the soft drinks industry and expects “consumer dynamics to evolve” as political and economic uncertainty in the UK looks set to persist.
“Our strong and flexible business model, our portfolio of differentiated and growing brands and our well-invested and efficient asset base give us confidence for continued profitable growth as we enter a new financial year,” it said.
For the 2019 financial year, the company expects profit to be ahead of the prior year and in line with its estimates.
A.G. Barr also said its £30m share repurchase programme had continued and was expected to be completed during the course of 2019, albeit later than previously indicated.