AG Barr trading in line and seeing an upsurge in sales of ‘drink now’ products
The Irn-Bru maker said that despite lockdown restrictions being in place for much of the first quarter of this year, the soft drinks division’s trading has been “relatively strong” since January 25 – the start of the company’s fiscal year.
As lockdown restrictions have eased the company has seen a positive impact on its sales volumes and product mix, with a shift back towards ‘drink now’, hospitality and leisure.
In the take-home market, the strong performance of the company’s “Funkin” ready-to-drink cocktails during 2020 is continuing, with an increase in both customer listings and new consumers enjoying Funkin cocktails at home, the company said in a statement released ahead of today’s annual general meeting.
“Whilst there remains some uncertainty in the short term as pandemic related restrictions ease, we believe we are well placed to drive the growth of the business and remain confident in the company’s prospects for the full year,” the statement concluded.
Peel Hunt said the improvement in trading was as expected “and should continue as consumer mobility continues to improve”.
There was not enough in the statement to make the broker change its forecasts.
“We make no changes to our forecasts. The shares are trading on 22.4x FY22E PE, and we maintain our 575p target price and our Add recommendation,” Peel Hunt said.
AG Barr shares currently trade at 526p, down 0.8% on the day.
— adds broker comment and share price reaction —