Irn-Bru maker AG Barr to close Scottish site with loss of jobs after unveiling record £420m sales
“The Strathmore brand has struggled to compete in recent years, and we believe we have now reached a point where the Forfar site is no longer sustainable”
The maker of Irn-Bru is on track for another year of revenue growth after enjoying record annual sales of more than £420 million.
AG Barr said the 5.1 per cent jump in sales was accompanied by a double-digit hike in profits and came despite “challenging market conditions”. It also announced plans to “discontinue” its Strathmore bottled water brand later this year which is likely to lead to the closure of a small manufacturing site in Forfar, with 24 jobs on the line.
The Cumbernauld-headquartered group said revenue growth had been led by a “standout performance” from its Rubicon fruit drink brand and continued strong growth from its core Irn-Bru product line, with distribution gains and successful new product launches said to have played a key role.
The results for the year to January 25 showed that revenues topped £420.4m, up from £400m a year earlier. Adjusted profit before tax came in at £58.5m, a 15.8 per cent increase from £50.5m in the prior period. On a statutory basis, pre-tax profits nudged up 3.7 per cent to £53.2m. The headline sales number had been flagged in a trading update in January.
As part of the firm’s “progressive dividend policy”, the board is recommending a final dividend of 13.76p per share, bringing the proposed total pay-out for the full year to 16.86p - up 12 per cent on the year before.
Barr said its outlook for the current period was unchanged, with the group expecting to deliver another year of revenue growth and margin improvement. The guidance takes into account the fact that 2025/26 is a 53-week year, the proposed discontinuation of Strathmore and the additional regulatory compliance costs related to extended producer responsibility fees and the increased national insurance burden.
Chief executive Euan Sutherland said: “2024/25 was a successful year for the company. I would like to take the opportunity to thank my colleagues across the business who delivered these excellent financial results.
“Looking forward, we have a refreshed strategy centred on growth and are committed to our long-term financial targets. I am confident that successful execution of our plans will see another year of positive progress towards our long-term goals.”
On the plans for Strathmore, a spokesperson for AG Barr, said: “We have announced a proposal with our Strathmore Water colleagues in Forfar which could see the closure of the site and 24 roles becoming redundant.
“The Strathmore brand has struggled to compete in recent years, and we believe we have now reached a point where the Forfar site is no longer sustainable. The proposals are subject to consultation, and we intend to fully support our employees through this period of change.”
Within the soft drinks market, the energy category continued to outperform the wider market, the firm noted, increasing 5.5 per cent year-on-year in value terms. “Other flavoured carbonates”, an important category for Irn-Bru, Rubicon and Barr Flavours, was up 0.3 per cent in value but down 2.7 per cent in volume. The still juice category, meanwhile, remained “resilient”, achieving a 3.9 per cent increase in value during the year.
Irn-Bru - the company’s most famous product - is now said to be one of the top five carbonated soft drinks in the UK, thanks to a concerted push south of the Border in recent years. The firm’s Funkin ready-to-drink cocktail business has also benefited from strong market growth, though the latest numbers reflected ongoing depressed conditions in the on-trade sector.
It was the first set of annual results to be presented by Sutherland, the Scots-born former Superdry boss, who became Barr’s chief executive at the start of May last year. The change at the helm saw Roger White depart having led the iconic soft drinks maker for more than two decades. White is now the boss of Irish drinks firm C&C Group, owner of Scotland’s best-selling beer brand Tennent’s.
Analysts at house brokerage Shore Capital said AG Barr had released “another set of excellent results”. They added: “Euan Sutherland took up the mantle of long-standing and long admired Roger White as chief executive officer in May 2024, and we are very pleased by the progress that has been delivered, providing a strong base for future progress.
“We see much to like in AG Barr, with well-supported market leading brands, increasingly well invested manufacturing facilities, an increasingly vibrant management team whilst remaining relatively immature in what remain attractive long-term growth markets.”
Matthew Webb, an analyst at Investec, noted: “Within soft drinks, Rubicon was again the star performer, supported by Irn-Bru, with double-digit growth in England. Funkin’s decline was driven by the ongoing depressed conditions in the on-trade, but this should be offset in [the new financial year] by ongoing growth in the off-trade.”
Zoe Gillespie, investment manager at wealth firm RBC Brewin Dolphin, said: “AG Barr continues to pop, with another strong set of results. Revenues and profits are on the rise, despite a challenging economic backdrop, and many of its brands are growing ahead of the market.
“The discontinuation of the Strathmore water brand is unlikely to have a material impact on the company and, with plenty of cash in the bank and an appetite for acquisitions, it seems that another strategic move could be in the offing in the not-too-distant future.
“AG Barr has a lot of qualities as a business and continues to invest in its operations - while the drinks market is highly competitive, the company should remain in a strong position when others may struggle.”
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