AG Barr (LSE:BAG) reported annual profits ahead of market expectations on Tuesday and signalled stronger revenue growth in the year ahead, supported by expansion in the energy and health drinks segments that helped absorb slightly higher costs linked to the Middle East conflict.
The Scottish beverage producer, known for Irn-Bru, posted adjusted pretax profit of £65.8 million for the financial year ended January 31. That represents a 12.5% increase from the previous year and slightly exceeds the £65.4 million consensus forecast compiled by LSEG.
Group revenue increased 4% to £437.3 million, while adjusted earnings per share reached 44.24 pence.
AG Barr also reported an adjusted return on capital employed of 20.4% and an adjusted operating margin of 14.8%.
“This was a year of significant strategic progress in which we also delivered on our targeted financial metrics,” CEO Euan Sutherland said. “We have strengthened the foundations of the business and stepped up our investment in brand development, commercial capability and our operations to ensure we can consistently sustain high levels of performance.”
The results highlight the company’s ongoing shift toward faster-growing beverage categories. Over the past year, AG Barr sold its Strathmore water brand and redirected the proceeds toward energy and wellness products. As part of that strategy, the company acquired Frobishers Juices, adding a fruit juice label to a portfolio that already includes Boost energy drinks and the Rubicon juice brand.
Looking ahead, Sutherland said AG Barr expects revenue to grow by a low double-digit percentage in the 2026/2027 financial year, marking a clear acceleration from the 4% increase recorded in the most recent year.
The company added that it aims to “consistently deliver” annual revenue growth of at least 4%, maintain operating margins between 14% and 16%, and achieve a return on capital employed in the range of 19% to 21% over the long term.
Regarding the broader economic backdrop, AG Barr said the ongoing Middle East conflict has had only a limited direct impact on its operations, mainly through higher energy costs. The company noted that it has no direct revenue exposure to the region.
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