Further fizz was added to the share price of IRN-BRU-maker A.G. Barr (BAG) today, as the company said it outperformed the sluggish UK soft drinks market during a weather-affected first quarter. Investors bid the strongly-performing shares up another 7p to 577p on news the £663 million cap's sales grew 2.4% over the opening 15 weeks to 12 May, versus a flat performance for the wider market.
This implies branded soft drinks business A.G. Barr is taking market share in a UK industry blighted of late by unseasonable weather, weak consumer confidence as well as increased levels of promotions. Glasgow-based A.G. Barr's core brands – namely IRN-BRU, Barr, Rubicon and KA - are performing well despite the inclement weather and a step-up in promotions.
Supporters argue this validates the group's proven strategy of sustained investment behind long-term brand building, while analysts also believe the efficiently-run firm is managing to recover raw material price inflation.
In today's statement, chief executive officer (CEO) Roger White (pictured) said the company's new Milton Keynes facility remains on course for commissioning within the next eight weeks. Encouragingly the site, which will double the company's canning capacity and enable the existing Cumbernauld plan to operate more efficiently, should be operational by the end of the summer.
Meanwhile, the Competition Commission is due to report soon on the planned merger between A.G. Barr and rival beverages business Britvic (BVIC), the maker of Tango, Robinsons and Fruit Shoot brand-owner, first flagged up to the market in September.
Provisional findings of the investigation are expected early next month and A.G. Barr says it will reconsider the derailed deal, put on the back burner when the OFT referred it to the Competition Commission in February, once the findings are known. White believes the strategic attractions of the tie-up to create Barr Britvic Soft Drinks, a European soft drinks leader with an enviable brand portfolio, remain very much intact.