Profits at soft drinks group AG Barr, best known for its Irn Bru and Tizer brands, have fizzed up by 19% in the first half, but the company's shares have been hit as investors cashed in on recent gains.
Barr reported profits of £16m on sales up 14% to £119m, with Irn Bru itself growing revenues by 8% as the company began a marketing programme for the brand in the north of England. The good weather in the early summer certainly helped, although that of course didn't last. But the company said:
Despite poor late summer weather, trading in the first few weeks of the second half has continued to give us confidence that we will meet our full year expectations.
Barr's shares, which stood at 900p at the start of January, have slipped 21p to £12.30 after a spot of profit taking.
Some analysts believe the company could be a tasty morsel for the likes of Pepsi or Coca-Cola to snap up. Ravi Lockyer, at Collins Sarri Statham, said:
The food and beverage sector M&A has been active, with total M&A deals second only to oil and gas M&A in 2010. Detractors of the M&A argument to the Barr family holding and the presence in soft carbonated drinks, which went ex-growth early in the noughties. AG Barr needs to build its EU business and in non carbonated/ healthy but this would not put off a Coca-Cola or Pepsi approach. Any approach would send the stock north of £15 in our opinion.
