Scottish beverage manufacturer AG Barr, renowned for producing the iconic Irn-Bru, has announced two significant acquisitions totalling over £50 million, purchasing soft drinks competitors Fentimans and Frobishers. The Cumbernauld-based firm revealed these strategic moves alongside reporting a robust financial performance for the year, anticipating a double-digit increase in annual profits.
Strategic Acquisitions Bolster Portfolio
AG Barr confirmed the completion of a £38 million deal to acquire Fentimans on Monday, financed through a mix of cash reserves and debt. Additionally, the company finalised a £13 million purchase of Devon-based juice business Frobishers at the close of its financial year in January. These acquisitions align with AG Barr's growth strategy, which emphasises enhancing organic expansion through targeted mergers and acquisitions.
Financial Performance and Future Outlook
The company reported a strong financial year, with annual revenues climbing approximately 4% to around £437 million. This growth, coupled with ongoing cost-saving measures and investments in the supply chain, has positioned AG Barr for double-digit growth in underlying pre-tax profits for the year ending January 31. Chief Executive Euan Sutherland highlighted that the performance met expectations and established a solid foundation for future growth, with momentum building in core brands and new product introductions.
Expanding into Adult Soft Drinks Market
Fentimans and Frobishers join AG Barr's existing portfolio, which includes leading brands like Irn-Bru, Rubicon, energy drink Boost, and the Funkin cocktails range. The acquired brands operate in the adult soft drinks sector, a market benefiting from increasing consumer trends towards reduced alcohol consumption. AG Barr noted that these acquisitions reflect a strategic effort to broaden its brand portfolio, drive growth, and achieve cost synergies through targeted mergers and acquisitions.
Brand Performance Highlights
AG Barr provided insights into brand performance, noting that Irn-Bru experienced modest growth in the latter half of the year following a stagnant first half, thanks to enhanced marketing and distribution initiatives. Rubicon and Boost delivered strong performances, helping to offset a decline in the Funkin range. The company emphasised that these developments, combined with the new acquisitions, position it favourably for continued success in the competitive soft drinks industry.
