Irn-Bru maker AG Barr has said signs of a turnaround for its drink brands after a tough 2019 is set to see a smaller-than-feared hit to annual profits.
Shares in the Scottish group jumped more than 14% after it said profits are set to come in at the top end of City expectations as it recovers from a challenging 2019 for soft drinks.
AG Barr, which also makes drinks including Rubicon and Tizer, warned last July over a profit drop of up to 20% as the UK's sugar tax, CO2 shortages and unhelpful weather took its toll.
READ MORE: Irn-Bru firm takes stake in adult soft drinks
But in its latest update, it said Irn-Bru had returned to growth in the final three months of 2019 and confirmed turnaround plans were under way for its Rockstar and Rubicon brands.
The Cumbernauld-based group also said moves to hike prices may have dented sales, but have now brought its pricing in line with rivals.
It now expects underlying pre-tax profits to be "just ahead" of £37 million for the year to January 25, though sales are set to fall to around £255 million against £279 million the previous year.
While the hit to its bottom line is set to be lower than first feared, AG Barr is still facing a fall of close to 18% on the previous year's £45.2 million in underlying profits.
READ MORE: Irn-Bru shares rise as new price strategy pays off
Roger White, chief executive, said: "Our focus remains the delivery of long-term value growth.
"We are taking action to reset our business and we enter the new financial year with confidence and a strong trading plan."
John Moore, senior investment manager at Brewin Dolphin, said AG Barr's update signalled that "last year could be a temporary blip and the company is back on track".
He added: "Today's update from AG Barr should provide further reassurance to investors who were spooked by last year's profits warning.
"The normally reliable company is contending with a challenging market, including tough comparators, the sugar tax, and unfavourable weather over the past year or so - but it is still managing to deliver, assisted by a very strong balance sheet."
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article