Soft drinks firms AG Barr and Fever-Tree see shares fizz as sales improve

Soft drinks firms AG Barr and Fever-Tree have revealed robust sales and pointed towards positive performances for 2024 despite pressure on consumers.

Shares in both companies moved higher on Tuesday morning as shareholders welcomed their latest updates.

Irn-Bru and Rubicon maker AG Barr revealed that sales jumped over a quarter during the past year as it was boosted by acquisitions and resilient consumer demand.

It revealed that revenues grew by 25.9% to £400 million for the year to January 28, compared with a year earlier.

AG Barr said this was supported by “strong” growth across its brand portfolio, with an 8% rise in like-for-like revenues.

The firm also benefited from a first full-year of ownership of the Boost energy drink business it bought in December 2022.

The company saw adjusted pre-tax profits rise by 16.1% to £50.5 million for the year, surpassing industry expectations.

Chief executive Roger White, who will step down from the business next month, said he was optimistic about the profit outlook amid steadier costs and reduced price increases for customers.

“The outlook is certainly more settled from a price and cost point of view,” he told the PA news agency.

“Across our products, we are seeing price inflation of mid-to-low single digits, so coming towards much more normal levels and that ultimately helps volumes.

“There are still some parts of the market where consumer demand is weaker, like in the on-trade there is still some softness in the late-night trade where we have younger people, students, who still have tighter finances.”

Meanwhile, mixer specialist Fever-Tree also recorded a rise in revenues as it was boosted by higher demand in the US.

It told investors that revenues increased by 6% to £364.4 million in 2023, compared with the previous year.

It benefited from a 22% jump in US revenues, with the region overtaking the UK for the first time as Fever-Tree’s largest market.

UK revenues dropped by 1% to £114.8 million “following a summer trading period impacted by adverse weather”.

Tim Warrillow, co-founder and chief executive officer of Fever-Tree, said: “2023 was a year when the Fever-Tree brand once again grew in breadth and depth, with market share gains across the globe.

“Perhaps the most significant milestone was establishing the US as our largest region, and with it, extending our market leadership position in both the US tonic water and ginger beer categories.

“The G&T of course remains an integral growth driver for the group but 2023 was a year where we saw a step change in our non-tonic portfolio.

“Not only have our gingers and sodas continued to see strong growth but the last 12 months have seen the launch of our range of cocktail mixers alongside the rollout of our adult soft drink range in the UK.”

AG Barr shares rose by 6% to 545p while Fever-Tree shares climbed 6.6% to 1,147p.