Bucking the wider market trend, the soft drinks manufacturer had a rather excellent 2018. Opening at £6.82, the stock ended up at £7.96, a nice little 16.7% increase across the year. It hasn’t been able to maintain that momentum in 2019, initially plunging back towards £7.50 after a poorly received January update – more on that below – before returning to £8 in mid-March. A.G.Barr PLC (LON:BAG) now sits at a current trading price of £7.94
Largely brushing off the impact of the Soft Drinks Industry Levy, and a sector-affecting shortage of carbon dioxide, AG Barr announced in January that it expects full year revenue to be around £277 million, a 5% increase year-on-year. It also said that it remains ‘confident of delivering profit ahead’ of that posted in 2017/18.
However, an overall solid update was spoiled by the tone struck in its outlook, sending the stock nearly 5% lower on the date of the statement. Though the Irn Bru-maker did claim that its ‘strong and flexible business model’, a portfolio of ‘differentiated and growing brands’ and its ‘well-invested and efficient asset base’ gives it confidence in continuing profitable growth, it also warned on the ‘current political and economic uncertainty’ in the UK and the threat of ‘further regulatory intervention’ and changing ‘consumer dynamics’.
As for Tuesday’s results, analysts are expecting operating profit to climb to £46.4 million; any word on its forecasts for the paresent financial year in the face of the continued economic uncertainty, meanwhile, could dictate the market reaction.
AG Barr PLC has a consensus rating of ‘Hold’ alongside an average target price of £6.75.
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