Shares in AG Barr (BAG) bubbled up 4.5% to 679p after the Irn-Bru maker served up a reassuring FY26 trading update guiding to a year of double-digit profit growth.
| Share price: 679p (+4.5%) | PE: 15.1 |
| Market cap: £721m | Yield: 2.8% |
The FTSE 250 firm insisted it is entering 2026 with ‘good momentum’ and a series of product launches planned. Investors also applauded the acquisitions of soft drinks rivals Fentimans and Frobishers for a combined £51 million.
Thirst for growth
Cumbernauld-based AG Barr is the company behind iconic Scottish tipple Irn-Bru as well as Rubicon, Boost and Funkin.
It has strengthened its brand portfolio through the £38 million acquisition of soft drinks-to-mixers business Fentimans, which competes in the mixers market with Fevertree Drinks (FEVR:AIM).
AG Barr has also snapped up Devon-based premium natural fruit juices and soft drinks brand Frobishers for £13 million.
Both acquired brands operate in the attractive adult soft drinks market, one benefitting from the consumer trend of reduced alcohol consumption.
AG Barr’s CEO Euan Sutherland said: ‘In-line with our strategy of enhancing our organic growth with M&A, we are delighted to announce the acquisitions of Fentimans and Frobishers. The synergies associated with these acquisitions are expected to drive meaningful accretion over the medium term.’
Tasty momentum
For the year to January 2026, AG Barr expects to serve up a solid 4% rise in revenue to £437 million.
Thanks to ongoing efficiency initiatives and supply chain investment, the company forecasts expansion in adjusted operating margins from 13.6% to 14.7%, which should help to deliver double-digit profit growth.
AG Barr explained that investment in marketing and distribution initiatives drove modest growth for Irn-Bru in H2 after a flat H1. ‘Good performances from Rubicon and Boost offset a decline in Funkin’.
We believe investors should continue to pay up for AG Barr given its brand strength, pricing power, cash generation, progressive dividend and high returns on capital employed.
The two latest deals, which mark the continuation of the company’s M&A strategy, serve to boost its presence in another attractive growth category and enhance AG Bar’s competitive position.
Read the press release here: https://www.agbarr.co.uk/investors/results-and-news/regulatory-news/
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