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Drinks maker demonstrates impressive resilience against inflationary pressures
Thursday 31 Mar 2022 Author: Tom Sieber

AG Barr (BAG) 553p

Gain to date: 10.7%

Original entry point: Buy at 499.5p, 7 May 2020

Given the turbulent backdrop of the last two years or more the share price performance of soft drinks maker AG Barr (BAG) has been pleasing.

The company behind the iconic Irn-Bru brand announced adjusted profit for the year to 31 January 2022 of £41.5 million, ahead of peak pre-Covid levels in 2019 despite the loss of the UK bottling contract for the Rockstar brand.

Dividends are making a big comeback, with a final dividend of 10p complementing a 2p first-half payment and 10p special payout doled out earlier in the year.

AG Barr also invested in further innovation in its brand portfolio, helping to support future growth in the business. The recent acquisition of a stake in plant-based foods company Moma demonstrates the company is responding to shifting consumer tastes and preferences.

Liberum analyst Wayne Brown commented: ‘As a vertically integrated, 100% branded business, with more than 40% of the sales coming from the impulse channel giving the group total commercial oversight and pricing power flexibility, we remain confident that AG Barr remains well placed to deal with inflationary pressures and grow sales and profits again.’

SHARES SAYS:  A high quality outfit still worth buying. 

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