REG - Barr(A.G.) PLC - Final Results
26/03/2024 07:00
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RNS Number : 2319I Barr(A.G.) PLC 26 March 2024
IMMEDIATE RELEASE
26 March 2024
A.G. BARR p.l.c.
("A.G. BARR" or "the Group")
Results for year ended 28 January 2024
Strategic progress delivering excellent financial performance
A.G. BARR, the branded multi-beverage business with a portfolio of
market-leading UK brands, including IRN-BRU, Rubicon, FUNKIN and Boost, today
announces its results for the year ended 28 January 2024.
Financial summary
2023/24 Versus 2022/23
Revenue £400.0m £317.6m +25.9%
Profit before tax £51.3m £44.4m +15.5%
Adjusted profit before tax* £50.5m £43.5m +16.1%
Adjusted operating margin* 12.3% 13.6% (130)bps
Net cash at bank* £53.6m £52.9m +1.3%
EPS (basic p/share) 34.59p 30.47p +13.5%
Dividend per share (interim & proposed final) 15.05p 13.10p +14.9%
Headlines
· Strong brand momentum delivering volume and value growth, with
like-for-like revenue* up 8%. Revenue, including a full year contribution from
the Boost portfolio, up 25.9%.
· Successfully delivered year one of our margin rebuild programme,
including an initial contribution from the first phase of Boost/Rio production
in-sourcing, which commenced in November 2023.
· Adjusted profit before tax* of £50.5m, up 16.1% on the prior
year.
· Strong cash generation and robust balance sheet with a net cash
at bank* position of £53.6m after significant investment in the business and
the £12.3m acquisition of the Rio soft drinks brand in October 2023.
· Full year dividend* of 15.05 pence per share including the final
recommended dividend of 12.40 pence per share.
· Delivering growth responsibly - highlights include FUNKIN B Corp
accreditation and further progress on our net-zero roadmap.
· Early March 2024 announcement of two proposed business
reorganisations - changing the route to market strategy in the symbols and
independent retail channel and fully integrating the Boost business into Barr
Soft Drinks.
Outlook
Having seen continued positive brand momentum in the early weeks of the new
financial year, we remain confident in our strategy and the continued delivery
of revenue and profit growth in the year ahead.
Roger White, Chief Executive, commented :
"I would like to take the opportunity to thank all of the teams across the
Group who have worked incredibly hard to deliver this excellent financial
performance.
With our business in a strong financial position, and our portfolio of
differentiated brands poised for further growth, I have every confidence that
our proven strategy, our results-driven teams and our well-invested asset base
will continue to support long-term growth and value creation."
For more information, please contact:
A.G. BARR 0330 390 3900 Instinctif Partners 020 7457 2010/05
Roger White, Chief Executive Justine Warren
Stuart Lorimer, Finance Director Matthew Smallwood
Next planned trading update - July 2024
* Items marked with an asterisk are non-GAAP measures. Definitions and
relevant reconciliations are provided later in this announcement.
Chair's Introduction
I am pleased to report that A.G. BARR has enjoyed a further year of
significant progress across multiple fronts, in addition to delivering an
excellent financial performance. Revenue grew by 25.9% year-on-year and we
finished the year with adjusted profit before tax* of £50.5m, 16.1% ahead of
the prior year.
Despite continued global macro uncertainty and volatility we have navigated
these challenging times well. Our long-term growth strategy has been well
executed during the year. We have continued to invest in our brands, people
and infrastructure and have made good progress against our medium-term margin
development plans, following the first full year of ownership of the higher
growth but currently lower margin Boost and MOMA businesses.
Highlights during the year include :
· Strong revenue and volume growth across our soft drinks
portfolio, with a standout performance from the Rubicon brand
· Good progress on a number of fronts in the first full year of
ownership of the Boost business alongside the acquisition of the Rio tropical
fruit drinks brand
· Margin rebuild plan well underway, accompanied by strong cash
generation and balance sheet strength
Our performance has been delivered by an excellent team of people across the
whole Group, who have worked hard in the execution of our winning strategy.
Dividend
The Board is pleased to maintain its progressive dividend policy and
recommends a final dividend of 12.40p per share to give a proposed total
dividend for the full year of 15.05p per share. This represents year-on-year
growth of 14.9% (2022/23 : 13.10p). The final dividend is payable on 7 June
2024 to shareholders on the Register of Members at the close of business on 10
May 2024. The ex-dividend date is 9 May 2024.
Board
As planned, after 62 years with the business, Robin Barr stepped down from the
Board in May 2023. We were pleased to welcome Julie Barr and Louise Smalley
as Non-Executive Directors during the course of the year.
In August 2023, after over 21 years as CEO, Roger White announced his
intention to retire from the business. He will step down from the Board at
the end of April 2024, remaining available until the end of July to support a
smooth leadership transition.
Roger has led the transformation of A.G. BARR from a regional soft drinks
business into the highly successful multi-beverage, branded company that it is
today and he has been instrumental in delivering significant value to
shareholders, stakeholders and employees. It has been a great pleasure to
work with Roger and on behalf of the Board I would like to thank him for the
huge contribution he has made to A.G BARR's success over two decades as CEO
and to wish him well for the future.
I was delighted to communicate earlier this year that Euan Sutherland will
join as the Group's CEO with effect from 1 May 2024. Euan has a wealth of
consumer goods experience, an excellent track record in delivering sustainable
growth and a history of improving efficiency and profitability through major
transformation programmes. Euan is well placed to lead A.G. BARR through the
next exciting phase of its development and to ensure the continued long-term
success of the business.
Responsibility
Our Environmental, Social and Governance Board sub committee is now well
established and providing important oversight and direction for the Group,
with a particular focus over the past 12 months on our environmental
sustainability progress and our net-zero roadmap.
We continue to make good progress across our broader responsibility agenda.
Highlights during the course of the year include FUNKIN's achievement of B
Corp status*, validating its high social and environmental standards, as well
as external recognition, received from both customers and industry bodies, of
the progress we have made. Further details can be found within our
Responsible Business Report.
People and culture
I have previously referenced A.G. BARR's unique and positive culture. I am
pleased to update shareholders that our levels of employee engagement as
measured by our Everyone Barr None survey, have risen further over the last 12
months. This reflects the steps we continue to take, supporting our
colleagues across areas such as diversity and equality, reward, mental health,
learning and development as well as workplace flexibility.
We continue to build on our unique culture, protecting and supporting the
individuality of our business divisions, people and brands. Over the course
of the year, we have been encouraged by the open and constructive feedback
received at various Board engagement sessions which now informs much of our
thinking, planning and future actions.
We are equally as proud of our values and behaviours as we are of our
financial performance.
Prospects
Looking ahead, while we operate in what is likely to remain a volatile
environment, I am confident that we have a Group with growth momentum,
market-leading brands, a strong margin rebuild plan which is well underway and
a long-term strategy which will deliver superior shareholder returns.
Mark Allen OBE
CHAIR
Chief Executive's review
I am delighted to report our results for the 52 weeks ended 28 January 2024.
As this is my final annual reporting of A.G. BARR results I wanted to take the
opportunity to say how exceptionally proud I am of all the teams across the
Group who make this such a unique and special business.
Over the past 12 months we have delivered an excellent financial performance
and made significant progress across our strategic objectives. We have
navigated the challenges of persistent inflation, a volatile regulatory
environment and changing consumer habits, delivering well against our
priorities.
The following financial metrics quantify our strong performance:
· Revenue £400.0m up 25.9 %
· Adjusted profit before tax* £50.5m up 16.1 %
· Reported profit before tax £51.3m up 15.5 %
· Net cash at bank* £53.6m up 1.3 %
· Basic earnings per share 34.59p up 13.5 %
Definitions of adjusted items are provided later in this report.
Strategic objectives
We are driven by our overarching Group purpose - to create value with values -
underpinned by our consistent strategic priorities:
· connecting with consumers
· building brands
· driving efficiency
· building trust
During the year we leveraged our capabilities to drive superior growth across
the Group, both in value and volume. In this period of significant inflation
during which volume growth has been hard to come by, our performance is all
the more pleasing.
We continued to invest across the Group in support of our long-term organic
revenue and profit growth ambitions. We have also benefited from the growth
and diversification that our recent acquisitions have brought to the Group,
further reinforcing the importance of such value-adding acquisitions as part
of our overall growth strategy. Our growing brand portfolio is strongly
aligned with current consumer and category trends, providing choice for all.
Soft drinks market
Across the period the total UK soft drinks market increased in value by 8.3%
while volumes declined by 2.9%. These trends were similarly reflected in
both the Carbonates and Stills sub sectors. The high levels of price
inflation prevalent across the market in 2022 continued into 2023, however the
scale of these inflationary increases eased somewhat in the latter part of the
year.
Within soft drinks market sub categories, while lemonade and mixers continued
to decline, Energy and Sports once again significantly outperformed the
market, with strong gains in both value and volume terms.
We are pleased to report that the Group's soft drinks portfolio, supported by
our brand building and pricing strategy, delivered both value and volume
market share gains in the period.
(Source: Circana Total Soft Drinks Market 52 weeks to 27 January 2024)
Cocktail market
The on-trade channel remained variable across the year, with late night venues
in particular experiencing reduced footfall in the context of consumers
feeling the impact of increased cost of living pressures. Despite these
tougher market conditions, the value of cocktails remained flat at £688m and
cocktail penetration increased - one in five (9.4m) on-premise GB consumers
now drink cocktails out of home, a 0.2% increase on the prior year.
Growth of ready to drink (RTD) products has continued at pace within the UK
take home market, now worth £544m. Cocktails have been the main growth
driver within the total RTD category, increasing in value by 19.2%, more than
four times the rate of the RTD category as a whole. FUNKIN remains the
number one RTD cocktail brand within this growing sector.
(Sources: CGA Mixed Drinks Report Q3 2023 ; Nielsen Pre-Mixed Alcoholic Drinks
Total Coverage Data MAT 27/01/2024)
Plant-based milk market
The value of the plant-based milk market grew year-on-year by 1.2% with
volumes down 8.6% and is now worth £369m. Oat milk continued to be the key
growth driver in the category with volume growth of 2.9% and value sales up
12%, compared to value declines in almond (down 11%), soya (down 7%), and
coconut (down 11%) milks.
Oat milk's share of the total plant-based milk market increased to 59%, up
from 53% in the previous year, with 21% of UK households now purchasing oat
milk.
MOMA grew significantly ahead of the total plant-based milk market with sales
up 37%, driven by its specific focus on the growing oat milk sub category, its
strong brand momentum as well as distribution gains.
(Sources: Nielsen Total Market Plant-Based Milk 52 weeks to Dec 23; Kantar UK
Household Penetration 52 weeks ending 02/11/2023)
Porridge market
The value of the total porridge market grew 13% versus the prior year with
volumes down 0.7% and is now worth £249m. All porridge subcategories were
in value sales growth, with the convenience-focused pots segment showing the
fastest growth, up 18%.
MOMA's porridge pot range grew ahead of the market, up 20% in value driven by
strong sales momentum and distribution gains in large multiple retailers.
(Source: Nielsen Total Porridge 52 weeks to Dec 23).
Connecting with consumers
Consumer engagement has remained fundamental to the delivery of our strategy
across the year. Our portfolio of brands appeals to a wide demographic of
consumers and we employ a broad and varied range of activities to increase
brand awareness, create excitement, build loyalty and offer choice.
Across our soft drinks portfolio we have invested in a number of successful
advertising and marketing campaigns, including a new IRN-BRU creative, "WIRE",
which engaged consumers in the great IRN-BRU taste debate, Rubicon's
successful "Made of Different Stuff" campaign, with a strong social media
focus, and Boost's "Let's Do This" consumer advertising programme, targeting
growth across a range of channels.
FUNKIN's summer campaign "It's FUNKIN Time!" raised brand awareness with 18 to
34-year olds to 47%, while MOMA's "The Barista's Choice" out of home and
digital advertising campaign promoted the brand's credentials as a
high-quality oat drink perfect for both professional baristas and home coffee
making alike.
We believe sponsorship remains an important means of connecting with
consumers. As such Rubicon RAW renewed its partnerships with GB Snowsports
and the Boardmasters Festival, while Boost continued its partnership with
Leeds United Football Club, raising brand awareness with football fans and
beyond.
Building brands
Brand building is at the heart of our growth strategy. Across the year we
launched a number of innovative new products, created exciting flavours and
limited editions, and gained incremental customer distribution through
effective sales execution within multiple channels.
Our core soft drinks brands performed very strongly.
IRN-BRU grew volume ahead of the market and delivered a 8% increase in sales
revenue. IRN-BRU XTRA continued to grow, supported by two sell-out Tropical
and Ice Cream limited edition flavours across the summer, reflecting
consumers' ongoing preference for great tasting, no sugar options.
Energy & Sports continue to be the fastest growing subcategories within
the UK soft drinks market, up 16.4% and 54.8% respectively in value terms.
Boost brought strong incremental sales to the Sport drinks market with its
Raspberry & Mango limited edition innovation, delivered successful new
product development to the 500ml can market with Blood Orange and Raspberry
Crush and reinvigorated the brand's citrus proposition with the introduction
of 250ml Lemon & Lime.
We now have greater scale and presence in energy as we combine the Boost
brand, Rubicon RAW Energy and our new energy innovation, PWR-BRU.
The Rubicon brand had an excellent year, with sales up 15%, driven by growth
across the full brand portfolio. Rubicon's exotic fruit proposition and its
vibrant and energetic brand positioning are proving a winning combination,
with consumers keen to experience flavours and products that differ from the
norm.
FUNKIN's innovation progressed at pace. From new additions to its RTD range,
including Margarita, Aperitivo Spritz and a non-alcoholic Passion Fruit
Martini, to its new premium Double Shot bar strength RTD cocktails in cans,
the brand remains the UK's Number 1 cocktail choice behind the bar and at
home.
MOMA continued to build its position in the plant-based oat drink market and
within the breakfast porridge category. With the range growing to include an
organic oat milk product, and the development of a new professional range
designed specifically for the speciality coffee sector, MOMA is a growing
challenger brand with strong British farming and craft oat credentials.
In support of our brand-building strategy we were pleased to acquire the
tropical fruit drinks brand Rio for a total consideration of £12.3m in
October 2023. Rio has been marketed, sold and distributed on an exclusive
licence basis by Boost Drinks since 2021. The acquisition allows us to
realise the benefits of full brand ownership, support Rio's continued growth
and accelerate our manufacturing in-sourcing plans to access margin
benefits.
Driving efficiency
2023 was a year of further investment in efficiency and continuous improvement
across the business.
Our multi-year capital investment programme at our Cumbernauld site is
progressing to plan in its second year. This asset refresh programme will
deliver faster and more efficient production lines, more dual production
capability with our Milton Keynes site, providing greater resilience and
flexibility, as well as contributing to our net-zero roadmap, through lower
emissions and reductions in packaging weights.
Following the acquisition of the Boost business in December 2022, we have
commenced the first phase of our planned manufacturing in-sourcing activity.
This insourcing, alongside our overarching supply chain capital investment
programme, brings operational leverage and synergy benefits supporting our
margin rebuild plans.
Building trust
It has been a further year of progress across our responsible business
priorities and commitments.
The FUNKIN business was delighted to achieve B Corp accreditation, a further
significant milestone in FUNKIN's development, certifying its high standards
of social and environmental performance.
Our No Time To Waste environmental sustainability programme continued to drive
the business towards the achievement of our science-based targets and net-zero
commitment. Tangible progress across the year included new bio-fuelled
vehicles and further increases in recycled content across our packaging.
This progress received welcome external validation through an improved rating
(A) from the Climate Disclosure Project, widely considered to be one of the
most comprehensive independent environmental data sets available.
We continued to support our people across a variety of areas both
professionally and personally - from learning and development opportunities to
assistance with financial planning - and we are pleased to report that our
employee engagement, measured by our annual survey, saw Group-wide engagement
increase to 76%, versus an industry benchmark of 69%. (Source: WorkL)
Building trust also extends to our customers and suppliers with whom we aim to
build strong collaborative relationships. As an example, Boost celebrated
its 20th anniversary in Northern Ireland with a retailer recognition 'Always
in your Corner' campaign, and we were delighted to achieve "Best Overall
Service" at the Scottish Wholesale Association's awards ceremony - our 12th
win in 14 years.
Outlook
I would like to take the opportunity to thank all of the teams across the
Group who have worked hard to deliver this excellent overall performance. It
has been a privilege to lead the business and work alongside incredibly
talented people.
We closed the year in strong financial health and with our brands and business
poised for further growth. I have every confidence that our strategy,
alongside our results-driven teams, unique brands and well-invested assets
will continue to support our growth and success in the years ahead.
Roger White
CHIEF EXECUTIVE
Financial review
OVERVIEW
The business has delivered a very pleasing set of results in a competitive
market environment, reflecting the benefit of strong brands, an agile
organisation and a talented team.
Revenue grew 25.9% to £400.0m. Like-for-like revenue growth*, which
excludes the dilutive effect of the Boost acquisition, was up 8.0%. This
strong performance was broad-based across the portfolio, driven by core brand
distribution gains and successful revenue management that supported margins
but ensured our brands remained affordable during a period of continued
pressure on household incomes.
As expected, operating margin was impacted by the 2022 Boost acquisition.
However, the Group reported a record adjusted profit before tax* of £50.5m up
16.1% on the prior year (2022/23 : £43.5m), driven by our strong trading
performance, further efficiency across our supply chain as well as progress
across our margin rebuild programme. Reported profit before tax was £51.3m
(2022/23 : £44.4m).
Our balance sheet and cash generation remain strong. During the year £60.2m
cash generated from operations funded the £12.3m acquisition of Rio Tropical
Limited in October 2023, supported the continued commitment to capital
investment across our operating sites (cash capital expenditure* of £17.8m)
and gives the confidence to recommend a 17.0% increase in the final dividend
in line with our progressive dividend policy. Following these significant
investments in brands and assets, we ended the year with £53.6m net cash in
bank* (2022/23 : £52.9m). The Group has significant debt capacity headroom
of up to 2.5x EBITDA. However, in the near term, we value the financial
flexibility that a positive cash position provides.
The ongoing investment in our brands, asset base and people reinforces our
confidence that the business will continue to grow and create value in line
with our strategic ambition.
ADJUSTING ITEMS
The reported results include a £0.8m credit (2022/23: £0.9m credit) within
operating expenses which has been excluded from adjusted profit before tax*.
The adjustment relates to a prior year accrual associated with the acquisition
earn-out of Boost Drinks Limited in December 2022. Following the lapse of
the earn-out, the accrual is no longer required and has been released.
SEGMENTAL PERFORMANCE
There are three reportable segments in the Group:
· Soft drinks
· Cocktail solutions
· Other
Soft drinks - Revenue up 30.0%, gross profit up 23.7%
A strong performance across our soft drinks segment was driven by the
combination of growth in average unit selling price and growth in underlying
volume (up c.3%) in an overall market that experienced volume decline.
Despite mixed summer weather, IRN-BRU and Rubicon delivered both volume and
revenue growth as a result of securing new customers, extending distribution
with existing customers, revenue growth, improved format mix and successful
innovation.
IRN-BRU performed particularly well in England, benefiting from the continued
success of our zero sugar XTRA which delivered double digit growth.
IRN-BRU's innovation across the year focused on limited edition summer
flavours as well as a Scottish launch of a new product, PWR-BRU, into the
energy category.
Rubicon had a very strong year, delivering double-digit growth in both volume
(up 10.0%) and revenue (up 14.7%), with an impressive performance from both
Rubicon Spring and Rubicon Sparkling, underpinned by Rubicon Still's return to
growth and the continued focus on Rubicon RAW, the brand's energy drink
launched in 2021.
Our financial results for 2023/24 include a full 12 months' contribution from
the Boost portfolio, while the prior year comparators include Boost's
contribution for only the two months from the point of acquisition.
The Boost Drinks portfolio spans energy, sports and iced coffee and includes
Rio, the tropical fruit drinks brand acquired by the Group in October 2023.
The portfolio held volumes flat in a year when the business was focused on
margin after a challenging period of sustained input inflation.
Across the remainder of our portfolio, KA grew 7.8% in revenue and 5.3% in
volume. This offset Sun Exotic and Simply Fruity which lost volume as a
result of production and customer prioritisation decisions.
Cocktail solutions - Revenue up 0.2%, gross profit down (4.9)%
FUNKIN reported broadly flat revenue versus particularly strong prior year
comparatives, in the context of a difficult period for the on-trade and lost
distribution in Australia, as a result of supply chain challenges. The
on-trade environment was more challenging with customers under pressure from
lower late night venue footfall, consumer spending squeeze and high inflation
across their cost base.
Volume and revenue continued to grow strongly in the important take home
channel. FUNKIN ready to drink (RTD) cocktails maintained their market leading
position in the grocery channel with broader and deeper distribution of their
award-winning RTD cocktails.
Other - Revenue up 28.0%, gross profit up 39.1%
This segment represents our MOMA business division, comprising oat milk drinks
and other oat-based products, primarily porridge. Since acquisition we have
consistently invested in the long-term potential of oat milk, given MOMA's
growing position in this winning segment of plant-based drinks.
MOMA continues to build distribution, achieving revenues over £10m for the
first time, up 28% versus the prior year. Oat milk continues to grow in both
grocery and out of home channels. Targeted customer wins in speciality
coffee outlets are particularly pleasing and indicate further growth potential
in a market where taste and quality are highly prized.
MARGINS
While pricing moderated across many commodities, as core material costs came
off their 2022 record highs, cost inflation persisted in employment and
service-related inputs.
Gross margin of 38.6% was a decline on the prior year (2022/23 : 40.3%) as a
result of the known medium-term structural impact from the Boost and MOMA
acquisitions. This impact was offset by disciplined cost management, the
benefit of a resilient and stable supply chain, and the operational
efficiencies delivered from the accelerated initial phase of Boost/Rio
in-sourced manufacturing.
Overhead costs increased by 23.8% reflecting a full year of the Boost
business, marketing support behind our brands and ongoing investment in our
talent base. We continually invest in talent, through both additional
resources and competitive reward and remuneration, in order to retain and
recruit the right skills to support future growth.
At 12.3%, adjusted operating margin* was 130 basis points below the prior
period (2022/23 : 13.6%). This was an improvement upon our expectations from
earlier in the year and largely a consequence of the successful acceleration
of Boost and Rio production in-sourcing. This provides further confidence
that our margin rebuild programme will deliver as planned over the next two
years.
INTEREST
The Group remained net cash positive throughout 2022/23, with surplus cash
held on rolling short-term deposits. Resulting interest income of £1.4m
offset finance charges of £0.2m largely associated with lease interest costs
under IFRS 16.
TAXATION
The reported tax rate for the year ended 28 January 2024 was 25.0% compared
with 23.6% for the year ended 29 January 2023. The corporation tax rate was
19% for the first 2 months of the financial period and 25% for the remaining
10 months (2022/23 19%). Deferred tax was calculated at 25% for the full 12
months.
EARNINGS PER SHARE (EPS)
Adjusted basic EPS* for the year was 33.88p, an increase of 14.2% on the prior
year. This reflects the strong profit performance, an unchanged share base and
the increased tax charge detailed above. Excluding the impact of taxation, EPS
rose 16.1%. Basic reported EPS was 34.59p, an increase of 13.5% on last
year. Based on a diluted weighted average of 112,448,605 shares, diluted EPS
was 34.24p (2022/23: 30.22p).
DIVIDENDS
The Group's dividend policy aims to deliver a progressive and sustainable
dividend to shareholders that has regard to performance trends including
revenue, profit after tax and cash, and that satisfies certain guiding
principles around dividend cover, payout ratios and medium-term profit
outlook.
In line with this framework, and following the interim dividend of 2.65p per
share paid in October 2023, the Board is recommending a final dividend for the
period of 12.40p. This will bring the full year dividend to 15.05p per share
(2022/2023: 13.10p per share) which provides 2.3 times dividend cover and
delivers a payout ratio of 51%. Subject to approval by shareholders at the
AGM in May, the final dividend will be paid to holders of ordinary shares on
the register as of 10 May 2024 with an ex-dividend date of 9 May 2024.
BALANCE SHEET
Disciplined capital allocation is a key component of our business strategy.
The Board regularly reviews this strategy in the context of its prevailing
risk appetite, current capital programme and strategic plans. We continue to
believe that a strong balance sheet supports growth, while enabling M&A
and securing a sustainable progressive dividend. The Board retains a
medium-term intention to operate an efficient balance sheet, which would
include a prudent amount of debt, and is comfortable that the cashflows and
earnings profile of the Group could support a debt capacity up to 2 - 2.5x
EBITDA. However, in the near term, the Group wishes to have the financial
flexibility provided by a positive cash position to provide agility to react
to adverse trading conditions and fund, from existing cash and debt resources,
potential mergers and acquisitions that are a key element of the Group's
growth strategy. We will review annually the level of cash held against
these objectives to identify any surplus.
In the year ended 28 January 2024, the Group successfully completed the
acquisition of the Rio tropical drinks brand through the purchase of Rio
Tropical Limited for £12.3m. The acquisition was fully funded from Group cash
reserves. The Rio brand had previously been marketed and distributed under a
franchise agreement by Boost Drinks Limited. Securing full ownership of the
brand allows the Group to invest in its long-term growth. The primary
financial implications of the acquisition are the elimination of brand owner
royalty payments and a £15.3m increase in intangible assets.
The Group remains financially strong with net cash at bank, no material trade
debt issues, appropriate inventory levels, a defined benefit pension surplus
and a £23.9m increase in the net asset base to £292.7m. Together with
operating profit growth, these deliver a healthy and improving Return on
Capital Employed of 18.7%.
CASH FLOW
Our cash performance remains positive with cash generated from operations of
£60.2m and a profit to cash conversion ratio* of 96.0%, driven by a continued
focus on disciplined cash management.
Overall working capital impact on cashflow has been an outflow of £5.2m.
Higher inventories, from a combination of input cost inflation, increased
mango stocks and a planned stock-build to support customer service during the
installation of our new PET line at Cumbernauld have been partially offset by
improved finished stock management. Trade payable and receivables have
benefited from lower finished goods in both FUNKIN and Boost while trade
receivables have increased by 6%, broadly in line with revenue.
Cash capital expenditure* of £17.8m (2022/23 : £14.6m) was focused on our
multi-year asset refresh programme at our Cumbernauld site. This programme
continues on plan with the upgrade of our large format PET line successfully
commissioned in the summer of 2023 and the installation of a new small format
PET line on schedule for completion in the first quarter of 2024.
The capital programme is part of an overall longer term, supply chain
optimisation programme that aims to support future profit growth by providing
improved efficiency, capacity and customer service. The programme will
facilitate improved capacity utilisation by enabling the insourcing of much of
the Boost/Rio production currently undertaken by contract packers. This
in-sourcing initiative is an important element of our margin rebuild
strategy. It commenced in November 2023 with the successful in-house
production of key Boost and Rio canned products and will complete in 2026/27
at which time we aim to be producing over 90% of Boost/Rio products in our own
facilities.
FINANCIAL RISK MANAGEMENT
The Group's risk management process is owned by the Board and operates at
every level within the business to support the successful delivery of our
strategic objectives and financial plans. The process is based on a balance
of risk and opportunity, determined through assessment of the likelihood and
impact of the risk and within the context of the Group's risk appetite, as
established by the Board. Risks are monitored throughout the year with
consideration to internal and external factors, and updates to risks and
mitigation plans are made as required. The principal risks that could
potentially have a significant impact on our business have not changed since
the end of the financial year.
TREASURY AND COMMODITY RISK MANAGEMENT
The treasury and commodity risks faced by the Group are identified and managed
by the Group Treasury and Commodity Committee whose activities are carried out
in accordance with Board approved policies and subject to regular Audit and
Risk Committee oversight.
Key financial risks managed by this committee include exposures to foreign
exchange rates and the management of the Group's debt, commodity and liquidity
positions. The Group uses financial instruments to hedge against foreign
currency exposures. No transactions are entered into for speculative
purposes.
The Group seeks to mitigate risks in relation to the continuity of supply of
key raw materials and ingredients by developing strong commercial
relationships with its key suppliers. The Group manages commodity pricing
risk actively and where commercially appropriate will enter into fixed price
supply contracts with suppliers to reduce risk.
As at 28 January 2024, the Group had £20.0m of funds held on short-term,
interest earning deposit with two relationship banks. In addition to the
Group's cash position, the Group had £20.0m of unutilised committed debt
facilities, consisting of a revolving credit facility with our principal
relationship bank. This expires in February 2026. Our funding requirements
and facilities are continually reviewed to ensure they remain appropriate,
providing a balance of security and optionality.
ACCOUNTING POLICIES
The Group's financial statements have been prepared in accordance with
International Financial Reporting Standards and the Listing Rules of the
Financial Conduct Authority.
There have been no changes to the accounting policies applied this year. All
new or amended standards that are applicable have been adopted with no
material impact on the results for the current and prior reporting periods.
PENSIONS
The Group continues to operate the A.G. BARR p.l.c. (2008) Pension and Life
Assurance Scheme. This is a defined benefit scheme based on final salary,
which also includes a defined contribution section for pension provision to
senior managers.
The defined benefit scheme has been closed to new entrants since 5 April 2002
and closed to future accrual for members in May 2016. Existing and new
employees have been invited to join an outsourced defined contribution
scheme.
The pension scheme remains well funded and no cash payments were made in
2023/24. The scheme's triennial valuation as at April 2023 identified a
£3.2m surplus on a technical provisions basis and indicated that the scheme
could be expected to reach self-sufficiency by 2032, with no additional cash
contributions required.
On an IAS 19 valuation basis, which is determined before the benefit of the
Central Asset Reserve (CAR) funding arrangement, the surplus of £2.4m as at
29 January 2023 improved to a surplus of £3.2m as at the balance sheet
date. The scheme has a long-established financial de-risking strategy that
includes pensioner buy-in policies and asset hedging. The Group continues to
work proactively with the Pension Trustee to further de-risk the pension
liabilities and secure the commitments to employee benefits as part of the
Group's ongoing strategic risk management.
____________
We believe our robust financial fundamentals are key in the support of our
strategy, brand momentum and strong execution plans, enabling us to deliver
growth in the year ahead and beyond.
Stuart Lorimer
Finance Director
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 28 JANUARY 2024
2024 2023
£m £m
Revenue 400.0 317.6
Cost of sales (245.8) (189.5)
Gross profit 154.2 128.1
Other income - 1.3
Operating expenses (104.1) (84.1)
Operating profit 50.1 45.3
Finance income 1.4 0.5
Finance costs (0.2) (1.4)
Profit before tax 51.3 44.4
Tax on profit (12.8) (10.5)
Profit attributable to equity holders 38.5 33.9
Earnings per share (pence)
Basic earnings per share 34.59 30.47
Diluted earnings per share 34.24 30.22
STATEMENTS OF FINANCIAL POSITION AS AT 28 JANUARY 2024
2024 2023
£m £m
Non-current assets
Intangible assets 130.4 116.2
Property, plant and equipment 109.0 102.5
Right-of-use assets 5.2 5.4
Loans and receivables - 1.5
Investment in associates - 0.7
Retirement benefit surplus 3.2 2.4
247.8 228.7
Current assets
Inventories 36.5 34.7
Trade and other receivables 63.8 60.4
Derivative financial instruments - 0.1
Current tax asset - -
Short-term investments 20.0 40.0
Cash and cash equivalents 33.6 13.6
153.9 148.8
Total assets 401.7 377.5
Current liabilities
Loans and other borrowings - 0.7
Trade and other payables 70.3 72.3
Derivative financial instruments 0.3 0.1
Lease liabilities 1.8 1.5
Provisions 0.5 0.8
Current tax liabilities 0.7 0.7
73.6 76.1
Non-current liabilities
Deferred tax liabilities 32.3 28.2
Lease liabilities 3.1 3.6
Contingent consideration - 0.8
35.4 32.6
Capital and reserves
Share capital 4.7 4.7
Share premium account 0.9 0.9
Share options reserve 4.0 3.4
Other reserves (0.1) 0.1
Retained earnings 283.2 259.7
292.7 268.8
Total equity and liabilities 401.7 377.5
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 28 JANUARY 2024
2024 2023
£m £m
Profit for the year 38.5 33.9
Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurements on defined benefit pension plans 0.7 (1.5)
Deferred tax movements on items above (0.2) 0.6
Items that will be or have been reclassified to profit or loss
(Loss)/gains arising on cash flow hedges during the period (0.3) 0.2
Deferred tax movements on items above 0.1 -
Other comprehensive income/(expense) for the year, net of tax 0.3 (0.7)
Total comprehensive income attributable to equity holders of the parent 38.8 33.2
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 28 JANUARY 2024
Share capital Share premium account Share options reserve Other reserves Retained earnings Total
£m £m £m £m £m £m
At 29 January 2023 4.7 0.9 3.4 0.1 259.7 268.8
Profit for the year - - - - 38.5 38.5
Other comprehensive (expense)/income - - - (0.2) 0.5 0.3
Total comprehensive (expense)/income for the year - - - (0.2) 39.0 38.8
Company shares purchased for use by employee benefit trusts - - - - (3.6) (3.6)
Proceeds on disposal of shares by employee benefit trusts - - - - 1.3 1.3
Recognition of share-based payment costs - - 2.1 - - 2.1
Transfer of reserve on share award - - (1.6) - 1.5 (0.1)
Deferred tax on items taken direct to reserves - - 0.1 - - 0.1
Dividends paid - - - - (14.7) (14.7)
At 28 January 2024 4.7 0.9 4.0 (0.1) 283.2 292.7
Share capital Share premium account Share options reserve Other reserves Retained earnings Total Non-controlling interests Total
£m £m £m £m £m £m £m £m
At 30 January 2022 4.7 0.9 1.6 (5.1) 242.4 244.5 3.7 248.2
Profit for the year - - - - 33.9 33.9 - 33.9
Other comprehensive income/(expense) - - - 0.2 (0.9) (0.7) - (0.7)
Total comprehensive income for the year - - - 0.2 33.0 33.2 - 33.2
Company shares purchased for use by employee benefit trusts - - - - (0.7) (0.7) - (0.7)
Recognition of share-based payment costs - - 2.0 - - 2.0 - 2.0
Transfer of reserve on share award - - (0.2) - 0.2 - - -
Derecognition of put liability - - - 1.3 (1.3) - - -
Recognition of liabilities with non-controlling interests - - - 3.7 - 3.7 (3.7) -
Dividends paid - - - - (13.9) (13.9) - (13.9)
At 29 January 2023 4.7 0.9 3.4 0.1 259.7 268.8 - 268.8
Cash Flow Statements for the year ended 28 January 2024
2024 2023
£m £m
Operating activities
Profit for the period before tax 51.3 44.4
Adjustments for:
Interest and dividends receivable (1.4) (0.5)
Interest payable 0.2 1.4
Impairment of investment in associate 0.7 -
Write off of loans and receivables 1.5 -
Contingent consideration (0.8) 0.8
Revaluation of put liability - (2.7)
Depreciation of property, plant and equipment 11.2 9.8
Amortisation of intangible assets 1.1 1.2
Share-based payment costs 2.1 2.0
Gain on sale of property, plant and equipment (0.5) (1.0)
Operating cash flows before movements in working capital 65.4 55.4
Increase in inventories (1.8) (4.5)
Increase in receivables (3.4) (7.6)
Increase in payables - 4.3
Difference between employer pension contributions and amounts recognised in - (4.9)
the income statement
Cash generated by operations 60.2 42.7
Tax paid (11.7) (6.8)
Net cash from operating activities 48.5 35.9
Investing activities
Acquisition of subsidiary (net of cash acquired) (12.3) (18.6)
Purchase of property, plant and equipment (17.8) (14.6)
Proceeds on sale of property, plant and equipment 0.6 1.6
Funds placed on fixed term deposit (20.0) (40.0)
Funds returned from fixed term deposit 40.0 -
Interest received 1.4 0.1
Net cash used in investing activities (8.1) (71.5)
Financing activities
Acquisition of minority interest - (3.4)
Loans made 5.0 -
Loans repaid (5.7) (0.3)
Lease payments (1.9) (1.7)
Purchase of Company shares by employee benefit trusts (3.6) (0.7)
Proceeds from disposal of Company shares by employee benefit trusts 1.3 -
Dividends paid (14.7) (13.9)
Interest paid (0.1) (0.2)
Net cash used in financing activities (19.7) (20.2)
Net increase/(decrease) in cash and cash equivalents 20.7 (55.8)
Cash and cash equivalents at beginning of year 12.9 68.7
Cash and cash equivalents at end of year 33.6 12.9
Cash and cash equivalents per the cash flow statements above comprises cash
and cash equivalents per the statement of financial position of £33.6m (2023:
£13.6m), net of bank overdrafts of £nil (2023: £0.7m) for the year ended 28
January 2024.
1. General information
A.G. BARR p.l.c. (the "Company") and its subsidiaries (together the "Group")
manufacture, distribute and sell a range of beverages. The Group has
manufacturing sites in the UK and sells mainly to customers in the UK with
some international sales.
The Company is a public limited company, which is listed on the London Stock
Exchange and incorporated and domiciled in Scotland. The address of its
registered office is Westfield House, 4 Mollins Road, Cumbernauld, G68 9HD.
The financial year represents the 52 weeks ended 28 January 2024 (prior
financial year 52 weeks ended 29 January 2023).
Basis of preparation
The financial information for the year ended 28 January 2024 contained in this
news release was approved by the Board on 26 March 2024. This announcement
does not constitute statutory financial statements within the meaning of
Section 435 of the Companies Act 2006, but is derived from those financial
statements, which have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the UK and in conformity
with the requirements of the Companies Act 2006.
This information has been prepared under the historical cost method except
where other measurement bases are required to be applied under IFRS, using all
standards or interpretations required for the financial period beginning 30
January 2023. No standards or interpretations have been adopted before the
required implementation date. Whilst the financial information included
within this announcement has been prepared in accordance with the recognition
and measurement criteria of IFRS, it does not comply with all disclosure
requirements.
Statutory financial statements for the year ended 29 January 2023 have been
delivered to the Registrar of Companies. Statutory financial statements for
the year ended 28 January 2024, which have been prepared on the going concern
basis, will be delivered to the Registrar of Companies following the Group's
Annual General Meeting.
The directors have adopted the going concern basis in preparing these accounts
after assessing the principal risks.
This assessment was undertaken through modelling of a number of reasonably
possible downside scenarios that could impact the business (both individually
and cumulatively) over the period until January 2027. These scenarios
include a major brand issue which impacts reputation and consumer purchasing,
a cyber attack and a global pandemic. In each scenario the Group continues
to be cash generative throughout the forecast horizon, resulting in our
liquidity headroom being maintained.
Our experience through the Covid-19 pandemic has given us confidence that the
Group can remain profitable and cash-generative through prolonged disruption.
The most significant potential financial impact would be due to a significant
reduction in sales. The revenue and operational leverage impact of such a
volume loss would have a negative impact on Group profitability, however the
scenario modelling would indicate that the Group would remain profitable over
the next 12 months and we would anticipate a recovery in the following years.
The Group has £20m of committed and unutilised credit facilities providing
the business with a secure funding platform. The facility expires in February
2026. Throughout these severe but plausible downside scenarios, the Group
continues to have significant liquidity headroom on existing facilities and
against the revolving credit facilities financial covenants.
The directors believe that the Group is well placed to manage its financing
and other business risks satisfactorily, and have a reasonable expectation
that the Group will have adequate resources to continue in operation for at
least 12 months from the signing date of these consolidated financial
statements. They therefore consider it appropriate to adopt the going concern
basis of accounting in preparing the financial statements.
The auditors have reported on those financial statements. The reports were
not qualified, did not contain a reference to any matters which the auditors
drew attention by way of emphasis without qualifying their report, and did not
contain a statement under Section 498 (2) or (3) of the Companies Act 2006.
Changes in accounting policy and disclosures
(a) New and amended standards adopted by the Group
A number of new or amended standards became applicable for the current
reporting period and the Group had to change its accounting policies as a
result of adopting the following standards:
· IAS 12 Income Taxes - International Tax Reform - Pillar Two Model
Rules;
· IFRS 17 Insurance Contracts;
· Amendments to IAS 12 Income Taxes - Deferred Tax related to Assets and
Liabilities arising from a Single Transaction;
· Amendments to IAS 1 Presentation of Financial Statements and IFRS
Practice Statement 2 Making Materiality Judgements - Disclosure of Accounting
Policies; and
· Amendments to IAS 8 Accounting Policy Changes in Accounting Estimates
and Errors - Definition of Accounting Estimates
The amendments listed above do not have a material impact on the results for
the current and prior reporting periods.
(b) New standards, amendments and interpretations issued but not effective for
the financial year beginning 29 January 2024 and not adopted early
Certain new accounting standards, amendments to accounting standards and
interpretations have been published that are not mandatory for 28 January 2024
reporting periods and have not been early adopted by the Group. These
standards, amendments or interpretations are not expected to have a material
impact on the entity in the current or future reporting periods or on
foreseeable future transactions.
2. Segment reporting
The Board and senior executives have been identified as the Group's chief
operating decision-makers, who review the Group's internal reporting in order
to assess performance and allocate resources.
The performance of the operating segments is assessed by reference to their
gross profit.
Soft drinks Cocktail solutions Other Total
Year ended 28 January 2024 £m £m £m £m
Total revenue 346.6 42.9 10.5 400.0
Gross profit 135.6 15.4 3.2 154.2
Soft drinks Cocktail solutions Other Total
Year ended 29 January 2023 £m £m £m £m
Total revenue 266.6 42.8 8.2 317.6
Gross profit 109.6 16.2 2.3 128.1
There are no material intersegment sales. All revenue is in relation to
product sales, which is recognised at a point in time, upon delivery to the
customer.
All of the assets and liabilities of the Group are managed on a central basis
rather than at a segment level. As a result, no reconciliation of segment
assets and liabilities to the statement of financial position has been
disclosed for either of the periods presented.
Included in revenues arising from the above segments are revenues of
approximately £68.0m, which arose from sales to the Group's largest customer
(2023: £60.3m). No other single customers contributed 10% or more to the
Group's revenue in either 2023 or 2024.
All of the segments included within "Soft drinks" and "Cocktail solutions"
meet the aggregation criteria set out in IFRS 8 Operating Segments.
Geographical information
The Group operates predominantly in the UK with some worldwide sales. All of
the operations of the Group are based in the UK.
2024 2023
Revenue £m £m
UK 383.0 303.7
Rest of the world 17.0 13.9
400.0 317.6
The rest of the world revenue includes sales to the Republic of Ireland and
international wholesale export houses.
All of the assets of the Group are located in the UK.
3. Taxation
2024 2023
£m £m
Charge/(credit) to the income statement
Current tax on profits for the year 11.5 7.0
Adjustments in respect of prior years 0.2 0.7
Total current tax expense 11.7 7.7
Deferred tax
Origination and reversal of:
Temporary differences 1.4 3.5
Adjustments in respect of prior years (0.3) (0.7)
Total deferred tax expense 1.1 2.8
Total tax expense 12.8 10.5
In addition to the above movements in deferred tax, a deferred tax credit of
£0.1m (2023: debit of £0.6m) has been recognised in other comprehensive
income and a debit of £0.1m (2023: credit of £0.2m) has been taken direct to
reserves.
The tax on the Group's profit before tax differs from the amount that would
arise using the tax rate applicable to the consolidated profits of the Group
as follows:
2024 2024 2023 2023
£m % £m %
Profit before tax 51.3 44.4
Tax at 24.0% (2023: 19.0%) 12.3 24.0 8.4 19.0
Tax effects of:
Items that are not deductible in determining taxable profit 0.6 1.2 2.1 4.6
Current tax adjustment in respect of prior years 0.2 0.4 0.7 1.6
Deferred tax adjustment in respect of prior years (0.3) (0.6) (0.7) (1.6)
Total tax expense 12.8 25.0 10.5 23.6
The weighted average tax rate was 25.0% (2023: 23.6%).
The standard rate of corporation tax applied to reported profit is 24.03%
(2023: 19%). The applicable rate has changed following the UK Government's
announcement that the corporation tax rate would increase from 19% to 25%
effective from 1 April 2023. The 24.03% for the year ending 28 January 2024
comprises two months at 19% and ten months at 25%.
4. Dividends
Dividends paid in the financial year were as follows:
2024 2023 2024 2023
per share per share £m £m
Final dividend 10.60p 10.00p 11.8 11.1
Interim dividend 2.65p 2.50p 2.9 2.8
13.25p 12.50p 14.7 13.9
The directors have proposed a final dividend in respect of the year ended 28
January 2024 of 12.40p per share. It will be paid on 7 June 2024 to all
shareholders who are on the Register of Members on 10 May 2024.
Dividends payable in respect of the financial year were as follows:
2024 2023
per share per share
Final dividend 12.40p 10.60p
Interim dividend 2.65p 2.50p
Total dividend payable 15.05p 13.10p
5. Investment in subsidiaries
2024 2023
£m £m
Opening investment in subsidiaries 113.6 90.3
Investments made in the year 12.3 23.3
Closing investment in subsidiaries 125.9 113.6
On 24 October 2023 the Group acquired 100% of the shares and voting rights in
Rio Tropical Limited ("Rio") granting it control. The Group has concluded
that, together, the acquired inputs and processes are a business that will
create value by generating revenue in the soft drinks category, supported by
the Group's brand building capability.
For the four months ended 28 January 2024, Rio contributed income of £0.5m,
and a similar impact on profit. Had Rio been a subsidiary for the full
financial year, it would have contributed c.£1.4m income to the Group and
c.£1.4m profit.
The value of the identifiable assets and liabilities of Rio Tropical at the
date of acquisition were:
£m
Intangible assets 12.0
Deferred tax (3.0)
Total identifiable net assets acquired 9.0
Goodwill 3.3
Value on acquisition 12.3
Total consideration 12.3
Represented by:
Cash 12.3
On 5 December 2022, the Group acquired 100% of the shares and voting interests
in Boost Drinks Holdings Limited ("Boost") granting it control. Included in
the identifiable assets and liabilities of Boost are inputs (inventories,
receivables and payables) and an experienced workforce with technical
expertise. The Group has concluded that, together, the acquired inputs and
processes are a business that will create value by generating revenue in the
soft drinks category, supported by the Group's brand building capability.
For the two months ended 29 January 2023, Boost contributed revenue of £7.3m
and had an immaterial impact on profit. Had Boost been a subsidiary for the
full financial year, it would have contributed c.£50m revenue to the Group
and c.£1.0m profit.
The value of the identifiable assets and liabilities of Boost at the date of
acquisition were:
£m
Property, plant and equipment 0.2
Right-of-use assets 0.3
Intangible assets 16.9
Inventory 6.0
Trade receivables 8.5
Cash and cash equivalents 1.3
Trade payables (7.1)
Accruals (2.8)
Lease creditors (0.3)
Other taxes and social security (0.7)
Current tax (0.2)
Deferred tax (4.1)
Total identifiable net assets acquired 18.0
Goodwill 1.9
Value on acquisition 19.9
Total consideration 19.9
Represented by:
Cash 19.9
On 20 December 2022 the Group acquired the remaining 38.2% equity stake in
MOMA Foods Ltd ("MOMA") for a total cash consideration of £3.4m.
Acquisition-related costs
The Group incurred acquisition-related costs of £0.1m (year to 29 January
2023 £1.2m) on legal fees and due diligence costs. These costs have been
included in 'Administrative expenses'.
The principal subsidiaries are as follows:
Principal subsidiary Principal activity Country of incorporation Country of principal operations
FUNKIN Limited Distribution and selling of cocktail solutions England UK
FUNKIN USA Limited Distribution and selling of cocktail solutions England UK
Rubicon Drinks Limited Distribution of fruit based soft-drinks England UK
MOMA Foods Ltd Distribution and selling of oat drinks and cereals England UK
Boost Drinks Limited Distribution and selling of soft-drinks England UK
Rio Tropical Limited Distribution of soft-drinks England UK
A.G. BARR p.l.c. holds 100% of the equity and votes of the subsidiaries. (Year
ended 29 January 2023: 100%). The subsidiaries have the same year end as A.G.
BARR p.l.c. and have been included in the Group consolidation. The companies
listed are the trading subsidiaries.
CAUTIONARY STATEMENT
This report is addressed to the shareholders of A.G. BARR p.l.c. and has been
prepared solely to provide information to them.
This report is intended to inform the shareholders of the Group's performance
for the year ended 28 January 2024. This report contains forward-looking
statements based on knowledge and information available to the directors as at
the date the report was prepared. These statements should be treated with
caution due to the inherent uncertainties underlying any forward-looking
information and any statements about the future outlook may be influenced by
factors that could cause actual outcomes and results to be materially
different.
Glossary
Non-GAAP measures are provided because they are tracked by management to
assess the Group's operating performance and to inform financial, strategic
and operating decisions.
Definition of non-GAAP measures used are provided below:
Adjusted basic earnings per share is a non-GAAP measure calculated by dividing
adjusted profit attributable to equity holders by the weighted average number
of shares in issue.
Adjusted operating margin is a non-GAAP measure and is calculated by dividing
adjusted operating profit by revenue.
Adjusted operating profit is a non-GAAP measure calculated as operating profit
after adjusting items.
Adjusted profit before tax is non-GAAP measure calculated as reported profit
before tax after adjusting entries as disclosed in the adjusting entries
accounting policy.
Cash capital expenditure is a non-GAAP measure and is defined as the cash
outflow on purchases of property, plant and equipment, and is disclosed in the
cash flow statement.
EBITDA is a non-GAAP measure and is defined as operating profit before
depreciation and amortisation.
Full year dividend is a non-GAAP measure and is defined as the total dividends
declared for the financial year.
Gross margin is a non-GAAP measure calculated by dividing gross profit by
revenue.
Like-for-like revenue growth is a non-GAAP measure comparing adjusted revenue
in the current year to the prior year excluding Boost revenues in each year.
Net cash at bank is a non-GAAP measure and is defined as the net of cash and
cash equivalents plus short-term investments less loans and other borrowings
as shown in the statement of financial position.
Operating margin is a non-GAAP measure calculated by dividing operating profit
by revenue.
Profit conversion to cash ratio is a non-GAAP measure and is defined as net
cash from operating activities divided by adjusted profit before tax.
Return on capital employed (ROCE) is a non-GAAP measure and is defined as
reported profit before tax as a percentage of invested capital. Invested
capital is a non-GAAP measure defined as period end non-current plus current
assets less current liabilities excluding all balances relating to any
provisions, financial instruments, interest-bearing liabilities and cash or
cash equivalents.
Revenue growth is a non-GAAP measure calculated as the difference in revenue
between two reporting periods divided by the revenue of the earlier reporting
period.
Reconciliation of Non-GAAP measures
Year ended 28 January 2024 Year ended 29 January 2023
Adjusted Consolidated Income Statements Reported Boost Adjusted Reported MOMA acquisition impact Gain on sale of property Boost acquisition fees Boost earn-out Adjusted
earn-out
accrual
write
back
£m £m £m £m £m £m £m £m £m
Revenue 400.0 - 400.0 317.6 - - - - 317.6
Cost of sales (245.8) - (245.8) (189.5) - - - - (189.5)
Gross profit 154.2 - 154.2 128.1 - - - - 128.1
Other income - - - 1.3 - (1.3) - - -
Operating expenses (104.1) (0.8) (104.9) (84.1) (2.7) - 1.2 0.8 (84.8)
Operating profit 50.1 (0.8) 49.3 45.3 (2.7) (1.3) 1.2 0.8 43.3
Finance income 1.4 - 1.4 0.5 - - - - 0.5
Finance costs (0.2) - (0.2) (1.4) 1.1 - - - (0.3)
Profit before tax 51.3 (0.8) 50.5 44.4 (1.6) (1.3) 1.2 0.8 43.5
Tax on profit (12.8) - (12.8) (10.5) - - - - (10.5)
Profit for the period 38.5 (0.8) 37.7 33.9 (1.6) (1.3) 1.2 0.8 33.0
Adjusting entries:
MOMA acquisition impact - the remeasurement and release of the contingent
consideration in respect of MOMA Foods Ltd following the Group's acquisition
of the remaining 38.2% minority interest in December 2022.
Gain on sale of property - the gain on the disposal of the Newcastle
distribution site in the year to 29 January 2023.
Boost acquisition fees - the acquisition fees incurred on the successful
acquisition of Boost Drinks Holdings Limited.
Boost earn-out - an £0.8m accrual related to the potential payment associated
with the acquisition of Boost Drinks Holdings Limited earn-out was made in the
year to 29 January 2023 that was subsequently reversed in the year to 28
January 2024.
Like-for-like revenue growth £m
Revenue for year to 28 January 2024 400.0
Less Boost (64.8)
335.2
Revenue for year to 29 January 2023 317.6
Less Boost (7.3)
310.3
Movement 24.9
Revenue growth 8.0%
Adjusted basic EPS 2024 2023
Adjusted profit attributable to equity holders of the Company £m 37.7 33.0
Weighted average number of shares in issue 111,289,068 111,258,209
Adjusted basic EPS (p) 33.88 29.66
Full year dividend 2024 2023
pence
pence
Interim dividend paid 2.65p 2.50p
Final dividend declared 12.40p 10.60p
Full year dividend 15.05p 13.10p
Gross margin 2024 2023
£m
£m
Revenue 400.0 317.6
Gross profit 154.2 128.1
Gross margin 38.6% 40.3%
Net cash at bank 2024 2023
£m
£m
Cash and cash equivalents 33.6 13.6
Short-term investments 20.0 40.0
Loans and other borrowings - (0.7)
Net cash at bank 53.6 52.9
Operating margin 2024 2023
£m
£m
Revenue 400.0 317.6
Reported operating profit 50.1 45.3
Operating margin 12.5% 14.3%
Adjusted operating margin 2024 2023
£m
£m
Revenue 400.0 317.6
Adjusted operating profit 49.3 43.3
Adjusted operating margin 12.3% 13.6%
Profit conversion to cash ratio 2024 2023
£m
£m
Net cash from operating activities 48.5 35.9
Adjusted profit before tax 50.5 43.5
Profit conversion to cash ratio 96.0% 82.5%
ROCE 2024 2023
£m
£m
Profit before tax 51.3 44.4
Intangible assets 130.4 116.2
Property, plant and equipment 109.0 102.5
Right-of-use assets 5.2 5.4
Investment in associates - 0.7
Inventories 36.5 34.7
Trade and other receivables 63.8 60.4
Current tax (0.7) (0.7)
Trade and other payables (70.3) (72.3)
Invested capital 273.9 246.9
ROCE 18.7% 18.0%
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