Annual report and accounts 2023 - Flipbook - Page 60
A.G. BARR p.l.c. Annual Report and Accounts 2023
Financial review continued
Segmental
performance –
reported revenue
Cocktail solutions
FUNKIN delivered another year of significant growth
with revenue up 16.0% and gross profit up 10.2%. The
business benefited from a strong on-trade recovery,
especially in the first half of the financial year, and
continued distribution gains in the growing off-trade
ready to drink cocktail market. Gross margin was
impacted by increases in input costs, fruit in particular,
and a more challenging macroeconomic environment
for our on-trade customers in the second half of the year.
+16%
Other
The ‘Other’ segment represents our MOMA business
unit, comprising oat milk drinks and other oat based
products. MOMA continues to build distribution across
both grocery and food service channels with revenue
up over 41% versus the prior year. Cost inflation in both
processing and raw materials has adversely impacted
gross margin. The Group secured full ownership of the
MOMA business in December 2022 and this will now
allow us to invest for the long-term growth of the brand.
Cocktail solutions
Operating margin
The combination of the inflationary macroeconomic
environment, the medium-term margin dilutive impact
of the Boost and MOMA acquisitions and our
commitment to maintaining marketing investment
behind our long-term growth drivers, led to an adjusted
operating margin* of 13.6% (2021/22: 14.9%).
Soft drinks
+16%
Our marketing spend was ahead of sales growth for the
second successive year as we continued to invest
behind our core brands, innovation and our acquisitions.
During the year we also provided support with the
immediate cost of living challenges, through targeted
one-off payments as well as longer term investment
in personal skills and capabilities.
Interest
The Group remained net cash positive throughout
2022/23. Finance income of £0.5m relates to interest
earned on cash held on rolling short-term deposits.
The finance charge of £1.4m primarily relates to the
non-cash MOMA acquisition accounting (£1.1m),
included as an adjusting item in determining adjusted
profit as explained in the adjusting items section. The
remaining finance charge of £0.3m relates to banking
costs associated with the Group’s revolving credit
facilities and lease interest costs under IFRS 16.
Taxation
The reported tax rate for the year ended 29 January
2023 was 23.6% compared with 34.1% for the year
ended 30 January 2022. The tax rate for the year is
above the 19% UK corporation tax rate due to c.£2m
of M&A related costs recognised in the year that are
non-deductible for tax purposes. These primarily rate
to c.£1m of acquisition transaction costs and £0.8m
of accrued earn-out recognised in the year.
The reported tax charge for the prior year included the
impact of the change in corporation tax rate from 19%
to 25% on deferred tax which increased the deferred tax
liability by £5.7m. Excluding the impact of the increase
in rate for deferred tax, the effective tax rate for the year
ended 30 January 2022 would be c.21%.
Earnings Per Share (EPS)
Adjusted basic EPS* for the year was 29.66p, an
increase of 37.4% on the prior year due to higher
operating profits and the adverse impact on the prior
year EPS from an increase in deferred tax as detailed
above. Basic reported EPS was 30.47p, an increase
of 21.4% on last year. Based on a diluted weighted
average of 112,178,721 shares, diluted EPS was 30.22p
(2021/22: 24.95p).
Other
+41%
58
Dividends
The Group resumed dividends, after the pandemic
related pause, with the announcement in September
2021 of a 2.0p interim dividend and a one-off special
dividend of 10.0p in recognition of the benefit from a
number of one-off cash inflows that had been received
but that were not part of normal trading.
