Final Results

RNS Number : 9496T

Barr(A.G.) PLC

26 March 2019

 

26 March 2019

A.G. BARR p.l.c. 

FINAL RESULTS for the year ended 26 January 2019

A.G. BARR p.l.c., ("A.G. BARR" or the "Group"), which produces and markets some of the UK's leading drinks brands, including IRN-BRU, Rubicon, Strathmore and Funkin, announces its final results for the 52 weeks ended 26 January 2019.

Financial headlines ¹

·	Revenue grew by 5.6% to £279.0m (2018 : £264.1m)
·	Profit before tax and exceptional items* increased by 2.5% to £45.2m (2018 : £44.1m)
·	Statutory profit before tax was £44.5m, reflecting a one-off past service pension charge of £0.7m (2018 : £44.9m)
·	Basic earnings per share before exceptional items* increased by 2.3% to 32.03p (2018 : 31.30p) Basic earnings per share decreased by 2.3% to 31.51p (2018 : 32.25p)
·	Net cash position at year end of £21.8m (2018 : £15.0m)
·	Proposed final dividend of 12.74p per share (2018 : 11.84p) to give a proposed total dividend for the year of 16.64p per share, an increase of 7.0% over the prior year

Strategic highlights

·	Successfully delivered reformulation plan with 99% of soft drinks portfolio currently exempt from soft drinks industry levy (SDIL)
·	Significant increase in volume share within the total UK soft drinks market
·	IRN-BRU brand benefited from continued focus on increasing distribution
·	IRN-BRU sugar free variants now account for 40% of the total IRN-BRU brand
·	Strong trading performance in strategic growth market of England and Wales
·	Innovation continues to support growth, particularly Rubicon Spring, IRN-BRU XTRA and Funkin
·	Commitment to introduce a minimum of 30% recycled material into our PET bottles by 2022
·	£30m share repurchase programme expected to complete during the course of 2019

Roger White, Chief Executive, commented:

"At the outset of 2018 we set out a clear strategy and specific actions which we believed were required to deliver continued financial success during what we forecast to be a year of significant changes across our industry.  I am pleased to report we have delivered another strong financial performance having adapted well to both the circumstances we anticipated and those which were less expected.

It is with this backdrop in mind that I emphasise the flexibility and strength of our business model, people and brands, all of which continue to deliver consistently.

We have grown revenue by 8.0% and 5.6% respectively over the past two years reflecting the growth potential of our business.  Whilst the uncertainty across the UK economy is likely to prevail for the foreseeable future, we have consistently demonstrated over the long-term that our strategy and execution are fit for purpose and resilient.  The markets in which we operate are robust and provide us with continued opportunities to grow.

We have exciting plans to deliver across the Group and are confident of continuing to make further progress in the coming year."

For more information, please contact:

A.G. BARR	0330 390 3900	Instinctif Partners	020 7457 2020
	Roger White, Chief Executive	Justine Warren
	Stuart Lorimer, Finance Director	Matthew Smallwood

Next trading update - July 2019

¹ All numbers, including comparators, reflect the adoption of IFRS 15 "Revenue from Contracts with Customers". Certain amounts payable to customers, previously presented as expenses, are now shown as a deduction to revenue.  Reconciliations are provided later in this announcement.

* Items marked with an asterisk are non-GAAP measures.  Definitions and relevant reconciliations are provided later in this announcement.

Where stated, brand growth is based on volume of cases invoiced for the 52 weeks to 26 January 2019.

Chairman's Introduction

Over the past 12 months we have produced another positive set of financial results, delivered with agility, resilience and enterprise.

Revenue grew by 5.6% and we ended the year with profit before tax and exceptional items* of £45.2m, 2.5% ahead of the prior year.  Profit before tax, after an exceptional cost of £0.7m relating to pension service, was £44.5m.  This was 0.9% lower than the prior year which benefited from an exceptional gain on a property disposal.

These results are all the more pleasing taking into account the continued economic and political uncertainty experienced by UK business as a whole, as well as the particular challenges faced by the soft drinks industry, such as regulatory intervention in the form of the Soft Drinks Industry Levy, CO₂ shortages and the resulting impact upon customer service.

We have approached these challenges with a sense of determination to identify the opportunities available to us and to create a competitive advantage. We have successfully grown our core brands, delivered market share gains and continued to develop our existing and new partnerships.

We exit the year with a strong balance sheet, providing us with the flexibility to exploit growth opportunities as they arise.

Dividend

The Board is pleased to continue with its progressive dividend policy and recommend a final dividend of 12.74p per share to give a proposed total dividend for the full year of 16.64p per share, a full year increase of 7.0% on the prior year.  The final dividend is payable on 7 June 2019 to shareholders on the Register of Members at the close of business on 10 May 2019.  The ex-dividend date is 9 May 2019.

People

We are a business built on the energy and expertise of our people.  2018 was another busy year and once again our people rose to the challenge.  I would like to take this opportunity to extend my thanks on behalf of the Board to the full team.  Their contribution to another set of positive financial results was invaluable.

Board

We were delighted to welcome Nick Wharton to the Board as an independent non-executive director with effect from 1 November 2018.  Nick's breadth of experience, gained across a range of diverse yet complementary sectors, provides valuable skills and insight to support the continued development of our Board capabilities.  We will continue to further develop and strengthen our Board skills and capabilities as required.

Prospects

Looking ahead, the political and economic climate in the UK indicates that 2019 will be another uncertain year for UK based businesses.  For soft drinks this is likely to be made all the more challenging by further regulation and ever changing consumer dynamics.  Despite these external factors we have confidence in our growth strategy and confidence that our people can execute it successfully.  We have a proven track record of delivery and are well positioned to further grow and develop our business across 2019 and beyond.

John Nicolson

CHAIRMAN

Chief Executive's Review

At the outset of 2018 we set out a clear strategy and specific actions which we believed were required to deliver continued financial success during what we forecast to be a year of significant changes across our industry.  I am pleased to report we have delivered another strong financial performance having adapted well to both the circumstances we anticipated and those which were less expected - carbon dioxide (CO₂) shortages during a period of prolonged hot weather, "Beast from the East" snow disruption as well as a number of customer business failures and ongoing customer credit risks.  These factors, together with the implementation of the Soft Drinks Industry Levy (SDIL), as anticipated, led to significant changes in pricing, promotional and demand factors in the wider market.  It is with this backdrop in mind that I emphasise the flexibility and strength of our business model, people and brands, all of which continue to deliver consistently.

Our activities were focused on our core brands and supported by positive contributions from innovation, Funkin and new partnerships.

Our revenue growth in the 52 weeks to 26 January 2019 was 5.6%, driven by a strong volume performance.  In the period the Group incurred less than £0.2m SDIL costs, successfully achieving our 99% levy free plan.  It is worth noting that across the wider soft drinks market, revenue growth is likely to reflect the increase applied to leviable products, a proportion of which is ultimately paid to the Treasury.

Despite the volatile operating environment across 2018 we have delivered against our long-term strategy.

·	Total Group revenue of £279.0m, an increase of 5.6% on the previous year
·	We grew our volume share within the total UK soft drinks market by over 11% year-on-year
·	Profit before tax and exceptional items* was £45.2m, an increase of 2.5% on the prior year performance of £44.1m.  Profit before tax was £44.5m
·	Operating margin before exceptional items* was 16.4%, a decrease of 66bps
·	Our balance sheet remains strong, with larger than anticipated net cash of £21.8m, reflecting lower capital spend and fewer shares acquired than initially planned in our share repurchase programme
·	We are pleased to recommend a final dividend of 12.74p per share to give a total dividend for the full year of 16.64p per share, a full year increase of 7.0% on the prior year

Soft drinks market performance

The UK soft drinks market has had a good year by any benchmark standard, however the underlying dynamics are somewhat difficult to disaggregate in full.  In particular the implementation of the SDIL has led to distortions in both value and volume performance in the market.  Unit pricing changes and shifts in promotional dynamics have been evident across the full year.

Total UK soft drinks market growth, as measured by IRI, highlights the significant acceleration of value growth ahead of volume in the wider market, with value up 8.1% and volume up 3.0%.  This was particularly evident in the carbonates category, where value grew 11.6% and volume increased by 2.7%.  Also notable were levy paid categories, such as regular colas, where value grew 1.9% while volume declined by 22.0%.

With increased value growth across the soft drinks market, the only sub-sector in decline was juice drinks which continues this long-term trajectory, as consumers choose water, flavoured water, functional or traditional carbonates.

Against this somewhat dynamic backdrop we made good progress, with overall Barr Soft Drinks volume share growing more than 11%.  We have seen an especially pleasing performance in both volume and value terms across England and Wales.

(Market data source : IRI Marketplace 52 weeks to 27 January 2019)

Strategy

We have continued our focus on our long-term growth strategy across 2018.  We did however adapt our trading tactics in order to underpin the significant portfolio changes we implemented during the period.  While our reformulation activity had been ongoing for several years, 2018 was a notable year which saw the reformulation of our biggest brands and the implementation of the SDIL.  Accordingly, we placed an intentional short-term trading focus on volume across our core carbonates business as we established where market pricing and promotions would sit post the SDIL implementation.  This has, as expected, given some real short-term boosts to our volume growth especially in our strategic growth markets of England and Wales and within our Barr flavours brand.  The IRN-BRU brand has also benefited from the continued focus on distribution growth, particularly IRN-BRU XTRA which, alongside IRN-BRU Sugar Free, now accounts for 40% of the total IRN-BRU brand sales on a volume and value basis.  Following its reformulation in January 2018, IRN-BRU regular has increased its volume share of the total UK carbonates market by 4.2%.

While the performance of Rubicon still juice drinks has been impacted in line with the overall decline in the fruit drinks category, the Rubicon brand as a whole has grown 7.9% in volume terms, reflecting the continued significant growth of Rubicon Spring.  

The Barr flavours range of traditional carbonates has made exceptional progress across 2018.  The proven formula of high quality product, a trusted brand and great value for money allowed the brand to take advantage of the opportunities in the market during the period.  We expect to deliver further progress in Barr flavours in 2019 due to the increased levels of distribution gained in the second half of 2018.

We expect to see the overall soft drinks market performance stabilise in 2019 as we lap the SDIL implementation and pricing, on a year-on-year basis, normalises.  Having altered our tactics in 2018, we expect to revert to our long-term strategy of value over volume as markets stabilise.  We anticipate this move back to a value-led approach will lead to a normalisation in our volume growth, while having a positive impact on margins across our core carbonates range.

We have seen a significant amount of change in our partnership brands across the reporting period.  We launched new partnerships with Bundaberg and San Benedetto in early 2018 and I am pleased to report that these new partnerships have got off to a strong start with the brands settling into our business well and both making good progress.

The Snapple brand has not made as much progress to date as we would have liked, however the change of ownership in the parent company Dr Pepper Snapple Group, which has been taken over by Keurig Green Mountain to form the new Keurig Dr Pepper (KDP) company, has led to a positive change which we hope will lead to a more autonomous position for AG Barr allowing us to refocus on growth over the long term.   

Rockstar progress has slowed in the period, down 3.1% in volume terms, in a challenging marketplace where significant competitive investment and activity have dented the strong prior year performance when the brand grew volume over 15%.  We expect to launch a number of innovative new Rockstar products across 2019 in order to regain our sales momentum in this exciting, dynamic but increasingly mature market.

We have regained momentum in our international sales performance with revenue growth of 8.6% as our business development plans delivered strongly in Ireland, Sweden and Germany in particular.  Our capital-light export driven model gives us access to a significant number of markets across the globe with relatively little risk and remains a source of growing contribution to the Group.

Much of our core business growth has been driven by innovation with a specific focus on building IRN-BRU XTRA and Rubicon Spring across the market.  While this emphasis will be maintained across 2019, our innovation pipeline continues to develop, as we adapt our portfolio to changing consumer tastes, purchasing behaviours and channel dynamics.  In common with most fast moving consumer goods companies we expect a mix of large scale opportunities, longer-term slower burn projects and those that don't make the grade.  We hope to see innovation delivering significant strategic growth in the business over the medium and longer term as well as providing us with short-term tactical boosts to revenue where possible.

The Funkin business continued its strong growth trajectory with revenue growth of 9.0% in spite of the FIFA World Cup and exceptional summer weather, when consumers typically favour longer beer and cider drinks over cocktails.  Funkin has made significant progress across core business development in the on-trade along with the exciting launch of draught cocktails, initially focused on outdoor events and now expanding into higher volume on-trade pubs, bars and restaurants. Following Funkin's initial foray into the "at home cocktails" market with the growing "Shaker Pack" product, the next step will be the launch of nitro cocktails in can format which will be launched into the market in the first half of 2019, further supporting our strategy of building the Funkin brand from its existing strong base in the on-trade into the wider consumer market.

We forecasted that operating margin would see a moderate reduction across the period as we continued to support brand development, innovation, customer service and flexibility.  However we were also impacted by the unplanned CO₂ shortages, unprecedented seasonal demand which led to suboptimal operating conditions and additional operating costs during the summer months.  Looking forward we anticipate modest cost inflation in the coming year which we expect to offset through management actions which, in tandem with our trading strategy, should see margin stabilise over the course of 2019.

Brexit

We have operated across the past year in a period of political and economic uncertainty and volatility.  We do not see any immediate end to this extended period of uncertainty.  Given our largely UK sales profile, our current assessment is that the specific issue of the UK's future exit from the European Union will not have a significant impact on our business other than through its effects on foreign exchange and the procurement of specific raw materials.  To mitigate these risks where possible we have exchange rate hedging cover in place at the top end of our treasury policy and we have secured both the required UK storage and materials to enable us to minimise any potential impact of operating difficulties around the time of the current Brexit exit date.  Should this change in any way we will adapt our plans and actions as appropriate.

Regulation and responsibility

We continue to work constructively to achieve positive outcomes across a range of regulatory discussions with our industry peers and governments, both central and devolved.  

In relation to packaging in particular we are committed to introducing 30% recycled material into our PET bottles by 2022, with a longer-term ambition of up to 50%.

Based on current government policy, both in Scotland and England, a deposit return scheme (DRS) for beverage containers is expected to be introduced in the UK within the next few years.  In the context of an increasing focus on the environmental impact of plastic, a DRS in the UK will set plastic drinks packaging apart from all other plastics, as bottles will become part of a truly circular economy.  

Along with our soft drinks industry peers, we are supportive of a DRS in principle and have been working positively and collaboratively with government.  Designed correctly, DRS can be a sustainable solution to packaging waste that is positive for the environment and practical for consumers, manufacturers and retailers.

In relation to health and diet, consultations around advertising, promotions, age restrictions and labelling are ongoing and we will play a full role in these debates to support the desire to create a healthier nation for the long-term.  Our 2019 annual report contains a full review of our sustainability actions which demonstrate our commitment to behaving responsibly across a broad range of issues.

Summary

We have grown revenue by 8.0% and 5.6% respectively over the past two years reflecting the growth potential of our business.  Whilst the uncertainty across the UK economy is likely to prevail for the foreseeable future, we have consistently demonstrated over the long-term that our strategy and execution are fit for purpose and resilient.  The markets in which we operate are robust and provide us with continued opportunities to grow.  Our brands, business model and people are agile, flexible and capable of adapting quickly and efficiently to maximise opportunities to deliver long-term value.  We have exciting plans to deliver across the Group and are confident of continuing to make further progress in the coming year.

Roger White

CHIEF EXECUTIVE

Financial Review

The following is based on results for the 52 weeks ended 26 January 2019.  Comparatives, unless otherwise stated, are for the 52 weeks ended 27 January 2018.

Overview

Our performance in the year to 26 January 2019 continued to demonstrate the rigorous execution of our strategy - to deliver more from our core brands, to drive innovation, to invest in the continued development of the Funkin brand and to grow internationally.  

In a departure from previous years, there has been an intentional short-term focus on volume growth as we sought to capitalise on structural changes in the market following the implementation of the SDIL and market-wide supply disruption during the summer.

While reported profit and earnings per share have been marginally impacted by a one-off exceptional charge relating to a past service pension charge, the underlying performance is strong.  We continue to deliver across the core performance areas of revenue, profit and cash generation and have delivered another year of strong results across a broad range of financial measures.

·	Revenue	up 5.6% to £279.0m
·	Gross margin	down 43bps to 43.9%
·	Profit before tax and exceptional items*	up 2.5% to £45.2m
·	Profit before tax	down 0.9% to £44.5m
·	Operating margin before exceptional items*	down 66bps to 16.4%
·	Operating margin*	down 122bps to 16.2%
·	Net cash from operating activities	up £2.4m to £44.6m
·	Net cash balance	up £6.8m to £21.8m
·	Basic earnings per share before exceptional items (EPS)	up 2.3% to 32.03p
·	Basic earnings per share (EPS)	down 2.3% to 31.51p

Our revenue increase was driven by volume growth across our core carbonates portfolio and underpinned by continued gains from innovation.  Volume improvement and modest price increases were in part offset by adverse brand and customer mix.  Cost pressures from commodity prices, the prolonged hot summer and CO₂ shortages tested our supply chain resilience and had a negative impact on gross margin as we placed customer service deliberately ahead of cost efficiency.  This allowed us to support our customers during a period of unprecedented demand.

Following the completion of our long-term reformulation programme, we consciously increased our marketing behind our core soft drinks brands and have continued to invest in the successful development of the Funkin business.

Margins have been impacted as a consequence of our volume over value trading tactics, adverse product and channel mix as well as sustained brand and customer investment.  Gross margin was 43.9%, down 43bps versus the prior year, while operating margin before exceptional items remained strong at 16.4%, down 66bps, delivering profit growth before tax and exceptional items of 2.5%.

Our disciplined approach to cash management continued to be a key area of focus.  We report only a modest rise in inventory despite having initiated a managed increase in selected raw materials as part of our Brexit planning.  Net receivables are down, with the impact of increased sales more than offset by strong credit control and active debt management.

We end the year with net cash of £21.8m, ahead of our previous expectations, as a result of phasing adjustments to our ongoing capital investment plan, in particular the upgrading of our Cumbernauld process room, as well as our decision to extend the timing of our share repurchase programme, having bought £10.3m of shares in the year and spent £18.5m to date.  Our strong financial performance and our confidence in the future support the recommendation of a final dividend of 12.74p per share, an increase of 7.6%.  This brings the recommended full year dividend to 16.64p per share, an increase of 7.0%, with a dividend cover of just over 1.9 times.

Segmental performance

While our overall volume growth was 6.9%, our revenue grew by 5.6%, reflecting price, product and customer mix impact.  

Carbonates

Our carbonates business represents over 76% of our revenue and over 80% of gross profit. Carbonates revenue increased by 8.9% (volume up 10.1%) driven primarily by IRN-BRU, the Barr flavours range and Rubicon Spring.  This growth delivered a 6.4% increase in gross profit as the previously mentioned impact of price, product and customer mix resulted in a modest reduction in gross margin.

The IRN-BRU brand continued to grow revenue and gain market share, particularly in England where distribution gains by zero calorie IRN-BRU XTRA have been a key growth driver.  Following its reformulation in January 2018, IRN-BRU regular has increased its volume share of the total UK carbonates market by 4.2%.  The Barr flavours range recorded double digit growth with distribution gains in the first half of the year, particularly in the impulse channel.  Rubicon Spring continues its positive growth momentum with an increase in brand formats with the successful launch of the 1.5L take-home pack.  After many years of sustained growth, Rockstar experienced low single digit volume and value decline, impacted by intense promotional pressure and new product launches by competitor brands, however our new franchise brands, Bundaberg and San Benedetto, performed strongly.

Stills and water

Our stills business is focused on our Rubicon fruit drinks and Strathmore water brands.  Rubicon fruit drinks faced significant competitive challenges in a declining market segment, impacting both pricing and volume.  

As a primarily 'on premise' brand, Strathmore gained less benefit from the significant weather related demand across the hot summer months and was impacted by competitive pricing across the market.

The combined pressures on these core brands resulted in an overall decline in our stills and water segment, with volume down 6.0%, revenue down 7.0%, delivering a decrease in gross profit of 8.7%.

Other

The 'other' segment is dominated by Funkin branded products.  Our Funkin business continues to perform strongly with sales growth of 9.0%.  The key on-trade business, benefiting from the continued growth of the cocktail market, has grown volume and margins in each of its product segments (syrups, mixers and pureés) with distribution gains and significant success through further innovation.  During 2018 Funkin entered the 'with alcohol' market with the launch of batched draft cocktails.  Despite its nascent nature, we believe this market segment has significant longer-term potential.

Margins

Operating margin before exceptional items reduced by 66bps to 16.4%, primarily driven by lower gross margin from adverse product and channel mix and our decision to increase our marketing investment behind both our core soft drink brands and Funkin.

Exceptional items

A pre-tax exceptional expense of £0.7m has been recorded in the year ended 26 January 2019.  This reflects a past service cost in respect of the equalisation of guaranteed minimum pension ("GMP") benefits.  On 26 October 2018, the High Court handed down a judgement involving Lloyds Banking Group's defined benefit pension schemes.  The judgement concluded that the schemes should equalise pension benefits for men and women in relation to GMP benefits.  The judgement has implications for many pension schemes, including the AG Barr defined benefit scheme.  We have worked with our actuarial advisers to understand the implications of the judgement for this scheme and the £0.7m pre-tax exceptional expense reflects the best estimate of the effect on our reported pension liabilities.  The Board is of the opinion that the nature of this expense, a non-routine pension cost relating to a significant legal ruling, makes it appropriate to be classified as 'exceptional'.

In the prior year, an exceptional credit of £0.8m (£1.1m post tax) was recognised.  This primarily comprised the gain on the sale of our Walthamstow site, partially offset by non-recurring costs associated with our reformulation programme.  Both of these activities were completed to plan during 2018.

Interest

Net finance charges, totalling £0.6m, largely comprised finance costs associated with the defined benefit pension deficit (under IAS 19).  Debt facility charges remain minimal, reflecting our strong net cash position, which has continued to improve this year.

The constituent elements of the interest charge comprised :

	2019	2018
	£m	£m
Interest related to Group borrowings	(0.2)	(0.3)
Finance costs related to pension	(0.4)	(0.7)
Net finance costs	(0.6)	(1.0)

Since the financial year end we have concluded the extension of our banking facilities.  Our new arrangements are three revolving credit facilities - two £20m facilities for three year terms and one £20m facility over a five year period.  These arrangements provide flexibility for short-term operational variability as well as offering optionality should acquisition opportunities be identified.

Taxation

Our reported tax expense of £8.7m (2018: £7.7m) represents an underlying effective tax rate of 19.5% (2018: 18.1%).  This is marginally higher than the UK statutory rate of 19.0% (2018: 19.2%), and is primarily due to the impact of depreciation and amortisation of non-qualifying assets and certain non-allowable expenses.

The effective tax rate of 19.5% (2018 :17.2%) (after exceptional items) has increased by 230bps from the prior year.  This reflects the impact of exceptional property disposals in the prior year, offset by the decreases in the main rate of corporation tax in 2018.

Cash flow and balance sheet

We remain financially strong and highly cash generative, with net cash from operating activities of £44.6m (2018: £42.2m) and net cash balances of £21.8m.

EBITDA before exceptional items increased by £1.3m to £54.6m, in line with increased profit performance and delivering an EBITDA margin of 19.6% (2018: 20.2%).  EBITDA to free cash flow conversion declined from 74.9% to 65.8% delivering a free cash flow of £35.9m, down £4.0m on the prior year; a creditable performance as the prior year benefited from the one-off exceptional cash benefit from the sale of our Walthamstow Depot (£2.5m) and an element of Brexit related stockbuild.  This year we supported increased inventory as we initiated a raw material stock build as a contingency against potential Brexit related disruption and incurred slightly higher capital cash outflows as part of our ongoing capital investment programme.

We remain committed to a well invested asset base and have continued to invest in line with our long-term programme of replacement and expansion.  Our major project in the year has been the replacement and upgrade of our liquid to line processes within our Cumbernauld factory.  Cash spend on this £13m investment was lower in 2018/19 than originally planned, due to rephasing of both operational activity and supplier payments, however the project remains on schedule with commissioning planned for early 2020.  As a consequence of this re-phasing, capital expenditure in 2019/20 is anticipated to be higher than previously guided as we complete existing projects and we continue our capital replacement and optimisation strategy across all our asset base.

The Group balance sheet continues to strengthen with net assets growing £8.7m to £209.8m across the financial year. This growth, after dividends paid to shareholders of £17.9m and £10.3m of share repurchases, was delivered from a combination of continued profitable business growth and a £1.7m reduction in pension liabilities under IAS 19.

Return on capital employed (ROCE) increased from 20.5% in 2018 to 21.0% in 2019 as operating profit growth and the reduction in share capital through the share repurchase programme more than offset investment in our asset base.

Share repurchase programme

Shareholder approval for a £30m share repurchase programme was received in May 2017.  During the financial year we continued to progress this programme with the purchase and cancellation of 1.5 million shares, at an average price of £6.82 and a total cost of £10.3m.  This takes our share repurchase programme to-date to £18.5m and 2.8m shares (representing 2.4% of the issued share capital) at an average cost of £6.53/share.  Since the year end, we have continued to repurchase shares under an irrevocable mandate, and it remains our intention to complete the full £30m share repurchase during the course of 2019, albeit slightly later than the original expectation of completion by May 2019.

Pensions

The Group continues to operate two pension plans: the A.G. BARR p.l.c. (2005) Defined Contribution Pension Scheme and the A.G. BARR p.l.c. (2008) Pension and Life Assurance Scheme.  The latter 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 ("the scheme") has been closed to new entrants since 5 April 2002 (and to new executive entrants since 14 August 2003) and closed to future accrual for members in May 2016.  Existing and new employees have been invited to join the Company wide defined contribution scheme.  The scheme triennial actuarial valuation (as at April 2017), approved by the Pension Scheme Trustee on 8 March 2018, identified a £4.8m deficit based on an agreed range of actuarial assumptions.  Subsequent to the valuation, the Company and the Pension Scheme Trustee agreed a pension repayment plan intended to eliminate the deficit by 2021.  This plan was submitted to and accepted by the Pension Regulator.

On an IAS 19 valuation basis, which is before the benefit of the asset back funding arrangement, the deficit reduced from £15.2m at the end of 2017/18 to £13.5m at the balance sheet date.  The deficit reduction in the current financial year is primarily as a result of a higher net discount rate used to value the scheme's liabilities in the year, the commencement of the Company repayment plan and an updating of other assumptions partially offset by the recognition of the GMP liability noted above as an exceptional item.  The Company continues to work proactively with the Pension Trustee to de-risk the pension liabilities and secure the commitments to employee benefits as part of the Group's ongoing strategic risk management.  The Group remains of the view that the overall pension deficit is manageable.

Brexit - our actions

The Company has had a Brexit Steering Group in place since shortly after the UK Referendum decision. This group is chaired by the Head of Group Risk with input from external advisors and representation from each relevant business area. The group monitors developments, reviews the implications of various exit scenarios and has taken action where it has considered this to be appropriate. The steering group has considered the implications both for transition disruption in the 3-4 months post an exit and for our longer-term strategy.  Action has been taken to mitigate short-term transitionary issues by increasing foreign exchange coverage and inventory levels of strategic raw materials (both by the Company directly and by our supply base).  Given the UK focus of our commercial activities and the largely UK sourced supply base, our current assessment is that an exit from the European Union will not have a significant strategic impact on our business and is not a principal risk.  We have a well developed risk management framework in place at both functional and corporate levels of the business and we will continue to monitor closely both political and commercial developments, and react accordingly to these.  As part of our corporate viability evaluations we have modelled the impact of what we consider to be a severe but possible Brexit impact.  This evaluation indicated that there was no significant viability risk to the business from Brexit.

Accounting Standard changes : IFRS 15, IFRS 9,  IFRS 16

We have now adopted both IFRS 15 (Revenue from Contracts with Customers) and IFRS 9 (Financial Instruments) for the accounting period starting 28 January 2018, with full retrospective application.  IFRS 15 establishes a framework for determining and recognising revenue, as well as requiring certain incremental disclosures.  The primary impact has been a reclassification of certain payments and customer incentives previously presented as selling and distribution costs.  These amounts are now included within revenue.  Adoption of the standard has had no impact on profit before tax.  Adoption of IFRS 9 has had no material impact on the accounts.  

The adoption of Accounting Standard IFRS 16 (Leases) for the accounting period will commence 27 January 2019.  IFRS 16 establishes revised accounting recognition and additional disclosure requirements in respect of leases. The impact on the income statement for 2019 has been assessed as immaterial.

Earnings per share

Reflecting the increased profitability of the Company during the year, basic EPS before exceptional items is 32.03p (2018: 31.30p), an increase of 2.3%.  The underlying performance of the business, offset by the exceptional items outlined above, leads to reported basic EPS of 31.51p (2018: 32.25p) based on a basic weighted average of 113,626,941 shares (2017: 115,336,186 shares). The reduction in the basic weighted average number of shares is predominantly due to 1.5m ordinary shares being repurchased and cancelled during the year as part of the ongoing share repurchase programme.  Based on a diluted weighted average of 113,765,670 shares, diluted EPS is 31.47p. 

Share price and market capitalisation

At 26 January 2019, the closing share price for A.G. BARR p.l.c. was £7.62, an increase of 21.1% on the closing January 2018 position.  The Group is a member of the FTSE 250, with a market capitalisation^* of £868m at the year end.  

Stuart Lorimer

FINANCE DIRECTOR

Consolidated Income statement for the year ended 26 January 2019
	2019			2018
	Before exceptional items	Exceptional items**	Total	Restated * Before exceptional items	Exceptional items**	Total
	£m	£m	£m	£m	£m	£m
Revenue	279.0	-	279.0	264.1	-	264.1
Cost of sales	(156.5)	-	(156.5)	(146.5)	(0.5)	(147.0)
Gross profit	122.5	-	122.5	117.6	(0.5)	117.1
Operating expenses	(76.7)	(0.7)	(77.4)	(72.5)	1.3	(71.2)
Operating profit	45.8	(0.7)	45.1	45.1	0.8	45.9
Finance costs	(0.6)	-	(0.6)	(1.0)	-	(1.0)
Profit before tax	45.2	(0.7)	44.5	44.1	0.8	44.9
Tax on profit	(8.8)	0.1	(8.7)	(8.0)	0.3	(7.7)
Profit attributable to equity holders	36.4	(0.6)	35.8	36.1	1.1	37.2
Earnings per share (p)
Basic earnings per share			31.51			32.25
Diluted earnings per share			31.47			32.24
Earnings per share before exceptional items			32.03			31.30

* All numbers, including comparators, reflect the adoption of IFRS 15 "Revenue from Contracts with Customers". Certain amounts payable to customers, previously presented as expenses, are now shown as a deduction to revenue.  Reconciliations are provided in Note 1.

** An explanation of exceptional items is provided in Note 3.

Consolidated Statement of Comprehensive Income for the year ended 26 January 2019
	2019	2018
	£m	£m
Profit for the year	35.8	37.2
Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurements on defined benefit pension plans	0.6	10.8
Deferred tax movements on items above	(0.1)	(1.9)
Current tax movements on items above	(0.1)	-
Items that will be or have been reclassified to profit or loss
Cash flow hedges:
Losses arising during the period	(0.4)	(0.4)
Less: reclassification adjustments for gains included in profit or loss	0.3	0.2
Deferred tax movements on items above	-	0.1
Other comprehensive income for the year, net of tax	0.3	8.8
Total comprehensive income attributable to equity holders of the parent	36.1	46.0

Consolidated Statement of Changes in Equity for the year ended 26 January 2019

	Share capital	Share premium account	Share options reserve	Other reserves	Retained earnings as restated	Total as restated
	£m	£m	£m	£m	£m	£m
At 27 January 2018	4.8	0.9	1.6	(0.2)	194.0	201.1
Profit for the year	-	-	-	-	35.8	35.8
Other comprehensive income	-	-	-	(0.1)	0.4	0.3
Total comprehensive income for the year	-	-	-	(0.1)	36.2	36.1
Company shares purchased for use by employee benefit trusts	-	-	-	-	(0.5)	(0.5)
Proceeds on disposal of shares by employee benefit trusts	-	-	-	-	0.1	0.1
Recognition of share-based payment costs	-	-	1.1	-	-	1.1
Transfer of reserve on share award	-	-	(0.4)	-	0.4	-
Deferred tax on items taken direct to reserves	-	-	0.1	-	-	0.1
Repurchase and cancellation of shares	(0.1)	-	-	0.1	(10.3)	(10.3)
Dividends paid	-	-	-	-	(17.9)	(17.9)
At 26 January 2019	4.7	0.9	2.4	(0.2)	202.0	209.8
At 28 January 2017	4.9	0.9	1.8	(0.2)	172.8	180.2
Impact of IFRS 15	-	-	-	-	(0.8)	(0.8)
At 28 January 2017 *restated	4.9	0.9	1.8	(0.2)	172.0	179.4
Profit for the year	-	-	-	-	37.2	37.2
Other comprehensive income	-	-	-	(0.1)	8.9	8.8
Total comprehensive income for the year	-	-	-	(0.1)	46.1	46.0
Company shares purchased for use by employee benefit trusts	-	-	-	-	(3.2)	(3.2)
Proceeds on disposal of shares by employee benefit trusts	-	-	-	-	2.9	2.9
Recognition of share-based payment costs	-	-	1.0	-	-	1.0
Transfer of reserve on share award	-	-	(1.3)	-	1.3	-
Deferred tax on items taken direct to reserves	-	-	(0.1)	-	-	(0.1)
Current tax on items taken direct to reserves		-	0.2	-	-	0.2
Repurchase and cancellation of shares	(0.1)	-	-	0.1	(8.2)	(8.2)
Dividends paid	-	-	-	-	(16.9)	(16.9)
At 27 January 2018	4.8	0.9	1.6	(0.2)	194.0	201.1

The Consolidated Statement of Changes in Equity has been restated to reflect the adoption of IFRS 15.

Consolidated Statement of Financial Position as at 26 January 2019

	2019	2018 restated*
	£m	£m
Non-current assets
Intangible assets	103.1	104.5
Property, plant and equipment	95.3	94.3
	198.4	198.8
Current assets
Inventories	20.4	18.0
Trade and other receivables	57.7	56.2
Cash and cash equivalents	21.8	15.0
	99.9	89.2
Total assets	298.3	288.0
Current liabilities
Loans and other borrowings	-	0.1
Trade and other payables	56.9	54.1
Derivative financial instruments	0.4	0.4
Provisions	0.4	0.4
Current tax liabilities	4.0	3.6
	61.7	58.6
Non-current liabilities
Deferred tax liabilities	13.3	13.1
Retirement benefit obligations	13.5	15.2
	26.8	28.3
Capital and reserves attributable to equity holders
Share capital	4.7	4.8
Share premium account	0.9	0.9
Share options reserve	2.4	1.6
Other reserves	(0.2)	(0.2)
Retained earnings	202.0	194.0
	209.8	201.1
Total equity and liabilities	298.3	288.0
* The Consolidated Statement of Financial Position has been restated to reflect the adoption of IFRS 15.

Consolidated Cash Flow Statements for the year ended 26 January 2019

	2019	2018
	£m	£m
Operating activities
Profit before tax	44.5	44.9
Adjustments for:
Interest payable	0.6	1.0
Depreciation of property, plant and equipment	7.4	6.7
Amortisation of intangible assets	1.4	1.5
Share-based payment costs	1.1	1.0
Loss/(gain) on sale of property, plant and equipment	0.1	(2.5)
Operating cash flows before movements in working capital	55.1	52.6
Increase in inventories	(2.4)	(0.5)
Increase in receivables	(1.5)	(5.2)
Increase in payables	3.1	4.0
Difference between employer pension contributions and amounts recognised in the income statement	(1.5)	(2.1)
Cash generated by operations	52.8	48.8
Tax paid	(8.2)	(6.6)
Net cash from operating activities	44.6	42.2
Investing activities
Acquisition of subsidiary	-	(4.5)
Purchase of property, plant and equipment	(8.9)	(10.8)
Proceeds on sale of property, plant and equipment	-	4.2
Net cash used in investing activities	(8.9)	(11.1)
Financing activities
New loans received	21.0	15.0
Loans repaid	(21.0)	(15.0)
Bank arrangement fees paid	-	(0.2)
Finance lease payments	(0.1)	(0.1)
Purchase of Company shares by employee benefit trusts	(0.5)	(3.2)
Proceeds from disposal of Company shares by employee benefit trusts	0.1	2.9
Repurchase of own shares	(10.3)	(8.2)
Dividends paid	(17.9)	(16.9)
Interest paid	(0.2)	(0.1)
Net cash used in financing activities	(28.9)	(25.8)
Net increase in cash and cash equivalents	6.8	5.3
Cash and cash equivalents at beginning of year	15.0	9.7
Cash and cash equivalents at end of year	21.8	15.0

1.  General information

A.G. BARR p.l.c. ("'the Company") and its subsidiaries (together "the Group") manufacture, distribute and sell soft drinks and cocktail solutions. 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 26 January 2019 (prior financial year 52 weeks ended 27 January 2018).

Basis of preparation

The financial information for the year ended 26 January 2019 contained in this News Release was approved by the Board on 26 March 2019.  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 endorsed and adopted for use by the European Union.

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 and interpretations required for financial periods beginning 28 January 2018.  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 27 January 2018 have been delivered to the Registrar of Companies. Statutory financial statements for the year ended 26 January 2019, which have been prepared on a going concern basis, will be delivered to the Registrar of Companies following the Group's Annual General Meeting.

The auditors have reported on those financial statements.  Their reports were not qualified, did not include a reference to any matters to 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.

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:

•       IFRS 9 Financial Instruments, and

•       IFRS 15 Revenue from Contracts with Customers

The impact of the changes in accounting policies on the financial statements have been summarised in the table below:

Extract Statement of Financial Position	As per Annual Report and Accounts 27 January 2018	IFRS 15 restatement	Restated balance sheet as at 27 January 2018
	£m	£m	£m
Inventories	17.8	0.2	18.0
Trade and other receivables	56.6	(0.4)	56.2
Trade and other payables	53.5	0.6	54.1
Retained earnings	194.8	(0.8)	194.0
Extract Income and Comprehensive Income Statement	As per Annual Report and Accounts 27 January 2018	IFRS 15 restatement	Restated income statement for year to 27 January 2018
	£m	£m	£m
Revenue	277.7	(13.6)	264.1
Operating expenses	(86.1)	13.6	(72.5)

IFRS 15 was adopted by the Group from the beginning of this financial year with all comparatives restated.  IFRS 15 applies to all revenues arising from contracts with customers and replaces all other IFRS in this regard unless the contract falls within the scope of other IFRS.  The main impact of the standard is to reclassify certain amounts payable to customers, previously presented as expenses, as deductions to revenue.

IFRS 9 did not have a material impact on the results for the current and prior reporting periods.

2. Segment reporting
The Group's management committee has been identified as the chief operating decision maker.  The Management Committee reviews the Group's internal reporting in order to assess performance and allocate resources.  The Management Committee has determined the operating segments based on these reports.
The Management Committee considers the business from a product perspective. This has led to the operating segments identified in the table below: there has been no change to the segments during the year (after aggregation).  The performance of the operating segments is assessed by reference to their gross profit before exceptional items.
Year ended 26 January 2019
	Carbonates	Still drinks and water	Other	Total
	£m	£m	£m	£m
Total revenue	213.6	49.0	16.4	279.0
Gross profit	100.1	14.7	7.7	122.5
Year ended 27 January 2018
	Carbonates	Still drinks and water	Other	Total
	£m	£m	£m	£m
Revenue
Total revenue for year ended 27 January 2018 as reported	206.4	54.7	16.6	277.7
IFRS 15 adjustments	(10.3)	(2.0)	(1.3)	(13.6)
Total revenue for year ended 27 January 2018 * restated	196.1	52.7	15.3	264.1
Gross profit before exceptional items
Gross profit before exceptional items for year ended 27 January 2018 as reported	104.3	18.1	8.8	131.2
IFRS 15 adjustments	(10.2)	(2.0)	(1.4)	(13.6)
Gross profit before exceptional items for year ended 27 January 2018 * restated	94.1	16.1	7.4	117.6
*Refer to Note 1.
There are no intersegment sales.  All revenue is in relation to product sales, which is recognised at point in time, upon delivery to the customer.
"Other" segments represent income from the sale of Funkin cocktail solutions and other soft drink related items.
The gross profit from the segment reporting is stated before exceptional costs.
The gross profit before exceptional items from the segment reporting is reconciled to the total profit before income tax, as shown in the consolidated income statement.
All of the assets and liabilities of the Group are managed by the Management Committee 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 Carbonates, Still drinks and water and Other are revenues of approximately £47m which arose from sales to the Group's largest customer.  No other single customer contributed 10 per cent or more to the Group's revenue in either 2018 or 2019.
No customer contributed 10 per cent or more to the Group's revenue in the year to 27 January 2018.
All of the segments included within "Carbonates" and "Still drinks and water" 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.
	2019	2018 as reported	IFRS 15 adjustments	2018
Revenue	£m	£m	£m	£m
UK	267.6	266.8	(13.2)	253.6
Rest of the world	11.4	10.9	(0.4)	10.5
	279.0	277.7	(13.6)	264.1
The Rest of the world revenue includes sales to the Republic of Ireland and wholesale export houses.
All of the assets of the Group are located in the UK.
4. Exceptional items
During the period the following item has been classified as exceptional.  The Group identifies items as exceptional where the nature or scale of the item requires to be separately presented in order to better understand trading performance.
The items have been included exceptional items have been analysed in the table below:
				2019	2018
				£m	£m
GMP pension equalisation				0.7	-
Gain on sale of distribution site				-	(2.5)
Sugar reduction and reformulation programme costs				-	1.4
Redundancy costs for business reorganisation				-	0.1
Other costs relating to business reorganisation				-	0.2
Total exceptional net debit/(credit)				0.7	(0.8)
				2019	2018
				£m	£m
Items included in cost of sales
Sugar reduction and reformulation programme costs				-	0.5
Total included in cost of sales				-	0.5
				2019	2018
				£m	£m
Items included in selling and distribution costs
Sugar reduction and reformulation programme costs				-	0.9
Total included in selling and distribution costs				-	0.9
Items included in administration costs
GMP pension equalisation				0.7	-
Gain on sale of distribution site				-	(2.5)
Redundancy costs for business reorganisation				-	0.1
Other costs relating to business reorganisation				-	0.2
Total included in administration costs				0.7	(2.2)
Total exceptional net debit/(credit) included in operating expenses				0.7	(1.3)
Total exceptional net debit/(credit)				0.7	(0.8)
In the year to 26 January 2019 a charge of £0.7m has been included for the past service cost in respect of the equalisation of guaranteed minimum pensions ("GMP") benefits.  On 26 October 2018, the High Court handed down a judgement involving Lloyds Banking Group's defined benefit pension schemes.  The judgement concluded that the schemes should equalise pension benefits for men and women in relation to GMP benefits.  The judgement has implications for many pension schemes, including the AG Barr defined benefit schemes.  The £0.7m expense reflects the best estimate of the effect on our reported pension liabilities.  Management believe that the nature of this expense, a non-routine pension cost relating to a significant legal ruling, makes it appropriate to be classified as exceptional.
In the year to 27 January 2018, a £2.5m gain on sale was made on disposal of the Walthamstow distribution site, £1.4m of costs had been incurred as part of the ongoing sugar reduction and reformulation programme, and £0.3m of costs were incurred primarily increasing the redundancy provision and further recruitment costs as a result of the Company-wide restructure announced in the year ended 28 January 2017.  Due to their nature, management believed that these were required to be separately presented in trading performance so as not to mislead the users of the financial statements.

5. Dividends
Dividends paid in the financial year were as follows:
	2019		2018		2019	2018
	per share		per share		£m	£m
Final dividend	11.84	p	10.87	p	13.5	12.6
Interim dividend paid	3.90	p	3.71	p	4.4	4.3
	15.74	p	14.58	p	17.9	16.9
The directors have proposed a final dividend in respect of the year ended 26 January 2019 of 12.74p per share.  It will be paid on 7 June 2019 to all shareholders who are on the Register of Members on 10 May 2019.
Dividends payable in respect of the financial year were as follows:
	2019		2018
	per share		per share
Final dividend proposed in respect of financial year	12.74	p	11.84	p
Interim dividend paid	3.90	p	3.71	p
	16.64	p	15.55	p

6. Cash and cash equivalents
	2019	2018
	£m	£m
Cash and cash equivalents	21.8	15.0
Cash and cash equivalents in the table above are included in the cash flow statement.

Annual General Meeting

The Annual General Meeting will be held at 11:00am on 31 May 2019 at the offices of Ernst & Young LLP, 5 George Square, Glasgow, G2 1DY.

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:
Capital expenditure is a non-GAAP measure and is defined as the cash purchases of property, plant and equipment and is disclosed in the consolidated cash flow statement.
EBITDA is a non-GAAP measure and is defined as operating profit before exceptional items, depreciation and amortisation.
EBITDA margin is a non-GAAP measure and is calculated as EBITDA divided by revenue.
EBITDA to free cash flow conversion is a non-GAAP measure and is calculated as free cash flow divided by EBITDA.
Basic earnings per share before exceptional items is a non-GAAP measure calculated by dividing profit attributable to equity holders before exceptional items by the weighted average number of shares in issue.
Expansionary capex is a non-GAAP measure and is defined as the purchase of property, plant and equipment that is not the normal replacement of property, plant and equipment that has come to the end of its useful life. Maintenance capex is a non-GAAP measure and is defined as the purchase of property, plant and equipment that is the normal replacement of property, plant and equipment that has come to the end of its useful life. Expansionary capex and maintenance capex add together to the value of purchase of property, plant and equipment that appears in the consolidated cash flow statement.
Free cash flow is a non-GAAP measure and is defined as the net cash flow as per the cash flow statement excluding the movements in borrowings, expansionary capex, the net cash flow on the purchase and sale of shares by employee benefit trusts, dividend payments and non-cash exceptional items.
Full year dividend per share is a non-GAAP measure calculated as the sum of all interim dividends declared during the reporting period plus any proposed dividend payable in respect of that reporting period.
Gross margin is a non-GAAP measure calculated by dividing gross profit by revenue.
Gross margin before exceptional items is a non-GAAP measure calculated by dividing gross profit before exceptional items by revenue.
Market capitalisation is a non-GAAP measure and is defined as the closing share price at the end of a reporting period multiplied by the number of issued and fully paid shares of the Company.
Net asset growth is a non-GAAP measure and is defined as the increase in net assets from one reporting period to another. Net assets is a non-GAAP measure and is defined as total assets less current liabilities less non-current liabilities.
Operating margin is a non-GAAP measure calculated by dividing operating profit by revenue.
Operating margin before exceptional items is a non-GAAP measure calculated by dividing operating profit before exceptional items by revenue.
Operating profit before exceptional items is a non-GAAP measure calculated as operating profit less any exceptional items. This figure appears on the income statement.
Profit before tax and exceptional items is a non-GAAP measure calculated as profit before tax less any exceptional items. This figure appears on the income statement.
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.
ROCE is a non-GAAP measure and is defined as profit before tax and exceptional items 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.

Reconciliation of non-GAAP measures
Gross margin	2019 £m	2018 restated £m
Revenue	279.0	264.1
Reported gross profit	122.5	117.1
Gross margin	43.9%	44.3%
Gross margin before exceptional items	2019 £m	2018 restated £m
Revenue	279.0	264.1
Gross profit before exceptional items	122.5	117.6
Gross margin before exceptional items	43.9%	44.5%
Operating margin	2019 £m	2018 restated £m
Revenue	279.0	264.1
Reported operating profit	45.1	45.9
Operating margin	16.2%	17.4%
Operating margin before exceptional items	2019 £m	2018 restated £m
Revenue	279.0	264.1
Operating margin before exceptional items	45.8	45.1
Operating margin before exceptional items	16.4%	17.1%
EBITDA	2019 £m	2018 £m
Operating profit before exceptional items	45.8	45.1
Depreciation and amortisation	8.8	8.2
EBITDA	54.6	53.3
EBITDA margin	2019 £m	2018 restated £m
Revenue	279.0	264.1
EBITDA	54.6	53.3
EBITDA margin	19.6%	20.2%
EBITDA to free cash flow conversion	2019 £m	2018 £m
Free cash flow	35.9	39.9
EBITDA	54.6	53.3
EBITDA to free cash flow conversion	65.8%	74.9%
Free cash flow	2019 £m	2018 £m
Net increase in cash and cash equivalents	6.8	5.3
Expansionary capex*	0.4	4.4
Dividends	17.9	16.9
Finance lease payments	0.1	0.1
Acquisition of subsidiary	-	4.5
Purchase of Company shares by employee benefit trusts	0.5	3.2
Proceeds from disposal of Company shares by employee benefit trusts	(0.1)	(2.9)
Repurchase of own shares	10.3	8.2
New loans received	(21.0)	(15.0)
Loans repaid	21.0	15.0
Bank arrangement fees paid	-	0.2
Free cash flow	35.9	39.9
Expansionary capex	2019 £m	2018 £m
Expansionary capex	0.4	4.4
Maintenance capex	8.5	6.4
Capex per cash flow statement	8.9	10.8
ROCE	2019 £m	2018 restated £m
Profit before tax	44.5	44.9
Exceptional items	0.7	(0.8)
Profit before tax and exceptional items	45.2	44.1
Intangible assets	103.1	104.5
Property, plant and equipment	95.3	94.3
Inventories	20.4	18.0
Trade and other receivables	57.7	56.2
Current tax	(4.0)	(3.6)
Trade and other payables	(56.9)	(54.1)
Invested capital	215.6	215.3
ROCE	21.0%	20.5%

 

END

 

 

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