Final Results

Barr(A.G.) PLC
30 March 2005


30 March 2005



                                A.G.BARR p.l.c.

                     PRELIMINARY RESULTS FOR THE YEAR ENDED

                               29th JANUARY 2005



A.G.BARR p.l.c. the Scottish based manufacturer of soft drinks including the
popular Irn-Bru, Tizer and Orangina brands, announces its preliminary results
today for the 12 months to 29th January 2005.





Key Points



•               Profit on ordinary activities before tax increased by 13% to
                £15.6 million (2004 - £13.8 million).

•               Turnover of £127.2 million.  An increase on a like for like 52
                week basis of 3%.

•               An increased final dividend of 19.5p per share to give a total
                dividend for the year of 28.75p, an increase of 12.7% over the 
                previous year.

•               Core brands perform strongly in a difficult market.

•               Cash flow remaining strong with £35 million cash at bank.

•               Major investment programme in Scottish operations planned to
                facilitate future growth and efficiency.

•               Portfolio development continues with strong performances from
                new Simply products and further exciting development planned for 
                2005/06.







Commenting on the results Chairman, Robin Barr, said:

'I am delighted to report continued strong growth in profits at A.G.Barr,
further demonstrating the good progress the business is making.  This
performance is all the more pleasing against a backdrop of difficult trading
conditions relating largely to the poor weather of 2004.'





Commenting Roger White, the Chief Executive, said:

'The progress we have made across the last 12 months is reflected in our
excellent financial performance.

The resilience and flexibility of the business has been tested in what has been
a difficult year for many - I am pleased to report we have continued to build on
our previous year's performance across all areas of the business.

The announcement today of our development and investment plans for the business
in Scotland signal the strong belief we have in the opportunity to develop our
business further in the short, medium and long term.

Business performance for the first 8 weeks of the current financial year is in
line with our plans.'









For further information, please contact:



A.G.Barr                                   Tel  :  [phone]
Roger White, Chief Executive
Iain Greenock, Finance Director

Buchanan Communications                    Tel  :  [phone]
Tim Thompson / Nicola Cronk




CHAIRMAN'S STATEMENT



Review of results



I am pleased to report that profit on ordinary activities before tax was £15.6
million for the 52 weeks to January 2005 - an increase of 13% over the previous
53 week period. Turnover for the year to January 2005 was £127.2 million, an
increase of 1.5% over the turnover achieved in the previous financial year but
the increase was 3% if adjustment is made for the extra week last year. On the
back of an earnings per share rise from 49.90p to 56.56p, your directors have
been able to recommend a final dividend of 19.5p per share to give a total for
the year of 28.75p, an increase of nearly 13%.  These figures are all the more
pleasing as they have been achieved despite the poor summer weather of 2004
which contributed to a particularly competitive market place later in the year.



Our people



Our strong performance, particularly during the second half of the year, would
not have been possible without the continuing contributions from our employees
and I would like to thank them all, on behalf of our external shareholders, for
the excellent results.



I am pleased to record that we have completed the move in January this year of
our regional headquarters staff from traditional office facilities within our
long-standing Atherton factory to a purpose-built open plan environment within
leasehold offices at a nearby Bolton development.  Already we are seeing
improved efficiencies resulting from these enhanced working conditions.



The A.G.BARR p.l.c. 1995 Savings Related Share Option Scheme reached the end of
its ten year life in March this year.  Under the scheme we have made four offers
to employees.  Almost half of our employees currently participate in one or more
of the offers. The scheme has therefore proved to be a very successful vehicle
through which to encourage employees to increase their shareholdings in the
company and thereby align their ambitions more closely with external
shareholders.  Your directors are keen to continue this incentive and you will
therefore see the proposal for a renewal of the scheme for a further ten years
as part of the agenda for this year's Annual General Meeting.



Corporate governance



This Annual Report & Accounts contains the appropriate additional information
required in terms of the 2003 revised Combined Code on Corporate Governance.



Subsequent to the end of the financial year we have standardised the contracts
of all executive directors by introducing a basic one year's notice on
termination by the company.  Full details of the changes are contained in the
directors' remuneration report.



Relative to the proposal at the forthcoming Annual General Meeting to re-elect
James Espey for a third term of three years as a non-executive director, I am
pleased to confirm that his contribution to board discussions and overall
commitment to the company's affairs continue to be highly valued by both myself
and other board members.



Prospects



Cash flow was particularly strong last year and our balance sheet shows £35
million cash at bank at January 2005. Next year will however see the start of a
period of higher investment as we develop facilities which will both deliver
increased efficiencies and provide structures within which to achieve future
growth.



Despite the UK volume decline caused by last year's poor summer weather, it is
still anticipated that the soft drinks industry will show long-term growth -
albeit across a wider portfolio of products than hitherto.  We will require to
continue to adjust, as appropriate, our own range to remain competitive but I
believe that we will have the brands, the facilities and the people to enable us
to continue as a successful independent company.



Robin Barr, Chairman


CHIEF EXECUTIVE'S STATEMENT



Business performance figures for the year to January 2005, as highlighted by the
chairman, reflect the continuing strong overall progress of the company. This
success is the result of a simple and clear strategy, focusing on the basics,
coupled to strong execution across the business as a whole. The sales growth and
profit improvement were achieved in a difficult market. They reflect the
implementation of the strategic agenda set in previous years for evolutionary
change in the areas of core brand, market and portfolio development and
innovation, route to market, partnerships and improvement of operational
efficiency. These results provide the company with a solid platform for future
growth and success.



Opportunities for growing our business remain plentiful. Incremental growth,
including the development of a more diverse range of products, extensions of
existing brands and investment in the efficiency of our operations, will improve
our ability to increase sales and future profits. At the same time as delivering
this organic growth strategy we remain alive to the opportunity for acquisition
of the right brands and businesses, but only when they offer true long-term
value and enhance the prospects of our company. The continued strong generation
of cash and management's control of costs ensure that we have the financial
ability to act decisively when the right openings occur to grow our business
through either investment or acquisition.



Principal aim



We have successfully maintained our principal aim of building long-term value
rather than going for short-term gain. The investment in our key brands has not
only delivered a 3% increase in comparable sales revenue over the last year, but
has also put us on a strong footing for future growth. Lacklustre consumer
demand in the soft drinks category across the year created competitive trading
conditions, leading many in the industry to focus increasingly on price
promotion as their main source of sales growth. During this period we have
improved our promotional efficiency while maintaining competitive pricing. We
have also considerably increased our spending on marketing across our core
brands, in particular the exciting Irn-Bru Phenomenal campaign. Our sales
performance in the year saw uniform growth across all channels, further
highlighting the strength in and the diversity of our various customer sectors
and routes to market. I am pleased to report that our core brands have gained
market share over the course of the year, particularly in Scotland, reflecting
our decision to invest disproportionately in the Scottish market.  Irn-Bru has
delivered strong growth in Scotland with market share by value as recorded by
Nielsen Scantrak showing Irn-Bru for the first time with a market share in
excess of 20% of total carbonates in Scotland.  This further strengthens our
number position in our key market.



Ongoing and fundamental changes in consumer attitudes and preferences relating
to health and well-being have increased the demand for diet drinks, water and
health-based products. Having recognised these changes at an early stage, we
have been able to offer people what they want, namely choice. Our product
portfolio and the strength of our brands has to date left us undamaged by the
shifts in consumer requirements, but we are acutely aware of the need to broaden
our portfolio further to ensure future growth. We realise this can only be
achieved by meeting the changing demands of consumers.



Value over volume



This was a tough year in soft drinks.  In the year to January 2005 the UK
carbonates market, as measured by Nielsen, experienced in total a 7% volume
decline and a 5% value decline with our most relevant sector, other flavoured
carbonates, performing even more poorly at a 10% year on year decline in both
volume and value. This performance was due largely to the poor summer weather
and resulted in increased competition, mostly in the form of aggressive price
promotion. However, we have adhered to our objective of continuing to drive
value, even at the expense of volume. Our margins have continued to improve as a
consequence of the combination of this strategy and our strong management of
operating costs across the whole business.



The relentless consolidation of the retail market has proved as challenging as
we had expected. We have endeavoured to ensure that all changes, no matter how
significant, had a minimal effect on our overall business. Once again our
customer mix and diverse routes to market helped to safeguard our business
against the potentially significant negative short-term effects of retailer
consolidation or under-performance. Furthermore, our brands are proving strong
enough to compete in this consolidated market and the quality of our service
offering is acknowledged as second to none throughout our customer base.



Cost inflation has been severe in recent months, particularly in oil-based
commodities and utilities. While last year we actively managed much of the risk
associated with this issue, the prospects for the new financial year remain
challenging.  Sustained increases of many of our input costs will have a
negative cost impact on our operations. Therefore, to ensure our margins are
stabilised, we need to improve cost control measures and efficiencies, alongside
achieving price inflation in the category as a whole. Plans to deliver this
margin stabilisation are well progressed.


Investment planning



While we have sought to maximise the use of all our assets, our capital
expenditure has remained modest. However, as the chairman has commented in his
statement, we are now in a position to launch a significant asset development
programme.



Plans have been drawn up to invest in our sales, distribution and storage
activities in Scotland. These plans include the centralisation of our
warehousing from multiple off-site storage facilities to a single consolidated
manufacturing and storage facility at our existing Cumbernauld factory site.
Subsequently we will also improve our sales execution and efficiency with the
centralisation of our direct-to-store sales, distribution and administration
teams from the existing five locations across Scotland to the new facility at
Cumbernauld. Our Head Office, currently based at Parkhead, will also be
relocated to new offices on the Cumbernauld site. These proposals will, of
course, be subject to full consultation with all affected employees and, at the
time of writing, are subject to receipt of planning approvals.



The capital expenditure programme is expected to be of the order of £17 million
over a period of 3 years. Receipts from property sales will offset some of this
capital spend. Once the investment is completed, efficiency improvements are
expected to be of the order of £2.5 million annually.



This exciting investment programme in our core market is the outcome of rigorous
planning and would herald a 2-3 year period of development which will provide
the company with a modern, flexible and efficient selling, administration and
supply chain operation, capable of sustained growth.



Core brands



Last year we set out to improve the already strong market position of Irn-Bru,
focusing much of our efforts on our key market in Scotland. Having developed the
new brand positioning and associated campaigns, we significantly increased our
media spend on Irn-Bru. The Phenomenal campaign has delivered well in Scotland,
improving all our key brand indicators of penetration, frequency and loyalty and
with our planned activities in 2005-06 we look forward to making real progress
in the significantly bigger but more challenging UK market outside Scotland.



Diet Irn-Bru has performed strongly over the last year showing value growth of
5%. This year the brand will receive a full makeover, including exciting new
packaging and new consumer communication activity.  Diet Irn-Bru has now for the
first time been entirely separated from Irn-Bru in terms of marketing execution.
New dedicated Diet Irn-Bru TV, radio and outdoor advertising campaigns are just
some of the activities designed to improve the market potential and performance
of this key brand.



Following the relaunch of Tizer and the subsequent introduction of the Tizer
Colourz range we realised significant revenue improvements in the course of last
year. Not only has the Colourz range introduced some sparkle into a somewhat
uninspired market but it has also reinvigorated Tizer, a traditional brand,
giving it a more contemporary personality and appeal across the whole UK market.



The Orangina brand changed owners in the UK during the course of 2004. Cadbury
Schweppes' purchase of Orangina in October 2004 now provides this brand with a
brighter future outlook. Orangina's volume and value performance during the
course of 2004/05 suffered a significant decrease as the promotional and
marketing plans were altered considerably prior to the change in ownership. We
are now working with Cadbury Schweppes to determine the long-term positioning of
the brand and we foresee the potential development of a long term partnership
with Cadbury Schweppes.



Findlays Natural Mineral Water has shown itself capable of occupying a premium
position at the higher end of the water market while generating good growth
regardless of poor weather and strong competitor activity. Meanwhile the home
office delivery (HOD) business in water coolers continues to make steady
progress despite aggressive competition from multinational competitors. The HOD
market, whilst price sensitive, is largely a service-driven market and we have
made real progress in acquiring new business based on our service offering.
Following exploratory drilling we have established a further potential supply of
significant quantities of natural mineral water for our Findlays business and
are now considering our long-term investment options in this sector.



Lipton Ice Tea continued to perform well however volumes were impacted as a
consequence of the poor weather. Having worked closely with Unilever during the
early years of introducing Lipton Ice Tea into the UK market, we are now moving
forward to a new, simpler relationship with Unilever, more suited to the product
life cycle as it moves from the successful introduction phase into early
maturity.


Our regional brands, which include KA, Red Kola, D n B and the Barr flavours
range, continue to be among the most popular in their specific home territories
- sometimes even outperforming global brands. These quality products match the
tastes and preferences of regional consumers and have a strong future role to
play in our business.



The Barr returnable glass bottle range, which consists of typically impulse
purchases and is therefore heavily dependent on the weather, started the year
well but suffered as impulse consumption fell because of the poor summer
weather. However, returnable glass is an environmentally sound and high quality
packaging format which consumers continue to enjoy, and this range remains an
integral part of our business.  We will persist in our aim to stabilise the
market for returnable glass bottles by improving marketing and sales execution
with our key retail customers.



Portfolio development



The incremental development of our core brands has been complemented by
development of new products such as the Simply range. These single serve
products have been created specifically for the educational market and are
available in a wide variety of different flavours and formats, all developed to
meet the health requirements of this sector and to provide school children with
exciting and tasty drinks. The Simply range proved extremely successful in a
relatively short space of time, growing sales revenue by over 50%, and we
believe that it has the potential of becoming a much larger part of our
portfolio. During the course of the coming year we plan to launch further
products in this range, add to our portfolio with more products in the water
market sector and establish a presence in the areas of sports and energy drinks.



Through product innovation A.G. Barr will also make further ground in the area
of adult soft drinks or the 'Good for You' sector. Over the course of 2005 we
have planned several new product launches and we will invest in developing more
brands for this growing market.



Route to market



As noted earlier, our route to market diversity helped to insulate us from the
short-term impact of consolidation in the retail market. With our business
spread across all of the major multiple retailers and with strong trading
relationships in the independent and wholesale trade, coupled with our extensive
direct sales coverage in the impulse channel, we are achieving our planned
balanced growth profile in each of these different trade channels.



Having reviewed our execution support for the different routes to market and
channels, we have reorganised much of our commercial operation over the last
twelve months. Commercial resources have been upgraded and the focus on specific
channels has been improved. For example, we have developed a specialist food
service and catering sales team to speed up our penetration of this important
and growing market.



We continue to serve some 32,000 customers every week with our direct delivery
service. We are constantly evaluating the service and the overall efficiency of
the direct delivery operation. Over the course of the last year we have made
further investments in new technology, improved in-store execution and increased
people capabilities. Our capability in providing in-full, on-time delivery to
all customers has been improved over the course of the last year, aided
primarily by better forecasting, which has allowed us to ensure that all our
customers receive the best possible service and that our products are always in
stock and thereby available to consumers.



Partnerships



First and foremost we work in partnership with all our customers. Throughout our
business we also aim at steadily improving our working relationships with all
our other key partners, whether they are material or services suppliers,
franchise or execution partners, or marketing and sales partners. All these
relationships have improved, but we firmly believe we can better our business by
continuing to focus on this objective.

Our partnership with the Pepsi Bottling Group in Russia has made firm progress
with the Irn-Bru brand receiving further investment over the course of the last
twelve months. Performance in the Russian market sees Irn-Bru continuing to
maintain a market share of around 1%.



On a more disappointing note, the progress of Irn-Bru in other new markets has
been frustratingly slow. However, there have been some positive market test
results in a number of Eastern European countries and we hope that the Irn-Bru
presence will be extended during the course of the current year.


Operational and supply chain efficiency



We have again improved our operational efficiency.  Every employee is engaged in
well established processes of continuous improvement which we intend to
reinforce with an increasing emphasis on asset and technology driven change.



Over the past year we have continued to invest in our supply chain and further
opportunities exist to upgrade and improve in this area to drive efficiency
across our total business. The company is now beginning to reap the rewards of
its investment in technology, in particular in terms of better operational
planning, forecasting and increased flexibility. However, we are only scratching
the surface of what technology can do for our company and it will play a major
role in our future plans.



The recent rise in energy costs has given another impetus to making better use
of energy - something we do as a matter of course from an environmental
standpoint. We have made some important steps forward in this area over the past
twelve months, increasing both our spending and our efforts to meet our
environmental objectives and ensure we remain fully compliant with the
constantly changing legislation in this area.



Our people



Last but not least, the people of A.G. Barr are what makes our company so
successful. They are experienced, well-motivated and highly knowledgeable
individuals. Many have been with the company for more than 15 years. As the
chairman has stated, we are actively working to encourage increased share
ownership among all employees with the development of our Employee Share
Schemes. Across the business we are also strengthening the link between employee
performance and reward, as we roll out new performance management systems over
the course of the current year. In addition, we aim to assist our people in
other aspects of their work and create the best possible work-life balance, for
example through the introduction of a child care voucher scheme last year.



So that our people reach their full potential, we are improving their skills and
knowledge through training. More than ever before, the company offers NVQ
learning opportunities in almost all areas of our business, from the production
line and administration to marketing and sales. Last year we saw an increase in
uptake of practical and professional qualification courses across the business.
Ultimately business success depends on people. With our blend of experience,
skills and training, A.G. Barr is in a strong position to continue on the path
of stable growth driven by our people.



Roger White,  Chief Executive






A.G.BARR p.l.c.

Consolidated profit and loss account

for the year ended 29 January, 2005



The following are the unaudited results for the year to 29 January, 2005.  The
Board recommends the payment of a final dividend of 19.50p per share which if
approved by the shareholders will be posted on 08 June, 2005. The total
distribution proposed for the year amounts to 28.75p per share (2004 - 25.50p)


                                                                                Year ended          Year ended
                                                                                  29.01.05            31.01.04
                                                                                      £000                £000
Turnover                                                                           127,222             125,235

Profit on ordinary activities before interest                                       14,323              13,198

Interest received                                                                    1,285                 599
Profit on ordinary activities before tax                                            15,608              13,797

Tax on profit on ordinary activities                                                 4,600               4,085
Profit on ordinary activities after tax                                             11,008               9,712




Earnings per share on issued share capital                                         56.56 p             49.90 p
Basic earnings per share                                                           58.89 p             51.98 p
Fully diluted earnings per share                                                   55.65 p             49.33 p
Dividend per share                                                                 28.75 p             25.50 p
Dividend (£000)                                                                    5,595               4,963



            Record date:                       06 May, 2005
            Ex-div date:                       04 May, 2005




The financial information set out in this announcement does not constitute
statutory accounts.  The financial information for the year ended 31 January,
2004 is derived from the statutory accounts for that year which have been
delivered to the Registrar of Companies.  The auditors have reported on those
accounts and their report was unqualified and did not contain a statement under
S237 Companies Act 1985.




Balance Sheets
as at 29 January, 2005
                                                                      GROUP                       COMPANY
                                                                          Restated                      Restated
                                                               2005           2004          2005            2004
                                                               £000           £000          £000            £000
Fixed assets
Tangible assets                                              37,264         39,545        36,743          39,018
Investment in subsidiaries                                        -              -           205             205
                                                             37,264         39,545        36,948          39,223


Current assets
Stocks                                                        9,172         10,418         9,069          10,285
Debtors                                                      20,991         20,126        20,405          19,720
Cash at bank                                                 34,958         24,937        34,796          24,824
                                                             65,121         55,481        64,270          54,829

Creditors: Due within one year                               29,177         27,225        29,361          27,522
Net current assets                                           35,944         28,256        34,909          27,307

Total assets less current liabilities                        73,208         67,801        71,857          66,530

Provisions for liabilities and charges
Deferred credit                                                 619            628           619             628
Deferred taxation                                             4,819          4,757         4,804           4,745
                                                              5,438          5,385         5,423           5,373

                                                             67,770         62,416        66,434          61,157
Capital and reserves

Called up share capital                                       4,865          4,865         4,865           4,865
Share premium account                                           905            905           905             905
Own shares held                                             (2,809)        (2,750)       (2,809)         (2,750)
Profit and loss account                                      64,809         59,396        63,473          58,137
                                                             67,770         62,416        66,434          61,157




The 2004 figures have been restated to reflect the adoption this year of UITF38,
Accounting for ESOP trusts.  This has not affected profit.


Cash Flow Statement

For the year ended 29 January, 2005
                                                               2005                             2004
                                                        £000             £000            £000             £000
Net cash inflow from operating activities                              21,038                           20,417

Returns on investments and servicing of finance
Interest received                                      1,288                              603
Interest paid                                            (3)                              (4)
Net cash inflow from returns on investments and
servicing of finance                                                    1,285                              599

Tax
Corporation tax paid                                                  (4,433)                          (3,873)

Capital expenditure and financial investment
Purchase of tangible fixed assets                    (2,959)                          (3,306)
Sale of tangible fixed assets                            215                              274
                                                                      (2,744)                          (3,032)
                                                                       15,146                           14,111

Dividends paid                                                        (5,108)                          (4,720)
Increase in cash                                                       10,038                            9,391






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