A.G. Barr combines resilient brands, premium M&A and margin-enhancing insourcing, with a discounted valuation supporting an asymmetric five-year upside case.
Overview
A.G. Barr is a diversified UK beverage brand owner whose 88%-of-revenue soft-drinks division is anchored by IRN-BRU, Rubicon and Boost, complemented by FUNKIN cocktail solutions and MOMA oat products. Its competitive position rests on IRN-BRU’s distinctive Scottish heritage, broad grocery, convenience, wholesale and on-trade distribution, and a demonstrated ability to innovate around sugar reduction, hydration and functional products. FY25/26 revenue increased 4.0% to £437.30m, adjusted operating margin rose 120 basis points to 14.80%, adjusted PBT grew 12.5% to £65.80m and adjusted EPS increased 11.2% to £0.4424. **The central catalyst is the conversion of £40.00m of peak FY26/27 capex into lower co-packing costs and higher margins.** The £66.0m acquisition program adds premium and wellness growth but creates near-term integration and cash-flow concerns. At approximately 13.1x–15.4x P/E, the shares trade below the 16.7x historical median and 18.5x UK peer average. **The report’s five-year probability-weighted target is £9.39 versus a £6.50 starting price**, supported by a 55% base-case probability and progressive dividends.