Irn-Bru manufacturer AG Barr has confirmed the sale of its Strathmore water brand, and has acquired a majority stake in The Turmeric Co for £15m.
The company said it was looking to sell Strathmore in April, just one month after announcing it was scrapping the brand completely.
The deal is now complete, with the brand and its associated Forfar production site sold to Welsh water bottler Tŷ Nant for an undisclosed sum.
AG Barr said the disposal would negatively impact revenue in the short-term, but not profit.
It comes as part of a wider restructure designed to boost profits and simplify the company’s structure.
The drinks maker also confirmed it had acquired a majority stake in The Turmeric Co for an initial £15m.
The Turmeric Co was launched by former footballer Thomas ‘Hal’ Robson-Kanu in 2018, initially selling turmeric-based health shots. It has since expanded by launching a raw electrolyte drink and helping to boost Sainsbury’s functional drinks offering.
Robson-Kanu will continue to run the company and retains a significant stake. Its holding company, Innate-Essence, will be run independently from the AG Barr group, The Grocer understands.
AG Barr said the deal was consistent with its strategy of acquisitions and innovation in high growth, health-focused, functional beverage categories.
The deal was funded from the company’s net cash position and was not expected to have a significant impact on revenue or profit in the current financial year.
In a trading update, AG Barr said revenue rose 3% in the first half of the year as its Boost energy drink led the way.
Total revenue hit £228m as Boost delivered “strong double-digit growth” while Irn-Bru and Rubicon were flat in H1 with a stronger performance in Q2.
Funkin saw growth in the off-trade, which partially mitigated its challenges in stores, the company said.
Operating margins grew to 15% from 13% the year before, driven by improved manufacturing efficiencies and disciplined cost management.
CEO Euan Sutherland said “trading improved during H1 and we enter H2 with strong momentum and continued progress on margin improvement as our strategic initiatives continue to deliver.
“Our full-year guidance remains unchanged and in line with market expectations.”
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