"AG BARR (LSE:BAG)LSE:BAG:AG Barr last featured in February where we proposed them as an ISA candidate. We've tried to avoid discussing price movements since, but their 'The Snowman' Xmas TV advert (in Scotland only?) makes them hard to ignore - ..."
" A G BARR (LSE:BAG) This lot last featured in February (link here) where we proposed them as an ISA candidate. We've tried avoid discussing price movements since but their 'The Snowman' Xmas TV advert (in Scotland only?) makes them hard to ..."
"AG Barr (LSE:BAG)We're winding up our ISA candidates with LSE:BAG:AG Barr, makers of Irn Bru and probably some other products too. There's something fairly interesting going on with this lot from a trend perspective and we've drawn a circle ..."
" A G BARR (LSE:BAG) We're winding up our ISA candidates with A G BARR, makers of Irn Bru and probably some other products too. There's something fairly interesting going on with this lot from a trend perspective and we've drawn a circle around ..."
"Aberdeen Asset ManagementThis continues our ISA candidate analysis, but there's something perhaps worth remembering with Scottish focussed companies.While south of the border, the media (sometimes) pretends to be sane, if north of the border the ..."
one extract which seems to ring true:-
"""The broker also reckons despite strong performances in international and Funkin sales, the businesses remain too small to contribute significantly to group growth.""
It's going to be hard to compensate for the steady decline in carbonated drinks.
The concerns I have, apart from I hate Irn Bru, are all highlighted in the article, namely :-
1. It's almost entirely selling into the UK and it's a saturated market.
2. Carbonates make up 73% of the turnover and I think this market is starting to decline.
3. The Ice Cream bus is too small to worry about and I doubt Unilever is shaking in it's boots
4. Rockstar -- well I can't see it making that much of an impact against the hundreds of different energy drink suppliers all chasing after Redbull.
5. Funkin looks interesting, but they had to pay a huge sum to get into this market and I know not very much about cocktail mixers which seems a tad nichy to moi.
6. As mentioned earlier re Iron Brew -- I guess the bagpipe brigade drink this by the gallon, but it tastes disgusting and like Haggis I don't see it penetrating too many parts of the world, let alone the UK.
The share price has fallen quite a bit, but still trades close to a P/E of 18 so for me I don't see much of a bargain, given that it's revenue, despite hefty acquisition, is not much different than it was back in 2014 -- it ain't growing that much. earnings growth to Jan16 was 0%, and is projected to be negative to Jan2017.
350 and I might be interested, but I suspect it won't fall that far -- but you never know with the stock market.
All in all, not a bad company, but not high on my list right now.
gamesinvestor, noticed your mention of Barr AG on RIO board. Thought you and other investors / potential investors in BAG might be interested in this article by well respected analyst Phil Oakley:
Another example where the headline writer has not read the article properly. With profits and margins up, the headline should say that the numbers act as a sweetener which is the opposite to what the headline actually says.
" With increasing retail competition, general price deflation and poor summer weather squeezing the market already, Scotland's LSE:BAG:AG Barr has had its fair share of headwinds over the past 12 months. Now, the soft drinks business behind brands ..."
The problem for high sugar drinks manufacturers is not in my opinion re-formulating their drinks to be sugar free;after all we have no shortage of diet pepsi,diet coke,sugar free Vimto etc drinks on the market.
The problem is getting customers to buy the sugar free product in the same quantities as they bought the high sugar original.The risk is that if they feel that with tax the original high sugar drink is too expensive;they will simply not buy the sugar free substitute as they don't like it & spend their money elsewhere.
The sugar tax seems very topical and very emotional right now, but is this more or less important than the fundamentals of AG Barr and it's current share price?
It's shares have been in decline since the start of 2015 (some 15 months now).
I'm not an investor here, but became interested because of the news items and the budget.
Looking at it with no axe to grind and with no vested interest, I do think the share price "potentially" has a long way to fall yet.
It's growth rate is in low single digits, yet it's P/E is up at 16-17. It also still, despite the last 15 months drop, trades over 3 times it's net assets. OK the branding is all important here, but even so that's still a pretty generous valuation.
Games -- Currently opting for Treatt which offers natural flavourings and fragrances.End of promotion!!
In common with other soft drink companies, Barr responded to concerns over the sugar in its drinks some time ago by introducing sugar free versions. If you check the supermarket shelves you will find that most of the sweet fizzy drinks on the shelves are sugar free or low sugar. Bearing in mind that these drinks are also fat free, you can argue that these drinks are quite healthy. It is the chocolate bars such as Mars which should be causing concern as these have high levels of both sugar and fat and are widely consumed by children. I do not think that Osborne understands the problem.
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