Investec upgrades AG Barr to 'add', raises target price and full-year expectations

24th Mar 2015 10:30

Analysts at Investec Securities upgraded their full year forecast for soft drink producer AG Barr, citing strong performances and acquisitions.On Tuesday, the FTSE 250 group said that its profit on ordinary activities, before tax and exceptional items, increased by 10% to £41.9m, as all the group's core brands - RN-BRU, Barr, Rubicon and Strathmore - outperformed the market.Total turnover rose 2.7% to £260.9m, while stripping out the impact of the loss of the Orangina, the metric grew 3.3%.While group chief executive Roger White warned that market conditions were set to remain challenging, Investec said the company had plans in place to deliver organic growth in 2016, adding the Funkin acquisition will provide an additional boost.The brokerage said organic sales and margins should continue to improve next year, helped by "the benign cost environment and improved manufacturing efficiencies".Investec said it expected profit before tax to be £44.9m in 2015, with earnings per share amounting to 30.6p. The brokerage raised its target price to 714p and upgraded its rating on the stock to 'add'.