Barr (A.G.) Regulatory News (BAG)

A.G. BARR p.l.c.

FINAL RESULTS for the year ended 26 January 2013

A.G. BARR p.l.c. ("A.G. BARR"), the branded soft drinks group, announces its final results for the 12 months to 26 January 2013.

Key Points

·; Total turnover increased by 6.6% to £237.6m (2012: £222.9m - restated)

·; Profit on ordinary activities before tax and exceptional items increased by 4.3% to £35.0m (2012: £33.6m)

·; Underlying earnings per share increased by 10.9%*

·; Core brands IRN-BRU, Barr, Rubicon and KA all grew in the period; in addition Rockstar performed particularly strongly

·; Continued robust financial position

o net assets increasing to £130.6m

o ROCE over 20%

o strong underlying free cash flow of £22.0m

·; New production and warehouse facility at Crossley, Milton Keynes progressing to plan and expected to be operational in the summer of 2013

·; Second interim dividend paid, in lieu of the final dividend, of 7.4p per share (2012: 6.88p) giving a total dividend for the year of 10.02p per share, an increase of 7.6% over the prior year

·; Following referral of the proposed merger with Britvic plc to the Competition Commission, the companies are working with the Competition Commission during its investigation with a view to seeking clearance of the possible merger

Roger White, Chief Executive, commented:

"A.G. BARR has delivered a robust financial performance and continued to grow well ahead of the U.K. soft drinks market in the period. This once more proves the resilience of our operating model and the potential of our brands. Across the year, market conditions have remained difficult, specifically impacted by poor summer weather and further cost of goods inflation.

Despite the added distraction of the merger discussions with Britvic plc, the business has remained focused and delivered all of the 'business as usual' operating plans across the year.

We are now entering a period of significant workload associated with the Competition Commission enquiry, however the A.G. BARR board considers there to be a compelling rationale for clearance and that the benefits of the transaction remain significant for both shareholder groups.

While we await the Competition Commission's findings, we will continue to build and develop our plans to ensure the long term success of A.G. BARR as a standalone business. Our new operating capacity at Milton Keynes will come on-stream during the summer of 2013 and our investment in our brands and sales execution activities will continue unabated. We remain confident in our future prospects both as a standalone business and combined with Britvic plc."

21 March 2013

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*Underlying earnings per share exclude the effect of exceptional items after tax on the basic earnings per share calculation. In the year to 26 January 2013 these exceptional items after tax represented a charge of £3,058,000 (2012: a credit of £2,526,000).

The term "underlying" is not defined in IFRS and therefore may not be comparable with similarly titled measures reported by other companies. Underlying measures are not intended as a substitute for, or a superior measure to, IFRS measures.

Reconciliations of underlying measures to IFRS measures for earnings per share in respect of each period are provided in the earnings per share note.

Chairman's Statement

I am pleased to report further excellent results in what has been a busy and challenging year for the business. Over the last financial year, the business has continued to grow revenue, volume and profit despite a difficult marketplace and background of rising input costs. Despite these challenges, sales revenue continued the long term trend of outperforming the soft drinks market with an increase of 6.6% compared to 2.9% in the market.

In summary, total sales were £237.6m (2012 - restated: £222.9m) and profit before tax and exceptional items increased by 4.3%. Margins were slightly reduced due to higher cost of goods which were partially mitigated by our cost control and pricing actions. Underlying earnings per share increased by 10.9% to 24.7p.

In September 2012, we announced the potential merger of A.G. BARR p.l.c. with Britvic plc and in November we confirmed our commitment to the merger, subject to shareholder and regulatory approval. The merger has the potential to create a significant European soft drinks business, with a strong portfolio of complementary, company-owned and franchise brands, with long term positive growth potential and considerable short term combination synergies. In January 2013, shareholders in both companies voted overwhelmingly in support of the merger. However, the Office of Fair Trading subsequently referred the proposed merger to the Competition Commission for further review. Consequently, the condition to the merger relating to U.K. merger control was not satisfied, and in accordance with its terms, the offer lapsed. However, the boards of both A.G. BARR p.l.c. and Britvic plc continue to believe that there are no grounds for a significant lessening of competition as a result of the merger and are co-operating with the Competition Commission to seek clearance of the proposed merger. If clearance is received from the Competition Commission, on terms satisfactory to A.G. BARR p.l.c. and Britvic plc, the boards of both companies will each reconsider the terms of a possible merger.

The significance of the potential merger required substantial input throughout the various negotiations and in the related submissions to the Office of Fair Trading. However our priority was not to lose focus on the business elements within our control, building brand equity, driving sales fundamentals, seeking efficiency gains and controlling costs, at the same time as exploring further additional opportunities to create long term value for shareholders.

Whilst the burden of further regulatory clearance is significant, the potential long term benefits of the merger to shareholders remain attractive. We will continue to drive forward the A.G. BARR business whilst, simultaneously, working to achieve the required clearance.

Dividend

The board recommended a second interim dividend of 7.4p per share, which was paid to shareholders on 18 January 2013, in lieu of the final dividend, to give a total dividend for the year of 10.02p per share, a full year increase of 7.6% on the prior year.

Future Prospects

As a standalone business, we remain committed to our strategy of building brands for the long term. In addition, we will continue to ensure that we have an efficient asset base capable of supporting the Group's future growth ambitions. We have made further headway in improving operating performance across our asset base and our investment in new operational capacity at the Crossley site in Milton Keynes is making excellent progress. We anticipate commercial production will commence at this new facility in the summer of 2013.

The U.K. economic outlook remains challenging. However, we remain cautiously optimistic and believe our future prospects, either as part of a significantly larger merged business or on a standalone basis, are excellent.

Underpinning all of our activities are committed and capable teams across the business, all of whom have maintained focus during challenging and uncertain times to deliver an excellent financial performance. On behalf of the board, I would like to take this opportunity to thank all of our employees for their hard work and ongoing commitment.

Overall, the business is well positioned to deliver long term value for our shareholders. Our balance sheet and finances are strong and we will continue to follow our proven strategy of delivering growth in our brands through the implementation of our 2013/14 operating plans.

Ronald G. Hanna

CHAIRMAN

Business Review

In the 52 weeks to 26 January 2013, A.G. BARR has grown revenue and volume well ahead of the U.K. soft drinks market. The business performance was particularly pleasing in the second half of the financial year, with double digit revenue growth leading to full year sales of £237.6m, an increase of 6.6% on the restated prior year figure. Reported revenue has been restated to include certain invoiced costs associated with promotional activities as a deduction from sales on a basis consistent with the accounts preparation adopted by our peer group and in line with the prospectus issued in December of last year. The impact of this presentation is to reduce reported sales and gross margins whilst increasing the reported operating margin percentage. There is no effect on previously reported profit before tax position.

The general economic conditions in our core market remained difficult during 2012. Consumer behaviour maintained its trend of favouring familiar brands and value for money over new, premium priced products. Retailers in all channels fought hard for consumers' cash, leveraging price and, increasingly, deep cut promotions to build customer traffic in their stores.

Raw material cost inflation and volatility continued to be a feature in 2012 which, alongside the increased cost of promotion, impacted margins. Our various actions to control costs helped to mitigate much of this impact on operating margins.

Underlying pre-tax profits increased by 4.3% to £35.0m reflecting the improving trend of the second half business performance. Exceptional items amounting to £3.2m have been recognised which relate primarily to professional and legal fees in connection with the proposed all-share merger with Britvic plc.

We grew volume and value, ahead of the market, in both the carbonates and still segments. The overall soft drinks market experienced carbonates growth of 3.8% in value but was in marginal decline in volume terms, whilst the still segment grew value by 1.9% with volume declining 1.0%. During the 52 weeks to 26 January 2013, A.G. BARR grew carbonates revenue by 7.1% and volume by 6.0%. Stills also performed well relative to the market, growing revenue by 4.3% and volume 4.1%. Our performance was driven by consistent growth across the portfolio, with carbonates particularly benefiting from the double digit growth in the Barr range and the significant growth in Rockstar. Stills continue to grow steadily as we further develop our exotic brands Rubicon and KA.

The brand growth we have delivered is against a backdrop of extremely poor weather across much of the year, as well as a number of major national events, such as the 2012 London Olympics, and a period of intense competitor activity both promotionally and around the key events across the year.

During the year, the business has managed the increased workload, inevitable distraction and general uncertainty created by the potential merger of A.G. BARR p.l.c. and Britvic plc. We have worked hard to maintain our focus on 'business as usual' during the period and the performance of the second half reflects the efforts of all teams across the entire business.

In addition to delivering growth ahead of the market, a solid financial outcome and a strong operational performance, we have also completed the planning and much of the build programme associated with our new production and storage facility at Crossley Road, Milton Keynes. Following fit out we expect the site to be in commercial production in the summer of 2013. Initially the site will produce can volume and provide storage for several thousand pallets of finished goods inventory. The Milton Keynes site is an important asset for the future development of the business.

The financial position of the Group remains extremely healthy. During the year we have increased the level of net debt to £25.6m but this reflects early payment of the final dividend, fees related to the potential merger with Britvic plc and capital spend related to the new Milton Keynes facility, elements of which will convert to lease finance.

In January the board paid a second interim dividend of 7.4p per share, in lieu of the final dividend, which represents a 7.6% increase in the total dividend for the 2012 financial year. This reflects the continued financial strength of the business and the confidence of the board in its future prospects, either on a standalone basis or as part of an enlarged business.

The Market

The U.K. take home soft drinks category, as measured by Nielsen, was impacted by the adverse weather across much of 2012 and saw volume decline of 0.7%, whilst more positively, value grew by almost 3%. The soft drinks market, in volume terms, was driven by the continued strong performance of the energy category, which grew volume by over 9%. The overall market growth was constrained by core categories such as cola, which was in marginal volume decline, and stills in total, which was down 1% in volume. The stills market performance was impacted by the still sports drinks sub category, which was down 10% over the year but with the decline accelerating in the final quarter which was down over 17% in volume terms.

Carbonates continued to see good growth in value, increasing by 3.8%, driven once more by strong energy growth. Stills grew value by 1.9%, with all sub categories in growth except sports, which experienced 6.8% value decline in the period driven by the previously mentioned volume declines. Consumers' participation in the carbonates category has remained at a high level, supported by price-driven promotions across the main brands. However, the most polarising market movements in the period have been the growth in the value of energy drinks and the decline in still sports drinks, both sub categories reflecting changing consumer preferences as well as individual brand promotional programmes which have varied on a year on year basis.

Despite the impact on the market of very poor weather, soft drinks remains one of the key value growth areas of the grocery market.

Strategy

Our strategy, designed to deliver long term sustainable growth in value, has not changed and continues to focus on:

● Core brands and markets;

● Brand portfolio;

● Route to market;

● Partnerships;

● Efficient operations;

● People development; and

● Sustainability and responsibility.

The various well documented challenges in the market across the past 12 months have further confirmed that our business model, as a brand building, asset backed business, operating across multiple channels, gives us a strong market position allowing us to successfully navigate difficult market conditions and as we continue to drive significant growth. We believe that flexibility, focus on efficiency together with clear consumer and customer understanding are crucial to our continued success.

Core Brands, Markets and Innovation

Over the course of the last 12 months our core Group brands, together with our franchise brand Rockstar, delivered total growth of 8.6%. This performance, which is well ahead of the market, reflects the continued opportunities to develop availability, distribution and innovation across these key brands and to bring in increasing numbers of new consumers to our core brand offering.

Our geographical growth figures support the strategy of underpinning our Scottish base, which grew by 4%, and investing in the rest of the U.K., which grew by 12%, reflecting both the significant future growth opportunities and the relatively modest share of this geography currently enjoyed by our brands.

IRN-BRU:

Within our strong overall carbonates performance, IRN-BRU sales grew by 1.4%, with a strong second half growth of almost 5%. This is a particularly pleasing result given the increase in competitor promotional activity witnessed across the year in the multiple grocer channel. IRN-BRU continued to grow in both Scotland and England despite the competition in the key take home channel and difficult weather conditions across the year. We have continued to develop the long term equity position of the brand through great advertising. From a consumer perspective, the IRN-BRU brand has never been in a better position. The campaign achieved the highest ever recorded spontaneous awareness amongst key consumers. The continued use of value added promotional mechanics, this year being "BRU-Island", which offered consumers an opportunity to win a holiday to a sun-drenched tropical paradise, also added to the strong positive brand development activities across the year. This year's on pack promotion, which was featured on TV and heavily in store, specifically helped to deliver the strong second half sales performance of the IRN-BRU brand. IRN-BRU Sugar Free received year round marketing support and in line with our plans continued to grow ahead of regular IRN-BRU. Our strategy for the development of the IRN-BRU brand will continue to focus on long term sustainable growth, further consolidating its important position in Scotland and continuing the long term drive to build the brand's penetration in the rest of the U.K., in particular with consumers in the north of England.

We chose not to repeat the limited edition one off innovation of the prior year in which we sold a significant volume of "Fiery" IRN-BRU. However, it is anticipated that we will launch further exciting brand innovation during the course of 2013 to continue building the IRN-BRU brand across the market.

EXOTICS - Rubicon and KA:

Over the summer of 2012, Rubicon enjoyed the biggest single investment in marketing that the brand has ever received. The launch of the "Love the Exotic" marketing campaign included national TV advertising which highlighted the brand's authentic exotic taste credentials. This was one significant component of a campaign designed to drive awareness of the brand and to move it into mainstream shoppers' repertoires while at the same time rewarding the loyalty of long term consumers. In addition to the marketing activity, the recently launched 500ml PET Rubicon pack offered a new pack format for the brand, targeting 'on the go' consumers. The 'Love the Exotic' campaign was supported by further cricket related consumer and trade activity, all targeted towards underpinning the growth momentum of this key brand.

Within our 'exotics' range, KA delivered a strong second half growth performance of 21.3%, with full year growth of over 7% despite tough comparatives following the highly successful launch of KA into stills in the prior year.

Barr brands:

The strong growth momentum behind the Barr range of traditional carbonates continued across 2012. The brand grew by over 13% across the year, benefiting from both new packaging and a highly relevant value positioning in the market. The packaging redesign, with its bright bold new look, is the first step in a programme that aims to build the market positioning of the brand, specifically focusing on the wide variety of well known popular flavours. The Barr brand grew in popularity outside its core market, growing by 23% in the north of England during 2012, as increased levels of distribution delivered a corresponding uplift in sales. A major campaign for the Barr range commenced in early 2013, including TV advertising, underpinning our conviction that the Barr brand can continue to grow and develop as a key part of consumers' purchase repertoire specifically in Scotland and increasingly in the rest of the U.K.

Innovation 2012:

Innovation continued to play an important role across 2012 in growing the A.G. BARR business. The success of initiatives such as KA stills and Barr flavour extensions continued to drive interest in the brands with consumers, encouraging them to buy into the brands more often and helping grow and develop the brands. The launch of Rubicon into the frozen category in 2012 was an exciting development for the brand. The Rubicon range of ice cream and frozen push ups met our expectations from a brand development perspective achieving sales of over £0.5m despite the challenging market conditions for ice cream as a consequence of the poor summer weather. We will continue to develop Rubicon sales in this new category across 2013, building on the learning and experience of our first year although we do not expect sales in this category to have a material impact on our overall performance in the next 12 months. Innovation across all of our core brands will continue to play a key role in the growth of the business as we develop and build our brands to meet constantly evolving consumer needs.

Route to Market

We operate in a multi channel market place with numerous proven routes to market servicing these channels. We have continued to invest in capability, assets and technology to ensure that we can develop our supply capability to meet the changing market dynamics. The increasing use of technology to improve our service and customer contact has seen us roll out tablet based technology to our field based sales teams across the last 12 months. This technology allows us to improve sales force efficiency and execution, whilst significantly improving our customer contact.

We have a relentless focus on developing and improving our execution capabilities across the market and remain convinced that the key point of difference, across each route to market, is the quality and commitment of our people in building long term profitable customer relationships. The execution performance improvement delivered in the last 12 months has allowed us to achieve the significant growth we have delivered.

Partnerships

Our performance with our key partnership brands in 2012 has been strong, building on long term relationships and excellence in marketplace execution.

The Rockstar brand has almost doubled in the period, benefiting from market growth of 10% and also, more significantly, the very positive take up of the Rockstar innovation programme across the market. In particular, the Rockstar Xdurance product has driven much of the growth in the brand, reflecting the consumer acceptance of a strong mix of brand affinity, product acceptability and exciting pack design. The energy category is a key sub sector for carbonates and the Rockstar brand enjoys a strong following within this category. We have built a solid base business with Rockstar, particularly in the impulse channel, and expect to bring further Rockstar innovation into this growing sub category over the coming year.

The Orangina brand strategy is now well positioned following several years of re-alignment, moving from a volume based strategy to the current successful value based approach which reflects the brands quality niche positioning. Last year, Orangina outperformed the soft drinks market and grew revenue by a solid 6%.

During the year we have focussed on consolidating and simplifying our international sales which have encouragingly grown by 5.6%. The outcome of this process will allow us to develop a stronger core offering to international markets and to successfully accelerate growth in the future.

Efficient Operations

Following a challenging 2011, the past 12 months has seen a very solid operational performance. Product availability and consequent customer service levels significantly improved and operating costs have been well controlled. In tandem with delivering the required operating improvements across the last 12 months we have also made very significant progress with the development of our manufacturing and warehousing capacity at the new Crossley site in Milton Keynes. The building construction commenced on site in July 2012 and the completed site is expected to be handed over by the developer in April 2013. The 265,000 sq ft facility will be fitted out with production equipment over the course of the period from April to July and production of cans is expected to begin in the summer of 2013.

The total investment in the project is c.£44m and the full project is currently running on time and on budget.

This efficient purpose built site will facilitate future growth for A.G. BARR and provide increased efficiency and flexibility into the future. The recruitment and development of the local team is well underway and is making good progress.

People, Sustainability and Responsibility

It has been a challenging year for the whole of the team at A.G. BARR. In the second half, the announcement of the potential merger with Britvic plc and the associated uncertainty and increased workload were additional challenges for the team. Despite all that has come our way across the year, the spirit, tenacity, teamwork and capability of the whole A.G. BARR team has shone through, delivering consistent performance across all areas of the business. It is a huge credit to everyone that we have met our performance expectations and delivered all of our 'business as usual' objectives.

A.G. BARR has a unique culture and across 2012 we have made considerable efforts to understand what makes us successful and to ensure that the approach we take is consistent across the whole business. The drive to improve everything we do will continue as we develop better ways of working, improve systems and processes and better engage and train our people across the business. The development of our risk management capability and reporting is also increasingly important in improving performance throughout the Group.

The safety performance of our business maintains its position at the top of everyone's priorities. Across last year there was a drive to significantly improve reporting of near misses and an improvement to the consequential remedial action plans. Across the year almost 3,000 near miss incidents were reported and acted on.

A.G. BARR entered into a number of government sponsored responsibility deals, perhaps the most significant of which is our commitment to reduce the average calorific content of our drinks portfolio by 5% by 2016, which we expect to do without compromising quality or taste. This is an important step for A.G. BARR and is part of a growing industry wide commitment to demonstrate further responsible actions in the face of challenges from both consumer groups and government.

In October 2012, A.G. BARR confirmed its position as an official supporter and supplier to the Glasgow 2014 Commonwealth Games. This is a key event for Glasgow as a city and A.G. BARR is delighted to be involved as official soft drinks supplier to the Games, supplying a wide range of beverages, including water to the athletes' village during the Games and across all of the Glasgow 2014 venues. The Group has a long history of sports sponsorship and we look forward to working closely with the organising committee to do our part in delivering a great event in 2014.

Summary

A.G. BARR has once again delivered a strong financial performance in challenging markets. The business has continued to focus on delivering the basics well. We have driven strong revenue and volume growth and have continued to build share across the soft drinks market.

Our brands continue to respond well to our long term investment in equity as we improve awareness and loyalty at the same time as we build distribution and availability outside of our core geographies. Innovation has added further depth to our ranges and enticed increasing numbers of consumers to our brands.

We are investing further in assets, adding additional capacity to allow us to successfully grow at the same time as driving efficiency and flexibility. The Group remains in a very strong overall financial position despite the significant investment in brands and assets.

Our approach to Britvic plc during 2012 and the potential merger received overwhelming shareholder support; however the uncertainty as a consequence of the referral to the Competition Commission means that we must continue to build and develop our plans as a successful standalone business at the same time as we rigorously pursue our reference through the Competition Commission.

Given the performance of the business, alongside its proven strategy, business model and people, the board remains confident in the future either on a standalone basis our as part of a merged business.

Roger A. White

CHIEF EXECUTIVE

Financial Review

Overview

During the year ended 26 January 2013, the Group has continued to build upon its strong financial base leveraging its capacity for growth. We have maintained our focus on delivering sales fundamentals in a lean and efficient manner.

Despite very poor summer weather, we have once again secured sales growth across our core brands, extending penetration and distribution. We have continued to invest in the ongoing development of our people and of our asset base.

The macro economic environment has remained challenging, characterised by low growth and continued pressure on household incomes. In 2012, this has been further compounded by historically high commodity costs which have impacted margins.

For a few people within the Group, the focus over the second half of the year was very much on the potential merger with Britvic plc, however for the majority of staff the focus was very much on the delivery of both top line and bottom line performance targets. We are therefore very pleased to report a year of progress, with top line revenue growth, strong cash generation and growth in underlying operating profit.

Eliminating the impact of exceptional items, reported profit before tax increased to £35.0m, an increase on the prior year of 4.3%. This is a very encouraging result given the tough comparative prior year trading position, which saw an increase in turnover of 6.5% with underlying earnings per share increasing by 9.1%. Underlying earnings per share for the period has increased by 10.9%.

Our balance sheet strength has improved, with net assets increasing to £130.6m. Return on capital employed has remained strong, in excess of 20%, reducing slightly from the reported position last year due to the commencement of the construction of the new production and warehousing facility at Milton Keynes. This investment, which is part of our "fit for the future" programme, will provide much needed can capacity and will underpin the Group's ability to service its national customer base effectively and efficiently.

During the year, the Group generated a strong underlying free cash flow of £22.0m, however as expected the investment in the development at Milton Keynes led to an increase in our net debt position. Net debt ended the year at £25.6m, an increase of £18.9m on the prior year. The end of year net debt position included £20.4m of Milton Keynes related expenditure and was further impacted by pulling forward the final dividend (£8.5m) from June 2013 to January 2013 ahead of the expected merger with Britvic plc, together with £2.4m of merger related costs.

Segment Performance

During the financial period, the Group delivered growth across both the carbonated and still drinks segments. Overall turnover increased by £14.7m (6.6%), driven by strong growth in volume which increased by 5.6%.

Our carbonates segment delivered year on year turnover growth of 7.1%, with volume growing by 6.0% and value by 1.1%. In absolute terms, the increase in carbonates equated to additional turnover of £12.1m, delivered through distribution increases across all of our core brands, particularly through England and Wales. Within the category, the key performers were the Barr and Rockstar brands, which both exhibited double digit growth. IRN-BRU value increased by 1.4%.

The still drinks and water segment (stills) delivered year on year turnover growth of 4.3%, with volume growing by 4.1% and value by 0.2%. In absolute terms, the increase in stills equated to additional turnover of £2.2m.

A national advertising campaign ensured that Rubicon performed well, which was very encouraging given the strong prior year comparative performance. KA also performed strongly, particularly in the second half of the year once the effects of the first prior year comparative stills launch washed through. Strathmore performed in line with the prior year, which was an excellent outcome within the context of a very competitive water market and on the back of such a wet summer.

Margins

Throughout the year we have continued to see the level of promotion across branded products increase which, together with increasing commodity costs, has impacted margins.

We have attempted to mitigate this impact by implementing price increases and managing raw material cost inflation through operational and foreign exchange hedging activities. We have also continued to manage overhead costs tightly whilst we have invested to grow through geographic expansion.

Overall, on a like for like basis (i.e. net of volume growth), our cost of goods increased by 4.3%. Whilst sales price increases were secured, increases in the cost of sugar, together with a changing mix associated with lower margin products growing at a faster rate, led to a reduction in gross margin of 160 basis points. Including the impact of increased promotional activity, gross margins (pre exceptional items) reduced from 47.1% to 45.5%. Carbonates gross margins were the most affected, down 290 basis points to 50.6%, whilst stills margins increased from 25.6% to 27.6% as the cost of fruit pulp came down from its historical high point.

In the year ahead, we anticipate some reduction in the pace of input cost inflation which we expect to be at a low single digit level. Current market pricing for PET is down year on year, fruit pulp costs are lower but the cost of sugar remains stubbornly high. The biggest risk however is the current weakness of Sterling relative to both the Euro and the USD, with Sterling now trading 8% off its high point last year against the Euro and 6% off its high point relative to the USD, although we have appropriate levels of cover in place for the year ahead.

An operating profit of £34.9m (before exceptional items) was reported during the year, representing an increase of 3.7% on the prior year. Reported operating margins, before exceptional items, reduced slightly from 15.1% to 14.7%.

Profit before tax of £35.0m (before exceptional items) was reported, being an increase on the prior year of 4.3%, reflecting both lower finance charges and a small gain on un-hedged foreign exchange contracts.

EBITDA (pre exceptional items) of £41.7m was generated in the period, representing an EBITDA margin of 17.6%.

Interest

A net interest income of less than £0.1m was reported in the financial period, compared to a £0.2m cost in the prior year. This is summarised in the table below:

Finance income has benefited from the expected return on pension scheme assets being £0.2m higher than the interest costs associated with the scheme liabilities, together with a small gain arising from the fair value of forward foreign exchange contracts.

The cash interest cost includes the full year interest charges of £0.3m, offset to a small extent by interest income on cash balances. The Group has not undertaken any interest rate hedging activity which reflects the current net debt position and the future expectations of short term interest rates and future free cash generation.

The Group has £40.0m of banking facilities at its disposal, of which £26.5m was drawn at the end of the financial year. The Group continues to hold facilities with RBS totalling £25.0m, of which £10.0m is the outstanding balance on a five year term loan maturing in July 2013, £10.0m is available through a three year revolving credit facility expiring in March 2014, with the balance being a £5.0m annual overdraft facility. £5.0m of borrowings were repaid in line with the five year facility agreement, with a final £10.0m due to be repaid in the financial year ending January 2014.

In addition to the facilities with RBS, during the year the Group entered into a £15.0m revolving credit facility (RCF) with HSBC to part fund the purchase of land and buildings at Milton Keynes. This three year facility was put in place in June 2012 on competitive terms and expires in 2015. Post year end a further £20m RCF facility was finalised with RBS to cover short term working capital requirements through to March 2014.

Taxation

The tax charge of £6.3m is £1.0m lower than the total charge for the prior year and represents an effective tax rate of 19.7%, a reduction of 80 basis points from the prior year. The reduction primarily results from the beneficial impact on both current and deferred tax following the 2% reduction in corporation tax substantively enacted at the balance sheet date.

Earnings Per Share (EPS)

The reduced tax charge in the year has once again had a beneficial impact on underlying EPS, which at 24.70p represents an increase of 10.9% on the prior year.

Dividends

Ahead of the expected merger, a second interim dividend of 7.4p per share was paid on 18 January 2013 to A.G. BARR shareholders on the register on 4 January 2013. This payment was in lieu of the final dividend for the financial year ended 26 January 2013 and resulted in a total dividend for the year of 10.02p per share. This represented a payout ratio of 45.4% of basic EPS and an increase of 7.6% on the prior year dividend payment.

Balance Sheet Review

The Group's balance sheet has once again strengthened, with net assets increasing to £130.6m. The key change relative to the prior year has been the purchase of land at Milton Keynes and the capital expenditure associated with building this production and distribution facility. This has driven an increase in property, plant and equipment of £14.6m, offset by increased borrowings of £11.6m.

Relative to the prior year we have seen an increase in both inventories and trade receivables which have, to a small extent, been offset by an increase in trade payables. The retirement benefit obligation at £3.4m is very manageable, although it has grown, being further impacted by the lower discount rates used to value liabilities. Our deferred tax liability has decreased as a result of the reduction in the headline corporation tax rate.

Whilst our net debt at £25.6m is higher than previously guided, this includes the impact of pulling forward the dividend payment ahead of the expected merger completion date and legal and professional fees associated with the proposed merger. Our net debt to EBITDA ratio has increased from 0.2 to 0.6 times.

Return on capital employed (ROCE) has remained strong at 20.6%, reducing slightly from the reported position last year (22.8%) due to the inclusion of £17m of assets relating to Milton Keynes which are not generating any return. Restating to acknowledge this factor, ROCE would be slightly ahead of the position reported last year.

Non-Current Assets

The largest asset on the balance sheet remains the acquired intangible assets, being the £74.4m carrying value of the Rubicon and Strathmore brands, goodwill and customer lists. This has reduced by £0.3m from the prior year, reflecting the continued amortisation of Groupe Rubicon acquired customer lists which now have a residual life of six years.

During the year, property plant and equipment increased by £14.6m to £69.5m. The Group invested £3.7m of maintenance capital expenditure (prior year: £6.9m) during the year. This was £3.0m lower than had previously been guided as a number of projects, including a head office extension, an ERP replacement and an effluent treatment plant, were deferred in light of the merger discussions.

The majority of maintenance capital expenditure continued to be invested in plant and equipment at Cumbernauld, production and infrastructure projects at the Forfar site, some modest IT expenditure targeted at improving efficiencies, commercial vehicles and assets, which included branded vending machines and chilled refrigeration equipment.

Expansionary capital expenditure amounting to £7.1m was invested in the purchase of land and a further £9.3m in the building of the Milton Keynes facility, which is held as an asset under construction at the year end. Prepayments of £4.0m were made towards plant and equipment which will be repaid in March at the conclusion of a plant leasing arrangement. Handover of the site is expected at the end of April, after which the plant and equipment will be installed to facilitate initial production in the summer of 2013.

In the year ahead capital expenditure is anticipated to remain at similar levels to those seen in 2012/13. A further £7.0m is anticipated in order to complete the building of the Milton Keynes facility. £1.5m is proposed to be invested to develop additional office space at Cumbernauld, whilst a decision on the requirement to replace our existing ERP solution will be taken once the outcome of the proposed merger discussions is known.

Maintenance capital expenditure of circa £6.5m is anticipated in the forthcoming year, which is in line with ongoing depreciation. Major projects at Cumbernauld include updating the syrup room, investing in sugar dissolving capability, improving water treatment capability, together with the ongoing focus on increasing efficiency and improving and reducing energy consumption. At the Strathmore facility in Forfar, funds are planned to replace water treatment and shrink wrapping equipment. In addition, the Group will continue to invest in its IT infrastructure, its fleet of commercial vehicles and behind branded chilled equipment in the marketplace.

Current Assets and Liabilities

Current assets increased by £4.2m over the period to £71.0m (previously £66.8m). The increase was driven by increases in inventories and receivables, partially offset by reduced cash balances.

Finished goods inventories increased by £1.3m (10%), as we increased 330ml and 500ml canned inventory in order to ensure customer service within the context of capacity constraints during the first half of the new financial year. Raw material inventory increased by £0.6m (11%) as we bought forward purchases of juices in order to benefit from improved pricing from suppliers.

A strong sales performance at the end of the financial year, together with the timing of the year end, which fell a full four days short of the month end, impacted the collection of receivables. Trade receivables increased by £5.2m (14%) relative to a year ago. During the year, the provision for doubtful and bad debts reduced by just under £0.3m reflecting the very clean receivables position, with overdue debt representing only 2.6% of the total outstanding. The average number of trade receivable days has increased from 61 to 65, reflecting the early year end close relative to the calendar month end.

The total receivables position also includes £5.6m of prepayments. Of this, £4.0m relates to the prepayment of initial plant and equipment deposits that will be repaid to the Group in March 2013 on satisfactory conclusion of lease financing arrangements.

An asset of £1.5m has been recognised as at the end of January, reflecting the fair value gain on forward foreign exchange Euro and USD contracts. These contracts have been elected for hedge accounting and whilst they remain effective any volatility is reflected through the balance sheet rather than through the P&L. The Group has good levels of foreign currency hedging in place, which will help insulate against cost of goods price volatility in the forthcoming year.

Current Liabilities

Current liabilities have increased by £8.3m, of which £6.5m relates to an increase in short term borrowings with trade and other payables increasing by £2.6m. The average time taken to settle trade payables has increased by 7 days to 35 days. The current tax liability has remained broadly in line with the prior year whilst a foreign forward exchange contract liability and a small redundancy provision have been settled through the course of the year.

Non-Current Liabilities

The £6.7m increase in non-current liabilities again relates mostly to the increase in borrowings of £5.2m together with an increase in the defined benefit pension obligation of £3.0m. This is partly offset by a £1.5m reduction in deferred tax liabilities.

Cash Flow and Net Debt

Our financial position has continued to improve as we have delivered growth in underlying trading performance, increased underlying operating profits and generated strong cash flow.

A free cash flow of £22.0m was generated in the period, representing an increase of £6.1m on the prior year. This was despite exceptional cash costs amounting to £2.7m. The increase in free cash flow was attributable to two areas: reduced maintenance capital expenditure and reduced pension scheme deficit repayments.

A reported EBITDA of £41.7m translated into a net operating cash flow of £34.2m after increases in working capital requirements associated with an inventory build and relatively high levels of trade receivables. Pension payments reduced by £2.8m relative to the prior year, principally as a result of agreement between the pension scheme trustees and the Group to cease deficit recovery payments through to the next triennial valuation in April 2014. Maintenance capital expenditure was £3.2m lower than the prior year.

Below free cash flow there are three significant cash out flows, the first being £20.4m associated with Milton Keynes, of which £4.0m of initial plant deposits is repayable and the second being £19.4m of dividends distributed to shareholders. Of the latter, £8.5m was distributed early in lieu of the final dividend for the year ahead of the planned merger. Finally, in line with the facility agreement, a further £5.0m repayment was made towards the 5 year term loan which expires in July 2013.

Shares with a net value of £0.3m were purchased on behalf of various employee benefit trusts to satisfy the ongoing requirements of the Group's employee share schemes.

The resulting net cash outflow was financed by fully drawing the £15.0m debt facility entered into with HSBC during the year.

As at the end of January 2013, the Group's closing net debt position stood at £25.6m, being the closing overdrawn net cash position of £0.6m and borrowings of £25.0m.

Exceptional Items

The Group incurred £3.2m of exceptional items during the period. The majority of expenditure related to professional and legal fees incurred in connection with the proposed all-share merger with Britvic plc. A further £0.3m related to redundancies following an organisational structure review at the Walthamstow distribution depot, recruitment and programme management costs relating to the Milton Keynes production and distribution project and expenditure relating to preliminary work in assessing the replacement of the Group's ERP platform. The latter project was put on hold pending the outcome of the merger discussions.

Pensions

Throughout the year the Group has continued to operate two pension plans, being the A.G. BARR p.l.c. (2005) Defined Contribution Pension Scheme and the A.G. BARR p.l.c. (2008) Pension and Life Assurance Scheme. The latter is a defined benefit scheme based on final salary, which also includes a defined contribution section for pension provision to executive entrants. Both sections of the defined benefit scheme are closed to new entrants but remain open for future accrual.

The deficit of £0.4m disclosed at the end of the last financial year has increased to a deficit of £3.4m. Reflecting historically low gilt yields, the increase in the deficit has been driven by a further reduction in the discount rate used to value the scheme's liabilities, which reduced from 4.8% to 4.6%. Mortality assumptions across the year have remained stable, with life expectancy for males being 87 to 88 and for females 89 to 91, depending on their age as at the end of January 2013.

The present value of the scheme's funded obligations equates to £90.3m, which represents an increase of just under £7.0m on the prior year. The fair value of the scheme's assets have increased during the year by a net £3.9m to £86.9m, with £2.3m of benefits being paid to pensioners over the course of the year.

During the year we successfully moved all pensions administration, investment advice and actuarial support to Hymans Robertson. The move was undertaken with limited disruption and I am pleased to report that the service and professional advice received has improved. The pension investment subcommittee which was established during the year is continuing to work to reduce the underlying risk associated with the defined benefit pension scheme, whilst offering a broader investment choice to defined contribution members.

Summary

A.G. BARR has delivered a robust performance in a marketplace impacted by the combination of very poor summer weather and the ongoing economic challenges faced by consumer goods companies, notably raw material cost pressures and inconsistent consumer demand. Looking forward it is unlikely that these challenges will materially change, however we remain cautiously optimistic that the combination of our proven operating model, continued focus on efficiency, building brand equity, sound balance sheet and capacity for future growth leave us well placed to continue to build on this performance.

Share Price and Market Capitalisation

At 26 January 2013 the closing share price for A.G. BARR p.l.c. was £5.50, an increase of 34% on the closing January 2012 position. The Group is a member of the FTSE250, with a market capitalisation of £642.2m at the year end.

Alex Short

FINANCE DIRECTOR

A.G. BARR p.l.c.

Consolidated Income Statement for the year ended 26 January 2013

The following are the final results for the year to 26 January 2013.

There is no proposed dividend for the year ended 26 January 2013 as a second interim dividend was paid to shareholders on 18 January 2013 in lieu of the final dividend for the year ended 26 January 2013.

A.G. BARR p.l.c.

Consolidated Statement of Comprehensive Income for the year ended 26 January 2013

A.G. BARR p.l.c.

Consolidated Statement of Changes in Equity for the year ended 26 January 2013

A.G. BARR p.l.c.

Consolidated Statement of Financial Position as at 26 January 2013

A.G. BARR p.l.c.

Consolidated Cash Flow Statement for the year ended 26 January 2013

A.G. BARR p.l.c.

1. General information

A.G. BARR p.l.c. ("the Company‟) and its subsidiaries (together "the Group‟) manufacture, distribute and sell soft drinks.

The Group has manufacturing sites in the U.K. and sells mainly to customers in the U.K. but does have some international sales.

The Company is a public limited company incorporated and domiciled in Scotland. The address of its registered office is Westfield House, 4 Mollins Road, Cumbernauld, G68 9HD.

The Company has its listing on the London Stock Exchange.

Basis of preparation

The consolidated and parent Company financial statements of A.G. BARR p.l.c. have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. They have been prepared under the historical cost accounting rules except for the derivative financial instruments and the assets of the Group pension scheme which are stated at fair value and the liabilities of the Group pension scheme which are valued using the projected unit credit method.

Restatements

Revenue

The revenue figure for all comparative periods presented has been restated to include, as a deduction therefrom, customer invoiced promotional investment that was previously included within distribution costs. The change in policy reduces the revenue to include certain invoiced costs associated with promotional activities to bring the reporting to a basis consistent with the accounting policy adopted by our peer group and in line with the prospectus which detailed the proposed merger with Britvic plc issued in December 2012. The change in policy reduces the revenue to the amount that will be collected net from customers following deductions made and invoiced by customers for promotional activity rebates. This has no impact on the operating profit previously reported.

Cost of sales

Rockstar royalties

Royalties incurred under the Rockstar franchise agreement have been restated to cost of sales from administration costs. As sales of the Rockstar brand increase, this amendment has been made to give a more accurate reflection of the gross profitability of the Group and impacts all comparative periods presented. This restatement has no impact on the operating profit of the Group.

Foreign exchange

Foreign exchange gains and losses incurred on forward currency contracts have been restated to cost of sales from administration costs. The forward currency contracts are used to purchase raw materials from overseas, therefore this restatement more accurately reflects the cost of goods to the Group. This restatement has no impact on the operating profit of the Group.

Fair value movements on financial instruments

Previously fair value movements on forward foreign exchange contracts recognised in the consolidated income statement were included within administration costs. In the year to 26 January 2013 the policy has been amended to include these costs within finance income and finance costs as this provides a clearer presentation of the trading of the Group.

The effect on the gross profit, operating profit and profit before tax for the year to 28 January 2012 following the aforementioned restatements are shown in the following table:

Earnings per share

A share subdivision of the Company's issued and to be issued share capital was approved at the annual general meeting on 21 May 2012. This resulted in treble the number of shares being in issue after the subdivision.

As a result of the change in the number of shares in issue and in line with the requirements of IAS 33 Earnings per share, the earnings per share figures for the year to 28 January 2012 have been restated as if the subdivision had taken place at 30 January 2011, the first day of that financial year.

2. Segment reporting

The Group's management committee has been identified as the chief operating decision maker. The management committee reviews the Group's internal reporting in order to assess performance and allocate resources. The management committee has determined the operating segments based on these reports.

The management committee considers the business from a product perspective. This led to the operating segments identified in the table below (after aggregation): there has been no change to the segments during the year. The performance of the operating segments is assessed by reference to their gross profit before exceptional items.

There are no inter-segment sales. All revenue is from external customers.

Other segments represent income from water coolers for the Findlays 19 litre water business, rental income for vending machines, the sale of Rubicon ice-cream and other soft drink related items such as water cups. Rubicon ice-cream was launched in the year to 26 January 2013.

The gross profit from the segment reporting is stated before exceptional costs as the dual running and external manufacture exceptional costs allocated to cost of sales in the consolidated income statement in the prior year relate to both Carbonates and Still drinks and water. The gross profit from the segment reporting is reconciled to the total profit before income tax, as shown in the consolidated income statement.

All of the assets and liabilities of the Group are managed by the management committee on a central basis rather than at a segment level. As a result no reconciliation of segment assets and liabilities to the consolidated statement of financial position has been disclosed for either of the periods presented.

Each of the following items are included in the reportable segments results and balances, and no adjustments are required in arriving at the costs included in the consolidated primary statements:

Capital expenditure comprises cash additions to property, plant and equipment.

All of the segments included within Carbonates and Still drinks and water meet the aggregation criteria set out in IFRS 8 Operating Segments.

Geographical information

The Group operates predominately in the U.K. with some worldwide sales. All of the operations of the Group are based in the U.K.

The Rest of the world revenue includes sales to Ireland and wholesale export houses.

All of the assets of the Group are located in the U.K.

Major customers

No single customer accounted for 10% or more of the Group's revenue in either of the years presented.

3. Exceptional items

During the year to 26 January 2013, A.G. BARR p.l.c. and Britvic plc announced shareholder approval of a proposed all-share merger.

Professional and legal fees and employee costs of £2,866,000 were incurred in relation to the proposed merger and have been classified as exceptional in the current year. The deal has since been referred to the Competition Commission for further investigation.

Construction of a new production site at Crossley in Milton Keynes commenced in July 2012. Project management and associated recruitment costs of £122,000 have been treated as exceptional in the year to 26 January 2013.

During the year to 26 January 2013 preliminary work in relation to the replacement of the existing Enterprise Resource Planning (ERP) system was undertaken with costs of £45,000 treated as exceptional.

A further £125,000 of redundancy costs relating to a reorganisation of the distribution operations within England was incurred in the year.

In the year to 28 January 2012 the Mansfield distribution site was sold. During the period of the closure, a third party had taken over the distribution operations with dual running costs of £182,000 incurred.

A further £929,000 of additional costs were incurred for the manufacture of goods at third parties following operational difficulties in the commissioning of production plant at Cumbernauld during the closure of Mansfield and shortly thereafter.

An environmental provision of £63,000 relating to the closure of Mansfield was released during the prior year and redundancy costs of £109,000 were recognised as result of the site closure.

In the prior year a curtailment in the Group retirement pension plan arose due to the Mansfield site closure. An exceptional credit of £497,000 was recognised reflecting a decrease in the number of employees within the scheme.

A pension increase exchange exercise was undertaken during the year to 28 January 2012 resulting in an improvement in the risk profile of the defined benefit scheme. An associated pension credit of £2,582,000 and consultancy costs of £94,000 were recognised as exceptional in this year.

A gain on disposal of Mansfield assets of £49,000 was recognised during the prior year, with £13,000 of costs associated with the closure of the site also being incurred in the year to 28 January 2012.

4. Earnings per share

Basic earnings per share have been calculated by dividing the earnings attributable to equity holders of the parent by the weighted average number of shares in issue during the year, excluding shares held by the employee share scheme trusts.

The weighted average number of shares in issue and the diluted weighted average number of shares in issue have been restated for the year ended 28 January 2012 following the share subdivision on 28 May 2012. This is in line with the requirement of IAS 33 Earnings per share.

For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potentially dilutive ordinary shares. These represent share options granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the year. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.

The underlying EPS figure is calculated by using Profit attributable to equity holders before exceptional items:

This measure has been included as it provides a closer guide to the underlying financial performance as the calculation excludes the effect of exceptional items.

The dividend per share figures for the year ended 28 January 2012 have been restated to take into account the share subdivision that took place on 28 May 2012. This share subdivision has had no impact on the total dividend paid by the Company.

A second interim dividend was paid to shareholders on 18 January 2013 in lieu of the final dividend for the year ended 26 January 2013.

6. Cash and cash equivalents

Cash and cash equivalents include the following for the purposes of the consolidated cash flow statement:

Annual General Meeting

The Annual General Meeting will be held at 9.30am on 28 May 2013 at the offices of KPMG, 191 West George Street, Glasgow, G2 2LJ.

Statutory Accounts

The financial information set out above does not constitute the Company's statutory accounts for the years ended 26 January 2013 or 28 January 2012 but is derived from the 2013 accounts. Statutory accounts for 2012 have been delivered to the registrar of companies, and those for 2013 will be delivered in due course. The auditors have reported on those accounts; their reports were (i) unqualified and (ii) did not contain statements under section 498(2) or (3) of the Companies Act 2006.