An outstanding contribution by Strathmore Mineral Water at Forfar helped Irn-Bru maker AG Barr produce extra fizz from its performance last year.
Pre-tax profits on ordinary activities for the 12 months to January 25 by the Cumbernauld-based group increased by 10% to £41.9 million, and total turnover rose 2.7% to £260.9m.
However, chief executive Roger White warned about the impact of price deflation in the UK, which would make it more difficult for businesses to deliver continued growth.
The core brands of Irn-Bru, Barr, Rubicon and Strathmore all grew and outperformed the market, with particularly strong growth driven by Strathmore water produced by 60 personnel at West High Street in Forfar.
Mr White said the water category has overtaken cola to become the largest single category by volume for the first time.
Strathmore had an outstanding year, with growth of more than 20%, and the development of the brand was supported by the huge level of awareness driven by the sponsorship of the Glasgow 2014 Commonwealth Games.
Strathmore drinks were on the “field of play”, with athletes from around the Commonwealth enjoying and interacting with the brand across the whole event, said the company.
Strathmore’s brand association with sport has been strengthened through a partnership with Scottish Rugby, and Strathmore Twist has been launched into the growing flavoured water category and is expected to show strong future growth.
Barr said its range of flavoured carbonated drinks continues to grow steadily year on year, driven by innovation, quality and value for money.
With sales growth of more than 6%, it remains comfortably ahead of the carbonates market growth.
Irn-Bru sales grew 1.6%, and also benefited from the Commonwealth Games sponsorship, with sales in England and Wales rising by 5.6%. Just under £1 million of Irn-Bru ice cream was sold.
Barr sold more sugar-free brands, and the total sugar content of company-owned brands had been reduced at a rate greater than the government responsibility pledge.
Market performance of fruit juice was poor, but Barr’s Rubicon delivered further solid performance with growth of 3.4%
Overall turnover increased by 3.3% excluding the impact of the loss of the Orangina brand after exiting from the contract with Lucozade Ribena Suntory.
The chief executive added: “We have delivered an excellent financial performance in difficult market conditions over the past 12 months, whilst continuing to build the platform required for sustained and profitable long-term growth.
“We will continue our approach of tight cost control, rigorous cash management and focus on execution whilst continuing to invest for the long-term in our brands, assets and people.”
Overall market conditions are expected to remain challenging with price deflation in the UK, but Barr was confident it could continue to prosper.
The proposed final dividend is 9.1p per share to give a total of 12.12p, an increase of 10% over the prior year.