Barr (a.g.) Share Discussion Threads

[philanderer] 25/10/2022 23:22

'Irn Bru gets cosy with winter warmer World Cup campaign'

[essentialinvestor] 25/10/2022 12:42

Usually view and then take a look at NICL, but the % spread on the later
can be very nasty.

[spectoacc] 25/10/2022 12:40

"...Crucially the headwinds of higher gas and aluminium , mangos and sugar are now reversing rapidly so will help into next year..".


I've no idea of the answer to this, but surely they'd forward-bought a lot of the above? Eg contracted fuel costs? So the issue would be less how high the gas price has gone, and more about how long their fix was/when it ends/ended, and what the next fix will be at.

I want to like BAG more than I do down here.

[essentialinvestor] 25/10/2022 12:09

Appreciate the view.

[wiganpunter] 25/10/2022 12:02

Sorry one last point . I was really interested in the deck to look at the brand rollout in Australia and USA which is worth a read also.

[wiganpunter] 25/10/2022 12:00

the point on milk is alternative milks used to be seen as expensive and now they aren't . the adoption as illustrated in the mid year results deck attached isn't price led but its behavioural .hxxps://www.agbarr.co.uk/media/b5ad40ph/agb-2022_23-interim-results-presentation-website-1.pdf

is very strong so they now have a well established ( 10 year ) brand in moma for a category they had no exposure to.

eps in first half was 19p so they should comfortably do 35-40p for the full year. margins re at 44% and crucially the headwinds of higher gas and aluminium , mangos and sugar are now reversing rapidly so will help into next year. as the coke numbers demonstrate this soft drinks category is very robust . I own them its a well run company, sat on high cash and I know the moma story really well and as I said on half the normal multiple I think its an easy 25% plus return next 12 months with many catalysts.

[makinbuks] 25/10/2022 11:33

Also a fair point, but the core business is very mature so even exceptional performance produces relatively marginal improvements

[spectoacc] 25/10/2022 11:20

Or - they've run out of better investment opportunities in the core business. What do the numbers say, or do we need to wait a bit?

[makinbuks] 25/10/2022 11:14

Exactly and Barr's obviously feel they can contribute to that effort with their production, distribution and marketing skills as someone said above

[essentialinvestor] 25/10/2022 11:09

That's a fair point, ethical and health reasons are driving uptake.

It's more a question of whether MOMA can gain profitable traction.

[makinbuks] 25/10/2022 11:05

Is the price comparison to cows milk relevant? Its not like Irn Bru vs Coke, people are switching for ideological reasons not taste or cost.

[yf23_1] 25/10/2022 09:59

Isn't the MOM stuff 1L, not 2 pints ?
Add 13% to the MOMA prices.

[essentialinvestor] 25/10/2022 09:07

spec, I make it a consensus of approx 31 pence on the FY giving 14 X,
unless there has been a downgrade since.


Off topic - I like Coats (COA) fwiw on a 2-3 year view. I also trade it,
just sold 40k bought yesterday. Only fair to mention they have geared up
the balance sheet to fund one of two recent acquisitions - the other
paid by way of an equity raise. Dominant position in their core market of threads,
twice the market share of the nearest competitor. May be worth sticking on
a watch list, however they are not immune from a wider consumer slowdown
hitting their end markets, clothing, footwear etc. Rate the CEO fwiw, but
as always dyor, particularly so given weakening macro.

[spectoacc] 25/10/2022 06:04

There's a price I'd buy back BAG I'm sure. But even now, HL says PE 18, yield 2.2%, and that's going into a downturn.

A quick Google:

Milk:

MOMA: [...]
(£1.50 cheapest I could find, if that link's not working).

[essentialinvestor] 24/10/2022 15:46

I love oats, eat them raw with a bit of honey and (dairy) milk,
but not keen on oat milk in tea.

[wiganpunter] 24/10/2022 15:43

in a survey done by Assosia in September a 2 pint bottle of milk on average across 4 of the UK major supermarkets was £1.25. the nearest own brand alternatives were £1.05 for soya milk, £1.07 for almond milk and £1.24 for oat milk. if branded products were used milk is £1.71 same as oat milk with almond milk at £1.78. point being im prepared to buy companies like this with high cashflow, zero debt and a long list of very cheap and therefore relatively demand immune brands like iron bru, Snapple , tizer and a great stable of energy drinks on half the usual multiple as they have either discounted a lot or been put there due to illiquidity. rates I take your point but they will be where they were maybe 8-10 years ago and that isn't going to stop people being soft drinks especially at a point headwinds reverse which commodity pricing tells exactly that story.

[essentialinvestor] 24/10/2022 15:33

Appreciate the view, thanks. GPE nearly 20% off recent lows I notice.

[spectoacc] 24/10/2022 15:18

@EI - not even remotely nearly enough! Rates will keep rising into next year, the consumer is going to fall off a cliff, so many co's are going to p/w IMO.

Wondering if $-earning mid-caps might be showing some value, but then again it isn't just us in trouble.

We've had one of the biggest bubbles of all time, fail to see how we won't have one of the biggest busts.

Edit - but yes, maybe we're due a 20% bear market rally before long. Hope so, still have some things to sell ;)

[essentialinvestor] 24/10/2022 15:15

Spec, how much is already discounted though?.

I guessed markets may make a low in the first half of this November,
not completely given up on that, but let's see.

[spectoacc] 24/10/2022 15:01

"its also now cheaper than milk"

Is it? Not round here. But the margins are surely much higher, & can see BAG would want a piece of that.

We're due a very large recession, so not in BAG atm (or much of anything). I can't see a way out of shrinking consumer (fuel bills doubled even with the cap; mortgage rates; unemployment coming), shrinking govnt (Hunt on austerity plus, and now a PM who was also all for austerity), Boe not only taking away the punchbowl but sticking fingers down throats (no more easy money, no QE, QT coming, interest rates have to go much higher to quelle 10% inflation).

There'll be some great buys when we're halfway through it I'm sure, but the housing market crash has barely even begun yet for eg. People still have Covid savings, & winter fuel bills haven't fully kicked in with the weather being mild.

PS I'm great at parties.

[essentialinvestor] 24/10/2022 15:01

wig and Phil, thanks.


I was in an admittedly small Waitrose branch last week and the did not stock MOMA.


BAG arguably looks attractive, all be it we are in bear market with some
vicious falls among smaller caps.

[wiganpunter] 24/10/2022 14:57

Hello i know the MOMA brand well and would offer the following thoughts. Oat milk offers you exposure to fast growing health brand, vegan , and is more environmentally green . its also now cheaper than milk. the porridge , granola and bircher muesli are excellent and in most large supermarkets. id definitely use the barista in coffee and semi in tea .my point being its a great brand in a huge expansive market and the breakfast items are really good too. if you get a 3-5% market share and thats going to take you comfortably into funkin numbers with ag Barrs distribution and marketing power. ex that AG Barr has been dislocated with lots of other midcaps . ex cash of 61m it trades on about 10-12x earnings versus a sector on 18-22. what I would suggest is that it like many other uk well run companies becomes a private equity target or someone like britvic, C&C or a bigger brewer that wants more soft drink access - why ? good diverse brands, well established ( 109 years ), low pricing points across the range , disciplined capital allocation , 15.6% margin ( even with inflation ) and as you look at disinflation in packaging , aluminium , fuel etc like many other staple companies those headwinds become tailwinds really quickly. It suffers I think from being overowned by lindsell train and rathbones so you get selling when they need to reallocate and there isn't a great deal of liquidity. there are 2 new non execs both with excellent experience too especially Zoe Howorth. in a world where businesses that have good free cashflow which they have are trading very cheaply with tailwinds coming I think they are back above 500 quickly and potentially on interest lists for the inevitable consolidation . other names for me on that list would be melrose, ibstock and kingfisher .

[philanderer] 21/10/2022 23:33

EI , strangely enough my three worst performing shares this week have all been drink related... BVIC, BAG and DGE

[essentialinvestor] 21/10/2022 13:45

Goodness, getting ugly.

[essentialinvestor] 18/10/2022 15:18

Phil, average PE over the last 5 years above 20, significantly kower
now, however we are in post ZIRP. Very high multiples on stocks like BAG
may not be seen again for sometime.

Net cash, some great brands, particularly IB.