AG Barr has reported a strong set of results for 2006, despite what the company's CEO described as a "challenging year".

The Irn-Bru maker spent 2006 restructuring its business in Scotland and integrating the Strathmore Water business it purchased in June last year.

Profit on ordinary activities before tax and exceptional items increased by 6.7% to GBP19.1m (US$37.4m), the company said today (26 March). Turnover increased by 10.2% to GBP141.9m. Adjusting for the turnover from the Strathmore business from the date of acquisition, the like-for-like increase was 3%.

CEO Roger White added: "This has been a challenging but ultimately successful year. We have delivered a strong financial performance at the same time as making significant improvements to the operational base of the business. In the second half of the year we also successfully completed the integration of the Strathmore business. We are now focused on delivering the financial benefits of all our investments."

The company said that sales in the first seven weeks are 13% ahead, on a like for like basis, reflecting changes in promotional phasing - underlying sales remain in-line with expectations.

"This was a very satisfactory performance during a year in which the excellent summer weather masked to a degree the ongoing challenge of the structural changes taking place within the soft drinks market in the UK. In addition our company faced abnormal internal pressures both in respect of our major infrastructure project in Scotland and the integration of the Strathmore Water business purchased in June 2006."

The company's flagship brand Irn-Bru showed value share, as measured by Nielsen, up 4% nationally. The company said growth in England and Wales was pleasing where market share was up by 14%.

"Our Irn-Bru business in the impulse channel grew strongly but this masked the weaker performance in multiple grocers where the percentage of product sold on deal fell, as we promoted less aggressively than our competitors - the performance in multiples is something we plan to address in 2007/08. Irn-Bru, however, is now on a national basis larger by volume than each of Lilt, 7up, Sprite and total Tango," Barr said.

Meanwhile, the company said its Tizer brand performance stabilised half-way through 2006, whilst Orangina grew by 9% in value over the year.

Overall, exceptional items in the year produced a net charge of GBP2.8m. They represented a GBP2.7m provision for the closure costs at the Atherton site during 2007/08 and a balance of GBP2.4m in respect of the costs related to the reorganisation of the Scottish operations - against this the disposal of property in Scotland, which became redundant as part of the re-organisation project, produced a gain of GBP2.3m.