Irn-Bru maker AG Barr swallows one of Britain's fastest-growing porridge firms
Irn-Bru maker AG Barr has swallowed a majority stake in one of the UK’s fastest growing porridge brands.
The Cumbernauld company behind Scotland’s most famous soft drink said it had acquired an initial 60 per cent equity stake in Moma Foods. It has also agreed a path to full ownership over the next three years.
Moma was founded by Tom Mercer in 2006 as a challenger brand in the porridge market, using quality British jumbo oats. Most recently, the brand has diversified into the high growth plant-based milk sector, and is now the UK’s third largest oat milk brand.
London-based Moma also produces a range of low sugar granola and bircher muesli branded products.
Financial teams surrounding the deal have not been disclosed.
Roger White, chief executive of AG Barr, said: “Plant-based milk is a fast-growing category, in particular, and Moma’s oat milk is a premium quality product with huge potential. This exciting investment is a positive indication of AG Barr’s growth ambitions.”
Mercer, founder and chief executive of Moma, added: “I’m hugely excited to embark on the next phase of Moma’s growth with AG Barr. I believe that together we can harness the passion that is integral to Moma and grow into a significantly bigger brand.
“We’re 100 per cent focused on crafting oats into the tastiest food and drink products we can, and I’m looking forward to the next leg of our journey.”
Barr said the deal is not expected to have a material impact on the group’s profits for the current financial year ending January 30.
Last week, the group revealed that its profits for the year are expected to beat market forecasts after strong sales continued in recent months.
The firm, whose other brands include Rubicon, said sales since September “have grown ahead of our expectations” – marking the second time it has upgraded its profit guidance in the last four months.
It said it has been boosted by positive trade in the “on-the-go” and hospitality markets, while recent product launches have also performed better than forecast.
Barr told investors that its production and supply chain has remained resilient and supported recent growth despite the “challenging supply-chain environment”.
Last week’s update came after bosses warned in September that the business was facing supply chain challenges amid a shortage of lorry drivers, impacting delivery of Scotland's other national drink.
Revealing record financial results, the iconic soft drinks maker warned of “increased challenges” in recent weeks and said it continued to “monitor closely” the situation.
In the half-year period, total sales jumped 19.5 per cent to £135.3 million compared with the same period a year earlier.
Pre-tax profits were up nearly four-fold from £5.1m to £24.4m - impacted by a £7m writedown on the Strathmore water brand recorded in results last year.
The firm also announced a recommencement of dividends, comprising an interim dividend of 2p per share plus a one-off special dividend of 10p per share.
Barr highlighted its strong balance sheet with £65.6m of net cash at the bank.