A bright future for C&C?

A bright future for C&C?

John Dunsmore and his parachute regiment have done more than stop the rot at C&C Group; they have sown the seeds of success at the Magners cider maker.

There were not many analysts or observers who expected C&C Group to realise such a rapid turnaround in its prospects, ourselves included.

At the turn of last year, the Magners and Bulmers owner was languishing on a share price of EUR1 or less and nursing the effects of another bruising year for its cider brands in Ireland and the UK. That heady summer of 2006, when Magners broke onto the UK drinks scene with its over-ice concept, seemed like a long-forgotten dream.

The decision to parachute in Dunsmore, ex-CEO of Scottish & Newcastle, and his right-hand man, Stephen Glancey, as chief operating officer, have proven to be masterstrokes over the last 18 months.

C&C Group's share price hit EUR3.34 at the end of yesterday (27 May) and, although down 2% in trading so far today, has been above EUR3 since late March.

Following C&C Group's full-year results announcement this week, Dunsmore said that he believes the group can stabilise Magners' volume sales in the UK later this year, following around three years of consistent decline.

At the same time, the group has shaved costs off the business in Ireland and has conducted the sort of wheeling and dealing in the transfer market that a football manager would be proud of.

Earlier this month C&C disposed of its spirits and liqueurs division for just under EUR300m (US$399.4m). Before that it acquired the rights to Tennent's lager in Scotland and Anheuser-Busch InBev brewing operations in Scotland and Ireland - both in the North and in the Republic.

C&C also acquired Gaymer Cider Co late last year from Constellation Europe, giving its cider portfolio a greater strength in depth.

After some analysts last year described C&C's predicament as a "perfect storm", investors are increasingly thirsty for the new-look C&C Group's shares. The question now is whether Dunsmore and his team can reap what they have sown.