IRELAND: C&C Group export volumes leap, but UK "challenging"
C&C is making hay in North America
C&C Group has reported a sharp jump in international volumes in its financial year-to-date, but UK trading remains “very challenging”.
In a trading update today (16 January), the Dublin-headquarted firm reported that, in the nine months to the end of November, international volumes rose 45% year-on-year. Sales in the same period were up by 37.4%.
In the latest quarter, international volumes increased by 28%, as sales rose by 32%. Magners volumes were up by 16% in North America in the three-month period.
C&C also noted an “improved performance” in its home market of Ireland, with volumes edging up by 1.8% in the third quarter.
However, the group was dragged down by its performance in the UK, where there has been “little discernible improvement” in the trading environment.
“It remains a tough market for brand owners and the increased competition in cider is adding to pricing pressure,” C&C said. Cider volumes in Q3 dropped by 11.9% as sales fell by 19%.
Meanwhile, trading since 1 December has been “mixed”, the company said. But, it added that “good growth in export volumes should continue in the last quarter of the year”.
Its EUR12.4m (US$16m) acquistion of Irish drinks firm Gleeson Group remains subject to approval from the country's competition authorities. In a note, analysts Nomura said that it believes the downturn in the Irish on-trade is starting to "bottom out". "In our view, this is constructive for C&C’s stronger distribution footprint into the Irish on-trade post the Gleeson transaction," it said.
And last month, C&C completed a US$305m deal to buy Vermont Hard Cider Company, which it expects to contribute EUR1.5m of earnings in its full-year results.
The group reaffirmed its operating profit guidance at the “lower end” of its previously-stated range of EUR112m to EUR118m.
For a full copy of C&C's update, click here.
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