C&C Group H1 profits climb, but struggles continue in US
- H1 net profits up 23.3% to EUR51.8m (US$65.95m)
- Net sales in six months to end of August increase 9.3% to EUR368.1m
- Operating profits rise 16.9% to EUR65m
- Company reiterates interest in Spirit Pub Co
C&C Group performed strongly domestically, but was disappointed by its US performance
C&C Group has seen a healthy rise in half-year sales and profits helped by its domestic markets, but admitted its US performance was “disappointing”.
Net profits in the six months to the end of August were up 23.3% to EUR51.8m (US$65.95m), the Dublin-headquartered group said today. Sales in the period rose 9.3% to EUR368.1m, while operating profits climbed 16.9% to EUR65m.
Stephen Glancey, C&C's CEO, said the strength of its Ireland and Scotland business, which generates 86% of group profits, “underpinned” the lift in earnings. “Given the lower than expected contribution from the US and England & Wales businesses, this is a solid outcome,” he added.
In the UK overall, the company said the cider market remains “challenging”. In England and Wales, sales of its Magners brand fell 17.4% in the six months, while volumes slipped 10.3%. As a result, C&C said: "Management are evaluating internally the optimal structure of the business in England & Wales."
In the US, sales fell 22.6% to EUR20.5m, while volumes slid 21%.
In C&C's export business, sales were flat at EUR13.6m, while volumes were up 3.7%, but Australia remains “challenging”.
The group also said today that its preliminary approach to UK pub company Spirit had been “rejected”. But, the company added: “Our commercial interests could be materially enhanced through direct participation in the management of high quality retail assets ... . Such a combination would provide the group with the enhanced position in an important consumer market, while offering a range of commercial options across all our domestic markets.”
Shares in C&C Group were this morning trading down 9.54% at EUR3.36.
For coverage of C&C's post-results conference call, click here.
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