IRELAND: C&C Group H1 sales, profits slip
Magners cider owner C&C Group has reported a 10% slide in net sales and a fall in profits for its fiscal half-year, but shares in the Ireland-based group rose after it reaffirmed full-year earnings guidance and stabilised cider volumes.
Net sales for the six months to 31 August fell by 10.5% to EUR257.5m (US$380.4m), representing a 6% fall on the same period last year at constant currency rates, C&C Group said today (8 October).
Net profits before exceptional items fell 9% to EUR48.4m, while operating profits fell to EUR57.4m against EUR66.4m a year earlier.
Despite the falls, shares in the group crept up by nearly 4% to EUR3 in early trading on the Irish Stock Exchange.
The rise followed comments from C&C Group CEO John Dunsmore, who said the firm remains on-track to meet full-year operating profits guidance and that the group expects to "stabilise" cider volumes by the end of its fiscal year - following several years of consistent decline for both Magners in the UK and Bulmers cider in Ireland.
Cider volume sales were flat for the six months, C&C Group said, despite a 2% drop for Magners in the UK (excluding Northern Ireland).
C&C Group has also been boosted by its acquisition of brewing assets in Republic of Ireland, Northern Ireland and Scotland, including the Tennent's lager brand, from Anheuser-Busch InBev.
Dunsmore said: "We are very pleased to have completed the acquisition of the Tennent's business. This transaction is an evolution of our stated strategy and clearly enhances the group's position in the Long Alcoholic Drinks sector."
Following the deal, Dunsmore said C&C will review its marketing strategy.
"We expressed our intention to invest an additional EUR8m (of incremental profit growth) behind the group's cider brands," he said.
"Following the acquisition of the Tennent's business, and in light of recent trading conditions, we will now review overall marketing investment and deploy our marketing spend where we believe we can get the best returns for shareholders."
In spirits and liqueurs, where C&C owns Tullamore Dew Irish whiskey, Carolans and Frangelico, volume sales for the half-year fell 15%.
The fall reflected destocking by distributors in major markets, but the firm added that there are "some indications that this de-stocking process may be drawing to an end."
For the full statement, click here.
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