UK: C&C Group rating lowered

By | 5 March 2008

Share coverage of C&C Group has been cut, despite the introduction this week of a draft version of the Irish company's Magners cider brand in the UK.

Dresdner Kleinwort has this week reduced its rating of C&C to 'hold' from 'buy', warning that ongoing competition in the UK would lead to a further slide in market share in 2009.

The broker also warned that an increase in excise duty on cider in the UK was more likely now. A tax increase could hit EBIT at C&C to the tune of around EUR30m (US$45.7m) in 2009, DKW warned.

Full-year earnings per share in 2008 have been estimated by DKW as slipping to EUR0.30 from EUR0.54 a year earlier.

The target price for C&C shares was upped, meanwhile, to EUR4.50 per share from EUR4.20 previously.

Late last week, C&C said that it will partner with Coors Brewers in the UK as its exclusive distributor for Draught Magners Original Irish Cider in the country. The roll-out will kick in during the summer.

Sectors: Beer & cider

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