IRELAND: C&C Group swings to FY loss, cider sales fall

By | 12 May 2009

Magners cider owner C&C Group has reported net losses of EUR70m (US$95.6m) for its fiscal full-year, due to falling cider sales and restructuring charges.

The net loss for the year ended 28 February compares to profits of EUR235 for the previous year. Before exceptional items, profits fell to EUR80m for the the group's most recent year, from EUR103m the year before, C&C Group said today (12 May).

Net sales for the 12 months slipped by 14% to EUR514m, as poor weather last summer and recession in the UK and Ireland further ate into the Ireland-based firm's cider sales.

The firm, which sells Magners cider in the UK and Bulmers in Ireland, saw its share price dip by 5% to EUR1.79 on the London stock exchange this morning, although the fall follows a steady rise over the last couple of months, from less than EUR1 at the beginning of March.

"This performance reflects a rapid deterioration in economic conditions in the Group's core markets over the past year and the consequent impact on consumer spending," C&C said. "It also reflects an increasing shift from the On-Trade to the Off-Trade market."

Profits were hit by EUR159.6m of one-off charges, including impairment charges on excess apple juice stocks and also factory machinery. Restructuring charges during the year totalled EUR12m.

C&C Group CEO John Dunsmore, appointed last autumn with the task of reviving the firm's fortunes, said: "We are in the process of aligning C&C's operating cost base with an exceptionally challenging environment.

"Increased operating efficiency, reduced capital spend and more effective marketing investment will contribute to our financial performance in FY2010 and to the development of an agile business which is increasingly responsive to the market."

Net sales for the 10 weeks to 12 May were broadly flat against the year before, with core cider volumes up by 9%, C&C said.

In its outlook, the group said that it aims to "stabilise" cider sales by volume for the full-year and plans to deliver EUR5m in annual cost savings, beginning in the current financial year.


Sectors: Beer & cider

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