IRELAND: C&C revenues down on weak economy and weather

C&C Group has said that a weak quarter from its cider division has contributed to a drop in revenues for the group for the four months ended 30 June.

In an interim statement, the Irish drinks group said that revenues for the period had fallen by 8% compared with the same period last year. This performance includes a revenue decline of 10%­ for C&C's Cider division and growth of 3% in revenue for spirits and liqueurs.

However, group operating profit for the period showed an increase on the same period last year, reflecting the improved operating margins arising principally from the cost reduction programme initiated in February 2008.

Cider revenue declined in both the UK and the Republic of Ireland in the period.

In the UK, Magners overall performance was broadly in line with expectations for the period. Magners Draught was launched in May and after a slow start, due to initial equipment supply difficulties, is now progressing well, the company said.

In the Republic of Ireland, the decline in cider revenue in the period reflects weak market conditions, particularly in the on-trade.

"The group's overall performance during the first three months of the fiscal year (March to May) was broadly satisfactory. However, a weak trading performance in June together with continuing unsettled weather and a deteriorating economic backdrop in C&C's principal markets makes the outlook uncertain," the update said.

"C&C's current expectation for the half year to 31 August 2008 is that revenue is unlikely to match last year's level but improved operating margins during the period should, at least, offset the impact of revenue decline on operating profit."