Sales, volumes slip for C&C Group in FY, but profits return
- FY net profits hit EUR47.4m (US$53.9m) after one-offs in FY15 drive losses of EUR81m
- Net sales for 12 months to end of February dip by 3.1% to EUR662.6m
- Operating profits total EUR648m versus EUR58.4m operating loss
- Total volumes fall by 7.6%
C&C Group saw profits return in fiscal-2016
C&C Group has seen its bottom line return to the black in its most recent fiscal year, after one-offs hammered profits in the year-prior.
Net profits in the 12 months to the end of February came in at just under EUR50m, although sales in the period were down by 3%. Group volumes also fell, by 7.6%.
A year ago, C&C posted a net loss of EUR81m after it took a EUR150m impairment charge in the US. Stripping out one-offs in both this year and last, net profits were down by 11.7% to EUR80.8m, with operating profits decreasing by 10.3%. The operating profits performance was "as guided" in C&C's trading update earlier this year.
In its domestic market, the Irish group saw volumes dip by 6.2% due in part to poor weather in H1, while Scotland posted a 6% volumes fall. In the US, volumes were down by 18%, with the company echoing comments by the CEO of Boston Beer Co this year that the cider segment was suffering a "general weakness" in the country. "The key shift in dynamic within the category appears to be a loss of momentum from the commercial cider brands," said C&C.
Export volumes jumped by 14.8%, thanks mainly to Asian markets, where "further (distribution) deals ... are in the pipeline for FY2017".
"Cider is now penetrating deeper into international markets as consumers are attracted to the sweet natural taste," said CEO Stephen Glancey. "Magners is the original premium apple cider and we are pleased to report growth not only in the UK but across our Export business, where cider grew by 15% over the past 12 months and with momentum sustaining into the current year."
C&C also used the results announcement to confirm it expects to deliver EUR15m in cost savings. In January, the company said it would cut 180 jobs in the UK and Ireland, due to "intensely competitive" trading environments.
Looking forward, Glancey said the group is "positioned to deliver earnings growth" in fiscal-2017.
Following the release of the results, C&C's share price has held steady at EUR4.10 as of 0918 BST today.
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