UK/IRELAND: Summer calender gives hope to C&C Group - analyst
C&C Group has EUR68.3m (US$108.8) in ready cash
C&C Group's underlying weaknesses may in part be shored up by a summer of big events, an analyst has said.
The group's full-year results, reported earlier today, are mostly in line with expectations, according to Canaccord Genuity's Wayne Brown, with lacklustre volumes down 10.5%. Shares are likely to fall and risks remain high and toward the downside, Brown said.
The company's EUR68.3m (US$108.8) cash on hand was its greatest protection, Brown noted, although he criticised C&C's “so-far pedestrian pace of its M&A strategy”.
“After three years to explore its M&A strategy, we feel there is a lack of opportunity to drive significant value,” he said.
In a conference call with investors today, C&C Group CEO Stephen Glancey said his company is on the hunt for acquisitions, possibly in the soft drinks market.
Brown said C&C's current trading has been poor because of bad weather in its larger markets of the UK and Ireland, but added that the company's second quarter from June to August will be a likely catalyst, thanks to a crowded summer-events calendar.
“[This] is the high point for cider volumes, comparatives ease and there is the diamond jubilee, Euro [football] championships and Olympics, which should help underlying weakness,” he said.
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