Analysis - C&C Group's H1 hints at Ireland rebound
C&C Group posted an H1 profits and volumes rise in Ireland
C&C Group's latest half-year results suggest that Ireland's beer and cider market is “starting to turn the corner”, an analyst has said.
The Irish owner of Magners and Bulmers reported yesterday (30 October) that H1 net sales in the country, excluding the Gleeson Group acquisition made earlier this year, rose by 2%. Volumes in the country, again excluding Gleeson, were up by 2.7%, after an 11.5% decline in Q1.
Nomura analyst Edward Mundy said today (31 October): “Strong H1 profit delivery in the ROI division should not be a surprise given the good summer weather. However, we detect greater optimism that the macro environment is starting to turn a corner and improving on-trade performance would indicate that price deflation from the move from on- to off-trade should start to moderate.”
Last year it was revealed that sales in the Ireland's off-trade channel had dropped by a third since 2007. Figures also showed that total consumption declined by 3.2% in the first seven months of last year, with decreases across beer, wine, spirits and cider.
Mundy today said the Gleeson purchase, completed in March, will help C&C grab a larger share of the Irish beer market than its current 2% slice, while also offering greater distribution opportunities for brands such as Tennent's and Caledonian Smooth.
In its results yesterday, C&C said that for the first time in seven years, the Irish on-trade in Long Alcoholic Drinks outperformed the off-trade, down 1% compared to off-trade's 2% drop.
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