C&C Group has credited stronger than expected growth in its cider brands for helping deliver growth in profits in the first half of the year, on the back of revenues which were up 9%.

The Ireland-based company today (11 October) reported profit before finance costs and non-recurring items of €68.4m and adjusted earnings per share of 16.2 cents for the first six months, increases of 10% and 14% respectively. The group generated free cash flow of €61.9m in the period.

Maurice Pratt, group CEO, said: "C&C is pleased to report continued earnings growth, notwithstanding significant marketing investment behind the Magners brand.

"This financial performance reflects a better than expected contribution from the group's cider division. Magners has exceeded our expectations in the UK while Bulmers, with the benefit of good summer weather, delivered strong growth in Ireland."

Volume for the group's cider brands grew by 27%. Volume for the group's Irish whiskey brand, Tullamore Dew, grew by 15%.
The company said that the results were achieved despite a marketing investment in the period increased by 34%.

The group said it will pay an interim dividend for the period of 6.5 cents per share, an 18% increase on last year.

C&C said it expects the strong underlying (i.e. weather adjusted) market performance of its Cider division to continue into the second half of the year.

"This division is the principal driver of C&C's earnings growth," the company said.

However, it warned that the international spirits & liqueurs division could experience some temporary performance shortfall in the second half as a result of impending distribution changes.

"The weak overall trends in the Soft Drinks & Snacks division are continuing into the second half of the year," the company said. "The planned re-organisation of the Snacks business, announced in June, commenced implementation on 30 September. The realignment of distribution of the former Allied Domecq brands in Ireland will substantially reduce the profit of the group's Distribution division when the expected changes become effective in February 2006."

In conclusion, the company said: "In summary, the group expects moderate EPS growth for the full 2005/6 fiscal year. Beyond 2005/6, the group's objective is to enhance underlying earnings growth from the further roll-out of Magners in the UK. To support this growth, C&C will expand its cider manufacturing capacity in Clonmel in 2006, ahead of the timeframe originally envisaged."