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C&C Group battles Brexit blues as H1 sales, profits drop - results

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  • H1 net profits down 6% to EUR42.9m (US$47m)
  • Net sales drop 14% to EUR307m
  • Operating profits fall 5% to EUR54m

C&C Group has posted a sluggish first-half as the Irish drinks company blamed Brexit for heavy currency headwinds.

C&C Groups Tennents Lager brand found export growth

C&C Group's Tennent's Lager brand found export growth

Net profits were down 6% to EUR42.9m (US$47m) in the six months to 31 August, C&C said today. Net sales dropped 14% to EUR307m in the same period while operating profits fell 5% to EUR54m.

The company said net sales in its domestic markets for the combined Bulmers, Tennent's and Magners brands were down 1% in the first half. However performance was also affected by a fall in the Sterling following the Brexit vote. Overall, net sales took a EUR24.4m hit on currency fluctuations, with Scotland the most affected region, down EUR13m. Group operating profits were impacted by EUR2.8m.

C&C Group CEO Stephen Glancey said: "In the first half we have seen some variability in consumer demand and are cautious on forward consumer reaction to political and economic conditions in our core markets. However, we have a business that is capable of weathering these challenges and our confidence in the medium to long term outlook is based on the strength of our key brands, our business model and leading positions in Ireland and Scotland - where fundamentals remain strong."

Tennent's exports were up by 50% as the brand continued to expand its global footprint, most recently in China.

C&C is in the middle of a cost-cutting programme targetting EUR15m in savings. The company this month announced the sale of its Shepton Mallet cider plant to Brothers Cider as it consolidates production at remaining sites. It has also invested EUR9m in a new PET bottling line at its Clonmel production plant in Ireland, Glancey said.

C&C has been battling declining sales as well as pressure in Ireland on its Magners brand over the past few years. It also suffered a EUR150m impairment charge in the US last year caused by the underperformance of US acquisition Vermont Hard Cider.

C&C Group's share price dipped in early morning trading today. As of 0954 it was down 0.8%.

To read the company's full results, click here.


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