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Interim Profits and Sales Fall at C&C Group

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Interim Profits and Sales Fall at C&C Group

Interim Profits and Sales Fall at C&C Group
November 03
09:34 2015

C&C Group, the Irish and UK manufacturer and distributor of branded cider, beer, wine and soft drinks, has reported a 2.6% fall in net revenue to €358.6 million, with operating profit dropping 9.5% to €62.6 million for the six months ended 31 August 2015. The operating profit decline reflects a challenging period in the group’s core markets of Ireland and Scotland and these headwinds are expected to adversely impact profitability by €10 million in the financial year. However, C&C Group has identified significant growth opportunities for its export business as it expands in new markets.

The group manufactures Bulmers, the leading Irish cider brand, Magners, the premium international cider brand, the C&C Brands range of English ciders and the Tennent’s beer brand. C&C Group also owns and manufacturers Woodchuck and Hornsby’s, two of the leading craft cider brands in the United States. The Group’s Irish wholesaling subsidiary, Gleeson Group, owns and manufactures Tipperary Water and Finches soft drinks. The group also distributes a number of beer brands in Scotland, Ireland and Northern Ireland, primarily for Anheuser-Busch InBev and owns Wallaces Express a Scottish drinks wholesaler.

Stephen Glancey, chief executive of C&C Group.

Stephen Glancey, chief executive of C&C Group.

The drinks group has commenced a new cost saving programme to deliver €15 million in annualised savings. C&C Group has also launched share buy-back programme to repurchase up to €100 million of its shares by July 2016

Stephen Glancey, chief executive of C&C Group, comments: “Over the last six months there has been a lot of M&A activity in our sector with valuations reflecting both availability of liquidity and asset scarcity. We believe that the landscape will continue to evolve in the next twelve months. We have and will continue to review acquisition opportunities to optimise value for shareholders but only if they deliver superior and sustainable long term returns which are in keeping with our return parameters.”

He continues: “Looking ahead, we expect improved operational performance in Ireland and Scotland as we move through the second half and into FY’17 underpinned by ongoing cost saving initiatives, sustained investment behind our brands and increased emphasis on niche and premium. We are assuming that market conditions will continue to be testing particularly in our core markets in the coming months but we are confident that we are taking the right actions to build durable, long-term value for all shareholders and this is reflected in a 5.1% increase in our interim dividend.”

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