A better than expected performance from drinks distributor Matthew Clark will boost earnings and limit liabilities at Bulmers Cider maker C&C.
The drinks company expects earnings per share growth for the 12 months to the end of February to be around 20 per cent.
C&C said in a statement that it expected earnings before interest and tax – a measure of the cash a company generates – to be towards the upper end of market expectations.
The company said net debt would be between €305 million and €312 million, well below current market estimates, partly due to an improved contribution from subsidiaries Matthew Clark and Bibendum. C&C acquired both from Conviviality and split the businesses.
Chief executive Stephen Glancey explained that it acquired both the assets and liabilities of Matthew Clark as part of the deal. "The assets turned out to be better than expected, while the liabilities were lower."
As a result the acquisition will cost it around £50 million (€58m), he added.
The group said its core Scottish and Irish-branded businesses, including Bulmers cider, which is known as Magners in the UK, and Tennent’s lager, enjoyed positive trading momentum.
"The sponsorship of next week's Cheltenham Gold Cup by our Irish cider brands Magners and Bulmers will build on this momentum, and demonstrates the ambition we have for these brands," its statement said.
Mr Glancey said Bulmers remained the third biggest drinks brand in Ireland behind Guinness and Heineken.
World Cup
He noted that last year’s good summer and the World Cup helped boost the cider’s sales. “When the sun shines the Irish consumer always comes back to Bulmers, and they stay with it.” The good weather and football also helped Magners sales in the UK.
Mr Glancey said in Scotland the government's introduction of minimum unit pricing on alcohol in April 2018, designed to discourage binge drinking, helped push consumers towards established brands and away from cheaper beers. Tennent's grew market share 4 per cent.
He said that C&C’s niche and craft beers, such as Five Lamps, performed well last year, alongside its core brands.
C&C's shares traded at a high of €3.28 on the Irish Stock Exchange on Thursday after opening at €3.19 following the news.
The company owns and distributes a range of ciders, beer and wine.
