The decline in the Republic’s bar trade may be about to turn around, according to one drinks company, which reported yesterday that its pub sales outperformed off-licence sales last summer for the first time in seven years.
C&C, maker of Bulmers and Magners cider, said yesterday it expected full financial-year profits to be between €125 million and €132 million after reporting that its operating surplus for the six months to August 31st grew 7.9 per cent to €71.1 million.
Profit before tax fell to €50.5 million from €64 million. This was due to one-off charges that totalled €15.5 million and included a €5.2 million restructuring charge and a €3 million cost associated with acquisitions in the US and the Republic.
The Dublin-listed group, which has operations in Ireland, Britain and the US, said yesterday that volumes in the Republic declined by 2 per cent during the six-month period, which is the first half of C&C's financial year.
However, it noted that the gap between on- and off-trade sales has been narrowing over the past 18 months. For the first time in seven years, C&C said, pub sales outperformed those from off-licences, falling by one per cent in comparison to two per cent.
“This was despite a strong summer trading period driven by good weather, which disproportionately benefits ‘take home’ consumption,” its statement added.
Sentiment improves
C&C chief executive Stephen Glancey said the performance was down to the fact that "more people were drinking in pubs" during the period. "Consumer sentiment has improved."
C&C said yesterday that revenues grew 28 per cent in the six-month period to €336.7 million from €263.4 million. Earnings before interest, tax and write-offs rose 8.7 per cent to €82.8 million.
The growth was driven by acquisitions, Gleeson's drinks manufacturing and distribution business in the Republic and the Vermont Hard Cider Company in the US, both of which were purchased during its 2012/13 financial year.
Stripping out their impact, revenues were down 10.7 per cent at €235.3 million, and operating profit fell 5.6 per cent to €62.2 million. C&C is proposing to pay an interim dividend of 4.3 cent per share, a 7.5 per cent increase on the same six-month period last year.
