C&C’S SHARE price dropped by 2.6 per cent in Dublin yesterday in spite of the company reiterating its previous operating profit guidance for the current year.
In an interim management statement released before the drinks group’s annual meeting in Dublin, C&C said “we remain confident” of achieving an operating profit of between €108 million and €115 million.
It made an operating profit of €105 million last year.
C&C said trading in June had been “relatively weak” in comparison to the previous year because of poor weather in Ireland and the UK, its two main markets.
But a good first quarter had given sufficient impetus for it to restate its operating profit forecast.
C&C indicated that if it outperforms its forecast for the year, its “current intention” is to reinvest the money in the Magners cider brand, which it sells in the UK and other markets. The recession in Ireland continues to squeeze Bulmers cider revenues.
In the three months to the end of May, Bulmers increased its volumes by 2.7 per cent but its net revenues fell by 3.3 per cent. The underlying price deflation here was 6 per cent.
Magners achieved volume growth of 14.9 per cent in the period while its net revenues were up 11.5 per cent.
Gaymers cider posted a 22.2 per cent decline in volumes and a 15 per cent drop in revenues.
Tennent’s lager recorded a 4 per cent rise in volumes and a 5.9 per cent increase in net revenues, as a result of price increases. C&C described this as a “robust performance”.
It said Tennent’s made “good progress” in the Republic in the three-month period. Group finance chief Stephen Glancey told the AGM that Tennent’s would contribute about €2 million in operating profit this year from the Republic.
Chief executive John Dunsmore said there was good reason to believe the cider category in the UK would continue to grow, with Magners a likely beneficiary of that trend.
Mr Dunsmore and Mr Glancey said they saw potential to grow the Magners and Tennent’s brands in selected overseas markets.
The company recently began airing a television commercial in New Zealand for Magners.
With C&C now almost debt free, Mr Dunsmore said it was “in a position to look at opportunities, both organic and through acquisition, to take the business forward into the long term”.
