Persistent rain wiped half a billion off the value of alcoholic drinks group C&C yesterday. Shares in the company fell more than 15 per cent after the company issued a profit warning as wet weather dampened demand for Magners and Bulmers.

C&C said very poor weather in June and into July, together with heavy competition on prices, was likely to lead to weak second-quarter cider sales.

Operating profits for its 2007- 2008 financial year would closely match last year's performance, it said in a statement ahead of its annual general meeting yesterday.

The company had previously indicated that profits would grow by 15 to 25 per cent this year.

Although traders had speculated for weeks that the company's sales would be hit by one of the wettest Junes since records began in Britain and Ireland, the news that profit growth would be flat this year surprised and disappointed shareholders.

Almost 16 million shares in the stock traded on the Iseq index, with the share price down by 19 per cent at one point. However, after a hitting a low of €8.20, it made a slight recovery in the afternoon, and closed at €8.55, down €1.59 on the day.

In a statement, C&C said its current high level of spending on marketing and other fixed costs meant its profits were particularly sensitive to changes in sales volumes.

Total revenues increased by 15 per cent in its first quarter, and sales volumes of Magners in Britain are still expected to grow by 35 per cent this year. However, operating profits for the March-August period are likely to be down on the same period in 2006.

A heatwave last summer helped C&C to an 89 per cent rise in sales volumes of Magners in its last financial year after its marketing campaign convinced British drinkers that cider could be a premium product for pouring into a glass with ice, not just a bargain-bin beverage typically consumed by teenagers.

Analysts were upbeat yesterday about the company's long-term prospects for growth.

At its agm, one shareholder asked the board if it had been wise to sell its snacks and soft drinks divisions and become "a one-trick pony" - a "one-and-a-half-trick pony" if its spirits and liqueurs division was included - given cider is so exposed to the whims of the weather.

C&C chief executive Maurice Pratt said the geographic expansion of Magners in Europe would help reduce the risks of concentrating on cider. The company was spending €12 million market testing the drink in Barcelona and Munich.

Mr Pratt, who told shareholders he was personally suffering from the effects of the weather with his first summer cold in years, said it would be October before the group could assess the potential for Magners in those cities, where cider is not traditionally consumed.

C&C is also considering extending its Bulmers Iced drink - a pint with a head of iced cider - to the Magners brand.