C&C Group has reported a pretax loss of €65.8 million for the year to end of February after sales of its Magners cider slumped due to wet weather and increased competition from rival beverages.
The company also recorded a one-time charge from a revaluation of property, plant and machinery by a net €130.6 million.
Revenues declined 11 per cent to €514.4 million while adjusted diluted earnings per share have declined 15 per cent to 25.4 cent.
The company said the performance reflects a rapid deterioration in economic conditions in its core markets over the period and also an increasing shift from pub sales to off-licence sales.
A second consecutive poor summer in 2008 – sales of cider traditionally rise during hot summers – and the weakening of sterling, which reduced the company’s cost competitiveness in the UK.
It said free cash flow increased 138 per cent to €76.1 million and follows a significant full-year reduction in capital expenditure.
Trading in the first ten weeks of the current fiscal year has been “mixed,” it said.
C&C last year appointed three new executives, including chief executive John Dunsmore, as part of its attempt to revive revenue. The company, which relies on cider for about three quarters of sales, has cut jobs and introduced a pear-flavored version.
“We are in the process of aligning C&C’s operating cost base with an exceptionally challenging environment,” Mr Dunsmore said in the statement. The company expects operating profit to be between €77 million and €82 million this fiscal year, in line with a forecast given in March.
Underlying operating profit fell 27 per cent to €90.2 million, in line with expectations.
Cider sales were down 15.2 per cent with a 14 per cent drop in Bulmers sales in Ireland and an 18 per cent fall in Magners sales.
The results included an exceptional gain of €10 million from foreign exchange hedges and a write-down of €11 million on juice reserves.
The company has proposed a final dividend of 3 cent, bringing the full-year dividend to 9 cent, down 66 per cent on 2007. The company said it intended to pay a dividend of no less than 6 cent in 2010.
At 10.15am C&C shares were up 5.5 per cent at €1.90, giving the company a market capitalisation of €596 million. The stock remains down 62 per cent over the last 12 months but has gained 30 per cent since the start of the year.
