Bulmers group blames weather for €700m drop

THE makers of Bulmers cider, alcoholic drinks group C&C, has pointed to recent bad weather as the primary reason for a further €700 million drop in the value of the company.

A 27% decline in C&C’s share price yesterday means the company has lost more than half of its value this year — a fall of almost €2.5 billion.

C&C has made an expensive push to gain more cider drinkers in Britain, where Bulmers trades under the Magners name.

That gamble seemed to have paid off with sales of Magners between February and May running 90% higher than a year ago.

However, the wet weather, the worst recorded in more than 240 years, has hit the company hard.

“Trading performance deteriorated at an unexpected rate during the second half of July and C&C’s cider sales volumes for the month declined significantly on the same period last year. This weak performance primarily reflects the sustained period of extremely poor weather in Great Britain and Ireland and also increased competition in Great Britain,” the company said.

When combined with competition from other brands, C&C said profits between February and August will be 35% lower than in the same months of 2006.

This comes just weeks after C&C told shareholders that profits this year would barely match that of last year, the second time it has lowered its expectations. The company was unable to say what the outlook was for the remainder of the year.

C&C, run by former supermarket boss Maurice Pratt, relies on cider sales for the vast majority of its profits. Over the past year it has sold brands including Tayto crisps and Ballygowan mineral water to focus on cider and spirits production.

Despite the setback, C&C said it is pressing ahead with its plans to sell Magners on the continent, spending €12m testing the appetite in Munich and Barcelona.

The fall in C&C’s value came on the day the Irish stock market finally regained some of the ground it has lost in recent weeks. The ISEQ gained 3.5% yesterday, or €3.4bn, reversing some of last week’s €8bn drop.

The stock market was helped by bumper profits from Ryanair, which gained 12% in value.

Whether yesterday’s rise can be sustained will become clearer today when AIB, the country’s biggest bank, unveils its profits for the first half of the year.