C&C blames weather, equipment, the economy for falling revenues

DRINKS group, C&C has warned that its first-half revenues — for the six months to the end of August — will probably show a decline on levels reported for the same period last year, when revenue topped €375.6 million.

In an interim management statement, published yesterday in conjunction with its annual general meeting, the group — which makes the Bulmers and Magners cider brands — also said that revenue for the four months to the end of June; basically the first four months of its financial year, have seen an 8% year-on-year decline.

Within this group figure, the cider division of the business saw a 10% like-for-like fall in revenue, and the spirits and liqueurs arm saw revenue fall by 3%.

Accordingly, C&Cs share price took a hit yesterday, falling by 12.50% — or 34c — to €2.38.

Regarding the first four months of its current year, C&C said that revenue in its core cider division showed a year-on-year decline in both Ireland and Britain.

“In Britain, Magners’ overall performance was broadly in line with expectation for the period. Magners Draught was launched in May and, after a slow start due to initial equipment supply difficulties, is now progressing well. In the

Republic, the decline in cider revenue in the period reflects weak market conditions, particularly in the on-trade,” it said.

In its announcement of its last set of full-year results, earlier this year, when it showed a fall in operating profits and group revenue; C&C said it was looking for an improved performance in the current year with modest all-round revenue growth expected.

However, its updated message yesterday was: “The group’s overall performance during the first three months of the fiscal year was broadly satisfactory.

“However, a weak trading performance in June — together with continuing unsettled weather and a deteriorating economic backdrop in C&Cs principal markets — makes the outlook uncertain.”

On a brighter note, C&C added that group operating profit for the first four months of its financial year showed a year-on-year increase and that although half year revenues might be down, improved operating margins should offset the impact of revenue decline.