C&C warns of 8% fall in first-half revenue

DRINKS group C&C expects first-half revenue to be down by 8% following a poor summer and increased competition.

In a trading statement yesterday it said revenue at its cider unit for the six months to 31 August will fall 11%. Almost three-quarters of C&C’s revenue comes from cider.

Bulmers cider volumes in Ireland are expected to show a decline of 11% in the in the half year, while Magners volumes are expected to show a decline of 15%.

Spirits and liqueurs shipments are expected to increase by 3% over the same period last year.

C&C said a forecast return to growth in Britain did not materialise because of the weaker market background and slower-than-expected benefits from marketing initiatives.

It said its performance reflects a deteriorating economic environment in its principal markets and in particular the poor performance of the on-trade channel.

The company recently hired a new executive to direct British sales of Magners and introduced draft and lower-calorie versions of the drink.

The performance is at the lower end of guidance given in July.

Davy analyst, John O’Reilly, said weather, deteriorating economic conditions and competitive pressures are significant negative factors.

“But, that said, there has been a slower realisation of the benefits from market initiatives. C&C is also conceding that its efforts to arrest a decline in British volumes are not working to expectation,” he added.

C&C expects difficult conditions to continue through the year.

Last month it said it expected improved margins from cost reductions to at least offset first-half sales decline.

C&C rose 12 cents, or 5.1%, to €2.47 in Dublin trading yesterday after falling 20% in the four weeks leading up to yesterday’ s statement.