Shares plummet by 16% as firm forced to revise figures

THE makers of Bulmers and Magners cider, C&C, saw 16% wiped off its market value yesterday.

The dive in the share price was caused when the group had to correct some of the figures issued as part of last week’s trading statement, when it said sales for the first four months to end June were up 3%, boosted by a 3% increase in cider demand.

It was forced to contradict those figures yesterday pointing out that sales fell by 5%, while sales in its critical cider division were down 6% overall.

C&C fell 16%, or 36 cents, to €1.85, giving it a market value of €607.9 million. That’s the stock’s biggest decline since February 26.

Cider revenues in Ireland were flat and not 7% ahead as reported last week, the new guidance to the market by the group said yesterday.

In Britain, where C&C has been struggling, it said sales of Magners were down a substantial 12%.

C&C, which also makes Tullamore Dew Irish whiskey, said spirits and liqueur sales were down 22% in the period to June 30, which was 1% more than indicated in the July 8 statement.

C&C said its guidance remained unchanged with operating profit in the current year expected to come in at the top end of its previously indicated range of between €77m and €82m.

Despite the reassurance on the earnings side, investors took flight and the shares were still trading down over 10% by late afternoon.

Last week’s trading statement was seen as encouraging, boosted by the positive news about the successful launch of the group’s pear cider.

News that cider sales had ended their decline and had begun to increase saw the shares rise as investors looked to a better year from the struggling group.

Ambitions for cider sales under the Magners brand have not been achieved, with bad weather, weaker economic trends and strong local competition resulting in a very competitive market environment.

Last week’s optimistic outlook suggested the group was over the worst and that its relatively new management team, signed from Scottish & Newcastle, were finally starting a comeback for the group which has struggled since its flotation.

It emerged recently that former management took €4.7m from the group in severance pay.

Former boss Maurice Pratt was paid a total of €2.54m in the group’s last financial year, according to its annual report for the year to the end of February.

Mr Pratt, who stepped down in October, received a €1.73m “termination payment”.

Brendan Dwan, who stepped down on May 1, received just over €1m, while Brendan McGuinness, who retired in April last year, was paid €1.25m.

James Muldowney, who left the board in July last year, was paid €658,000. This brought the total payments linked to departing directors to €4.7m.