C&C sees solid first half results

DRINKS group C&C has reported a solid set of first-half results — including a €5 million year-on-year rise in pre-tax profits — despite tough trading conditions in Ireland and Britain during the second quarter of its financial year.

Pre-tax profit, for the six months to the end of August, amounted to €64.8m (before exceptional items) — up from €58.7m for the same period last year.

After exceptional items are included, the interim pre-tax profit figure rose from €54.8m to €59.7m. First-half operating profit, meanwhile, was up by just under €3m at €62.3m; but group revenue for the period was down by about €40m at €399.3m.

The group’s outgoing chief executive, John Dunsmore, called the first half performance “robust” in the face of a tough second quarter notable for poor weather and low consumer confidence levels.

“The underlying strength of our brands and stability of our business model is evident in the continued delivery of steady growth in earnings, dividends and strong cash flow in difficult trading conditions,” he said.

Yesterday’s figures also included a proposed 11% year-on-year increase in the interim dividend payment to shareholders, to 3.67c per share. Adjusted diluted earnings per share, meanwhile, rose by 7.1%, year-on-year, to 16.5c.

In terms of operational performance, in the first half, C&C said that while net revenue in its Magners division in Britain was down by 2.3%, year-on-year, the product (in which investment grew by over 9%) is showing “positive indications for the future”.

Revenue was down in each of its product divisions, except its third part distribution brands. However, a €1.2m increased contribution from the group’s beer portfolio helped its business in the Republic “broadly meet its objective of holding absolute contribution levels”.

Barry Gallagher of Davy Stockbrokers said yesterday’s results would be overshadowed by the announcement of John Dunsmore’s pending departure.

“In the last three years, John Dunsmore, Stephen Glancey and Kenny Neison have overseen the reversal of the decline of the Magners brand, defended profits in a very challenging Irish market, created value through the Tennent’s deal and laid the foundations for the export business,” he said.

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