Drinks group profits to grow €7m

Drinks group C&C is expecting operating profits, for its current financial year to grow by up to €7m on the previous 12 months; although earnings from its Irish operations are likely to remain flat.

In a trading update, published yesterday to coincide with its AGM, the Dublin-headquartered owner of the Bulmers/Magners cider brands said that operating profit for the year to the end of next February should be in the range of €112m to €118m.

In its last financial year, C&C delivered operating profits of €111.2m, which were up by 9% and above initial estimates.

Despite adverse weather eating into cider sales in both Ireland and Britain, C&C’s lager brands — such as Tennent’s — have performed well over the first quarter of the group’s current fiscal year.

In the three months to the end of June, C&C’s net cider revenues were down by 11.5% in Ireland and 25.5% in Britain.

“Despite a challenging quarter and tough consumer backdrop, we’re confident that our resilient business model and strong brand market combinations, will deliver continued earnings growth for the full year and maintain our business momentum,” said Stephen Glancey, C&C’s chief executive, adding that management expects a recovery in cider volumes and revenues over the remainder of the financial year.

While Mr Glancey said that the Irish market remains “difficult” and earnings here will stay flat, he noted that the Irish operations are still a very strong business strand for the group and management will still seek to invest here — both organically and, possibly, through acquisition — if the opportunity presents itself.

Speaking during yesterday’s meeting, C&C chairman Brian Stewart said that the group — despite its main management being Scottish these days — remains “very much an Irish company”, with Ireland still at the heart of its business.

When asked by one shareholder about the prospect of the group de-listing from the ISEQ and making London its sole share listing, Mr Stewart said that was not the intention, at this moment, but such issues were always under review. He added that the company hopes to continue with a “progressive dividend policy”, whereby shareholders’ dividend payments would grow in line with group earnings.