C&C agrees deal to buy Vermont Hard Cider Company for €233m
The Middlebury, Vermont-based company produces Woodchuck, the leading cider brand in the US, with nationwide availability. Subject to anti-trust clearance, it is expected that the deal will conclude by the end of C&C’s current financial year, which runs to the end of next February.
It will mark a significant strengthening of the Irish group’s presence in the US cider market. Around this time last year, C&C bought the Hornsby’s cider brand for €20m from Californian wine business E&J Gallo.
The Vermont deal — that business is set to generate earnings of $15m this year — is expected to be immediately earnings accretive. It will also increasingly take the strain off C&C’s core Irish and British cider brands — most notably, Bulmers and Magners — which have suffered from poor weather conditions.
First half figures — covering the six months to the end of August — published yesterday, showed a 2% year-on-year fall in C&C’s net revenue to €263.4m; with operating profit (before exceptional items) down by 2.7% to €65.6m.
While earnings per share grew by 9% to 16.5c and management proposed a 9% increase in the interim dividend to 4c per share; the group is now forecasting full-year operating profits at the lower end of its previously stated guidance range of €112m-€118m.
The period showed a 9.8% year-on-year revenue decline in C&C’s Irish division and an 18.4% drop in its UK cider unit.
Speaking yesterday, C&C’s chief financial officer, Kenny Neisen said that while trading conditions in the group’s core markets remain “challenging” and its cider products failed to see any volume uplift from Euro2012 or the Olympics, the business remains cash generative, with a robust balance sheet and a resilient business model.
