C&C reaffirms its profit guidance

Cider-focused drinks group C&C has reported a resilient close to the calendar year of 2013, leading it to reaffirm its operating profit guidance of €125m to €132m for its current financial year.

The group is chiefly known for its Bulmers/ Magners cider brands. Yesterday it published its third- quarter trading update, covering the three months to the end of November.

The group said that the period saw an improvement in international sales volumes, satisfactory trading over the Christmas period and particularly resilient performances emanating from its Irish and Scottish operations.

In the latter market, the Tennent’s Lager brand performed well during the three-month window, while overall brand volume in the Republic increased, maintaining the performance seen in the first six months of the group’s financial year.

While C&C’s UK cider division continues to find trading challenging, the group said the excellent progress made in developing its multi-beverage offering in Ireland and through the Tennent’s UK business and the resulting earnings growth and cash generation has provided a degree of balance to the more competitive cider market in Britain.

Back in October, C&C reported a near 30% year-on-year increase in first-half revenues (for the six months to the end of August) to €336.7m, with operating profit rising 8% on the back of the good summer weather.

Yesterday, it updated saying that for the nine months to the end of November, net revenue for its Republic of Ireland division was up 176.2% (3.7% if its acquisition of leading distribution firm, Gleeson is excluded).

Revenue for the period for the group’s third-party brands rose by nearly 5% and was up by 92.5% year-on-year in its international division.

However, annualised revenue declines of 2.9% and 17.5% were evident in the Tennent’s UK and Cider UK arms. Management has already said its current financial year is one of transition, with the integration of recent acquisitions being a core focus.

It added yesterday that the group’s balance sheet remains strong, with its core markets still resilient.

C&C’s shares were up by nearly 3% yesterday, at €4.46.