C&C ‘well-placed’ for acquisition growth despite pressures

Drinks group C&C has said it is well-placed to take advantage of acquisition opportunities despite Brexit concerns and currency headwinds continuing to eat into its balance sheet.
C&C ‘well-placed’ for acquisition growth despite pressures

Acquisitions potentially including assets being made available from the sale of international brewing giant SABMiller.

Speaking yesterday, on the back of C&C’s interim results, chief executive Stephen Glancey said that management looks at mergers and acquisitions opportunities all the time, but hasn’t seen anything suitable of late.

However, he said the group still has a strong balance sheet, making it well-positioned to exploit anything that comes up. It is best known for its twin Bulmers and Magners cider brands and Tennent’s lager.

Mr Glancey said C&C would chiefly look to strengthen its cider portfolio in its key locations of Ireland, Scotland, England, Wales and the US and could partner with smaller companies or even look at the central and eastern European assets of SABMiller, which are being sold to allow for the brewer’s $103bn (€95bn) sale to Anheuser-Busch InBev, which was approved this month.

C&C yesterday reported a near 8% annualised fall in operating profits to €55.1m for the six months to the end of August, with net revenue falling over 8% to €307m.

“However, Bulmers enjoyed volume growth of 6% in Ireland and Magners volumes rose 11%, while Tennent’s volumes were ahead by 2%, year-on-year.

“Furthermore, while revenues and operating profit still fell in each of its core geographies (profits stabilised in Ireland), volume and market share gains have seen C&C have its best year in England and Wales, where it has traditionally struggled, for a number of years,” the company said.

Management said its first half was hampered by currency headwinds notably the weakening of sterling, but that the positive effects of its €15m cost-saving plan (which is seeing production centralised at Clonmel, Co Tipperary) and its recent increase in marketing spend will be evident in the second half of the year, up to the end of February.

The company is more cautious on Brexit particularly by evidence it has negatively affected consumer drinking trends.

“We have seen some variability in consumer demand and are cautious on forward consumer reaction to political and economic conditions in our core markets.

"However, we have a business that is capable of weathering these challenges and our confidence in the medium to long-term outlook is based on the strength of our key brands, our business model and leading positions in Ireland and Scotland where fundamentals remain strong,” Mr Glancey said.

C&C’s share price was down by over 2.5%, yesterday, at €3.50.

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