C&C credit London cider sales with jump in revenue

British drinkers having their thirst quenched by Magners cider for the first time were today said to be behind an 8% rise in half-year revenues for maker C&C Group.

The drink has been rolled out in the greater London area this summer and C&C said volumes in the six months to August 31 were double the level of a year ago.

The profile of Magners has been boosted in the capital by sponsorship of London Wasps rugby club, who were recently crowned as champions of the Zurich Premiership for the third successive year.

At the same time, C&C led an advertising blitz which saw the drink promoted via billboards, television stations, radio and posters on the London Underground.

Magners already has a strong foothold in Scotland where it is the leading packaged cider and is the shirt sponsors of Edinburgh rugby club and Dundee football club.

In a trading update ahead of its half-year results in October, C&C said the step-up in spending on advertising would not leave its operating margin below the level of last year.

Revenue growth was ahead of its own expectations and “reflects the net impact of strong growth in the cider division and a reduced contribution from the soft drinks and snacks division”, the company said.

In addition to Magners, C&C manufactures Bulmers cider which grew sales volumes by around 8% in the period and meant overall revenues from cider rose by more than 25%.

Its other brands include Ballygowan mineral water, Tayto crisps, Tullamore Dew Irish whiskey, Carolans Irish Cream and Irish Mist liqueur.

C&C listed on the London and Dublin stock exchanges in May with a value of €725m.

The group, established in 1968, was acquired by spirits giant Allied Domecq in 1998 and bought by BC Partners, co-investors and management in 1999.

The recent takeover of Allied by French drinks giant Pernod Ricard has put its distribution deals in doubt and C&C said the performance of its spirits and liqueur division could suffer “some temporary performance shortfall” in the second half as it makes alternative arrangements.

C&C added that fewer consumers bought fizzy drinks and snacks in the first half and it lost market share, while margins had come under pressure in the growing market for bottled water.

Although the soft drinks and snacks market was not expected to improve over the next six months, C&C expected “the strong underlying market performance of its cider division to continue into the second half”.

The company, which employs around 2,000 staff, has its main manufacturing and distribution sites in Cork, Dublin, Clonmel in Co Tipperary and Newcastle West in Co Limerick.