C&C refreshed by demand for cider

Drinkers swapping traditional tipples for Bulmers and Magners cider ensured drinks firm C&C Group celebrated a summer of sales and profits growth today.

C&C said the performance of Magners following its roll-out in the greater London area had exceeded expectations, while the drink found new fans in its existing markets of Scotland and Northern Ireland.

Despite the cost of an advertising blitz that included sponsorship deals with the London Wasps and Edinburgh rugby clubs, C&C said profits during the six months to August 31 bubbled 10% higher to €68.4m.

Revenues grew by 9% to €419.5m on the back of a 28.2% improvement in cider sales, which also reflected the good summer weather that boosted demand for the Bulmers brand in its Irish heartland.

C&C said sales volumes of Magners more than doubled during the six months after adverts on billboards, television stations, radio and posters on the London Underground had a winning impact on changing drinkers’ tastes.

It now plans to spread Magners around the UK and will begin work next year to expand its manufacturing base in Clonmel, Co Tipperary, where the cider has been produced for the past seven decades.

Promoting the Magners brand led to a 34% hike in investment compared with last year, but chief executive Maurice Pratt said the growth in earnings proved it was money well spent.

“This financial performance reflects a better than expected contribution from the group’s cider division,” Mr Pratt said.

“Magners has exceeded our expectations in the UK while Bulmers, with the benefit of good summer weather, delivered strong growth in Ireland.”

In addition to Magners and Bulmers, C&C makes Ballygowan mineral water, Tayto crisps, Tullamore Dew Irish whiskey, Carolans Irish Cream and Irish Mist liqueur.

C&C listed on the Dublin and London 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.

C&C said volumes of Tullamore Dew grew by 15% and overseas drinkers were increasingly selecting it among their favourite whiskey brands, although there were fewer shipments of Carolans than a year earlier.

Ballygowan water had the edge on its other soft drinks brands during a summer marked by generally warm weather, but margins came under pressure from heavier expenditure on marketing.

This year’s takeover of Allied Domecq by French drinks giant Pernod Ricard has put its distribution deals in doubt and C&C stressed again that its spirits and liqueur division could suffer “some temporary performance shortfall” in the second half as it makes alternative arrangements.

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