C&C shares rise 3% as Bulmers sales hold up well

Shares in C&C rose over 3% as the sales of Tennent’s lager in Britain and Bulmers cider in Ireland held up relatively well at the half-way stage, as the company gets through the Brexit uncertainty in good shape.

C&C reports on a half-year basis on the six months to the end of August because it generates a significant amount of sales and earnings during the summer months.

By volume. sales of Tennent’s, Magners, and Bulmers were affected in the latest six-month period because the year-earlier comparative earnings period was particularly tough, with the World Cup and good summer weather in 2018.

And the company’s performance was “resilient” under the circumstances, said chief executive Stephen Glancey.

Overall operating profit rose 9.2% to €63.8m as revenues climbed 13.5% to almost €875m in the period.

In Ireland, Bulmers fell back to its long-term market share as net revenues from the cider fell by 4.2%.

But it said “competition remains intense” from new product launches by big brewers. Revenues at its C&C Gleeson wholesale distributor rose significantly.

In Britain, its combined distribution business Mathew Clark and wine business Bibendum posted a combined operating margin of 2%. Bibendum made a loss in the period but will break even in the course of the year, C&C said.

Volume sales of Tennent’s in Scotland fell almost 5% but it nonetheless generated higher net revenues from the lager. Volume sales of the Magners cider in Britain fell by almost 3%.

In international markets, it said that Tennent’s volume sales in Italy, its largest export market, continued to be weighed by its new distribution deal through AB InBev.

“Despite the economic uncertainties linked to macro and political issues, current trading is in line with expectations,” said Mr Glancey, adding it was on course to achieve its earnings target for the full-year.

Analysts at Davy highlighted the “significant operational progress” at Matthew Clark Bibendum, saying it was likely to keep its earnings forecasts unchanged.

“EBIT (earnings before interest and tax) delivery for core markets is stable and consistent with our expectations,” the analysts said.