C&C forecasts earnings rebound in current year

Shares in C&C climbed by nearly 3% yesterday as the Irish drinks group gave an upbeat outlook for its current financial year, backed by a better-than-expected dividend lift for investors.

Despite posting drops in operating profit and group revenues for the 12 months to the end of February, C&C said it has returned to growth in its traditionally tough market of England and is “positioned to deliver earnings growth and strong cash generation in fiscal year 2017.”

The fiscal year 2016 results for the beer and cider maker — most notable for its Bulmers/Magners cider and its Tennent’s lager brands —showed a 3.1% drop in net revenue to €662.6m and a 10.3% fall in operating profit to €103.2m.

Adjusted diluted earnings per share were 11% down on the previous year at 24.2c.

Net revenues in Ireland and Scotland — C&C’s strongest markets —were down by 10.5% and 6.8% respectively at €261.6m and €227.4m.

North American sales were down by nearly 15% at €45.3m. Management said that its cider brands had a challenging year, due to poor weather and rising competition.

However, management said the core objective of stabilising the C&C Brands business (its operations in England and Wales) after years of declining profits had been successfully achieved, with operating profit unchanged at €10.5m, although net revenue was down by 11% at €103.8m.

The headline performance had been flagged in C&C’s last trading update in March. However, dividend movement — a full-year rise of nearly 19% to 13.65c was announced — took some by surprise.

C&C also said the €115m returned to shareholders last year, via buybacks, will increase to over €130m in the next couple of months.


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