Profits at Bulmers owner grow 4% despite falling revenue

C&C Group produces Bulmers as well as Tennent's, both of which delivered net revenue growth and improved market share.

Bulmers owner C&C Group has seen their operating profit increase by 4% during the first half of their current financial year despite a drop in revenue stemming from a loss of income from distributing Budweiser across the country.

According to the company’s interim results for the first six months of its financial year, ending on August 31, net revenue fell by 4% to €825.7m with C&C Group saying this was largely due to the Budweiser Brewing Group (BBG) taking over distribution of its products in the Republic of Ireland.

During 2024, the two companies reached a new distribution agreement whereby BBG would resume distributing all of its own products in the Republic of Ireland from January 1, 2024, while C&C Group would re-assume control and distribution of its cider portfolio, which includes Bulmers — branded as Magners in the UK — across the British on and off trade.

In their results, C&C Group noted that revenues were also hurt by modestly lower volumes, especially in wine and spirits.

The company said its underlying operating profit is up 4%, compared to the same period last year, to €41.9m. Its underlying free cashflow stood at €41.7m for this period.

The company said its two leading brands, Tennent’s and Bulmers, delivered net revenue growth and improved market share. Bulmers net revenues in the period were up 6.6% with the company citing the “positive impact” of the summer weather in Ireland.

“Total cider market volumes, in both on-trade and off-trade was in growth at 4.1% and 5.8% respectively in the last six months.

The company’s distribution revenue dropped by 4.8% to €656m, while the operating profit of €15.2m for this segment is up 6.3% year-on-year. Net revenue in its GB Distribution business was down 1.1% with volumes down 1.4%.

The company said their results are in line with their expectations. Chief executive of C&C Group Roger White said the company delivered a “solid first-half performance” against a “challenging market backdrop”.

“We have made good initial progress in our programme to simplify and improve our core business processes. 

We believe we are well prepared for the all-important festive trading period, and whilst we expect challenging economic conditions to persist, we remain committed to the delivery of our full-year earnings targets. 

In the on-trade market in Ireland, the company said it is facing headwinds such as “mounting cost pressures and some variability in consumer demand”.

“International visitor spend in June was down 6% year-on-year, though still ahead of 2023 levels,” the firm said.

The company’s branded revenue declined by 1.3% in the period to €170m reflecting growth in its core brands and their premium brand portfolio. However, this was offset by a decline in its British cider portfolio and lower contract manufacturing volume.

The company said it expects to see continued solid trading in the second half of this year with overall cost projections for the year in line with our original forecasts.