C&C's full year results in line with forecasts

Wednesday 15 May 2013 16.48
C&C's net revenues for the year to end of February slip by 0.8% to €476.9m
C&C's net revenues for the year to end of February slip by 0.8% to €476.9m

Drinks company C&C has reported full year earnings in line with forecasts, with operating profits up 2.4% and a 0.8% fall in net revenue.

C&C said its operating profits, before exceptional items, rose by 2.4% to €113.9m for the year to end February.

Net revenue for the year fell by 0.8% to €476.9m, while pre-tax profits, before exceptional items, rose from €106.1m to €109m.

The company said it continues to see a challenging market for cider sales but said its Tennent's brand is performing strongly, offsetting weakness in sales of Bulmers and Magners and other cider brands.

C&C has proposed a final dividend increase of 5.6% to 4.75 cent per share. This gives 7.1% growth in the full year dividend to 8.75 cent per share.

''Our results are in line with stated guidance and while it has not been an easy year for our core cider brands, with poor weather and increased competition, particularly in the UK, the second half did bring some trading stability in Ireland,'' commented C&C's chief executive Stephen Glancey.

He also noted that C&C's international business saw volumes increasing by over 55% in the year.

See show C&C shares performed in Dublin trade

C&C's Irish division saw a 6.1% fall in revenues to €133.8m for the year while operating profits decreased by 11.9% to €38.5m. The company said that over the 12 month period, the growth in cider total volume sales outperformed the growth in beer total volume sales, with growth of 1% reported.

Poor summer weather hit the first half the year, but trading stabilised in the second half with Long Alcoholic Drinks (LAD) up 1.5% in the second half compared with a decline of 3.2% in the first.

The company recently completed a deal to buy the Gleeson wholesaler business. It said this shows its ''long term belief in Ireland as a place to invest and gives C&C a platform for domestic growth for the first time in many years''.

Revenue at C&C's UK division fell by 15.9% to €195.8m while operating profits decreased by 15.6% to €30.9m as the UK cider category saw its first volume decline in almost a decade - it dropped by 2% as poor weather hit consumption in the key summer months.

C&C noted that its Magners cider brand underperformed the market with volumes falling by 13.9%. It added that key summer events, including the London Olympics and the European Football Championship, failed to deliver any volume improvement.

Operating profits at the Tennent's UK division jumped by 34.7% to €30.3m while revenues rose by 2.6% to €229.3m. C&C said that volume held up better in the pub trade with a fall of 2% comparing favourably to a fall of 6% in the off-licence trade.

C&C said that revenues at its international division rose by 52% to €48.5m while operating profits jumped 33.8% to €9.1m. The company said that the next 12 months should prove to be a significant period for the development of the division after the purchase of Vermont Hard Cider Company in the US in December.

C&C's chief executive Stephen Glancey said that the next year will inevitably be a transition period as the company integrates its recently acquired businesses. ''C&C will continue to deliver earnings growth to sustain long term growth objectives,'' he added.