Drinks and snacks food group C&C has reported pre-tax profits of €58.1m for the six months ending August 31, up from €50.5m the same time last year. Revenue rose by 9.4% to €419.5m from €385.7m. The company said its operating margins at 16.3% is up slightly year on year, after a 34% increase in marketing investment.
Adjusted basic earnings per share rose by 14% to 16.2 cent, while an interim dividend of 6.5 cent per share has been declared - an increase of 18%.
C&C said that volume in its cider brands grew by 27%, while volumes of its Irish whiskey brand, Tullamore Dew, grew by 15%. The company also successfully extended the distribution of its Magner cider brand to the greater London area.
'This financial performance reflects a better than expected contribution from the group's cider division,' commented Maurice Pratt, C&C's Group Chief Executive. 'Magners has exceeded our expectations in the UK, while Bulmers, with the benefit of good summer weather, delivered strong growth in Ireland,' he added.
Six month revenues for the Cider division increased by 28.2% to €144.5m from 2004 levels. Profit before finance costs rose by 26.7% to €45.1m against €35.6m last year. Bulmers outperformed the market and grew by 8% in the period.
In the group's International Spirits and Liqueurs division, H1 revenues were up 3.2% to €28.9m. Profit before finance costs increased by 11.8% to €7.6m against €6.8m the previous year. Overall volume shipments increased 2% year on year.
Revenues in C&C's Soft Drinks and Snacks division fell by 0.9% to €129.3m. Profit before finance costs fell by almost 20% to €13.3m against €16.6m the same time last year. A modest decline in carbonated soft drinks was offset by strong growth in bottled water. The snack market also saw a modest decline.
In the group's Distribution division, revenues grew by 4.1% to €116.8m. Profits before finance costs declined by 20% to €2.4m compared to €3m in 2004.
C&C said it expects the strong underlying market performance of its cider division to continue into the second half of the year. It said that this division is the principle driver of its earnings growth.
However, it cautions that the International Spirits and Liqueurs division could experience some temporary performance shortfall in the second half as a result of impending distribution changes. It added that the weak overall trends in the Soft Drinks and Snacks division are continuing into the second half of the year.
'The planned reorganisation of the Snacks business, announced in June, commenced implementation on 30 September. The realignment of distribution of the former Allied Domecq brands in Ireland will substantially reduce the profit of the group's distribution division when the expected changes become effective in February 2006,' the company said in its results statement.
Shares in C&C closed up 11 cent to €5.26 in Dublin this afternoon.
