Drinks and snacks group C&C said today that it is set to post a 9% rise in group turnover for the year to the end of February as its key cider business achieved sales growth of about 30%.

In a trading statement, the company said its full-year operating margin (before exceptional items) should be broadly unchanged despite significantly increased marketing investment. 'The result is expected to be an EPS (earnings per share) outcome in line with current market expectations,' C&C added.

C&C said its financial performance mainly reflected the net impact of continued strong growth in the cider division and a significantly reduced contribution from the soft drinks and snacks division.

Today's financial statement said that turnover growth in C&C's cider division for 2005/7 will be about 30%. This reflects volume growth of about 6% for the group's Irish cider brand Bulmers and volume growth of about 125% for its international cider brand Magners. This growth came mainly from the UK where Magners is being rolled out in the greater London area and also very strong growth in Scotland.

C&C said the change to new distributors to replace Allied Domecq is progressing smoothly with no evident market disruption.

However, trading conditions in the soft drinks and snacks division remained difficult throughout the fiscal year. C&C said its performance deteriorated during the second half of the year as margins in the grocery channel contracted, and the full year outcome will show a material drop in operating margins. The company said it is taking steps to address the performance of its soft drinks business.

C&C said it plans to extend the distribution of Magners to the big cities of England and Wales this year and next. 'The successful implementation of this plan and continued share growth in existing markets for the group's cider business underpins the group's expectation of continued operating profit growth in 2006/7,' the company said in today's trading statement.

It added that its other divisions should show modest organic operating profit growth in 2006/7. This however will be outweighed by the effect of the loss of the distribution of Volvic and Evian and the Allied Domecq brands.

'Our strategy is to exploit the growth opportunities presented by Magners, Bulmers and Tullamore Dew and this will drive increased operating profit for the group as a whole,' commented C&C's Group CEO Maurice Pratt. 'We are also focused on improving the performance of the group's non-alcohol businesses,' he added.

In October, the company reported underlying growth of 10.3% in first-half operating profit. This compared to a 6.1% rise the same time the previous year, as C&C continued the roll out of its successful Magners cider brand in the UK.

C&C shares were down 23 cent to €5.65 in Dublin this afternoon - a fall of almost 4%.