Shares in drinks group C&C slumped over 17% in early morning trade after it said it expects earnings per share for its fiscal year to come in at the lower end of the range of market forecasts as it sees a drop in revenue and operating profits. The shares later recovered to close just four cent lower at €3.84.
In a trading statement, C&C says it expects its overall revenues for the year to the end of February 2008 to fall by about 10% compared to the previous fiscal year.
It said that it expects its operating profit margin to be down by about ten percentage points after the company reported weak cider sales in Britain.
'Including income from discontinued operations and from non-recurring foreign exchange gains, this operating performance is expected to result in earnings per share outcome for the 2007/8 full year at the lower end of the range of current market expectations,' C&C said.
C&C said that trading over the Christmas period followed the pattern seen in its third quarter - a solid performance in Ireland and a weak performance in the UK. Revenues for the quarter to the end of November fell by 15% compared with the same time the previous year. This reflects a decline of 18% for its cider division and growth of 1% for its spirits and liqueurs division.
The drinks company said the year on year decline in the cider division's revenue comprises a 30% fall in the UK and 2% growth in Ireland.
The poor UK performance was blamed on the loss of pub market share, the negative carry-over impact of poor summer weather and a very weak overall pub market.
C&C says the Irish performance of its Bulmers cider represents a very strong recovery from the quarter to the end of August, which was impacted by the poor summer weather. 'This performance reflects the established nature of the Bulmers brand in Ireland compared to Magners in Great Britain,' the trading statement said.
C&C also said that implementation of its cost reduction programme, announced in November, is progressing in line with expectations.
It said it continues to take a 'series of measures to sharpen its competitive response in Great Britain' and added that it expects to name a Managing Director for the Magners brand in the UK in the coming weeks.
