Shares in C&C Group slumped today after the drinks company said it expects its full year 2017 group operating profit to be in the region of €94m to €96m.
In a trading update for the 12 months to the end of February, C&C said its second half profits were broadly level year on year, despite the adverse impact of currency movements.
C&C said the biggest factor behind the decline in operating profits was the devaluation of sterling. It had reported operating profits of €103.2m the previous year.
It said that while the cost reduction plans announced in October 2015 were completed as planned in the second half of its financial year, the benefits were offset by incremental brand investment and price deflation.
"Our wholesale business stabilised in the second half of the year but did not recover the margin losses," the company added.
C&C noted that cider in Ireland continued to grow its share of long alcohol drinks as a generation of younger drinkers entered the category.
Its Bulmers brand growth slowed slightly in the second half and volume is likely to be 3% higher for the full financial year.
In Scotland, C&C said that its Tennent's beer brand grew volume and share in the second half of the year and across the full year, outperforming the overall UK beer market which declined by 1%.
Meanwhile, the Magners brand in the UK maintained a strong performance with volume expected to be up 11% for the full year. The company's cider brands in the UK transferred into the AB InBev portfolio on March 1 as planned.
In today's trading update, C&C said that the impact of currency, negative market pressures on pricing
and pack/channel mix have impacted its profitability.
In FY18 we will continue to invest in our core brands to deliver long term growth, remain disciplined on costs and look to strengthen our route-to-market where possible," it stated.
"Given market dynamics and consumer concerns we remain cautious on the outlook for our domestic markets and are not anticipating improved trading conditions in the short term," it added.
C&C is due to report its full year results for the year to the end of February in May.
Shares in the company were sharply lower in Dublin trade today.
