FDBusiness.com

Reflecting the impact of acquisitions and a return to volume growth of its Magners brand in Great Britain for the first time since 2007, Irish cider producer C&C Group has reported a 29.4% increase in operating profit from continuing operations to Eur63.4m for the six months ended 31st August 2010 on net revenue up 73% to Eur305.5m. Acquisitions contributed operating profit of Eur15.6 m while the group’s disposed spirit business contributed Eur4.5m in the period.

Although the Magners brand grew volume by 1.6% year-on-year, Magner’s Northern Ireland volumes declined by 20.6% and the Bulmer’s volumes declined 3.4% year-on-year in a challenging Republic of Ireland cider market. Operating profit in C&C’s original cider business declined by 1.8% to Eur47.9m. Group operating margin, as a consequence of new acquisitions, declined by 6.9 percentage points to 20.8% of net revenue.

During the first half, C&C disposed of its spirits and liqueurs business to Scotch whisky distiller William Grant & Sons for Eur300m. C&C also completed the integration of acquisitions – the AB Inbev beer business in Northern Ireland and the Gaymer’s cider operation in Great Britain. Indeed, synergy targets have now been revised upwards to Eur8m for 2010/11 and to Eur10m for 2011/12 delivering total cost and revenue synergies of Eur18m.

“Economic conditions in the group’s core markets of Ireland and the UK remain unpredictable and challenging. Consequently, we are appropriately cautious in our outlook. Despite the challenges, we are pleased to report the continued growth of the cider category in the UK and the return to modest volume growth for the Magner’s brand for the first time since 2007,” comments John Dunsmore, chief executive of C&C Group. “We remain confident of delivering to market consensus for operating profit in the range of Eur102-Eur106m for 2010/11.”