Strong First Half Performance by C&C Group
Helped by improved trading performances in its domestic markets in the second quarter, C&C Group, the Irish and UK branded cider and beer producer, has increased net revenue by 27.8% to €336.7 million operating profit by 7.9% to €71.1 million for the six months ended 31 August 2013.
C&C Group manufactures Bulmers, the leading Irish cider brand, Magners, the premium international cider brand, Gaymers cider and the Shepton Mallet Cider Mill range of English ciders and the Tennent’s beer brand. C&C Group also owns Woodchuck and Hornsby’s, two of the leading craft cider brands in the United States. The group’s Irish wholesaling subsidiary, Gleeson Group, manufactures Tipperary Water and Finches soft drinks. C&C Group also distributes a number of beer brands in the Scottish, Irish and Northern Irish markets.
Following a weak first quarter, the group recorded an improved performance in each of its domestic markets in the second quarter aided by warmer summer weather. C&C Group also continued to focus on operating efficiency, operating expenses in the period include significant investment in future areas of growth including Shepton Mallet Cider Mill and its US cider business.
During the period, C&C Group achieved volume and revenue growth in the Republic of Ireland as the Bulmers brand outperformed the broader LAD (long alcoholic drinks) market. The integration of the Gleeson acquisition is progressing to plan and the group is also investing in a craft brewery at its site in Clonmel to participate in the medium term opportunity presented by Irish craft beers.
The Tennent’s business is performing well as it continues to broaden its brand portfolio and to invest in trade lending and delivering volume growth in the Independent Free Trade (IFT). The performance of Caledonia Best, now over 12% of ale volumes in the IFT channel, and the recently launched Heverlee handcrafted premium Belgian beer is also encouraging.
Tennent’s provides a degree of balance to a competitive UK cider market. While Magners volume performance improved in the second quarter, fundamentals in the UK cider market remain challenging, according to C&C Group.
During the first half, C&C Group took a decision to invest in the Magners brand to retain its strong brand identity as the leading, premium cider. Despite competitor challenges Magners remains the number one UK modern cider by volume and by value.
Stephen Glancey, chief executive of C&C Group.
The cider and beer group is also continuing to make significant progress on the integration and re-positioning of its US operations. Construction of a new €23 million cidery in Vermont is progressing to plan and is due to open in April.
“FY 2014 is a transition period for C&C,” points out Stephen Glancey, chief executive of C&C Group. “Integration and performance of recently acquired businesses is a core focus. We are transitioning to a multi-beverage model in our domestic markets and continue to position the business to capitalise on international category growth. We will focus on continued operating efficiency, deliver earnings growth and enjoy the benefits of a strong balance sheet. We are pleased to re-affirm guidance to deliver full year earnings growth of between 10% and 16%, implying an operating profit range of €125 million to €132 million.”
