Magners cider maker and drinks distributor C&C Group revealed today that its first-half earnings have been in line with expectations on revenues down around 3%.
In a brief trading update, the company said its underlying operating profit in the six months to 31 August would be in the range of €39m-€41m, reflecting the phased rebuilding of C&C’s distribution business profitability after a bungled software upgrade at its Matthew Clark and Bibendum businesses hit earnings last year.
However, revenues have taken a hit from the disposal of its NAB business in Ireland, lower contract brewing volumes, and softer cider volumes in Britain.
C&C noted that Tennent’s achieved volume and value share growth over the latest 12 weeks, supported by targeted marketing campaigns around the Euro 2024 tournament, and, despite mixed summer weather, Bulmers outperformed the cider market in Ireland. Its premium beer and cider brands, driven by Menabrea and Orchard Pig, continued to perform strongly, reporting double digit revenue growth.
Performance in its Matthew Clark and Bibendum business was described as “encouraging” with net revenues expected to be up 2%.
Meanwhile, the Dublin-based company revealed that it had reached an agreement with Budweiser Brewing Group, part of AB InBev, to restructure elements of their trading relationship, with C&C reassuming control and distribution of its cider portfolio, including Magners, in Britain from 1 January 2025. On the same date, AB InBev will assume control and distribution of its beer portfolio in the Off Trade in the Republic of Ireland.
The group said: “Bringing the sales, trade marketing and distribution responsibilities in house will provide both companies with the opportunity to strengthen their respective brand portfolios and distribution platforms.”
Looking ahead, C&C commented: “While current market conditions remain challenging, improving efficiencies, business simplification, winning customers, and brand distribution remain our top priorities. We remain confident on achieving our operating profit target for the current financial year and making progress towards the operating profit target of €100m by full-year 2027.”
The trading update comes three months after C&C admitted making numerous accounting errors dating back to the 2021 financial year. Its Chief Executive, Patrick McMahon, subsequently resigned over the affair because he was the company’s finance head during the period. A search is currently underway for his successor.
NAM Implications:
- All positive moves…
- Meanwhile, rivals and others will await the bottom-line impact.
- Fingers crossed…
