C&C profits slip despite sales rise

A slide in full-year profits failed to dampen the mood at C&C Group as increased sales suggested the group was on the right strategic path.

The company, which in the past year has acquired Gaymer Cider Co from Constellation Brands and the Tennent’s beer brand from AB InBev, said that operating profit before exceptional items for the year to the end of February was 10.9% down on the same period last year at €89.5 million.

Sales, by way of contrast, rose 10.6% to €568.8m, mainly driven by a 5.9% rise in cider volumes.

Evidence of a recovery in the spirits market also came to light, with the company’s spirits and liqueurs unit, which is soon to be sold off to William Grant & Sons for €300m, recording a 4.1% volume decline for the year. This pointed to a strong recovery in the second half of the year after a first half drop of 15%.

Company CEO John Dunsmore said he was “Pleased to report an operating profit performance modestly ahead of stated guidance.”

He went on to express his confidence that 2011 would see the company return to profit, saying: “The performance of the underlying and the acquired businesses, together with identified synergy benefits, support our current expectation of earnings growth for FY11.

“The group’s strong underlying free cash flow generation and balance sheet strength will support the continuing development of a cider-led drinks portfolio.”

Alan Lodge, 26.05.2010