C&C reiterates full-year outlook despite washout summer

C&C Group said it remained on track to meet full-year expectations on Tuesday, despite washout summer weather hitting trading.

The Irish drinks manufacturer and distributor, which owns Bulmers, Magners and Tennent’s, said net revenues declined 3% to €861.4m in the six months to 31 August.

C&C attributed the decline to poor summer weather and subdued market conditions. In particular, revenues were affected by the disposal of its soft drinks business in Ireland, lower contract brewing volumes and softer cider volumes in Great Britain.

However, underlying group operating profits before exceptional items jumped 29% to €40.3m, after an efficiency drive boosted operating margins.

Looking to the full year, C&C acknowledged that conditions remained "tough", with consumer confidence dented in the lead-up to this week’s Budget.

But it said it remained on tracked to achieve full-year operating profits of €80m, with cost efficiencies expected to further enhance margins in the second half.

"Positively, we have well executed plans in place for the Christmas and New Year period, as well as encouraging trading momentum," it noted.

Ralph Findlay, chief executive, said: "Despite unfavourable summer weather, our brands demonstrated inherent appeal and resilience, with both Tennent’s and Bulmers growing market share.

"As we enter the busy Christmas and New Year trading period, we are committed to delivering outstanding service, winning customers, continuing to simplify the business and to further improve operating efficiency."

Greg Johnson, analyst at Shore Capital, which has a ‘buy’ rating on the FTSE 250 stock, said: "We see the update as reassuring, with the current valuation failing to reflect the medium-term margin rebuild opportunity and strengthening cash flow."

As at 0900 GMT, shares in C&C were down 2% at 158.2p.