Bulmers owner C&C expects currency and negative market pressures to impact profits
C&C Group has said it expects its full year 2017 operating profit for the premium drinks firm to be in the region of €94-€96m.
The Bulmers owner issued its pre-close trading update for the 12 months to February 28 this year - and reported that second half profit was broadly level year on year, despite the adverse impact of currency movements.
C&C said the major factor in the decline of group operating profit year-on-year - due in May 2017 - was the devaluation of sterling.
While cost reduction plans which were announced in October 2015 were completed, the benefits were outweighed by incremental brand investment and price deflation.
"Our wholesale business stabilised in the second half of the year but did not recover the margin losses," the company said.
However, the performance in the top three brands - Bulmers, Magners and Tennent’s - "was resilient and a significant improvement on FY16".
The firm noted that cider in Ireland continued to grow its share of long alcohol drinks as younger drinkers entered the market.
Bulmers is expected to post volume growth of +3pc for the full year (FY16:-13pc) and Magners +7pc (FY16:-6pc).
Meanwhile, Tennent’s volumes are expected to be flat year on year (FY16:-4pc) and growing share in the key independent free trade channel.
C&C said that the impact of currency, negative market pressures on pricing and pack/channel mix have impacted the Group’s profitability.
"In FY18 we will continue to invest in our core brands to deliver long term growth, remain disciplined on costs and look to strengthen our route-to-market where possible," the company said.
"Given market dynamics and consumer concerns we remain cautious on the outlook for our domestic markets and are not anticipating improved trading conditions in the short term."