C&C board pour cold water on takeover talk
Published 19/05/2011 | 05:00
DRINKS company C&C yesterday denied the board was positioning the company to be sold as the firm announced a strong set of annual results.
The maker of Bulmers Original cider has focused almost exclusively on its cider and Tennents lager business in recent years, selling its spirits business last summer and working to clear the company debt.
That has sparked speculation from analysts that the board were setting up the company to be sold to a major brewer, but company chief executive John Dunsmore and strategy director Kenny Neison both poured cold water on any takeover talk.
"That has not been the purpose for how we've positioned the business," said Mr Neison.
"We are keen to invest in our Irish base and plan to continue our strategy of bolt-on acquisitions," said Mr Dunsmore
"If that strategy does not work then we'll have to look at other ways to return value to shareholders, but selling the company is not part of our strategy at the moment."
The denial came as C&C reported a strong set of annual results and increased guidance for 2011 despite what Mr Dunsmore described as a "difficult" Irish market.
The company said operating profit increased 17pc to €105m for the year to February 28 on revenue that rose to €529m.
Those numbers translated into adjusted earnings per share of 25.4c -- an increase of 12pc -- and a dividend that increased 3.3pc to 6.6c.
The company is now essentially debt free, having cut it from €365m a year ago to €6m.
In Ireland, Bulmers volume was down 2.4pc while price/mix impact meant net revenue from the brand fell 7.1pc. Despite those numbers, profits were flat in Ireland last year at €43.7m compared to €44.2m in 2009.
"The Irish market is difficult, specifically consumers are dealing with an inflationary environment at the supermarket which is quite tough," said Mr Dunsmore.
The drinks' giant AB InBev announced earlier this year that it was entering the cider market but Mr Dunsmore said he took that as a positive for his company rather than a threat.
"It shows that the cider category is still growing. The fact that the world's biggest brewer is entering the market is an endorsement of it."
C&C closed down 1.39pc at €3.55.