C&C may cut Irish cider price drinks
Published 13/10/2010 | 05:00
CLONMEL-based C&C Group said it may cut Irish cider prices again as sales of Bulmers fell during the first half of the year, but rose in Britain where it sells the same product under the Magners label.
Cider sales in Britain returned to growth for the first time since 2007 following a £10m advertising campaign featuring a fictional Clonmel cricket club which pushed up volume growth in the UK during the six months to the end of August by 0.7pc.
British sales were also boosted by last year's purchases of Scottish brand Tennent's and the UK cider assets of Constellation Brands.
C&C was less successful in Ireland where cider profits fell 8.6pc to €27.8m despite price cuts and the introduction of pear and draft cider varieties in a bid to boost flagging local sales. Net sales fell by 8pc to €58.1m while volume sales fell 3.7pc. Lower prices knocked another 4.4pc off revenue. Most of the decline was seen in the pub trade where sales fell by 13pc to €79m.
Ireland's consumer environment is "very cautious", chief executive John Dunsmore said.
"The sheer scale of the challenge Ireland faces means there isn't a prospect of a near-term recovery. There's a very different mood there than there was two years ago," Mr Dunsmore added.
The results got a broad welcome from analysts with Davy Stockbroker's Brian Fagan saying that C&C is now in "a position to explore opportunities to strengthen its position in Britain or lay the foundations for further internationalisation of the cider business." Shares rose 2pc to close at €3.13 in Dublin. The company plans to pay a first-half dividend of 3.3 cents, up 10pc on the same period last year.
The company cleared its debts after the €300m sale of its William Grant & Sons spirits and liqueurs business in July. Excluding the impact of gains on disposals, pre-tax profits rose from €52m to €54.7m. The gain on the sale of William Grant saw post-tax profits rise from €52m to €276m. The company ended the period with net cash of €21m.
Total sales were also boosted by full contributions from the Tennent's lager business and Gaymer's, which owns the Blackthorn and Olde English cider brands.