Tuesday 25 October 2016

Currencies could wipe out solid start - C&C

Michael Cogley and Gavin McLoughlin

Published 08/07/2016 | 02:30

The company seen a 9pc increase in Bulmers sales in Ireland
The company seen a 9pc increase in Bulmers sales in Ireland

Drinks company C&C received a welcome boost from "decent" weather in March and May but warned currency fluctuations may wipe out any gains made at the start of the year.

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Good weather helped the company to a 9pc increase in Bulmers sales in Ireland, which will come as relief to the firm that saw its business hampered by poor conditions in 2015.

Speaking at the company's agm yesterday, chief executive Stephen Glancey said the company would consider buying other brands in the island of Ireland and businesses in Britain.

However, he said that "the pricing has to be right and it has to be sustainable".

He said fewer than 30 out of 160 staff had transferred to its Clonmel facility after the closure of a facility in Borrisoleigh, with the remainder taking severance packages.

Mr Glancey also said that acquisition opportunities may emerge in a year or so due to market consolidation caused by the planned merger of Anheuser Busch and Ab InBev.

"What we've seen in previous periods of consolidation is that they'll start selling assets because a brand doesn't fit with their portfolio, or other people want to get together to compete with them," he said.

"In those instances I think we're well positioned… but that's a way off, none of the stuff that's been on the market so far is anything that we would consider." Mr Glancey also said the company had received a number of recent approaches to brew beer for other companies.

He said companies importing beer to the UK are likely to look to have it manufactured in that country if the recent downward move in sterling endures, and that C&C would look to win some of that business.

Chief financial officer Kenny Neison said he couldn't see Brexit having any effect on the company's progressive dividend policy.

But the company said it was cautious on its outlook for the year.

"The result of the referendum in the UK brings with it uncertainty, volatility and a lack of visibility," it said, highlighting vulnerability to a weakened sterling given half of its profits are denominated in sterling and reported in euro.

"At current levels, if sustained, currency movements have the potential to undo the earnings benefit from both cost reduction activity and the steady progress made in trading year-to-date," the firm said.

Goodbody analyst Liam Igoe welcomed the increase in sales but warned of the effects poor weather and a weakened sterling could have on the company.

"The overriding theme of the statement is that volume trends have returned to growth, though it is a very early stage in the year and weather remains dull in Ireland and the UK and the impact of Brexit on the UK consumer may dampen consumer sentiment," Mr Igoe said.

Irish Independent

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