Shares fall in cider firm C&C as drinkers stay home
SHARES in cider maker C&C fell yesterday after the company said sales were hit by changing drinking habits which mean that consumers are drinking at home and avoiding pubs.
Profits rose despite the changes. The maker of Bulmers cider and Tennent's lager said pre-tax earnings topped €110.9m, well up on 2010's figure of €79m. Turnover, however, slid to €716m from €770m.
In Ireland, C&C said the market was continuing to shrink but had stabilised, while consumers continued to move their drinking to their homes.
Long alcoholic drinks (LAD) volumes in Ireland fell 1pc year on year as on-trade volumes fell 6pc. In contrast volumes from off licences climbed 7pc.
"Home consumption in the Republic now accounts for 44pc of total consumption, up 3pc on prior financial year," the firm said; a trend that was likely to continue. "The pricing differential and increasing levels of promotional activity in the off trade remain a key factor in this switch, a deflationary trend that we expect to continue over the next few years.
"On an aggregate level, pricing in LAD off-trade fell by 7pc in the year while on-trade pricing remained relatively flat."
Cider revenue here fell back but turnover from beer rose by more than €2m. Company chief executive Stephen Glancey said the company had stabilised its position in Ireland, and confirmed there would be no further cuts at the firm's base here in Clonmel.
"Magners exports increased some 28pc during the year and much of that comes from Clonmel. On the contrary to reducing numbers there we are awarding bonuses to staff," he said.
Mr Glancey added he was "unconcerned" about the introduction of minimum pricing for alcohol in Scotland as it had been trailed for sometime.
Davy stockbrokers' Richard O'Donovan described the results as "solid".
"C&C has kept profits in Ireland stable over the last three years in the face of significant consumer headwinds. Magners posted its first positive revenue growth in five years in an increasingly competitive market. Export growth looks to be accelerating and the division is becoming a more substantial part of the overall group.
"In addition, while Tennent's profit expansion has been impressive, we see more upside for the brand in the coming months and years. The group is now beginning to see the benefits of leveraging its loan book in the on trade, while it is capturing more brand profits in this channel through an improved route to market," he added.
C&C closed the day down 1.81pc at €3.53.