Business World

Friday 23 June 2017

C&C chief executive Glancey gets chairman's vote of confidence

C&C's portfolio includes Bulmers
C&C's portfolio includes Bulmers
Gavin McLoughlin

Gavin McLoughlin

C&C chairman Sir Brian Stewart has backed the company's current management team to lead the cider firm forward.

The Bulmers maker's profits have fallen amid intense price competition in England and Wales and meagre returns on a $305m acquisition of the Vermont Hard Cider Company. Management faced robust criticism from an angry shareholder at last week's AGM.

"We are disappointed in the financial performance of the last year... it wasn't where we expected to be," Stewart said.

"Funnily enough, that isn't the issue that drives the board. The issue that drives the board is what is good for the company, where we see the company can go in the longer term.

"We as a board are confident in the executive team and we're confident in the strategy we as a board have embarked upon for C&C as a group."

Shareholders, as a whole, overwhelmingly backed the management team.

Chief executive Stephen Glancey said that "if somebody can run the business better, that's absolutely up to shareholders".

"As long as we think we're doing the right thing for the long term, we're content. The reality is that when we came in, the share price was 85c. Six years on, it's €3.50 or whatever," he added.

However, C&C chief financial officer, Kenny Neison, said the company did regret the timing of the Vermont acquisition.

"I think the way we look at it just now, the US cider category will be the biggest cider category in the world, we look at a ten-year horizon. The first couple of years have been incredibly bumpy and challenging for us and the one thing that we regret is the timing of the transaction.

"We got in at the wrong moment but you don't necessarily control when a deal is going to be done. Ultimately, as long as the category keeps growing, it gets to bigger scale than the UK, we think we'll find our way."

He said the the deal had potential road bumps.

"I think if you begin to see the cider category go negative in the US and we are where we are in terms of profitability, then clearly the room for growth disappears - and we've lost a lot of money on the transaction."

Glancey said it would be "easier" for C&C if the UK votes to remain in the European Union.

"We're internationalists, so we'd rather have a free market in Europe where goods can flow...if the UK was to leave, I think it would cause politically quite a lot of issues in Scotland, and it would also cause currency disruption - so it would bring some risk.

"But to be honest, I don't think it would change the fundamentals of our business," he added.

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