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C&C awaits Dunsmore's next move

WITH John Dunsmore due to step down from the board at the end of February what does the future hold for C&C's ex-boss and his 1.5 per cent stake in the drinks company?

Last Tuesday C&C published its interim management statement showing that while the Clonmel-based cider producer and brewer had a strong performance in the UK in the three months to the end of November and over Christmas, trading conditions remain tough in the Irish market. They predicted operating profits of €110m for the year to the end of February.

For drinks industry watchers perhaps the most significant nugget of information was the fact that 51 per cent of the volumes of its Irish cider brand Bulmers shipped through the off-trade in the quarter to the end of November.

However, most investors will be more concerned about Mr Dunsmore and his shareholding. Mr Dunsmore headed up the team of former Scottish & Newcastle executives who were drafted in to turn C&C around in November 2008.

Mr Dunsmore surprised the market when he announced last October that he would quit as CEO at the end of 2011 and as a director at the end of February 2012. As part of his package Mr Dunsmore and his colleagues received the right to purchase up to 13.8 million C&C shares for an up-front payment equal to 10 per cent of C&C's November 2008 share price of €1.15. This resulted in Mr Dunsmore acquiring 5.12 million C&C shares, a 1.5 per cent stake in the firm with a market value of €16.3m at today's share price of €3.18.

With Mr Dunsmore due to step down from the C&C board at the end of next month he will no longer face any restrictions in selling these shares. Though he retains options over 2 per cent of C&C's shares, he will be effectively free to do as he pleases, said a C&C spokesman. Still aged only 52, he is unlikely to want to retire any time soon.

With the Bulmers brand outside the Republic now owned by Heineken, which acquired S&N's UK and West European businesses in 2008, all eyes will be on Mr Dunsmore's next move.

Sunday Indo Business