Business Irish

Monday 23 April 2018

C&C denies Orange is behind €100m shares plan


Paul O'Donoghue

Irish drinks company C&C has said its decision to launch a €100m share buyback scheme was in no way influenced by activist investor Orange Capital.

Chief executive Stephen Glancey also said that the firm is not planning on any international acquisitions in the near future and added that it is still committed to both the US and UK markets.

Earlier this month activist investor Orange Capital called on the Bulmers maker to sell its US operations, cut back in England, and focus resources on its core Scottish and Irish markets. The New York-based hedge fund, which has amassed a near 5pc stake in C&C, also called on the company to take on more debt to fund a share buyback.

C&C announced a €100m share buyback programme yesterday following on from a €30m buyback completed in the company's 2015 financial year. The buyback will be funded mainly from C&C's cash reserves and cash flow and will be completed by July 2016.

Mr Glancey said Orange's demands had no impact on the decision. "No, we bought stock back in January and we have announced this now for several reasons," he said. Chief financial officer Kenny Neison added: "We have always been open to returning cash to shareholders, at the end of the year we signalled that we would buyback shares and we are just following up on that now, we have a strong enough balance sheet." Orange had not responded to a request for comment at the time of publication. The buyback announcement came as C&C reported its interim results for its 2016 financial year.

In the six months to the end of August revenue fell by 2.6pc to €358.6m while pre-tax profit, after exceptional costs, dropped to €52.7m from €60.3m.

The main reasons given for the drop were competitive pressures and a poor summer season in Ireland and Scotland. However the firm nearly doubled its free cash flow to €66.4m during the period.

Despite pressure from Orange Mr Glancey said the firm is committed to the US market, where revenue fell by 12pc to €24.4m. "We are taking the long view on it, you would only sell a business when you have optimised value and it is difficult to see how it would be optimally valued based on how it has performed."

He declined to comment on reports that C&C has been in talks to acquire the UK operations of Carlsberg. He said while the firm is not looking at international acquisitions, it will continue to monitor opportunities in the UK and Ireland.

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