Sunday 25 March 2018

C&C incurs €38m restructuring cost but eyes growth

C&C boss Stephen Glancey
C&C boss Stephen Glancey
John Mulligan

John Mulligan

Restructuring at Bulmers owner C&C resulted in the group incurring €38.4m in exceptional costs during its last financial year.

The company reported results yesterday that were in line with analyst expectations, and insisted it's positioned for growth after a tough two years.

Its revenue in the 2016 financial year fell 3.1pc to €662.6m, while operating profits were 10.3pc lower at €103.2m.

C&C chief financial officer Kenny Neison confirmed that virtually all the exceptional items - which amounted to €33.4m net of tax - were linked to its rationalisation programme that was revealed earlier this year. The figure included exceptional costs already incurred as well as provisions.

Severance costs totalled €14.5m.

The company announced earlier this year that it's closing two plants, one at Borrisoleigh in Co Tipperary, and another at Shepton Mallet in England.

That has resulted in the loss of about 270 jobs. But C&C is investing €10m at its plant in Clonmel, where cider production has now been centralised.

A new production line at the Clonmel plant will be operational next month.

C&C has raised its final dividend by more than 27pc and gearing remains low at just 1.3 times net debt to EBITDA (earnings before interest, tax, depreciation and amortisation). Net debt rose slightly during the financial year to €163m. It also recorded strong cash generation.

C&C chief executive Stephen Glancey told the Irish Independent that the company remains a strong investment proposition.

He said Bulmers in Ireland remains a "great brand", outselling its nearest rival by a factor of seven. But sales of the cider were hit last year, including by the poor weather and the launch of Heineken's cider brand, Orchard Thieves.

The group has also been pushing its brands into export markets. Tennent's performed well in the five months since it was launched in South Africa, as well as in Italy, said Mr Glancey.

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