C&C sales up 28pc as pubs bounce back
PUBS are enjoying a resurgence, according to Bulmers maker C&C, which cited a recovery in Irish pub sales as it reported half-year profits.
Net sales at the brewer totalled €336.7m in the six months to August, a 28pc increase, with the Irish market performing particularly well. Irish revenues from Bulmers jumped by 18pc.
For the first time in seven years, Irish pub sales of its products outperformed off-licence sales.
"Basically, more people are drinking in pubs," said chief executive Stephen Glancey. "Consumer confidence is improving and that brings people back to pubs.
Unemployment is a big part of it too, and that has stabilised in Ireland." Mr Glancey said the company expects that trend to continue, and welcomed the Government's extension of the special 9pc VAT rate.
The company's share price rose marginally, trading up 0.1pc to €4.11 by early afternoon, as it reaffirmed previous forecasts for full-year profits.
It expects an operating profit in the range of €125m to €132m this financial year, and earnings growth of between 10 and 16pc.
This summer's good weather helped boost second-quarter sales on both sides of the Irish Sea – cider sales always spike during prolonged periods of sunshine in Ireland and the UK. However sales still fell significantly in the UK with revenues down 16pc, even further than some analysts' expectations.
"Fundamentals in the UK cider market remain challenging" said the company, though Magners still remains the number one UK modern cider brand by volume and value.
C&C recently decided to invest €3m in marketing the brand in the UK, including a new sales team.
The brewer is seeking to diversify its product portfolio, and is in the process of adding a craft brewery in Clonmel to harness growing demand.
Craft beers, said Mr Glancey, provide a way for pubs to offer consumers something different.
C&C's diversification process also includes an expansion of the company's cider portfolio, including the Affleston and Blackthorn brands in the UK.
The company has proposed an interim dividend increase of 7.5pc to 4.3 cents per share.