C&C profits drop but Magners turns corner

Published: 08 October, 2009

Magners owner C&C Group saw profits decline in the six months to Aug 31 in the face of an increasingly cluttered cider market and trade destocking in spirits.

But the company said there were signs that British sales of Magners had turned the corner after a prolonged period of decline.

Group operating profit before exceptional items fell 13.6% to €57.4 million on revenue that was 10% lower than a year earlier at €257.5 million.

Revenue from cider in the UK dropped 9% to stand at €90.8 million, though operating profit was level thanks to increased margins after a review of its cider pricing strategy across all markets.

The company said: "Recent share performance trends show more encouraging signs, and the bi-month of June and July 2009 returned Magners to volume growth in the on-trade for the first time since May 2007."

Revenue in the spirits and liqueurs division fell by 20.2% to €33.2 million on a constant currency basis, with operating profit 38% lower than the same period in 2008 at €4.9 million.

Volume shipments of spirits fell 15% overall, with Frangelico 21% down and Tullamore Dew down 19%.

The UK OFT has said it will look into C&C's acquisition of Tennent's in Scotland, completed last week.

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