Market for cider in Ireland “gradually improving”

Pre-tax profits rose to €116.2 million at C&C marking the drinks group’s fifth successive year of earnings growth.

In the year to February 28th 2014, profits advanced by 5 per cent, while revenues soared by 30 per cent to 620.2 million, on the back of acquisitions includign Gleesons in Ireland and Wallaces Express in Scotland.

Stephen Glancey, C&C group chief executive, said the year saw a "robust performance" from the group, one which was delivered "while managing the change associated with the integration of recent acquisitions in Ireland, Scotland and the US".

“The cornerstone of our strategy is maintaining strong domestic brand market combinations. FY2014 marked continued progress towards this objective with the development of a customer focused, multi-beverage model in Scotland and Ireland. This includes an expanded and well-invested brand portfolio and enhanced sales force capability. In Scotland we are pleased with progress on Caledonia and Heverlee and in Ireland we are optimistic on the prospects for our new Irish lager, Clonmel 1650.”

Across Ireland and the UK, Mr Glancey said that conditions are “gradually improving” and C&C’s businesses are well positioned to benefit from improved consumer sentiment in these key markets.

In Ireland, volumes were 1.1 per cent and ahead of a market that was level year on year. Reduced spend on consumer marketing and some cost benefit from the integration of Gleeson into the group’s Irish business contributed to the margin uplift. Cider net revenue increased by 1.7 per cent, while overall beer volume for the group was up 3.7 per cent, despite a decline of 16 per cent for Tennent’s in the off-trade.

“In the UK, the broader cider market remains competitive and commoditised. We are focused on building a portfolio of authentic, traditional high quality ciders targeting the premium, and craft segments of the market.”

“In the US, the combined impact of integration, increased competition and distributor consolidation materially impacted our performance. While we have re-based our own short term expectations of growth, the market remains both attractive and dynamic.”

Dividends grew by 14.3 per cent, up to 5.7 cent a share.

Longer term, C&C’s investment in its new cidery in Vermont reflects its commitment to the US and the “absolute authenticity” of our product, Mr Glancey said. For the current financial year, the objective is to deliver mid-single digit operating profit growth, Mr Glancey said.