C&C reports earnings increase

Drinks group C&C today reported an increase in earnings before interest and taxes amid rising demand for cider in its key market in Britain.

The Irish group also said it was effectively debt free and forecast growth in earnings before interest and tax of around 10 per cent in 2011/12.

Earnings before interest and taxes for its 2010/11 year to end-February, rose to €100.5 million, compared with a forecast for €104 million in a Thomson Reuters I/B/E/S poll.

C&C shares have climbed 7 per cent over the past year to €3.60 on a rebound in sales of its Magners cider in Britain where full-year sales volumes grew 4 per cent, while exports grew 34 per cent.

"While we have not assumed any pick-up in consumer spend within the next 12 months, the shape of our business today should sustain earnings growth," chief executive John Dunsmore said.

"Magners now enjoys growth and momentum in both the UK and international markets," he said, adding Magners outperformed the growing premium cider category in Britain.

Strong British sales in the past two months, buoyed by good weather, the royal wedding and a string of public holidays, have raised expectations for the coming year, he said today.

He forecast British cider market growth of 10 per cent. "We are feeling pretty good on how we have traded in the first two months. You have had very favourable weather conditions for cider, most of Britain has been on holiday, it seems, for a fair part of April. So, so far so good for us."

In Ireland, where C&C sells cider under the Bulmers brand, earnings remained flat on sales down 2.4 per cent.

The group said it expected 2011/12 EBIT of €108 million to €115 million. Earnings per share met forecasts with a 12 per cent increase to €25.4 euro cents. The company plans to pay a 6.6 cents dividend.

Reuters