C&C operating profit declines 9.2% to €115 million

Drinks distributor and manufacturer C&C reported revenue growth of 10.3 per cent to €683.9 million for the year to the end of February.

However, operating profit at the company declined 9.2 per cent to €115 million in the 12 months to February 28th.

The company attributed the decline in profitability to challenging trading environments in C&C Brands and in the US.

Stephen Glancey, C&C group chief executive said the company's core businesses in Ireland and Scotland, which represent 86 per cent of operating profit, delivered modest earnings growth during the year.

“Outside of our core segments, we have been restructuring and investing behind our market positions and brands to drive performance. During the year, we have consolidated our C&C Brands business; accelerated our product investment and development in the US; and, made exciting progress in new international markets,” he added.

C&C reported a “strong performance” in both Ireland and Scotland, with operating profit growth of 1.5 per cent and 1.8 per cent respectively. Across the two regions, C&C noted strong portfolio performance with growth in new brands and it said that 2016 would see investment and support for Tennent’s and Bulmers brands. Integration with Gleeson in Ireland has now been completed C&C said, and it is making solid progress with Wallaces Express.

Exports of Tennent’s brand grew 37 per cent in the year, and C&C said that recent development of the cider category in Asia and Europe “validates long term potential for cider”.

In relation to the North American market, C&C said the disruption effect of new entrants eased in the second half of the year.

However, the drinks groups reported a sharp fall in profits in its small North American division, where operating profit fell to €1.5 million from €11 million as volumes fell 18 per cent.

As a result it said it was to write down €150 million from the value of its US business.

C&C increased its final dividend by 22.8 per cent to 7.0 cent per share, bringing full year dividend growth up to 15 per cent.