C&C says competition from Heineken and Diageo has made it ‘sharper’

Group reports revenue of €1.57 billion for full financial year

C&C reported a flat performance in Bulmers, but margins improved and the brand stabilised. Photograph: Nick Bradshaw

C&C reported a flat performance in Bulmers, but margins improved and the brand stabilised. Photograph: Nick Bradshaw

 

The Bulmers/Magners maker C&C, which reported solid full-year results on Wednesday, says increased competition in its core Irish cider market has made it “sharper”.

C&C saw its key Bulmers brand expand sales by almost 3 per cent and improve its share of the cider market to 60.2 per cent in the 12 months to the end of February. It also progressed in winning “high volume” pub accounts in Dublin.

Diageo this year launched Rockshore cider to compete with Bulmers in the Irish market, while Heineken in recent years successfully launched Orchard Thieves and, with a more muted impact, Appleman’s.

Speaking to The Irish Times after the release of its results, C&C’s chief executive Stephen Glancey said Bulmers had increased its share of the Irish cider market through brand recognition.

“When the sun shines, people ask for Bulmers . . . I wouldn’t say the extra competition hasn’t hurt us. But investment by bigger companies in the category can sometimes help to lift it. The competition has made us sharper in what we do,” he said.

The company, which also owns Tennent’s, benefited from the strong summer and World Cup last year, but flagged Brexit uncertainty which has put consumer spending under pressure.

The group, which exports to more than 60 countries, reported a flat performance in Bulmers, but margins improved and the brand stabilised.

C&C’s Irish distribution arm, C&C Gleeson, recorded volume growth of 8 per cent, helped by new customer wins and an enhanced range following the acquisition last year of UK distributors Matthew Clark and Bibendum.

On the whole, net revenue in the Republic improved slightly to €219.2 million while operating profit stood at €40.3 million.

C&C reported group revenue of €1.57 billion and a profit before tax of €92.9 million. The almost threefold revenue increase is attributable to the acquisition of Matthew Clark and Bibendum.

Super-premium portfolio

Core brands including Bulmers, Magners and Tennent’s recorded 5.5 per cent growth in their key home markets while the company’s super-premium and craft portfolio recorded volume growth of 46.2 per cent, now making up 7.9 per cent of branded revenues.

C&C said it is targeting double-digit earnings per share growth in the coming financial year.

In the 12-month period, C&C acquired distributors Matthew Clark and Bibendum, which gives it “unparalleled access to this profitable market channel”. It will also allow it develop sales of its high premium speciality beers and ciders.

Following its acquisition spree, C&C’s net debt to earnings ratio was 2.51 times at the end of February, with debt of more than €301 million.

Despite missing revenue estimates, C&C chief executive Stephen Glancey said the year was a “transformational one” for the company.

He added that geopolitical events, and Brexit in particular, leave uncertainty for the group.

C&C proposed a final dividend per share of 9.98 cent, up 6.5 per cent on the previous year and making a total dividend of 15.41 cent per share.