C&C sees earnings rebound after 10% full-year profit drop

C&C said it is on course for a rebound in earnings in its current financial year following a 10.3 per cent drop in operating profit in the year through February as Irish cider sales fell amid a very poor 2015 summer and rising competition.

Operating profit fell to €103.2 million from €115 million for the previous financial year, in line with guidance given by the company in March.

Net cider sales across the island of Ireland fell 16 per cent in the year, with a new competitor in the market, Heineken’s Orchard Thieves brand, resulting in Bulmers share of the long alcoholic drinks market slipped to 7.9 per cent from 8.8 per cent.

“In our domestic businesses in Ireland and Scotland we faced a range of challenges including poor weather, increased competitor dynamics and of course the impact in Scotland of the changes to drink driving regulations,” said Stephen Glancey, group chief executive.

C&C booked a €38.4 million restructuring charge last year, some €18.2 million was made up of severance costs. The company said in January it was closing a water-bottling plant in Borrisoleigh, Co. Tipperary and its cider-making facility in Shepton Mallet, in Sommerset, England, with a combined loss of more than 260 jobs.

Shares fell as much as 1.1 per cent in early Dublintrading to €4.03.

Having returned €115 million to shareholders in the last financial year, including from share buybacks, the group plans to increase this amount to over €130 million by the end of June. It also increased its dividend by 18.7 per cent to 13.65 cents per share.

“The tone and substance of the full-year release were very much as expected, with adjusted earnings per share and earnings before interest and tax in line with our expectations,” said Cathal Kenny, an analyst with Davy. “The positive surprise was oni dividend, which was more progressive than anticipated.”

The company said it is “positioned to deliver earnings growth and strong cash generation” in the current financial year.