Market 'challenging' for cidermaker C&C

CONDITIONS IN the cider market remain “challenging”, drinks group C&C said yesterday.

However, the company said it was on target to achieve the profit level expected by the market. C&C forecast its operating profit for the year to the end of February 2010 would be “towards the top end” of the €77-€82 million range and that the decline in cider volumes over the period would be “modest”.

The maker of Bulmers and Magners cider also announced that it has completed the acquisition of the Gaymer Cider Company, subject to a review by the UK Office of Fair Trading (OFT).

The latest acquisition, financed by £60 million (€67 million) in new bank financing, is not expected to “contribute meaningfully” to operating profit for C&C’s current fiscal year.

The group, which is under new management since late 2008, said revenue in the three months to the end of November 2009 fell 9 per cent on the same period the previous year.

This was excluding the impact of the acquisition of the Tennent’s brand, which was completed in September for £180 million (€205 million).

Tennent’s is expected to contribute €7 million in operating profit this year.

Revenue at the cider division fell 13 per cent, while spirits and liqueurs fell 4 per cent. In the distribution division, revenue rose 7 per cent. In Britain, cider revenues fell 17 per cent, while the Republic experienced a 13 per cent decline.