30th October, 2013 by Andy Young
C&C Group, the company behind brands such as Magners and Tennent’s, has announced a 7.9% increase in its operating profit to €71.1 million in the six months to 31 August 2013.
C&C said that despite a weak first quarter improvements in its beer volumes had helped drive its growth, while its cider business saw significant declines. The group’s net revenue for the period increased by 27.8% to €336.7m.
Although sales of Tennent’s Lager fell by 5.8% the operating profit it generated increased by 9.2% to €16.6m. One of the group’s strongest performers was Caledonia Best, which reported 39% growth in the period.
In terms of cider it proved to be a difficult first half of the year for C&C, with an overall volume decline of 14%. The Magners brand volume fell by 10.4%, while the Gaymers and Shepton Mallet Cider Mill branded portfolio declined by 19.3% in the period.
Stephen Glancey, C&C Group CEO, said: “We are pleased to deliver solid earnings growth and strong free cash flow for the period. During this transition phase, our objective is to move towards a multi-beverage model in our domestic markets; and to position the business to participate in meaningful international category growth.
“Following a weak first quarter, the Group recorded an improved performance in each of our domestic markets in the second quarter aided by warmer summer weather.”
Glancey added that despite the decline volumes the group will be looking to expand both its beer and cider brands.
He added: “The Tennent’s business is performing well. We are broadening our brand portfolio, investing in trade lending and delivering volume growth in the Independent Free Trade (IFT). The performance of Caledonia Best, now over 12% of ale volumes in the IFT channel and our recently launched Heverlee handcrafted premium Belgian beer is also encouraging.
“Magners remains the number one UK modern cider by volume and by value. We are also investing over €3m this year in the new sales team and brand support at the Shepton Mallet Cider Mill. While early days, we are beginning to make progress with both the Addlestones and Blackthorn brands. A broader cider portfolio will be a distinguishing factor for C&C in the evolution of the cider market in the UK and Ireland.”
The group also re-affirmed its profit guidance for the full financial year, with a range of €125m to €132m.