C&C Group Issue ‘Stable’ FY2017 First Half Results
C&C Group has published its results for the six months ended 31 August 2016. The report reveals significant progress for the drinks manufacturer following a challenging 2015, with operating profits stabilised.
Net revenue in C&C Group’s domestic markets for Bulmers, Tennent’s and Magners saw a modest decline of 0.8% in the first half, although sales volume grew for Bulmers by 6%, Tennent’s by 2%, and Magners by 11%. Export markets saw 10% volume growth, with the export volume of Tennent’s reported as ‘particularly strong’, up 50% in the period.
Reported operating profit before exceptional items for the fist half of 2016 was €55.1m, down 7.9%. Incremental investment in marketing and price support were identified as factors in that drop.
C&C Group stated that the fall in the value of sterling had an ‘adverse impact’ on reported revenues, but that cash generation remained strong with free cash flow of €56.3m in the first half representing 89.8% of EBITDA.
Stephen Glancey, C&C Group CEO, commented on the results: “In the first half we have seen some variability in consumer demand and are cautious on forward consumer reaction to political and economic conditions in our core markets. However, we have a business that is capable of weathering these challenges and our confidence in the medium to long term outlook is based on the strength of our key brands, our business model and leading positions in Ireland and Scotland – where fundamentals remain strong.
“We also have a growing export business; a broadening portfolio of premium and speciality beers and ciders; and the right partner for our US brands. Our cash generative nature and balance sheet strength should ensure attractive returns for shareholders. We are well placed to either capitalise on the opportunities which may arise from the current phase of consolidation in our industry or return capital to shareholders.”
Mr Glancey also commented on the Scottish courts’ decision to support minimum pricing on alcohol there, stating, “C&C is a supporter of this initiative and we will work with the relevant authorities in Scotland and Ireland to ensure we meet our obligations.”
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