C&C Group has issued a trading update covering 1 March to 31 May 2016, revealing that in terms of volume sales compared to the previous year, volume sales of Magners GB and the volume of exports increased substantially in the market by 24% each, while Bulmers has grown by 9%, Tennent's Ireland by 4% and Tennent's GB by 5%.
Magners GB has continued its recovery, which was seen at the back-end of FY 2016. In the off-trade, its volume MAT is +5% in a cider category that is down 2%. This has been helped by a significant uplift in investment in the brand, with the 'Hold True' above-the-line campaign, as well as a complete packaging rebrand.
In terms of the export market, C&C expects to remain on course to deliver volume growth of +20% for the year, with Spain and Italy performing well in particular, thanks to tourism in both countries being on the up again and the introduction of a new format for the Tennent's premium range.
The US persists in being a troublesome market for the cider category, but C&C is hopeful that its partnership with Pabst will be successful in recovering market share in the second half of FY 2017 and into FY 2018.
In its statement, C&C Group commented on the outlook for the rest of the financial year, saying; "Our Bulmers, Magners and Tennent’s brands are strong and connect with local customers and consumers in our core markets. We have a growing export business which is entirely unaffected by the UK decision to leave the EU and our conservative approach to currency risk covers most of our transaction exposure through natural hedging.
"However, with almost 50% of profits denominated in Sterling and reported in Euros, C&C is exposed to the translation impact of a devalued Pound. At current levels, if sustained, currency movements have the potential to undo the earnings benefit from both cost reduction activity and the steady progress made in trading year-to-date."
Despite the possible implications of Brexit, C&C is confident that it has the right setup in place to continue to succeed. "While the longer-term economic implications of the UK referendum outcome are uncertain, the fundamentals of our brands and business model remain strong, supported by a robust balance sheet and cash conversion capability.
"We are an Irish domiciled business with a dual listing on the Irish and London Stock Exchanges. This together with our focused operating model helps to provide a degree of balance to the risks associated with the UK’s decision to leave the EU."
© 2016 - Checkout Magazine by Julianna Novellino