C&C falls into losses on lower cider sales

12th May 2009 09:41

Magners cider maker C&C Group slumped into losses and cut dividends as it was weighed by exceptional losses and a fall in cider sales in both Ireland and Britain.The group also said trading in the first 10 weeks of the new year was mixed. On a constant currency basis, overall revenues were flat year-on-year, despite volumes in the core cider markets being 9% higher than last year.Pre-tax losses came in at €65.8m from €102.3m profit last year as the firm was hit with €159.6m worth of exceptional charges. It included €11.1m stock write down, property, plant & machinery impairment of €136.5m and a net restructuring charge of €12m.Proposed full year dividend is down 66% to 9c per share.Revenue for the period declined by 11% to €514.4m as the cider division slid 15.2% to €386.8m. Revenue fell 14.1% for Bulmers in Ireland and 18.7% for Magners in Britain. The Rest of the World saw Magners Revenue increase 0.9%.The group said the performance reflects deterioration in economic conditions in its core markets in the last year and the consequent impact on consumer spending. It also reflects an increasing shift from the On-Trade to the Off-Trade market."Performance was adversely affected by a second consecutive period of poor summer weather during 2008 and a substantial strengthening of the Euro against Sterling reducing the group's cost competitiveness in the UK," said the group."These conditions have contributed to both price and volume declines together with a loss of market share in Ireland and the UK," it added.C&C reiterated its 2010 objectives. It hopes to stabilise cider volumes and deliver an operating profit performance within the range of €77m - €82m. It also hopes to pay a total dividend of no less than 6c.