C&C halts Magners decline

12th Oct 2010 07:36

Magners owner C&C lifted cider volumes in Britain for the first time since 2007, but poor demand in Ireland knocked cider sales overall in the first half of 2010.Revenue in the original cider business declined by 5.3% to €144.3m, with Magners down by 5.8% and Bulmers in Ireland seeing a decline of 7.8%. Magners UK volumes rose by 0.7% with exports up by 34%.Total net revenue in the six months to August rose by 73% to €305.5m, including first contributions from rival cider firm Gaymers and the Scottish and Northern Irish assets of the lager maker Tennents that C&C acquired last year. Operating profit in the original cider businesses also declined, by 1.8% to €47.9m, though overall operating profits rose by 29.4% to €63.4m. Pre-tax profits rose to €54.7m from €52.1m with net profits of €229m, which included the profit on the sale to William Grant of the Spirits & Liqueurs business for €300m.Synergy targets after the integration of Gaymer and Tennents have been revised upwards to €8m for 2010/11 and to €10m for 2011/12 delivering total cost and revenue synergies of €18m, C&C said."Economic conditions in the group's core markets of Ireland and the UK remain unpredictable and challenging. Consequently, we are appropriately cautious in our outlook," said chief executive John Dunsmore."We remain confident of delivering to market consensus for operating profit in the range of €102-€106m(i) for 2010/11. Our strong underlying free cash flow and balance sheet will ensure the Group can continue to invest for growth, despite the difficult trading environment in our core markets," he added.There is an interim dividend of 3.3c per share.