C&C considering move back into soft drinks market

DRINKS COMPANY C&C said yes-terday it would not confine itself to the beer and cider sectors when considering future acquisitions, as the company reported full-year results in line with expectations.

Noting that the company had finance capacity of €500 million, chief executive Stephen Glancey indicated the company would consider acquisitions in the “lad and soft drink” categories but not spirits.

CC& exited the soft drinks business in 2007 when it sold its portfolio to Britvic.

Results for the year to February last, published yesterday, show that operating profit at C&C rose by 9 per cent last year to €111 million despite a fall in revenue.

Turnover fell by 4.8 per cent over the year to €481 million, with Bulmers and Tennents experiencing volume drops of 3.3 per cent and 8.8 per cent respectively. However, Magners’ volumes grew by 5.3 per cent, boosted by growth in the UK and international markets, such as Australia and North America. Mr Glancey said the decline in overall revenue reflected the decision to exit from unprofitable contracts, as well as a drop in consumer sentiment.

Operating margins were up 2.9 percentage points at 23.1 per cent.

The company announced a higher than expected final dividend of 4.5 cent, a 36 per cent increase on the previous year.

Net cash stood at €68 million.

C&C’s Irish cider division delivered operating profits of €44.4 million last year. Revenue from Bulmers was down 8.5 per cent in the year with volumes accounting for 3 per cent of the decline and price/mix a further 5.5 per cent. Beer products Tennents and Caledonia Smooth continued to gain ground in Ireland, the company said.

In the UK, the Magners brand delivered positive volume and revenue growth, with revenues showing positive growth for the first time in five years. The sale of Magners in export markets such as Australia and North America grew by 28 per cent in volume terms.

Mr Glancey, who succeeded John Dunsmore as chief executive during the year, declined to comment on reports that two major drinks companies had expressed an interest in acquiring C&C.

In February C&C entered into a new €250 million loan facility, which allows for a further €100 million in uncommitted facility as well as additional debts of €150 million, the company said.

C&C closed down 1.8 per cent in Dublin yesterday at €3.53.