C&C warns of fall in annual profit following poor sales

Drinks group C&C has warned of a fall in annual profits, following poor sales in the last four months of 2014.

The company has forecast operating profits of €115 million in its financial year, which ends in February, down from €127 million in the previous year.

In an interim management statement, the cider maker said trading conditions in the three months to the end of November were below expectations.

C&C said volumes were down 3.4 per cent in Ireland during the quarter, despite a solid performance in the first six months of the year. It said the Irish market was slow in the period with October and November proving to be particularly quiet months.

In England and Wales, the company’s cider volume was down 9.8 per cent with net revenue down 18.2 per cent. C&C said it is advancing plans in both countries to significantly reduce costs, expand margins and increase investment behind the brand portfolio.

In Scotland, volumes, excluding Wallaces, were down 2.4 per cent.

Volume in Europe increased 18.6 per cent in the quarter with Magners up 7.1 per cent and Tennent’s up 62.1 per cent.

In the US, volume declined 16.2 per cent in the period, which C&C said was an improvement on the first half but still some way from a return to growth. However, the group said the “disruptive impact” of new entrants to the market has receded.

The company said the weaker than expected trading conditions in the third quarter continued through the Christmas period, leading it to update its profit guidance.

Earlier this month, C&C pulled out of €1 billion takeover talks with British pubs group Spirit. The Irish cider maker had been engaged in a bidding war with UK brewer and pub owner Greene King for the pub group.