Drink and snacks group C&C has said it aims to double its market share in the UK over the next year as it rolls out its Magners cider brand in England and Wales.
The group wants to increase its share of the long alcoholic drinks (LAD) market from the current 0.6 per cent to 1.2 per cent by extending distribution of Magners beyond London.
It is planning to launch Magners in major English cities like Birmingham and Manchester as well as in Wales, supporting the rollout with a national media campaign from March.
The planned expansion of Magners' reach will help the group to meet its promise of delivering continued growth in operating profit in the coming financial year. The company expects its other divisions to show only "modest" growth in operating profit in 2006/2007 and this will be outweighed by the effect of the loss of the distribution rights for Volvic and Evian mineral water and Allied Domecq's brands, it said.
The prospect of increased marketing investment to support Magners is also likely to act as a drag on C&C profits in the first half of the coming year.
Shares in C&C lost 23 cent, or nearly 4 per cent, to €5.65 yesterday as the group warned of the tough trading conditions faced by its non-alcoholic business last year. However, C&C expects cider's strong performance to offset the soft drinks and snacks division when it reports results for the current fiscal year.
The company expects sales growth of around 9 per cent in the year ending February 28th while operating margins should be unchanged despite increased marketing investment, C&C said.
Earnings per share are expected to be in line with market expectations of around 28 cent per share when the results are announced in May.
Cider will prove the main factor behind the improved performance, posting turnover growth of around 30 per cent in the 2005/2006 financial year.
In the Republic, Bulmers enjoyed volume growth of around 6 per cent, outperforming a flat market.
In the UK, sales of Magners were up by 125 per cent following its successful roll-out in London and strong growth in Scotland.
The picture in C&C's international spirits and liqueurs business was mixed, however, as strong growth from Tullamore Dew whiskey offset weakness in Carolans Irish Cream Liqueur.
The soft drinks and snacks division had an even tougher time with the second half performance deteriorating as margins in the grocery channel contracted.
C&C said there would be a "material drop" in operating margins in the full year although it was taking steps to address the performance of the business.
