CIDER MAKER C&C has said its revenues will fall by 13 per cent in its current financial year, with both Bulmers and its equivalent on the British market, Magners, losing market share.
With sales remaining subdued due to a combination of poor weather and weak consumer demand, the firm said it would have to write off the cost of excess apple juice stocks worth €11 million.
The value of its Clonmel manufacturing and packaging site, where it cut more than 100 jobs last month, has been written down by €130 million and is now valued at €70 million. The company’s new chief executive, John Dunsmore, would not speculate on whether further job cuts were likely. The company is due to meet unions tomorrow.
The drinks group said market conditions for cider sales in Ireland and Britain were, “if anything, getting worse”. It said its ambition was to stabilise cider sales in its current financial year.
In a trading update, C&C said revenues in the cider business would fall by 17 per cent, with sales of Bulmers in Ireland declining 14 per cent and sales of Magners in Britain dropping 23 per cent.
Mr Dunsmore said the Bulmers decline was “quite concerning” and would be the more difficult market to turn around. However, he said Ireland was “to some extent virgin territory” for pear cider and Bulmers Pear would be the subject of its next advertising campaign.
With demand for cider far below the maximum capacity of the Clonmel plant, C&C is looking at ways to earn revenue from the packaging facility at the plant.
C&C forecast an adjusted operating profit of €90 million for the financial year just ended, which was in line with investors’ expectations. It also said it would pay a final dividend of three cents, taking its total dividend for the year to six cents. The stock closed up 10 per cent at 99 cents on the Iseq index.
Summing up the extent to which the new management team believes there is long-term potential in Magners, chief operating officer Stephen Glancey said they were “probably now at the end of the honeymoon period and still very much in love”.
