TIDMCCR
C&C Group Plc("C&C" or the "Group")
Pre-Close Trading Update
Dublin, London | 10 March, 2017: C&C Group plc, the premium
drinks company, issues its pre-close trading update for the 12
months to 28 February, 2017 ("FY17"). Preliminary results for FY17
will be announced on 17 May, 2017.
Overview
FY17 Group operating profit is expected to be in the region of
EUR94-EUR96m. Second half profit was broadly level year on year,
despite the adverse impact of currency movements.
FY17 volume performance in the three principal brands of
Bulmers, Magners and Tennent's was resilient and a significant
improvement on FY16. Bulmers is expected to post volume growth of
+3% for the full year (FY16:-13%) and Magners +7% (FY16:-6%).
Tennent's volumes will be flat year on year (FY16:-4%) and growing
share in the key independent free trade channel. Niche &
Speciality volume, including Heverlee, Menebrea and Chaplin &
Cork's will be up 50%+ in the year and now constitutes 2% of Group
owned brand volume.
The major factor in the decline of Group operating profit was
the devaluation of sterling. The cost reduction plans announced in
October 2015 completed as planned in the second half. The benefits,
however, were outweighed by incremental brand investment and price
deflation attributable to changes in channel and pack mix across
the Group. Our wholesale business stabilised in the second half of
the year but did not recover the margin losses.
Market Review
Cider in Ireland continued to grow its share of long alcohol
drinks as a generation of younger drinkers entered the category.
Bulmers brand growth slowed slightly in the second half and volume
is likely to be +3% for the full financial year. The brand ceded
share of cider in draught but the volume loss was offset by growth
in pint bottle and small pack. The first activity linked to the
upweighted Bulmers plans for FY18 will be visible in March with the
launch of Outcider, by Bulmers.
In Scotland, Tennent's grew volume and share in the IFT channel
in the second half and across the full year, outperforming the
overall UK beer market which declined -1%1. Pricing was stable in
the second half.
The Magners brand in the UK maintained a strong performance with
volume expected to be up 11% for the full year (H1:+11%), picking
up share in a cider category that is -0.5%2. However, the negative
pressures on pricing and on pack and channel mix evident in the
first half of the year remain unchanged. The large grocery
retailers taking share from impulse and convenience and the shift
from glass to aluminium are both negative dynamics for brands like
Magners. The continued yield pressures and consolidation activity
currently taking place in the on and off premise channel further
reinforces the strategic rationale for the AB InBev partnership
announced in December 2016. Our cider brands in the UK transferred
into the AB InBev portfolio on March 1 as planned.
In our Export business, overall volumes are likely to be up in
the low single digits for the full year with Tennent's in
double-digit growth.
In the US, the cider category remains in double-digit decline.
Performance of the Magners brand improved considerably in the last
quarter and returned to modest growth in the North Eastern states
but our domestic US cider brands are lagging behind the category.
The carrying value of the US assets will be reviewed as part of our
full year end close process.
Outlook
The volume performance of our core brands and our growing
niche/speciality portfolio was robust in FY17, despite challenging
trading conditions. However, the impact of currency, negative
market pressures on pricing and pack/channel mix have impacted the
Group's profitability. In FY18 we will continue to invest in our
core brands to deliver long term growth, remain disciplined on
costs and look to strengthen our route-to-market where possible.
Given market dynamics and consumer concerns we remain cautious on
the outlook for our domestic markets and are not anticipating
improved trading conditions in the short term.
Cash and Earnings per Share
We have maintained capital discipline over the last 12 months,
returning EUR66m to shareholders through a combination of share buy
backs and dividend. Cash generation remains strong and there is no
change to previous guidance targeting leverage of 2x net debt to
EBITDA by the end of FY18.
Our share buy-back programme has reduced our weighted average
number of shares by c.7% year-on-year and should result in modest
EPS growth on a constant currency basis.
- END -
About C&C Group plc
C&C Group plc is a premium drinks company which owns,
manufactures, markets and distributes branded beer, cider, wine,
soft drinks and bottled water. C&C Group brands include:
Bulmers the leading Irish cider brand; Tennent's, the leading
Scottish beer brand; Magners the premium international cider brand;
Tipperary Water; Finches soft drinks, as well as a range of niche,
premium and craft ciders and beers. C&C Group also owns and
manufactures Woodchuck, a leading craft cider brand in the United
States and manufactures and distributes a number of 3rd party
international beer brands in Scotland and Ireland. C&C is also
a leading drinks wholesaler in Scotland and Ireland, where it
operates under the Tennent's and C&C Gleeson brands
respectively. C&C Group is headquartered in Dublin with
manufacturing operations in Co. Tipperary, Ireland; Glasgow,
Scotland; and Vermont, USA. C&C Group plc is listed on the
Irish and London Stock Exchanges.
Note regarding forward-looking statements
This announcement includes forward-looking statements, including
statements concerning current expectations about future financial
performance and economic and market conditions which C&C
believes are reasonable. However, these statements are neither
promises nor guarantees, but are subject to risks and
uncertainties, including those factors discussed on pages 14 to 15
of the Group's 2016 First Half Results Announcement that could
cause actual results to differ materially from those
anticipated.
Contacts
C&C Group plc
Stephen Glancey, Chief ExecutiveKenny Neison, Chief Financial
OfficerJoe Thompson, Investor RelationsTel. + 44 7980 844 580
Investors, Analysts & Irish Media
Mark Kenny/Jonathan NeilanFTI ConsultingTel: +353 1 663
3686Email: CandCGroup@fticonsulting.com
UK & International Media
Tim Robertson / Toby AndrewsNovella CommunicationsTel: +44 203
151 7008Email: TimR@novella-comms.com
View source version on businesswire.com:
http://www.businesswire.com/news/home/20170309006315/en/
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(END) Dow Jones Newswires
March 10, 2017 02:00 ET (07:00 GMT)
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