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C&C in a crowded marketplace

C&C's interim results should show whether trading conditions in the UK cider market have eased since the February year-end.
October 22, 2014

Irish beverage group C&C (CCR) managed to drive up organic sales volumes and operating profits during the year to February, but in the upcoming half-year results analysts will be anxious to see if margins in England and Wales have continued to deteriorate. The trouble is that C&C’s cider brands - which include Magners, Blackthorn and Bulmers - are competing in an increasingly crowded marketplace.

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Previously, C&C had been successful in positioning brands like Magners at the premium end of the alcoholic drinks sector. This partially offset the structural fall-away in pub volumes. But with so many alternatives now available in England and Wales, prices, margins and volumes have come under increasing pressure.

Still, the group should benefit from the freeze on cider duty, which has allowed prices to fall slightly in many UK pubs. The half-year numbers should also reflect the impact of the decision taken earlier this year to buy the remaining 50 per cent stake in Scottish wines and spirits wholesaler Wallaces Express.