C&C, the drinks company that owns brands such as Magners and Bulmers, experienced a substantial fall in first-half revenues but efficiency improvements at the two recently acquired businesses, Tennents and Gaymers, led to a 7.8 per cent jump in operating profits. But the real surprise news from the group is that chief executive John Dunsmore, who has helped allay the decline of key brands, is leaving after just three years in the job.
Despite impressive export growth, operating profits from the Magners and Bulmers brands, which respectively account for 39 per cent and 29.5 per cent of the total, experienced constant-exchange-rate falls of 4.7 per cent and 11.9 per cent. Bulmers has lost market share, while Magners felt a margin squeeze from pricing pressures and competition. Magners’ volumes were up 4.9 per cent while Bulmers' fell 3.5 per cent,
However, cutting underperforming lines at Gaymers and driving operational efficiency improvements there and at Tennents powered profit growth. While operational profits from both businesses are relatively small at €4.6m (£4.02m) and €12.8m, respectively, constant-currency profit growth was substantial at 109 per cent and 43.8 per cent. And profits from third-party brands almost trebled to €3.8m. C&C also benefited from a lower interest charge with weighted average net debt in the period of €115m, down €340m on the same period.
Subject to revision following the results, analysts expect full-year EPS of 28.1¢ (2011: 25.4¢).
| C&C Group (GCC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 275¢ | MARKET VALUE: | €929m | |
| TOUCH: | 274-275¢ | 12-MONTH HIGH: | 372¢ | LOW: 265¢ |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 12 | |
| NET ASSET VALUE*: | 197¢ | NET CASH: | €60m | |
| Half-year to 31 Mar | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2010 | 440 | 54.8 | 14.7 | 3.30 |
| 2011 | 399 | 59.7 | 15.8 | 3.67 |
| % change | -9 | +9 | +7 | +11 |
Ex-div: 26 Oct Payment: 16 Dec *Includes intangible assets of €462m, or 137¢ a share £1=€1.1406 | ||||
