A focus on more profitable business at drinks group C&C – which owns such brands as Bulmers and Magners – helped boost operating margin by 2.9 percentage points to 23.1 per cent and drive up underlying profits by 9 per cent to €111m. Nevertheless, weak consumer conditions are hurting – volumes slipped 10.5 per cent – leaving few catalysts for share price upside.
True, profits in Ireland were stable for the third consecutive year, but this had more to do with higher margins protecting profits as revenues actually slumped 7 per cent, even though C&C's beer sales rose 23 per cent in a flat market. The UK cider market was hardly sparkling either, as Magners net revenue edged ahead just 0.7 per cent year-on-year with volume increases largely offset by pricing pressure. The group's beer offering is looking flat, too: Tennent's sales, for instance, fell 3.2 per cent to €216m.
On a positive note, C&C's cider export markets are in good shape, albeit this segment is pretty small, accounting for 4 per cent of group sales and €6.6m of profit.
Broker Canaccord Genuity expects current year adjusted EPS of 29¢ (27.6¢ in 2012).
C&C (CCR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 349¢ | MARKET VALUE: | €1.18bn | |
| TOUCH: | 348-349¢ | 12-MONTH HIGH: | 394¢ | LOW: 265¢ |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 211¢* | NET CASH: | €68.3m | |
| Year to 29 Feb | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2008 | 598 | 102 | 28.4 | 27.00 |
| 2009 | 514 | -66 | -19.4 | 9.00 |
| 2010 | 491 | 64 | 18.2 | 6.00 |
| 2011 | 770 | 80 | 22.1 | 6.60 |
| 2012 | 717 | 111 | 30.0 | 8.17 |
| % change | -7 | +40 | +36 | +24 |
Ex-div: 23 May Payment: 13 Jul *Includes intangible assets of €485m, or 143¢ a share £1=€1.26 | ||||
