These results from C&C Group (CCR) reflect transition pains as part of the "revised commercial terms" with AB InBev, announced just before May's full-year results. Under the terms of the new arrangements, C&C’s distribution rights for AB InBev’s products in the UK have reverted to the latter entity, resulting in an overall fall in volumes for C&C. However, chief executive Stephen Glancey said that any short-term pain was worth the long-term gain, as scale benefits accrue from having the world’s largest brewer distribute its products. For now, however, the 7 per cent decline in total volumes weighed on interim sales and profits.
Distribution aside, C&C is benefiting from increasing discernment on the part of UK drinkers. Sales of craft and super-premium ciders were up by 27 per cent over the six months to €7.8m (£6.88m). This switch to premium brands, along with cost savings from the re-jigged AB InBev arrangements, helped the operating margin improve by 40 basis points to 17.9 per cent.
Analysts at Davy expect pre-tax profits of €81m in the year to February 2018, giving EPS of 22.4¢, with estimates broadly flat for FY2019.
| C&C GROUP (CCR) | ||||
| ORD PRICE: | 296¢ | MARKET VALUE: | €915m | |
| TOUCH: | 296-297¢ | 12-MONTH HIGH: | 419¢ | LOW: 285¢ |
| DIVIDEND YIELD: | 4.9% | PE RATIO: | NA | |
| NET ASSET VALUE: | 161¢* | NET DEBT: | 31% | |
| Half-year to 31 Aug | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
| 2016 | 450 | 50.3 | 13.8 | 4.96 |
| 2017 | 408 | 46.0 | 12.7 | 5.21 |
| % change | -9 | -9 | -8 | +5 |
| Ex-div: | 02 Nov | |||
| Payment: | 15 Dec | |||
| *Includes intangible assets of €527m, or 170¢ per share £1=€1.13 | ||||
