Irish cider-maker C&C Group has reported a decline in revenues of 4.9%, to €548.2 million, for the 12 months ended 28 February 2018.
The producer of Magners cider and Tennent’s said that the decline was due to challenging markets and adverse weather conditions. Despite this, the group said that its performance was in line with analysts’ expectations.
Challenging Markets
Operating profit fell by 7%, to €86.1 million, and operating margin dropped 40 basis points, to 15.7%. However, branded volumes increased by 0.3% and revenues rose by 0.8%.
Stephen Glancey, C&C Group CEO, said, "FY 2018 was a significant year of progress for the group, both in terms of strategic development, as well as improved underlying performance.
"While the trading environment in our key markets of the UK and Ireland remained challenging, our branded portfolio returned to volume and revenue growth, outperforming the broader LAD market," Glancey added.
Irish Marketing Push
During the year, C&C invested heavily in its Bulmers brand in Ireland. The group launched a new cider, Outcider by Bulmers, and introduced a new marketing campaign for Bulmers Original cider under the tag line '100% Irish'.
Despite the increase of options and brand affinity that these strategies brought to the group, overall Bulmers brand volumes fell by 6%. C&C’s craft and super-premium range experienced 'another good year'.
Strong UK Market
In the UK, economic growth slowed during the 2017 calendar year due to rising inflation and negative real-wage growth, dampening consumer spending.
The distribution of Magners and other UK-based ciders was transitioned to new distribution arrangements with international beer producer AB InBev. As a result, Magners' volume sales experienced a slow start to the year, but, after gathering momentum in the second half, the group saw an increase of 9% (after a 6% decrease reported in H1 ’18).
Glancey added, "The expansion of our distribution agreement with AB InBev for our cider portfolio in the UK gained momentum through its first year.
"Incremental on-trade and wholesale distribution points for Magners yielded positive results in H2 ’18. Our investment in Admiral Taverns further enhances our route to market across the UK. We completed the investment in December 2017, and trading to date is in line with our expectations," he said.
However, the group reported that the Tennent’s brand had a "very strong year", on the back of continued investment in social media, product innovation and sponsorships. Total net revenues for the brand were up by 5.3%. Brand volumes remained flat, despite the disruptive weather, allowing it to outperform a total beer market that saw a 2% drop in volume sales.
The group also reported that it returned €78 million to shareholders through share buy-backs and dividends.
The Irish cider-maker recently announced that it completed the acquisition of the wholesale arm of British drinks firm Conviviality.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Aidan O'Sullivan. Click subscribe to sign up to ESM: European Supermarket Magazine.
