Drinks firm C&C Group has made a 'solid start' to its FY20 trading year, the Magners cider maker said in a trading update to coincide with its AGM.
In the statement, C&C Group added the it is seeking inclusion on the FTSE UK Index Series, given that the majority of its earnings and activities now take place in the UK following the Matthew Clarke and Bibendum acquisition last year.
Commenting on its performance, Stephen Glancey, C&C's chief executive said, "Reflecting the inherent strength of the C&C business today, our objective is to again deliver double digit EPS growth in FY20. Thereafter, we will target EPS growth in a mid to high single digit range.”
Here's how leading industry analysts viewed its performance:
Roland French, Davy
"C&C’s AGM statement (covering March through June) notes a “solid start to FY 2020” ahead of key summer trading months. Trading to date is described as “in line with current market expectations” and laps a strong comparable trading performance, aided by favourable weather and the World Cup.
"We expect operating momentum was sustained through the first quarter across both pillar brands and Matthew Clark Bibendum (MCB). The group has reiterated its full-year guidance for double-digit EPS growth. We envisage no material changes to our forecasts."
David Fahy, Cantor Fitzgerald
"A short but positive update this morning. The integration of MCB appears to have been successful with it set to add significantly to EPS growth over the medium term. Despite its growth trajectory its valuation remains relatively attractive with a 12m forward P/E of 13.7x.
"Given the 4% jump this morning, It has now risen by 50% so far this year, hitting three year highs . As a result, of this rerating we are moving our price target and recommendation to “Under Review”."
Patrick Higgins, Goodbody
"Overall, we consider this to be a positive update from C&C, with the Group on-track to meet full year expectations. We remain positive on the stock give the strong momentum across the core divisions, particularly MCB, though note the strong share price performance in the year to date (+45%)."
Alex Smith, Shore Capital
"C&C has announced it plans to seek inclusion into the UK FTSE Index Series and in doing so plans to cancel the listing of its shares on Euronext Dublin in due course. The group will remain domiciled and a tax resident in Ireland. This move is said to reflect the change in geographic focus following the acquisition of Matthew Clark Bibendum. We see the outcome and timing here as dependent on shareholder discussions and Brexit consequences.
"We see C&C emerging from a period of transition as a stronger and more competitive business (across MCB/ distribution and the core branded businesses), which we do not believe to be encapsulated in the current valuation."
Investec
"Undoubtedly, good summer weather is positive for brewers in general and cider producers in particular, which boosted FY19A numbers for all in the sector. The summer of 2020 has not started too badly, however, at this stage of the summer performance is dependent on the weather through the rest of the season, which has more than two months to play out.
"The company has taken the opportunity in the IMS, as it did in its CMD, to flag its impressive sustainability credentials, noting amongst other features that the Irish business is carbon neutral and 40% of energy is from renewable resources, while 2025 is the date targeted for carbon neutrality in Scotland. The company has pledged to eliminate one-way plastic within two years."
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
