27th Oct 2016 08:01
LONDON (Alliance News) - C&C Group PLC on Thursday reported a fall in profit in the first half of its financial year, as sales were hit by negative movements in foreign exchange rates and investments it is making into its brands, as it warned on volatility created by the UK's vote to leave the European Union.
The Irish cider, beer and wine producer, which makes the Bulmers and Magners brands, said pretax profit in the six months to the end of August fell to EUR51.4 million from EUR58.1 million the year before, as revenue slipped to EUR307.0 million from EUR358.6 million.
C&C said its profit performance was hit by unfavourable movements in foreign exchange rates, and by investments in marketing and prices to drive momentum in its core brands.
However, those investments helped volume in the core brands of Bulmers, Tennent's and Magners to grow by 6%, 2% and 11%, respectively.
The second half should benefit from cost-reduction plans and efficiency gains, C&C said, with marketing spend weighted to the first half. It did warn, however, that it is seeing "some volatility in consumer behaviour as a result of the heightened economic uncertainty following the Brexit vote and subsequent devaluation in sterling".
"However, we have a business that is capable of weathering these challenges and our confidence in the medium to long term outlook is based on the strength of our key brands, our business model and leading positions in Ireland and Scotland ? where fundamentals remain strong," Chief Executive Stephen Glancey said in a statement.
"Our cash generative nature and balance sheet strength should ensure attractive returns for shareholders. We are well placed to either capitalise on the opportunities which may arise from the current phase of consolidation in our industry or return capital to shareholders," he added.
C&C will pay an interim dividend of 4.96 cents, up from 4.73 cents the year before.
C&C added that it is in support of the Scottish government's plan to introduce minimum pricing on alcohol in order to reduce irresponsible consumption.
Shares in C&C were trading down 0.3% at EUR3.54 on Thursday.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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