1st Sep 2006 07:00
C&C Group Plc01 September 2006 TRADING STATEMENT FOR THE SIX MONTHS ENDED 31 AUGUST 2006 CCR.I CCR.L Dublin, London, 1 September, 2006: C&C Group plc ('C&C' or the 'Group'), aleading manufacturer, marketer and distributor of branded beverages in Irelandand the U.K., today issued the following trading statement for the six monthsended 31 August 2006. Interim results, for the six months ended 31 August 2006,will be announced on 12 October, 2006. Financial Overview Turnover growth, for the six months to 31 August 2006, compared with the sameperiod in 2005, is expected to be in excess of 25%. Notwithstandingsignificantly increased marketing investment the overall operating margin(i) isexpected to increase by over four percentage points for the period. This performance reflects strong growth in the Cider division, primarily as aresult of the excellent performance of Magners in Great Britain. Operations Turnover growth in the Cider division for the period is expected to be over 75%arising from sales volume growth of c.7% for the Group's Irish cider brand,Bulmers, and volume growth of c.250% for the Group's international cider brand,Magners. In an overall Republic of Ireland LAD(ii) market which is estimated to have beenflat in the period, Bulmer's underlying buoyancy was enhanced by particularlygood summer weather, enabling the brand to significantly outperform the LADmarket. Magners' growth arose primarily in Great Britain where it is enjoying rapidgrowth as a result of the national rollout which commenced in March of thisyear. The rollout was helped by the excellent summer weather in Great Britain.In addition to growth as a result of the rollout, Magners' more establishedregions such as Scotland and Greater London have continued to show good volumegains for the period. International Spirits & Liqueurs' shipment volume growth was c.20% partly as aresult of stock building by our new distributors, who took over from AlliedDomecq. It is estimated that overall depletions growth was about 5% in theperiod. Tullamore Dew continued its strong performance. Turnover in the Soft Drinks & Snacks division is expected to be down by c. 3%reflecting the loss of the Danone Water brands. Underlying performance wasbroadly stable with the benefit of good summer weather offset by continuingprice pressure. The Distribution division is expected to show a decline in turnover and profitas a result of the loss of the former Allied Domecq brands. Goodwill C&C will lose the distribution rights to the wine brands owned by the FostersGroup in early 2007. This will reduce the profits of the Distribution divisionand, as a result, the Group intends to write off the €8m carrying value ofgoodwill attributed to that division at 31 August 2006. Capital Expenditure Due to capacity constraints C&C is experiencing difficulties in meeting the fullmarket demand for Magners, particularly in relation to take-home packs. Toaddress this and to allow for further growth C&C proposes to bring forward thenext phase of its Cider expansion plan with a view to having increased capacityoperational prior to Summer 2007. The resulting investment in both fixed and working capital will reduce theGroup's FCF/EBITDA(iii) expectation to a 30%-40% range in each of 2006/07 and2007/08 fiscal years. The decline in the FCF/EBITDA ratio, however, will not affect the Group'sdividend policy. Second Half Outlook C&C expects Magners' strong growth to be sustained in the second half year.This should lead to an acceleration in the rate of overall Group operatingprofit growth for the second half of the 2006/07 year compared with the rate ofgrowth in the half year to 31 August 2006. Trading Statement -Investor and Analyst Conference Call Details Maurice Pratt, Group Chief Executive Officer and Brendan Dwan, Group FinanceDirector will host a conference call for investors and analysts at 2.30pm (localIrish time) today. Dial in details are available from K Capital Source on +353 1631 5500 or c&[email protected] (i) Before exceptionals and amortisation (ii) Long Alcohol Drinks (iii) Free Cash Flow/Earnings Before Interest, Tax, Depreciation andAmortisation About C&C Group plc C&C Group plc is a leading manufacturer, marketer and distributor of brandedbeverages in Ireland and the UK. C&C manufactures the leading Irish cider brand,Bulmers, and the premium international cider brand, Magners, for export to theUnited Kingdom, the United States and Continental Europe. C&C also exportsspirits and liqueurs, including the premium Irish whiskey brand, Tullamore Dew,to over 80 international markets. The Group's portfolio also comprises some of Ireland's leading beverage brandsincluding Club soft drinks and Ballygowan bottled water. C&C also distributeswithin the Irish market several leading international brands, owned by thirdparties, including 7UP and Pepsi soft drinks and a wide portfolio of wines andspirits. Investors and analysts Irish Media International Media Mark Kenny/Jonathan Neilan Paddy Hughes/ Ann-Marie Curran Edward Orlebar K Capital Source Drury Communications M Communications Tel: +353 1 631 5500 Tel: +353 1 260 5000 Tel: +44 207 153 1523 Email: c&[email protected] Email: [email protected] Email: [email protected] This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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