C&C Gro
up (LSE: CCR), the Dublin-based company behind cider brands such as Magners, Bulmers and Ye Olde English, released its result for the first half of FY 2015, to 31 August 2014, this morning.
C&C’s share price had fallen by over 12% at one point in early trading, but has since recovered somewhat and currently stands 7.6% down on the day so far.
Despite net revenue increasing 9.3% to €368.1m, operating profit fell 2.7%, to €69.2m, earnings before interest, tax, depreciation and amortistion (EBITDA) dipped 2.2%, to €81m, and and free cash flow tumbled 48.4% to €30.8m.
C&C says that earnings growth in its core Ireland and Scotland businesses was offset by “challenges” in both the US, where performance was described as “disappointing“, and England & Wales, where the company says that “heightened competition” reduced the contribution from its cider portfolio.
Basic earnings per share (EPS) were up 22.4%, to 15.3 cents, and the board is recommending an interim dividend of 4.5 cents per share — an increase of 4.7% year-on-year, which the company says reflects its “strong balance sheet, underlying cash generation capability and commitment to deliver value for shareholders“.
C&C says that its first-half performance is “solid” when considered against prior year comparisons in Ireland, the fact it’s still in the early stages of its US marketing investment programme, and a trading environment in England & Wales that it describes “intensively competitive“.
Last week C&C confirmed that it had made a preliminary approach to the Spirit Pub Company, which operates pub & restaurant brands such as Chef & Brewer, Fayre & Square and Flaming Grill. Spirit rejected the approach, and C&C now has until 5pm on 20 November to announce whether or not it has a definite intention to make a formal bid.
Under the takeover code, because its interest in Spirit remains to be settled either way, C&C is prevented from issuing new operating profit guidance.
Commenting on the results, group CEO Stephen Glancey said
“The strength of our core business in Ireland & Scotland underpinned profit delivery of €69.2m in the period. Given the lower than expected contribution from the US and England & Wales businesses, this is a solid outcome.“
C&C’s share price has now fallen over 14% since it confirmed its interest in the Spirit Pub Company just five days ago.
