Interim Management Statement

RNS Number : 6022F

C&C Group Plc

15 January 2010

 



Interim Management Statement

     CCR.I        CCR.L

Dublin, London, 15 January 2010: C&C Group plc ('C&C' or the 'Group'), a leading manufacturer, marketer and distributor of branded beverages in Ireland and the UK, today issued the following Interim Management Statement covering the period from 1 September 2009 to the date of this statement. 

Three Months to 30 November 2009

Revenue(i)

Revenue, excluding the impact of the acquired AB-InBev business in Ireland, Northern Ireland and Scotland ("Tennent's"), for the three months to 30 November 2009, declined by 9% compared with the same period last year. This performance reflects a revenue decline of 13% for the Cider Division and a decline of 4% for the Spirits & Liqueurs Division. Revenue in the Distribution Division increased 7% compared with the comparative previous period. 

The performance in cider comprises a 17% decline in cider revenue in Great Britain ("GB") and a 13% decline in cider revenue in the Republic of Ireland ("ROI"). Rest of the World ("ROW") cider revenue increased 3% in the quarter.

Volumes

Total cider volumes in the period declined 9% compared with the same period last year reflecting a 15% decline in GB, a 7% decline in ROI and an 8% increase in ROW. Spirits & Liqueurs volumes increased 2% in the period compared with the comparative previous period.

(i)  Revenue on a constant currency basis

Nine Months to 30 November 2009

Revenue(ii)

Revenue, excluding the impact of Tennent's, for the nine months to 30 November 2009, declined by 7% compared with the same period last year. This performance reflects a revenue decline of 8% for the Cider Division and a decline of 14% for the Spirits & Liqueurs Division. Revenue in the Distribution Division increased 16% compared with the comparative previous period. 

The performance in cider comprised a 12% decline in cider revenue in GB and a 7% decline in cider revenue in ROI. ROW cider revenue was level year-on-year.

Volumes

Total cider volumes in the period declined by 3% compared with the same period last year reflecting a 6% decline in GB, a 2% decline in ROI and an 8% increase in ROW. Spirits & Liqueurs volumes declined 8% in the period compared with the comparative previous period.

 (ii)  Revenue on a constant currency basis

Trading since 1 December 2009

Overall cider volumes, for the month of December were 3% ahead of the same period in the prior year. This comprised a 17% increase in GB, an 8% decline in ROI and a 1% decrease in ROW. Spirits & Liqueurs volumes continued to recover and were 23% ahead of the prior year for the month of December. 

In GB, cider sales in December benefited from late ordering from the trade, which had adversely impacted previous months' sales, particularly in the On Trade. In the Off Trade, C&C's brand price premium moved materially ahead and the Group lost share accordingly. In ROI, C&C continued to grow market share. 

Spirits & Liqueurs' volumes are now lapping weaker monthly comparisons when destocking reduced shipments. 

Acquisition of Tennent's

The Group completed the acquisition of Tennent's on 28 September 2009 for a total consideration of £180m (c. €205m, of which €31m is deferred for twelve months), financed by existing cash reserves and an additional drawdown of €120m from the existing debt facility. The Group received unconditional approval from the UK Office of Fair Trading ('OFT') in respect of the acquisition on 30 November 2009. 

The integration of the Tennent's business is progressing well and the Group now has increased certainty about the timing and delivery of the identified synergy benefits of £10m announced at the time of acquisition.

The Group currently expects Tennent's to make an operating profit contribution of c. €7m in FY2010. This is ahead of expectation, reflecting both marketing investment spend and operational overheads at a lower level than originally anticipated. 

Acquisition of The Gaymer Cider Company

The Group announced the acquisition of The Gaymer Cider Company ("Gaymers") on 30 November 2009. It is expected that the acquisition will complete by the end of January. The acquisition is not conditional upon competition authorities' approval but is subject to review by the OFT. It is not expected that Gaymers will contribute meaningfully to operating profit in the current financial year.

The acquisition of Gaymers is being financed by a new bank facility of £60m (c. €67m). 

Distribution of Draught Magners

On 30 November 2009, the Group announced that it had signed a non-binding letter of intent with Molson-Coors UK ("MC") to modify the terms of the existing agreement under which MC distributes draught Magners for C&C in GB. C&C and MC have now concluded this agreement which will become effective from 1 March 2010.

Under the terms of the revised agreement, MC will continue to distribute draught Magners to the Independent Free Trade in England & Wales. C&C will distribute draught Magners to the On Trade in Scotland and to multiples in the On Trade in England & Wales. C&C will also distribute all other LAD brands to the On Trade throughout GB. A compensation fee of £1.75m (c. €1.95m) is payable by C&C to MC under the terms of the new agreement. 

Performance Review & Outlook 

Business conditions in the Group's core cider markets remain challenging. C&C expects to report a modest year-on-year decline in cider volumes for FY2010, this compares with a volume decline of over 14% in the 2008/09 financial year.

Excluding the impact of the Tennents acquisition, C&C expects to deliver an operating profit outcome for FY2010 in line with previously stated guidance - towards the top end of the €77m to €82m range. 

2010 Reporting Calendar 

C&C will issue its Preliminary Announcement for the year to 28 February 2010, on 18 May 2010. The Group will also hold its 2010 Annual General Meeting on 5 August 2010.

Investors and Analysts	Irish Media	International Media
Mark Kenny/Jonathan Neilan FD K Capital Source Tel: [phone] Email:  c&[e-mail]	Paddy Hughes/ Anne-Marie Curran Drury Communications Tel:    [phone] Email:    [e-mail]	Robert Ballantyne/Shanshan Willenbrock Cardew Group Tel:    [phone] Email: [e-mail]

About C&C Group plc

C&C Group plc is a leading manufacturer, marketer and distributor of branded beverages in Ireland and the UK. C&C manufactures the leading Irish cider brand, Bulmers, and the premium international cider brand, Magners, for export to the United Kingdom, the United States and Continental Europe. C&C recently acquired the Tennent's beer brand which is primarily sold in Scotland and Northern Ireland and The Gaymer Cider Company which produces a range of branded and own label cider for the on and off-trade in the UK. 

C&C also exports spirits and liqueurs, including the premium Irish whiskey brand, Tullamore Dew, to over 80 international markets. The company also distributes a number of beer brands in the Scottish, Irish and Northern Irish markets and niche spirits and liqueur brands across a number of international markets.

Note regarding forward-looking statements

This announcement includes forward-looking statements, including statements concerning expectations about future financial performance, economic and market conditions, etc. These statements are neither promises nor guarantees, but are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated.

 

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