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C&C's Christmas sales below expectations

By BFN News | 07:38 AM | Wednesday 14 January, 2015


Branded cider, beer, wine and soft drinks group C&C's trading over the Christmas period was below expectations in the domestic markets C&C said trading conditions in the third quarter generally were below expectations. In Ireland, following solid performance in the first six months of the year, volume (excluding Gleesons) was down 3.4% in the quarter. The market was slow in the period with October and November proving to be particularly quiet months. In Scotland, a similar trading profile was evident and volume (excluding Wallaces) in the period was down 2.4%. The Group's core markets, however, are expected to continue to provide resilient levels of profitability and cash flow. In England and Wales, pressure on pricing increased in the off trade channel, reflecting intensifying competition at both retail and brand owner points in the supply chain. Our cider volume in the quarter was down 9.8% with net revenue down 18.2%. C&C has, and continues to explore, a range of initiatives within these markets to deliver improved profitability. In the US, volume declined 16.2% in the period representing an improvement on the first half but still some way from a return to growth. However, the disruptive impact of new entrants to the market has receded. Retail data for the multi-outlet and convenience retail channel since July 2014 highlights that Woodchuck is performing broadly in line with the month-on-month movement in the category. The underlying performance trends of the second half provide increased confidence in the brand's prospects for FY16. We believe that the opening of the new cidery in August, product innovations and better sales execution are having a positive impact. The US cider category remains very attractive and the Group is firmly committed to capitalising on the long-term growth potential. Excluding the US, underlying performance in other export markets was strong. Volume in Europe increased 18.6% in the quarter with Magners up 7.1% and Tennent's up 62.1%. Distribution issues in Australia depressed overall volume in the segment for the quarter but those issues are now resolved. We anticipate a solid distribution platform in Australia in FY16 and the removal of the drag that Australia has proven to be over the last 18 months. Story provided by StockMarketWire.com

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