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C&C operating profits fall

By BFN News | 07:29 AM | Wednesday 11 May, 2016

Drinks group C&C's operating profits fell to EUR103.2m in the year to the end of February - 10.3% down on last time. Revenues were 3.1% lower at EUR662.6m and EBITDA fell 12.4% rto EUR122.6m. Free cash flow rose 47.5% to EUR126.4m and the dividend of 13.65 cents per share is up 18.7%. Group chief executive Stephen Glancey said: "Cider is now penetrating deeper into international markets as consumers are attracted to the sweet natural taste. Magners is the original premium apple cider and we are pleased to report growth not only in the UK but across our Export business, where cider grew by 15% over the past 12 months and with momentum sustaining into the current year. "While cider exports support jobs and agriculture in Ireland we recognise that the performance of Tennent's in International markets does the same for Scotland. Our beer business also continues to capitalise on the opportunity in international markets and our Tennent's brand grew last year by 34% as we opened new territories in Asia and Africa. In recent months we have finalised a number of new distribution deals and this will again sustain growth in the current financial year. Around 9% of our own brand volume is now sold internationally, underpinned by growth of 22% per cent in our Export segment in the last year. "In the United States we have entered an exciting new relationship with Pabst Brewing Company, providing deeper sales, marketing and distribution capability and a strong authentic beer portfolio to wrap around Woodchuck and Magners. The US is the home of Craft and in the longer term we believe the quality and authenticity of our hand crafted real ciders combined with Pabst will prove to be compelling for consumers and distributors. "In our domestic businesses in Ireland and Scotland we faced a range of challenges including poor weather, increased competitor dynamics and of course the impact in Scotland of the changes to drink driving regulations. Integration of Gleeson's and Wallace's is now complete and we have a stronger customer focused platform which provides us with a competitive advantage as we build on the relative strengths of our local heroes, Bulmers and Tennent's. "In the wider UK market, Magners Original has delivered both volume and share growth. We have a new marketing campaign this summer and this upweighted investment will support growth. The C&C brands business has also developed a number of speciality beers and ciders. Volume of Menabrea our Italian beer more than trebled and Heverlee, our Belgium Pilsner, grew by 34%. "We retain a strong balance sheet and our commitment is to deploy capital where we believe it will drive greatest value for shareholders. We returned €115 million to shareholders in FY2016 and our intention is to increase this to over €130 million by mid calendar 2016 under our current share buyback plan. We have also increased our dividend for FY2016 in line with our progressive dividend policy, providing certainty of value for shareholders. While we have returned substantial capital to shareholders during the year, leverage on our balance sheet remains conservative providing financial flexibility within the business. We are positioned to deliver earnings growth and strong cash generation in FY2017." Story provided by

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