And despite overall volume growth, net revenue declined by 2.1%.
The C&C Group as a whole produced Operating Profits of €115.0 million, down 9.2%, on a turnover up 10.3% to €683.9 million in the year to 28th February.
Irish net revenues declined 2.1% to €286.9 million from €293.1 million in FY 2014, with Operating Profits here running at €59.1 million.
The company reported a “solid performance in the core segments of Ireland and Scotland with operating profit growth of 1.5% and 1.8% respectively”.
The consolidation of the Gleeson’s and Wallace’s Express distributorships in Ireland and Scotland respectively led to cost reductions during the year coupled with a “strong portfolio performance with growth in ‘new brands’ and third party partner brands”.
Cider sales down
Net revenues from cider in Ireland fell 7.5% with volumes down 4.1%.
“The cider category in Republic of Ireland performed below the wider LAD category partly due to the one-off impact of the exceptional summer on cider in the previous financial year,” stated C&C, “As a consequence Bulmers brand volume (as a percentage of LAD) slipped to 8.8% (from 9.2% the previous year)”.
Nevertheless, Bulmers continues to hold an on-trade distribution rate of 95% and the Group reported “encouraging rate of sale” for new beer brand Clonmel 1650 which has been rolled out to over 500 outlets.
The Group plans increased investment in the Bulmers and Tennents brands this year.
Indeed, according to the Group, the recent development of the cider category in Asia and Europe validates the long-term potential for cider.
According to the Group, “The timing of changes in a number of distribution agreements resulted in lower Gleeson revenues during the year”.
The Gleeson business enjoyed a mixed year with integration significantly changing the business model in Ireland, stated the company.
The Irish business now services customers through one Island of Ireland sales force from a new information technology platform and it is in the process of setting up a central telesales operation based in new offices in Belfast.
Support functions have been consolidated and this has contributed to annual cost savings.
But there has been some pressure on Gleeson revenues as a consequence of gains and losses in distribution contracts. A number of brand owners made the decision earlier in the year to move to alternative distributors for competitive reasons. In the latter part of the year Gleesons won a number of new contracts, most notably distribution rights for Corona lager in Ireland and a sizeable wine supply deal.
C&C Group Chief Executive Stephen Glancy commented, “Our core businesses in Ireland and Scotland, which represent 86% of operating profit, delivered modest earnings growth during the year. During the course of FY2015, we continued to make progress towards our objective of building leading brand-led distribution businesses in both of these regions”.
The Group also completed a €30 million share buyback in FY2015.
Nevertheless at 86%, the Scots and Irish markets provided the lion’s share of the Group’s Operating Profit in the financial year.