Bulmers Summer sales down
This follows growth of 0.5% MAT to July last year.
Despite this LAD growth, the Bulmers cider manufacturer and distributor (which has a 92% share of on-trade cider sales and a 61% share of off-trade cider sales) suffered a 15% slump in volume sales of Bulmers here over the Summer period (May to August).
Net Irish revenue in H1 fell 12.3% to €142.3 million on a 5.8% reduction in volumes.
Overall, the C&C Group declared a 9.5% decline in operating profit to €62.6 million on net revenues down 2.6% to €358.6 million.
The manufacturer and distributor of cider as well as branded beers, wines and soft drinks put the decline in net overall revenues down to “a challenging period in core markets of Ireland and Scotland”.
However it was able to point to a “significant 31% growth in export business”.
Export growth was fuelled by the company’s brands Magners, Tennent’s and Shepton.
“We see the cider category continuing to accelerate growth internationally through increased penetration and new market development,” stated C&C Group Chief Executive Stephen Glancy, “Asia Pacific, Europe and Africa all performed well.”
Magners is now exported to over 60 countries and is a top tier international cider brand.
The company has put in place new distribution arrangements for Poland, South Korea and Nigeria with further countries to follow in the second half of its financial year.
While the US business was below expectations, the company is acting to improve earnings from this sector for the full year by “exploring new ways of market access”.
The company’s new cost-saving programme should deliver €15 million in savings per year and some €38 million has been knocked-off the net debt during H1 to bring this down to €119.8 million.
Following a €30 million buyback scheme which was completed last January, another share buyback scheme has been announced to repurchase up to another €100 million of the Group’s shares in time for the company’s AGM in July next year.
Many of the factors contributing to the H1 performance are one-off or transitional, according to Stephen Glancy who also included the weather, the transition to a brand-led wholesale model and legislative change in Scotland among reasons for the performance.
“In aggregate, the headwinds will adversely impact profitability by €10 million in the financial year,” he predicted, adding that, “Positively, the reception to our new brands such as Heverlee and Menebrea, access to the Drygate range and the launch of our new craft cider Dowds Lane Big Vat cider to complement our Five Lamps craft beer in Ireland has been good.”
He also hoped to increase Magner’s share of the cider market.
“Looking ahead, we expect improved operational performance in Ireland and Scotland as we move through the second half and into FY ’17 underpinned by ongoing cost-saving initiatives, sustained investment behind our brands and increased emphasis on niche and premium.
“We are assuming that market conditions will continue to be testing particularly in our core markets in the coming months but we are confident that we are taking the right actions to build durable, long-term value for all shareholders and this is reflected in a 5.1% increase in our interim dividend.”
