Drinks producer C&C Group – owners of the Magners, Bulmers, Tennent's and Gaymers – has announced a 9.5% slump in operating profit, as it declared its results for the six months to 31 August 2015.
The company cited difficult trading conditions and a particularly challenging period in its core markets of Ireland and Scotland, as to blame for the fall in profitability to €62.6m. Revenues were down by 2.6% to €358.6m.
Stephen Glancey, C&C Group CEO said that one-off or transitional costs, bad weather and legislative change in Scotland had all impacted performance. However, the Group announced it had begun a new cost saving programme it expects to deliver €15 million in annualised savings, and had achieved €38 million reduction in net debt during the period.
The group has also set to launch a share buyback programme to repurchase up to €100 million of the Group’s shares by July 2016. C&C also declared strong cash generation with free cash flow of €66 million representing 92% of EBITDA.
Glancey commented: 'In aggregate, the headwinds will adversely impact profitability by €10 million in the financial year. Positively, the reception to our new brands such as Heverlee and Menabrea, 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.
'Over the last six months there has been a lot of M&A activity in our sector with valuations reflecting both availability of liquidity and asset scarcity. We believe that the landscape will continue to evolve in the next twelve months. We have and will continue to review acquisition opportunities to optimise value for shareholders but only if they deliver superior and sustainable long term returns which are in keeping with our return parameters.'