Trading Statement
C&C Group Plc
31 August 2005
PRE-CLOSE TRADING STATEMENT
FOR THE SIX MONTHS ENDING 31 AUGUST, 2005
CCR.I CCR.L
Dublin, London, August 31, 2005: C&C Group plc ('C&C' or the 'Group'), a leading
manufacturer, marketer and distributor of branded beverages and snacks in
Ireland, today issued the following statement in advance of its close period for
the 6 months to 31 August, 2005. Interim results, for the six months ending 31
August, 2005, will be announced on 11 October, 2005.
Financial Overview
Turnover growth, for the first half to August 31, 2005, compared to the same
period in 2004, will be approximately 8%. The overall operating margin (before
IFRS adjustments and exceptional items) should be broadly unchanged despite
significantly increased marketing investment. The Group will also benefit from
reduced interest charges in the period.
This performance is ahead of the Group's expectations and reflects the net
impact of strong growth in the Cider division and a reduced contribution from
the Soft Drinks & Snacks division.
Operations
Turnover growth in the Cider division in the period will be over 25% arising
from sales volume growth of c.8% for the Group's Irish cider brand, Bulmers, and
volume growth of c.100% for the Group's international cider brand, Magners. In
a Republic of Ireland LAD market which is estimated to have grown by 1-2%,
Bulmers benefited from good summer weather particularly compared to last year.
Magners' growth is coming primarily from Great Britain where it is enjoying a
successful rollout in the greater London area and where Scotland continues to
show strong momentum.
International Spirits & Liqueurs' shipment volume growth will be c.2% with
continued strong growth from Tullamore Dew offset by weakness in Carolans Cream
Liqueur. C&C is in discussions with a number of alternative international
spirits & liqueurs distributors to replace Allied Domecq and expects to conclude
its new arrangements in October/November, 2005.
Trading conditions in the Soft Drinks & Snacks division have been difficult
within the period; the market being characterised by volume declines in
carbonated soft drinks and snacks and margin pressure in a growing bottled water
market. C&C experienced some market share loss and half year turnover for the
division is expected to be unchanged. Increased marketing investment, to support
growing segments of the market, will contribute to a reduction in the operating
margin.
Second Half Outlook
C&C expects the strong underlying (i.e. weather adjusted) market performance of
its Cider division to continue into the second half of the year. The
International Spirits & Liqueur division could experience some temporary
performance shortfall in the second half as a result of impending distribution
changes. The market trends in the Soft Drinks & Snacks division are expected to
continue in the second half of the year.
As a consequence, the Group now expects moderate EPS growth for the full year
(pre IFRS and exceptionals).
Accounting Changes
The company is adopting IFRS in the current financial year. The impact of this
will be to reduce reported EBITA for the first half by approximately €1.5
million. €1.0 million of this reduction relates to pensions and €0.5 million
relates to expensing share options. Reported earnings will also be affected by
the elimination of the P&L charge for goodwill amortisation. These changes have
no impact on cash and accordingly will not impact dividends.
Pre-close Trading Statement -Investor and Analyst Conference Call Details
Maurice Pratt, Group Chief Executive Officer and Brendan Dwan, Group Finance
Director will host a conference call for investors and analysts at 2.00pm (local
Irish time) today. Dial in details are available from K Capital Source on +353 1
631 5500 or c&cgroup@kcapitalsource.com
About C&C Group plc
C&C is one of the largest manufacturers, marketers and distributors of branded
beverages in Ireland and Northern Ireland and savoury snacks in Ireland. The
Group owns several of Ireland's most recognised beverage and savoury snacks
brands, with leading market shares in various segments of the Irish beverage and
savoury snacks markets, including Bulmers cider, Ballygowan bottled water, Club
soft drinks and Tayto crisps. Additionally, the Group distributes in Ireland
several leading international brands owned by third parties, such as 7UP and
Pepsi soft drinks, and Volvic and Evian bottled water, and a wide-ranging
portfolio of wines and spirits. In addition to its Irish operations, the Group
exports spirits and liqueurs to over 80 overseas markets and exports Magners
cider to the United Kingdom, the United States and Continental Europe.
Investors and analysts Irish Media International Media
Mark Kenny/Jonathan Neilan Paddy Hughes/ Ann-Marie Curran Edward Orlebar
K Capital Source Drury Communications Finsbury Group
Tel: +353 1 631 5500 Tel: +353 1 260 5000 Tel: +44 20 7251 3801
Email: Email: phughes@drurycom.com Email:
c&cgroup@kcapitalsource.com edward.orlebar@finsbury.com
This information is provided by RNS
The company news service from the London Stock Exchange
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