Trading Statement
C&C Group Plc
27 February 2006
PRE-CLOSE TRADING STATEMENT
FOR THE YEAR ENDING 28 FEBRUARY 2006
CCR.I CCR.L
Dublin, London, February 27, 2006: 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 year to 28 February, 2006. Preliminary results, for the year ending 28
February, 2006, will be announced on 9 May, 2006.
Financial Overview
Turnover growth, for the year to February 28, 2006, compared with the same
period in 2005, will be approximately 9%. The full year operating margin (before
exceptional items) should be broadly unchanged despite significantly increased
marketing investment. The Group will also benefit from reduced interest charges
in 2005/6.
This financial performance primarily reflects the net impact of continued strong
growth in the Cider division and a significantly reduced contribution from the
Soft Drinks & Snacks division. The result is expected to be an EPS outcome in
line with current market expectations.
Operations
Turnover growth in the Cider division, for 2005/6, will be approximately 30%.
This reflects volume growth of c.6% for the Group's Irish cider brand, Bulmers,
and volume growth of c.125% for the Group's international cider brand, Magners.
Bulmers continued to significantly outperform the Republic of Ireland LAD market
which is estimated to have been broadly flat in the 12 months to February 2006.
This performance reflects a combination of market share improvement throughout
the year and good summer weather during 2005. Magners' growth came primarily
from Great Britain where it is enjoying a successful roll-out in the greater
London area and very strong growth in Scotland.
International Spirits & Liqueurs' shipment volumes are expected to decrease
slightly with continued strong growth from Tullamore Dew offset by weakness in
Carolans Irish Cream Liqueur. The change to new distributors to replace Allied
Domecq is progressing smoothly with no evident market disruption.
Trading conditions in the Soft Drinks & Snacks division have remained difficult
throughout the 2005/6 fiscal year. C&C's performance deteriorated during the
second half of 2005/6 as margins in the grocery channel contracted, and the full
year outcome will show a material drop in operating margins. The Group is taking
steps to address the performance of its Soft Drinks business.
Outlook
C&C plans to extend the distribution of Magners to the principal centres of
population in England and Wales in 2006/7 and to support this roll-out with a
national media campaign. The successful implementation of this plan and
continued share growth in existing markets for the Group's cider business
underpins the Group's expectation of continued operating profit growth in 2006/
7. The timing and scale of the marketing investment involved in the Magners
roll-out, however, will limit profit growth in the six months ending August
2006.
C&C's other divisions, in aggregate, should show modest organic operating profit
growth in 2006/7. This however will be outweighed by the effect of the
previously announced loss of the distribution of Volvic and Evian and the
Allied Domecq brands.
Maurice Pratt, C&C Group CEO, concluded: "Our strategy is to exploit the growth
opportunities presented by Magners, Bulmers and Tullamore Dew and this will
drive increased operating profit for the Group as a whole. We are also focused
on improving the performance of the Group's non-alcohol businesses".
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 2.30p.m.
(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 a wide-ranging portfolio of wines. 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: c&cgroup@kcapitalsource.com Email: phughes@drurycom.com Email: edward.orlebar@finsbury.com
This information is provided by RNS
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