C&C warns of negative impact of sterling on full-year results

Drinks group C&C has warned it expects full-year profits to be hit by the fall in the value of sterling following the recent general election in the UK.

The company, which holds its annual general meeting in Dublin on Thursday, said in a trading update that if current exchange rates remain the same, its financial performance will be negatively impacted.

The group said trading to date across core markets for the period from March 1st to the present was “satisfactory and in line with our expectations.”

“C&C will be better placed to assess recent brand and new product development (NPD) investment in Ireland and the new ABI partnership following the key trading months of July and August,” it added.

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The drinks group said overall trade in Ireland has been subdued with Bulmers losing more draught distribution. Its premium and craft portfolio grew strongly over the reporting period with Heverlee and 5 Lamps standout performers.

The company, which recently launched a new Dowd’s Lane range of craft ciders and beers in Ireland, said while it was early days it was pleased with the response to a new livery and a heavyweight media campaign for Bulmers.

The group’s Scottish business benefitted from multi-year investment in both customers and brands, C&C said, with Tennants in particular gaining market share in what is a flat market.

It added that its premium and craft brands, which include Menabrea, Heverlee and Drygate, performed strongly.

C&C said the complex transition of Magners and other cider brands to AB InBev is on track with "minimal customer disruption."

The group added cider volumes are tracking slightly behind target across the GB market but it is anticipated they will normalise through the key summer trading months.

It was a similar story in the US where C&C said its business is “stable, with some progress on improving efficiencies.”

“Export has had a solid start to the year with Europe maintaining its strong performance from the prior year, but with a slower start in the newer markets of Africa and Asia. Australia and New Zealand have improved year on year and the new distribution arrangement is bedding in to plan,” the company said.