Despite a tough market, Irish drink producer C&C oversaw a 29% increase in operating profits for the first half of 2010.
Irish beverage producer C&C has reported a huge increase in operating profits for the first half of this year, a notable success for the company in tough economic conditions. Key to this success has been John Dunsmore. CEO of the company since November 2008, he has lead C&C in a tough consumer market both at home and abroad.
New acquisitions made by C&C have contributed to the strong performance with operating profits for continuing operations increasing 29.4% to €63.4m in the first half of 2010. The company looked to build on its solid Bulmers’ brand with new ventures including the purchase of Tennent’s in 2009.
Its Magners Cider brand returned to volume growth in the UK for the first time since 2007. In Ireland, Bulmers Cider volumes declined 3.4% year-on-year in a challenging market.
“Economic conditions in the group’s core markets of Ireland and the UK remain unpredictable and challenging,” said Dunsmore. “Consequently, we are appropriately cautious in our outlook.”
“Despite the challenges, we are pleased to report the continued growth of the cider category in the UK and the return to modest volume growth for the Magners brand for the first time since 2007. We are also pleased to confirm the successful integration of the Tennent’s and Gaymers businesses and a good first half performance from both acquisitions. Our newly strengthened position in the long alcohol drinks sector leaves us well placed to continue with the Magners recovery,” Dunsmore said.
“It is reassuring to see the development of Magners internationally begin to provide some protection against the current market challenges of Ireland,” he said.
C&C said it expected to make an operating profit of €102-€106 million for its fiscal year to the end of February 2011.
C&C said that in Ireland there was a weak consumer environment, with Bulmers’ volume down 3.4% and price deflation removed a further 4.4% from net revenues. Trading patterns in the second quarter were also influenced by increased competition around World Cup promotional activity.
But reduced input costs and the continued drive towards a competitive cost base have supported margins that remain level at 48% of net revenue, despite the pricing pressure, the company said. Wholesale pricing of draught Bulmers was reduced in May 2010 and follows on from the pint bottle reduction in June 2009.
Headquartered in Dublin, the C&C Group is a leading manufacturer, marketer and distributor of branded beverages in Ireland and the UK. Most notably, it is responsible for the Bulmers brand of cider in Ireland (referred to as Magners in the UK and elsewhere) which is a firm favourite in the summer months.
Dunsmore was formerly chief executive of Scottish & Newcastle (S&N). He joined the management of the Irish drinks firm along with two of his colleagues from S&N: Stephen Glancey, now chief operating officer with C&C, and Kenny Neison, who is now the strategy director with C&C.
Dunsmore had been with S&N since 1996, holding a string of management positions, in the UK and Europe. He was appointed to the board in 2002, and became group chief executive in 2007.
Good news at C&C
- Outlook C&C is set to have a strong 2010, with international markets improving.
- The firm reported operating profit for continuing operations increasing 29.4% to €63.4m for the first half of 2010.
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