Brexit hits trading as C&C revenue falls 8 per cent but cider sales are up
Drinks Group C&C said its revenue was down more than eight per cent due to investment in marketing and the volatile behaviour of customers after the Brexit vote.
The drinks company, who produce Bulmers and Magners cider, said that its half-year performance was "defined by currency headwind and investment in marketing and price support to drive momentum in our core brands."
The results
Operating profit was down from €62.6m (£56m) to €55.1m compared to the same period last year and net revenue dipped 8.1 per cent from €358.6m to €307m.
Cider sales were up – Bulmers by six per cent, Tennent's by two per cent and Magners by 11 per cent, "supported by brand investment and organisational focus", the company said. Volumes of craft beers and premium drinks were also up – by a whopping 24 per cent.
A wet summer cooled sales last year but were more positive this summer.
Read more: C&C's cider sales fizz after good weather but warns on Brexit vote impact
Regionally, its trading in Ireland and Scotland were stable.
Why it's interesting
The fall in the value of sterling particularly following the Brexit vote had an adverse impact on reported revenues and operating profits of €24.4m and €2.8m, respectively, the company said.
They also said that they were seeing some "volatility in consumer behaviour" across the industry "as a result of the heightened economic uncertainty following the Brexit vote and subsequent devaluation in sterling."
Read more: Smirnoff just made cider the new alcopop
The shares in C&C Group were down 1.6 per cent at the time of writing.
What the company said
Stephen Glancey, C&C Group chief executive, said that while reportings were down, the investment would "underpin long term brand values."
He added:
In the first half we have seen some variability in consumer demand and are cautious on forward consumer reaction to political and economic conditions in our core markets. However, we have a business that is capable of weathering these challenges and our confidence in the medium to long term outlook is based on the strength of our key brands, our business model and leading positions in Ireland and Scotland – where fundamentals remain strong.