Magners cider sales slide by nearly a fifth
The UK consumer's love affair with Magners cider has continued to cool over the last year, with C&C Group, which owns and manufactures the brand, reporting sales down nearly a fifth in the 12 months to the end of February.
The Irish cider and spirits group said UK cider sales fell 18.7 per cent and pointed the finger at poor economic conditions, uncertainty among consumers, a bad summer in 2008 and a shift from the on-trade to the off-trade for the decline.
Magners market share of the UK on-trade cider market fell by 5.1 percentage points to 15.2 per cent, it added.
Overall cider revenues fell 15.2 per cent, with pre-exceptional operating profits down nearly 22 per cent, at €84.8m (£76.3m). Operating margins fell to 17.9 per cent, down 3.3 percentage points.
Earnings per share were down 15 per cent at 25.4 cents (£0.23). A final dividend of nine cents (£0.08) is being proposed.
The group said trading in the 10 weeks since the year end had been "mixed", with overall revenues on a constant currency basis being flat year-on-year, despite volumes in the core cider markets being up nine per cent on the same period in 2008.
C&C said "a substantial strengthening" of the Euro against sterling reduced its cost competitiveness in the UK and contributed to "both price and volume declines together with a loss of market share in Ireland and the UK" in the last year.
The group's overall turnover, which included figures from C&C's spirits and liqueurs business, fell 11 per cent in the year to €514.4m (£463m), while pre-exceptional operating profits fell 27 per cent to €90.2m (£81.2m).
Exceptional items came to €159.6m (£144m), costs which included a restructuring of the group.
John Dunsmore, the former chief executive of Scottish & Newcastle who now heads C&C, said the group's operating cost base would be aligned "with an exceptionally challenging environment".
Dunsmore signalled there would be reductions in capital spending, as well as "more effective marketing investment", which would help boost the group's financial prospects in the current financial year.
