Profits slide at C&C Group

Magners producer C&C Group has reported an 11% decline in sales and an operating loss of €59.2m for the year to 28 February.

The group blamed its poor performance on the deteriorating economic conditions, poor summer weather and the continued shift from on to off-trade consumption.

"This performance reflects a rapid deterioration in economic conditions in the Group's core markets over the past year and the consequent impact on consumer spending," it said.

"It also reflects an increasing shift from the on-trade to the off-trade market. Performance was adversely affected by a second consecutive period of poor summer weather during 2008 and a substantial strengthening of the Euro against Sterling reducing the Group's cost competitiveness in the UK.

"These conditions have contributed to both price and volume declines together with a loss of market share in Ireland and the UK."

For the ten weeks to 12 May, volumes in Britain grew 9% on last year, largely attributable to substantial promotional activity for can multipacks in the off-trade. But revenue was down 5% because the promotion was below average pricing.

In Ireland, volumes were up 10% for the 10 weeks thanks to the timing of Easter, St Patrick's day and the success of the Irish rugby team in winning the Six Nations. Revenue grew in line with volume growth.

"We are in the process of aligning C&C's operating cost base with an exceptionally challenging environment," said chief executive John Dunsmore. "Increased operating efficiency, reduced capital spend and more effective marketing investment will contribute to our financial performance in FY2010 and to the development of an agile business which is increasingly responsive to the market."