{"id":274524,"date":"2026-01-31T23:55:12","date_gmt":"2026-01-31T23:55:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/274524\/"},"modified":"2026-01-31T23:55:12","modified_gmt":"2026-01-31T23:55:12","slug":"ccs-profit-woes-boost-case-for-deal-as-stock-fizzles-to-17-year-low-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/274524\/","title":{"rendered":"C&C\u2019s profit woes boost case for deal as stock fizzles to 17-year low \u2013 The Irish Times"},"content":{"rendered":"

The consumer-sapping rain lashing Ireland and Britain over the past week has poured even more gloom over investor sentiment towards C&C Group<\/a>, fresh from yet another grim trading update.<\/p>\n

Analysts have been busy with their pens since the owner of the Bulmers<\/a> and Magners cider and Tennents beer brands warned last Friday that its earnings would fall as much as 9 per cent in its financial year to the end of February \u2013 and that next year would be no better. <\/p>\n

It\u2019s hardly how drinks industry veteran Roger White, C&C\u2019s fifth chief executive since early 2020, wanted to celebrate the first anniversary of a tenure that \u2013 above all else \u2013 needs to re-establish investor trust in the business. <\/p>\n

Because the London-listed Irish group has been through the apple mill.<\/p>\n

Over the past six years it has gone through a \u00a3151 million (\u20ac174 million) cash call to shareholders to get through Covid lockdowns, a $20 million (\u20ac16.8 million) US sale of a problem cider business that cost $305 million a decade earlier, soaring inflation and a bungled initial roll-out of a software system at its UK wholesale unit.<\/p>\n

To reset expectations, White last year did away with a company goal of reaching a \u20ac100 million operating profit in its 2027 financial year, saying it would be hit in the \u201cmedium term\u201d.<\/p>\n

Following his warning that profit for the almost-complete year will fall between \u20ac70 million and \u20ac73 million and that next year\u2019s outcome will be similar, investment houses have started to write off any chance of the target being hit before 2030.<\/p>\n

Unless, that is, White pulls off a surprise when he outlines C&C\u2019s \u201cfuture strategic direction\u201d alongside annual results that will be published in May. <\/p>\n

[\u00a0Trading at group behind Bulmers cider \u2018below board expectations\u2019Opens in new window<\/a>\u00a0]<\/p>\n

Shares in the group have slumped 36 per cent in the past six months and are down by two-thirds over six years, leaving them wallowing around \u00a31.10 apiece, a level last seen 17 years ago. <\/p>\n

The driver of last week\u2019s alert \u2013 unlike some others in recent years \u2013 was out of C&C\u2019s control. The group blamed weak consumer confidence stemming from the UK budget in November affecting the hospitality sector which is supplied by its drinks distribution business Matthew Clark Bibendum. <\/p>\n

The UK accounts for about 80 per cent of C&C\u2019s revenues. Most of those sales come from the low-margin and \u2013 even at the best of times \u2013 low growth distribution business. <\/p>\n

C&C also pointed to what it called an \u201cadverse product mix\u201d. Those consumers still happy to go out are moving away from wine and spirits (where Matthew Clark Bibendum is particularly strong or, in the jargon of analysts, \u201cover-indexes\u201d) in favour of beer.<\/p>\n

While Christmas trading was \u201cin line with expectations\u201d, the early weeks of January saw \u201ccontinued softness of consumer demand\u201d, it said. The subsequent downpours across these islands \u2013 and implementation this weekend of a controversial UK government alcohol duty hike of 3.66 per cent \u2013 will not have helped as C&C enters the final weeks of its financial year. <\/p>\n

C&C\u2019s own core brands \u2013 Bulmers, the top-selling cider in the Republic, and Tennents, the No 1 beer in Scotland \u2013 both performed well over the festive period. This has been helped by White\u2019s focus on innovation, such as the relaunch of the zero-alcohol version of Bulmers last autumn. <\/p>\n

Following the transfer of control of Magners UK back to C&C 12 months ago \u2013 after eight years of sales and marketing in the hands of Anheuser-Busch InBev \u2013 the group has also been working to reboot a brand that had its heyday in Britain two decades ago. <\/p>\n

The remarkable resilience of the core brands may add to the case for White to be bold and go after another strong brand. Indeed, it may prove vital in maintaining the group\u2019s long-term independence. <\/p>\n

[\u00a0How Bulmers owner\u2019s new chief plans to put the fizz back into former market darlingOpens in new window<\/a>\u00a0]<\/p>\n

RBC Capital Markets analyst Tania Maciver argued in a deep-dive report on C&C last autumn that the group faces limited sales growth over the medium term if it does not carry out mergers and acquisitions to boost its stable of brands.<\/p>\n

A \u201cleading premium or craft\u201d drink brand deal, priced in the order of \u00a3200 million, would make more sense than targeting an expensive \u201cleading key brand\u201d in the UK, she said. <\/p>\n

C&C has an existing portfolio of niche premium and craft brands, including Orchard Pig cider, Five Lamps Irish lager and Menabrea Italian beer, that between them made up only \u20ac27 million, or 9 per cent, of its branded products net revenues last year.<\/p>\n

Maciver argued that a large and more diverse brand portfolio, similar to C&C\u2019s much bigger, global peers, is key to higher long-term growth potential. <\/p>\n

A transaction of the size she suggests would equate to almost half of C&C\u2019s current market value. But the group is highly cash generative \u2013 underlined by its ongoing \u20ac150 million shareholder distributions programme, started in 2024 and set to run out to 2027. Net debt excluding leases at the end of August stood at \u20ac91.5 million. <\/p>\n

\u201cIt has long been argued that the UK alcohol wholesale industry would benefit from consolidation,\u201d said Deutsche Numis analyst Damian McNeela in a note to clients as the market absorbed the latest profit warning. <\/p>\n

\u201cIt is too early to say whether the current challenging environment will prove to be the catalyst for action. What role C&C is likely to play is not clear.\u201d<\/p>\n

White\u2019s strategic vision in May should provide some answers. <\/p>\n","protected":false},"excerpt":{"rendered":"The consumer-sapping rain lashing Ireland and Britain over the past week has poured even more gloom over investor…\n","protected":false},"author":2,"featured_media":274525,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[133792,72,133791,61,60],"class_list":{"0":"post-274524","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-bulmers","9":"tag-business","10":"tag-c-c","11":"tag-ie","12":"tag-ireland"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/274524","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=274524"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/274524\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/274525"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=274524"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=274524"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=274524"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}