Drinks group C&C will commence a €15 million share buyback programme on Monday, despite reporting a drop in revenues in the first half of the year amid weaker cider sales in Britain over the period.
The Bulmers and Magners Irish cider-maker, which struck a deal with an activist investor in August to quell a shareholder revolt over the group’s declining share price, said net revenues are expected to be down 3 per cent for the six months to the end of August.
However, the London-listed but Ireland-based group said half-year operating profits are expected to fall in a range between €39 million and €41 million, “in line with [group] expectations” and up by about 30 per cent from the same period in 2023.
C&C said it remains “confident” it will achieve its goal of generating €100 million in annual operating profits by 2027.
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Sales across its core and premium brand range was in line with expectations, the group said, while it saw growth in its Matthew, Clark & Bibendum wholesale business in the first half. Tennent’s lager achieved volume and value share growth in the first half, “supported by targeted marketing campaigns around the Euro 2024 tournament”.
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Despite “mixed summer weather”, Bulmers “outperformed the cider market” in the Republic, C&C said, but cider sales and volumes in Britain were softer over the period.
The group also announced it will commence another €15 million share buyback on Monday, part of a plan to return €150 million to shareholders over the next three years after a period of significant upheaval in the boardroom.
C&C said the buyback was “underpinned by the board’s continued confidence in the medium-term outlook for the business”.
C&C came under the microscope in June when chief executive Patrick McMahon, who had been in the role for only a year, resigned abruptly as the group restated three years of its earnings resulting in an underlying charge of €5 million.
Activist shareholder Engine Capital then launched a campaign to have the group put up for sale, a push that was eventually ended in August when the board agreed, among other things, to appoint a new non-executive director. C&C announced last month that former PwC Ireland managing partner Feargal O’Rourke would join the board in that capacity.
On Monday, C&C said it plans to make a second non-executive director appointment “in the near future”, and has commenced the recruitment process for a new chief executive.
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