C&C toasts Tennent's as it eyes further acquisitions

C&C Group, the drinks firm behind the Tennent's, Magners and Gaymers brands, said yesterday it was in a strong position to make further acquisitions as it posted a rise in first-half profits.

The Ireland-based company also revealed that a recent major advertising campaign had helped drive a 0.7 per cent rise in sales of its flagship Magners cider in Britain - the first increase seen since 2007.

C&C said the integration of the Glasgow-based Tennent's business from InBev in 2009 was now complete and that its investment in the lager brand had led to a higher market share in Scotland and Northern Ireland.

Announcing its results for the six months to 31 August, the Dublin-based group also announced it had net cash of €20.8 million (18.2m) having sold its spirits and liqueurs business to William Grant & Sons during the summer in a €300m deal.

C&C's strategy director Kenny Neison said the strong balance sheet meant the company was "very well positioned to capitalise on any opportunities that present themselves over the next 12 to 18 months".

Neison added: "It may well be there are distressed asset sales to come out in the next couple of years."

The group reported a 29.4 per cent increase in earnings from continuing operations to €63.4m and said it was confident of meeting market expectations for a full-year operating profit of between €102 and €106m.

Tennent's contributed €12.6m in earnings, a performance described by analysts at Irish stockbrokers Goodbody as "significantly more than we anticipated".

A spokesman for C&C told The Scotsman that Tennent's was benefiting from being part of a smaller group.

"Tennent's is C&C's main beer brand and that means it has more focus than as part of a group with many different brands.

"We have invested in a new advertising campaign and the Wellpark Brewery is now one of C&Cs three main production sites."

The company is looking at securing contract brewing agreements with some rivals to diversify the range of Wellpark's products. C&C said it was also planning to further exploit the Tennent's distribution network to build sales of its premium Magners brand.

But the company said it remained cautious on the overall outlook with economic conditions in its core markets of Ireland and the UK remaining unpredictable.John Dunsmore, the former Scottish & Newcastle chief executive who holds the same role at C&C, said: "I think it's going to be pretty tough for the consumer in the UK and we're waiting to see what happens with public sector cuts in the next few days."

Total sales volumes of Magners grew by 1.6 per cent on the previous year, with exports increasing by 34 per cent thanks to strong contributions from North America and Australia.

In Ireland, where C&C sells cider under the Bulmers brand, sales were down 3.4 per cent. C&C is paying an interim dividend of 3.3 cents per share, up by 10 per cent.

Davy analyst Brian Fagan said: "C&C is now debt free and in a position to explore opportunities to strengthen its position in Britain or lay the foundations for future internationalisation of the cider business."

Shares in the company closed up 1.96 per cent at €3.12.