Tennent's adds fizz to Irish owner's figures as it drives up market share

SCOTTISH brewer Tennent's made a substantial contribution to the annual profits of Irish parent group C&C as it continued to gain market share.

Tennent's and cider brand Gaymers, in their first full year since being acquired by Dublin-based C&C from InBev in 2009, contributed €34.1 million (30.1m) of the group's operating profit, up 17 per cent to €105m.

This was more than double the full-year earnings contribution from the spirits and liqueurs business the company sold last summer to William Grant in a €300m deal.

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The Tennent's business alone contributed €27.5m and improved its margins from 17.4 per cent at the half year to 20.3 per cent.

The brand is gaining share in the Scottish on-trade and has regained its position as the top-selling draught lager in Northern Ireland.

Stephen Glancey, group operating officer and finance director, said there were plans to "premiumise" Tennent's in the off-trade. There will be investment in a new bottling line at the Wellpark brewery in Glasgow allowing the company to sell more of the brand in bottles.

Further investment is likely in Glasgow following the launch of a 1m training academy last November and a return to television advertising. The company is also offering loans to support publicans.

C&C's Magners cider brand also showed significant growth in Scotland with volume up by 13 per cent against an overall 2 per cent rise in the on-trade cider category north of the Border. Magners share of on-trade cider in Scotland increased by 2.1 per cent to 21.6 per cent.

Glancey described the group's performance as "robust" in the current trading environment, admitting that, while its Irish business remains cash generative, the market was suffering from deflation. He said growth was expected in the UK and elsewhere.

The company is run by a number of former Scottish & Newcastle executives, including S&N's ex-chairman Sir Brian Stewart, who now holds a similar role at C&C. John Dunsmore, chief executive, and the last CEO at S&N, said C&C had enjoyed a "strong financial and operating performance".

He added: "The group's balance sheet strength and cash generation capability provide us with financial flexibility to invest in the continuing development of our business and to support our brands."

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The group is now virtually debt-free having used the proceeds of the spirits business to slash debt from €359m to €6m.

It proposes a final dividend of to 3.3 cents per share (up 10 per cent) to make a full year dividend of 6.6 cents.