Tennent's owner mulls deals after fall in profits

The owner of Scotland's best-selling lager said it is well-placed to snap up assets arising from industry consolidation after posting a drop in first-half earnings.

C&C said export volumes of Tennent's rose a 'pleasing' 50% in the first half. Picture: Dan Phillips

Dublin-based C&C Group said the decrease came amid “volatility” in consumer behaviour after the Brexit vote and subsequent fall in sterling’s value.

Group chief executive Stephen Glancey told The Scotsman that despite such challenges and the period being somewhat “unpredictable”, the company was “quite happy” with the first half.

Sign up to our daily newsletter

The i newsletter cut through the noise

Operating profit before one-off items dropped 7.9 per cent to €55.1 million (£49.2m) for the six months to the end of August, dragged down in part by higher marketing spend.

“We’ve done the right thing, we think, long term which is invest behind our brands,” Glancey said.

He added that the “fizz is back in Magners” with volumes of the cider up by 11 per cent, as group sales came in 8.1 per cent lower at €307m, with a €24.4m dent from the fall in the value of the pound.

Sales of Tennent’s grew by 2 per cent in the first half, with export volumes up by a “pleasing” 50 per cent.

Glancey insisted that the “fundamentals” of C&C’s business in its core Irish and Scottish markets remained strong, adding that the group was “capable of weathering” the political and economic challenges.

In terms of potential M&A activity, he said: “We think we’re quite well positioned because we have low debt, we’ve got a very conservative balance sheet, to buy any assets that come up. Equally, as new people come to Europe and look for alliances, we’re well-positioned to support them with route to market in the UK and Ireland.”

Glancey also said that C&C welcomed the recent ruling by the Court of Session to back the Scottish Government’s controversial plans to impose a minimum price of 50p per unit of alcohol, describing it as “one of a range of initiatives to reduce the harmful effects of irresponsible consumption”.

He added: “C&C is a supporter of this initiative and we will work with the relevant authorities in Scotland and Ireland to ensure that we meet our obligations to the consumers and communities we serve.”