Tennent’s owner toasts rising profits

TENNENT’S lager maker C&C Group is on the hunt for acquisitions both in the British Isles and internationally after unveiling a €500 million (£400m) war chest, alongside a rise in full-year profits.

The Dublin-listed drinks firm, which bought the famous Scottish beer brand from Anheuser-Busch InBev in 2009 for £180m, has been given a €250m loan by its seven banks, with a further €250m available for takeovers or organic growth.

C&C – which also owns cider brands including Blackthorn, Bulmers, Gaymers and Magners – bought US cider outfit Hornsby’s from wine maker E&J Gallo in November for €20m in cash.

Stephen Glancey, who succeeded ex-Scottish & Newcastle boss John Dunsmore as chief executive at the turn of the year, told The Scotsman: “We’re a multi-beverage model. We wouldn’t confine ourselves to beer or cider. I’m thinking of long alcoholic drinks or soft drinks. Not spirits.”

Chief financial officer Kenny Neilson added: “The primary focus would be on overseas cider businesses, but there aren’t many of those assets around. So we would also look at domestic bolt-on acquisitions.”

Richard O’Donovan, an analyst at Davy stockbrokers, said: “C&C’s net cash position and strong free cash-flow gives it the option to look for value-creating mergers and acquisitions or return cash to shareholders.”

Being in “good shape financially” and having “well-performing brands” may also make the group itself a takeover target, according to Shore Capital analyst Phil Carroll.

Carlsberg, Molson Coors and SABMiller have been touted as possible buyers for C&C, which is chaired by former S&N chief Sir Brian Stewart. But analysts are divided over whether a bid will come and a spokesman for the group said its war chest meant it was the “predator, not prey”.

C&C posted a 9 per cent rise in operating profits for the year to 29 February to €111.2m thanks to efficiency improvements, including some at Tennent’s Wellpark brewery in Glasgow. Group revenues fell 4.8 per cent to €480.8m after abandoning some loss-making Gaymer drinks.

Glancey is opening a visitors centre at Wellpark, following the closure of a previous tourist attraction by In-Bev ten years ago. He said Tennent’s sales in Scotland had fallen by just 2 per cent, compared with an 8 per cent drop for the Scottish beer market, while Tennent’s profits were up 22.5 per cent to €22.3m thanks to the efficiency savings.

C&C is pushing Tennent’s lager into Australia, Italy, North America and Russia.