Magners cider maker lacks Spirit but keeps pubs on target
MAGNERS cider maker C&C Group has defended its bid to buy pub chain Spirit after suffering a share price hangover as tough conditions hit half-year profits.
Pre-tax earnings at the Irish company, which also makes Bulmers and Tennent’s Lager, fell 2.2 per cent to ¤81million (£64million) on 9.3 per cent higher revenue of ¤368.1million.
Its core Irish and Scottish businesses produced forecast-beating operating profit but in England and Wales it was down nearly 37 per cent on the same period last year. US profit plunged nearly 90 per cent.
he combination of cash flow coming from brand ownership and distribution has proved to be quite a powerful concept.
The UK problems underline why C&C made an approach to buy Chef & Brewer pub company Spirit, in order to improve distribution of its products in England and Wales.
Spirit has signalled its support for a rival £723million offer from Suffolk brewer Greene King.
C&C chief executive Stephen Glancey said: “The overall UK cider market remains challenging. Magners underperformed the market in the first half and we saw only modest improvement in our Shepton Mallet division.”
He said acquisitions of pubs by brewers have proved successful in Britain and Spirit would “provide the group with an enhanced position in an important market”.
He added: “The combination of cash flow coming from brand ownership and distribution has proved to be quite a powerful concept.”
Shares fell 33 cents to ¤3.39.
