Irish drinks group C&C said today that revenues for the three months to the end of November declined by 9% compared to the same time the previous year. This figure excludes the impact of the acquisition of  Tennent's business in Ireland, the North and Scotland. In an interim management statement, C&C said that business conditions in its core cider markets remain challenging.

The company said that revenues at its cider division fell by 13% while its spirits and liqueurs division's turnover dipped by 4%. However, its distribution division saw a 7% increase in quarterly revenues.

C&C said that cider revenues slumped by 17% in the UK, while Irish cider revenues fell by 13%. Cider revenues increased by 3%, however, in the rest of the world.

Goodbody analyst, Liam Igoe,  commented: "In its IMS this morning C&C said that the outcome for the year to Feb 2010 remains at the top end of the €77m-€82m range excluding Tennents, which is expected to deliver €7m profit in the year. This suggests an operating profit for FY10 of c.€89m, which compares with our current forecast of €82.5m and indicates an upgrade for FY10 EPS from 20.7c to around 22c. In terms of trends in the underlying businesses, C&C expects to report a modest decline in volumes in FY10. We had forecast flat volumes. Margins are improving and the performance also would have benefited from currency hedging.

The performance of Tennents was better than the company had anticipated, in part due to the fact that it had not increased its marketing spend to the extent it had intended. The guidance for the year, however, also includes a one-off fee of €2m that is to be paid to Molson-Coors in respect of the new agreement between the two companies on the distribution of draft Magners.

The statement also notes that C&C now has better clarity on the delivery of the hoped-for £10m of synergy benefits from the Tennents deal. Overall, C&C now looks set to deliver flat EPS year-on-year, which we would see as encouraging in what has been a very difficult market and economic background in its core Irish and British markets."

Interim Management Statement