Dublin, July 8 - Irish drinks group C&C has halted a long-running decline in cider sales, with sunny weather generating better than expected volumes, the company said on Wednesday, sending its shares higher.
The maker of Magners cider and Tullamore Dew Irish whiskey said revenue in the first four months of its current year, which began in March, rose 3 percent on a constant currency basis.
Volumes for cider, which it has traditionally marketed as a hot weather beverage to be drunk over ice, were flat year-on-year, ahead of the company's previous projections, as sunnier weather helped steady demand.
The company told analysts its forecasts did not assume the good weather would continue and any seasonal upswing from warmer temperatures would be reinvested.
C&C has already earmarked an additional 8 million euros to promote its brand following the recent good weather. "Investors will be quite happy with the update," one Dublin-based trader said. "Everything seems to be ahead of expectations."
In Ireland, where C&C sells cider under the Bulmers brand, volumes rose 4 percent, in contrast to a 4 percent drop in Britain which C&C said was still better than planned. Shares in the makers of Magners cider rose 2.2 percent, outperforming a 1 percent rise in the overall Irish market.
However at 2.43 euros the shares remain well below a peak of 14 euros reached in early 2007, after which C&C started to battle a rapidly deteriorating economy, repeated poor summer weather and tougher competition.
The company said operating profit in 2009 through 2010 should be at the top end of its previously indicated range of between 77 million euros ($107.2 million) and 82 million.
"The launch of Magners Pear has been strong," it said of its heavily-marketed new drink, though the company said it expected operating profit at its spirits and liqueurs business to decline by as much as a third in the current financial year.
C&C's new management team, recruited in November from brewer Scottish & Newcastle, started off in March by writing down assets worth 141 million euros to streamline the business in the face of falling sales.
"Following four months of encouraging trading in the cider division, the group now has a greater degree of visibility in and confidence about its plans for the current financial year," it said.