Dublin, July 13 - Irish drinks group C&C cut its full year profit goal on Friday, saying weaker than expected growth in cider sales in rainy Britain meant operating profit would now be approximately in line with last year.
C&C had set a target for 15 to 25 percent growth in the year to February 2008 and reiterated the goal as recently as May when it reported an 84 percent jump in full-year earnings thanks to strong growth for its Magners cider brand in the United Kingdom.
"Very poor weather in June and into July together with continued heavy price-led competition is likely to lead to a weak second quarter," C&C, which also makes Bulmers cider in Ireland, said in a statement.
"While the group expects strong volume growth for the full year in Great Britain it is reducing its sales volume expectations," the company said ahead of its annual shareholder meeting.
The Dublin-based company said cider sales had grown at an annual rate of 38 percent in volume terms in the three months to the end of May, driven by an 89 percent increase for Magners in Britain and a 2 percent rise for its Irish Bulmers brand.
Overall group revenue was up 15 percent year-on-year.
That was not enough to offset the increases in marketing and warehousing costs the company had initially budgeted for, however, while increased raw material and fixed manufacturing costs also took their toll.
"Group operating margin for the quarter was over three percentage points lower in the first quarter than in the same period last year," C&C said, adding that operating profit in its first half may even be lower than a year earlier.
Shares in C&C are among the worst performing Irish stocks in 2007 having fallen 26 percent since the start of the year. Analysts say it has slipped as talk earlier in the year that it may be a takeover target faded.
A wet start to the summer in Britain and Ireland had also taken its toll in recent weeks although at around 10 euros the shares are still trading at over four times their value at the time of C&C's 2004 stock market debut.