Magners-maker says economic climate and Budget squeezing consumer confidence
The maker of Magners cider and Jubel beer has blamed weaker summer sales and the autumn Budget putting pressure on consumer confidence for lower-than-expected yearly earnings.
Shares in C&C plunged by nearly a fifth on Thursday.
The Dublin-based brewer, which is listed on the London Stock Exchange, said it was being squeezed by 'well-documented challenges' facing hospitality businesses.
Weaker cider sales in Britain during the important summer period partly offset growth for the group's distribution business, through which it supplies drinks across the UK and Ireland.
C&C owns a swathe of brands including Tennent's and Bulmers, which it says are number one in Scotland and Ireland respectively, ciders Magners and Orchard Pig, and fast-growing flavoured beer Jubel.
The Irish company also said the wider economic environment and the Government's autumn Budget plans had put more pressure on its customers and affected consumer confidence more generally.
The Government said it avoided raising taxes for 'working people' in the Budget.
But it did raise taxes for some businesses through a higher national insurance rate, alongside increasing the national minimum wage from April, which several large companies have said will be passed on to customers through price rises, or staff through job cuts.
C&C is expecting to report underlying earnings before interest and tax of between 76 million euros and 78 million euros (£63.8 million – £65.5 million) for the year to the end of February, which it said was slightly below its target profit because of slower trading in January and February.
It would nonetheless be higher than the 60 million euros (£50.4 million) made the year before.
Looking ahead, C&C said it expects to see ongoing uncertainty for consumers alongside continued cost challenges for the hospitality sector, but that earnings should be slighter higher in the year ahead.
Russ Mould, investment director at AJ Bell, said: 'Magners-owner C&C crashed after saying it wouldn't hit earnings targets, blaming a tough economic environment and a cautious consumer.
'Having made progress with reshaping the board, including the appointment of former AG Barr boss Roger White to lead the company, all the ducks were in a row to drive a turnaround of the business.
'To now disappoint on trading is a massive blow to shareholders.'
Mr White, who became chief executive in January, said that 'whilst the market backdrop remains challenging, we are continuing to support our customers, invest in the business and have some exciting plans to implement this year'.
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