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Magners owner predicts a revival for cider sales

Magners cider maker C&C predicted earnings growth this year, after slowing the slide in sales volumes of its flagship brand in Britain.

The Dublin-based drinks firm, which acquired Tennent's lager in September, said market conditions were still challenging, but that continued resilience in off-licence sales and the launch of Magners Pear had helped trading.

Drinks veteran Tom McCusker, who is heading up Tennent's NI following an amalgamation of C&C Northern Ireland, Anheuser-Busch Inbev, and Quinn's Rehill McKeown, has the task of transforming the fortunes of the Northern Ireland operation.

Magners sales volumes fell 4.9% in Britain in the year to February, following the 17% drop seen a year earlier as the consumer boom in cider sales slowed. Supported by its "Method in the Magners" marketing campaign, the decline was 2.7% in the first two months of the new financial year.

It warned of year-on-year volatility in this year's figures due to a 10% increase in cider duty in March, a rise absorbed by C&C.

Cider revenues in Britain dropped 9.1% to €149m (£128.2m) in the year to February, as a result of tougher comparisons with a year earlier.

In pubs and clubs, the Magners brand continued to underperform the rest of the cider sector, although the launch of a pear version of the Magners brand and growth in draught volumes improved the trend on a year earlier.

Operating profits in the UK cider division improved 48.1% to €19.7m (£16.9m), helped by cost savings and a lower level of brand investment this year.

Across the group, which also sells Bulmers cider in the Republic, underlying earnings before exceptional items and acquisitions were down 10.9% to €89.5m (£77m).

Chief executive John Dunsmore said current trading, including for Tennent's and its other recent addition of the Gaymers Cider Company, supported its hopes of a return to earnings growth for the current financial year.

The group spearheaded a revival in demand for cider across Britain in recent years, with sales soaring by 264% in 2006, as the drink's popularity was boosted by a high-profile advertising campaign and hot summer weather.

However, it struggled to cope with the demand, and faced higher than expected costs in ramping up production. It failed to sustain the sales growth amid poorer weather and increased competition.