Belfast Telegraph

Weather slows Magners sales burst

Magners cider brewer C&C has suffered a sales hangover following bumper trading during the spring heatwave.

Volumes jumped 14.9% in the three months to May, but the Irish firm said sales were "relatively weak" in June, as the weather turned, though it still expects to hit its operating profits target of between 108 million euro and 115 million euro (£94 million - £100 million) for the current year.

The Magners brand was the driver for the good volumes as the warm weather, the brand's "method" advertising campaign and benefits of off-trade promotions boosted activity in the three months to May.

In Britain, which is the core market for the brand, volumes rose by 14% but there were also strong gains in the export market as volumes picked up by 32%, helped by demand in the US and Australia. Magners' revenues rose by 10.1%.

The story in Ireland was less cheery, with lower prices cutting the revenues at Bulmers, its key brand, by 3.3% despite revenues increasing.

Own brand supplier Gaymers had an even tougher time as volumes tumbled by more than a fifth, which cut C&C's cider volumes overall by 7.2% in the quarter and revenues by 0.4%

Beer brand Tennent's, the sponsor of Scottish football clubs Rangers and Celtic, got a seasonal boost with volumes up by 4% and higher revenues.

Broker JPMorgan raised its share price target after the update, adding it expects the strong growth at Magners to continue for the rest of the year.

"We think the Magners cider business in Britain will accelerate to 8% volume growth in 2012 in a cider category which should grow at least 10% given 50% more marketing investment by key brand owners," it said.

C&C said that if the improvement from the first quarter is sustained, the current intention is to invest more in Magners.

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