Wed 29th Oct 2014 - C&C Group report H1 profit and updates on Spirit C&C Group report H1 profit and updates on Spirit: Magners producer C&C Group has reported turnover up 9.3% to €368.1 million in the six months to 31 August. Operating profit down 2.7% to €69.2 million. Chief executive Stephen Glancey has also updated on the strategic fit that acquiring Spirit Pub Company would offer. Glancey said: “The strength of our core business in Ireland & Scotland underpinned profit delivery of €69.2m in the period. Given the lower than expected contribution from the US and England & Wales businesses, this is a solid outcome. Our businesses in Ireland and Scotland are the cornerstone of the Group representing 86% of operating profit. Central to both are strong brands and excellence in customer service. In these geographies we are delivering on our differentiated and focussed strategy of creating multi-beverage branded distribution models. In Ireland we combined our operations, and the C&C Gleeson’s business now spans the Island of Ireland. With integration of the Gleeson’s business complete and improving consumer sentiment, we are well positioned to drive future earnings growth. Scotland reported a resilient performance despite the significant task of integrating Wallaces and Tennent Caledonian. The acquisition is on track to deliver expected returns and integration will be completed early next year. This will ultimately provide a strong foundation for growing our combined business. The overall UK cider market remains challenging. Magners underperformed the market in the first half and we saw only modest improvement in our Shepton Mallet division in volume and value. While profit contribution is small in the context of the Group, management are evaluating internally the optimal structure of the business in England and Wales. In the US, performance remains below expectation and the Woodchuck brand has been further impacted by the disruption of new market entrants. While we have re-based our expectations in the US, the market remains both attractive and dynamic and we are confident in the long-term prospects for the category generally and specifically our US cider business. In time, we expect to participate meaningfully in category growth. Export performance has been encouraging across Europe, Asia and Canada. Excluding Australia, Magners volumes grew by 18.6% while Tennent’s export volumes grew by 12.9%. Australia remains challenging with distributor issues still to be resolved. C&C has a differentiated multi-beverage model in Ireland and Scotland ensuring a resilient base for sustainable operating profit and free cash flow. This combined with our inherent balance sheet strength provides optionality on capital deployment. Prospective investment opportunities will always be driven by strategic fit and long term shareholder value. With this in mind the Group approached the Board of Spirit Pub Company with a preliminary approach which was subsequently rejected by the Spirit Board. Our route-to-market capability in Ireland & Scotland is not matched in England and Wales and the concept of vertical integration in the sector is well established. Against this backdrop the Group are of the view that our commercial interests could be materially enhanced through direct participation in the management of high quality retail assets. Such models are well established in the UK and over time the combination of cash flow from branded alcohol together with excellent retail outlets have provided sustainable returns for shareholders. Such a combination would provide the Group with the enhanced position in an important consumer market while offering a range of commercial options across all our domestic markets. Under the takeover code given the Spirit situation no new operating profit guidance can be provided. The Board are proposing an interim dividend of 4.5 cent per share representing 4.7% growth on last year.”