Bulmers owner C&C Group got the nod of approval from shareholders this week as it returned to profitability amid an ongoing turnaround.
The cidermaker’s share price sank by about 18% in March after it said its annual earnings would miss expectations.
C&C said this week it had proved “resilient” after being plagued with challenges, including a botched IT upgrade and accounting irregularities.
While its annual results on Wednesday were in line with expectations, its share price consequently rose over 3% and is now back above the pre-March price.
Revenue was flat at €1.7bn in the year to 28 February, while pre-tax profits rose to €19.6m from a €111.6m loss the year before. It has seen an “encouraging” start to the current year, it added.
The rise in profits was attributed to a turnaround in Matthew Clark, its distribution arm which supplies major pub chains such as JD Wetherspoon. It had lost customers due to poor service levels, but a turnaround last year saw its operating margin double to 2.3%.
The results are the first under CEO Roger White since he took the helm in January, and saw the group reiterate its target to rebuild operating profit back to €100m from €77m last year.
“The group has progressed on a number of fronts over the last year, despite the ongoing challenging macro and market backdrop,” White said.
“With the key summer trading period ahead, we are executing our plans, supporting our customers, investing in innovation and brand-building, people, and systems, whilst continuing to simplify the business and control costs.”
On its brands, C&C recently regained full control of Magners in the UK from Budweiser, and plans to give it an increased focus, such as a new advertising campaign, to try drive sales.
Last year, Tennent’s and Bulmers both achieved market share gains despite volume falls.
“Our premium brand performance is encouraging, benefiting from ongoing consumer appeal for premium beer and cider, which is driving growth in this segment,” said White.
Deutsche Bank analyst Damian McNeela concluded: “Notwithstanding some of the industry headwinds we think C&C has stabilised…We think the new management team are well placed to drive shareholder value creation from here.”
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