- C&C Group manufactures the cider brands Bulmers and Orchard Pig
C&C Group shares dived on Thursday after the Magners owner warned that annual earnings would fall short of forecasts.
The drinks manufacturer expects to report underlying earnings before interest and taxes of between €76million and €78million for the 12 months ending February.
While this would exceed the €60million the Dublin-based company achieved the prior year, it noted this was ‘modestly below’ its profit target due to ‘softer trading’ in the first two months of 2025.
C&C also forecasts 2026 revenues to align with last year, partly due to the sale of its non-core soft drinks business in Ireland and lower cider demand across Great Britain last summer.
Looking ahead, it anticipates ‘continued uncertainty’ for consumers and challenges within the hospitality industry following the Autumn Budget.
Shares in the Bulmers and Orchard Pig cider maker closed 19.1 per cent down at 119.6p, making them the FTSE 250 Index’s biggest faller.
Bad taste: C&C Group shares dived on Thursday after the Magners owner warned that annual earnings would likely miss targets
From next month, employers’ National Insurance contributions will rise from 13.8 per cent above an annual salary threshold of £9,100 to 15 per cent on wages higher than £5,000.
At the same time, the National Living Wage will increase by 6.7 per cent to £12.21 per hour, and pubs will have their business rates relief slashed from 75 per cent to 40 per cent up to a cap of £110,000 per firm.
Many hospitality companies have warned that the measures will force them to reduce staffing levels, hike prices, or even close venues.
‘The macroeconomic environment and UK October Budget have placed a degree of additional pressure on our hospitality customers and impacted consumer confidence more generally,’ said C&C.
However, the group believes its earnings this year will be ‘marginally ahead’ of 2025 results, thanks to ‘ongoing investment’ in the business.
Roger White, chief executive of C&C, remarked: ‘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.’
The former AG Barr boss joined C&C at the start of this year after the previous CEO, Patrick McMahon, resigned due to accounting errors he oversaw while serving as the firm’s chief financial officer.
A fortnight after he stood down, hedge fund Engine Capital called on the company to undertake a strategic review, improve investor representation, and explore a potential sale to a private equity group.
In an open letter, the activist investor described C&C, which also produces Tennent’s lager and Italian beer Menabrea, as a ‘perennial underperformer’ that had failed to create shareholder value ‘over any relevant measurable period.’
Russ Mould, investment director at AJ Bell, said Engine Capital ‘won’t be happy’ with the latest trading update given it has ‘spent the past year pushing for change in the business.’
Mould added: ‘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.’
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