Dublin, August 29, 2008 - Irish drinks group C&C has not managed to reverse a fall in cider sales due to an economic downturn in Britain and Ireland and a particularly wet Irish summer, it said on Friday.
Sales of C&C's Magners brand, which fills about every eighth glass of cider drunk in Britain, fell 15 percent in the six months to the end of August compared with a year ago.
C&C sold 11 percent less Bulmers cider in Ireland, it said, adding that the difficult market conditions would continue to put pressure on revenue and operating profit in the second half of the year.
Shares in C&C reversed early losses to trade 5.5 percent higher in Dublin by 0925 GMT at 2.5 euros, however, above an earlier low at 2.26 euros and compared with a 0.25 percent stronger Irish market.
"A lot of the bad news was already discounted in the price," said Goodbody analyst Liam Igoe.
Irish newspapers have recently reported that rivals were increasingly likely to launch a takeover bid for C&C.
"Yes, it's a definite possibility," Igoe said. "Who'd do it is the big question," he said, adding that many of the world's biggest drinks groups -- such as InBev, Carlsberg and Heineken -- were busy completing bigger deals.
"Maybe somebody is taking a view that with the stock being cheap as it is ...it might be worth a punt ," Igoe said.
After repeated profit warnings related to poor weather, tougher competition and economic conditions, C&C's shares have lost more than 80 percent of their value since a peak at the beginning of 2007.
C&C said an 8 percent fall in first-half revenue was offset by a 1.5 percentage point rise in the group's operating margin and a 3 percent increase in shipments of spirits and liqueurs, resulting in broadly flat operating profit for the period.
"Our own enquiries attest to the difficulties being experienced by C&C's Bulmers and Magners cider brands," said Davy analyst John O'Reilly.
"Weather, deteriorating economic conditions and competitive pressures are significant negative factors," O'Reilly added.