C&c Share Discussion Threads

[daveyboy3] 03/9/2007 09:03

Horrendous article in the Sunday press about Pratt, I thought it was very OTT and did not consider the expansion of the distribution in the UK, Magners is selling reasonably well compared to last summer because of this extra availability making up for the lack of sunshine...

[eggbird] 02/9/2007 16:15

under 5 euro and Im gonna fill me boots!!!!!!!!!

[r0cksteady] 31/8/2007 09:46

agreed bigboots

[bigboots] 31/8/2007 08:50

Limited down side from here. There may be talk of offers now for the company seeing that sales have stabilised. Risk reward on the up side

[eoc74] 31/8/2007 07:07

Nothing new in that trading statement.

[197300] 30/8/2007 06:33

keevo,
c&c only have the bulmers name in ireland. s&n own the name in the rest of the world. that is why they use the name magners in the uk.
hindsught being perfect they should have bought bulmers when it was sold a couple of years ago or used the name magners allover.
s&n can manufacture any type of cider, put it in a pint bottle and call it bulmers and piggyback on the c&c advertising campaign

[keevo] 30/8/2007 00:49

how can S&N use the bulmers name!!

people obviously are going to the bar and asking for a bulmers and s&n are getting all the cash on the name !!!

was going to buy in but not after hearing this story. might buy at 4 euro per share but still overvalued if this lack of sales continues

[itansey] 28/8/2007 21:35

From NCB today:

C&C will issue a pre closed trading update on August 31st. C&C issued two profit warnings in July, the second on July 31st saying that H1 profits for continuing businesses would decline by 35% as its cider sales suffered from the combination of poor summer weather, increased competition in the UK and higher marketing and operating costs arising from its recent expansion. Given that only one month has elapsed since the last update and the size of the profit guidance reduction, we expect C&C to re affirm the guidance issued on July 31st. While August weather has improvement, UK competition remains a major concern for the stock.

Assuming a 60:40 split of sales and profits, H1 sales are expected to decline by 19% to Eur 430m with operating profits at group level dropping by 31% to 77.8m reflecting a margin contraction of 330 bps to 18% at group level. This reflects a decline in operating margin in its Bulmers Irish cider of almost 9% to 30% with the Magners margin declining to 20% from 36%. This would translate into an H1 EPS of 19.7c down 27% on the corresponding period when C&C reported earnings per share of 27.1c. C&C share price is likely to remain volatile given the lack of visibility of its UK cider sales displayed
by the July profit warnings.

[itansey] 28/8/2007 21:33

Full Lex Article:

Struggling C&C

Does it make sense to bottom fish in a cider vat? The shares of troubled Irish beverage group C&C are alluring for the investor looking for a stock with rebound potential. A former darling, its market capitalisation has shrunk from €4bn in June to €1.7bn now, as the UK's curious craze for cider has come to an abrupt halt.

The group derives 85 per cent of operating profit from cider, branded Bulmers in Ireland and Magners in the UK. Optimists blame C&C's problems on the weather. Sunshine and plenty of marketing in the summer of 2006 saw revenues leap, while under this year's deluge the attractions of drinking cider "over-ice" have waned.

But there are structural worries too. Scottish and Newcastle only relaunched its brand (which is, confusingly, called Bulmers in the UK) late last summer. S&N has the largest distribution network in the UK, and charges a wholesale price about 10 per cent below that for Magners. How Magner's will fare in the sunshine against a serious competitor is unknown. Also, if cider's popularity proves to be more than a passing fad there is the risk that the tax man notices – cider duty in the UK is only around 40 per cent of that for beer at present.

C&C has a solid balance sheet. After recent profit downgrades the shares trade at 15 times this year's estimated earnings, with the dividend yield of 5 per cent still covered 1.3 times. That does not yet look like a bargain – particularly since consensus forecasts, which project that earnings double next year after having dropped by a third this year, leave a lot of room for disappointment.

[analyst] 28/8/2007 18:51

Not been helped by today's FT Lex column...

Does it make sense to bottom fish in a cider vat? The shares of troubled Irish beverage group C&C are alluring for the investor looking for a stock with rebound potential. A former darling, its market capitalisation has shrunk from €4bn in June to €1.7bn now, as the UK's curious craze for cider has come to an abrupt halt.

The group derives 85 per cent of operating profit from cider, branded Bulmers in Ireland and Magners in the UK. Optimists blame C&C's problems on the weather. Sunshine and plenty of marketing in the summer of 2006 saw revenues leap, while under this year's deluge the attractions of drinking cider "over-ice" have waned.

etc.....

[eoc74] 28/8/2007 15:30

We are destined to test €5 though. To think, I got in originally at €4.84 and I thought at the time it was like giving away free money they were so cheap! How times have changed!

[r0cksteady] 28/8/2007 14:48

There is a chance i may cry if there is another profit warning!! I personally am a Guinness man but have turned to drinking Bulmers - someone has gotta keep the sales going :)

[eoc74] 28/8/2007 14:24

No, Guinness and Cider are not direct competition in my book. Young people dont drink Guinness....except for myself.......:)

Seriously though, the image of Cider was undoubtedly changed by C&C. But I dont think that marketting approach is enough when faced with a big brewer like S&N. Building the brand is plausible but unfortunately I think that instead of Magners being THE cider over ice, it has just become another cider in what is now known as the "Over Ice Category". I dont know if the punter distinguishes between the main players. Lets see whats in store for us on Friday. However, another profit warning surely cannot await us as if they already know that, they must inform the market immediately and until this moment they havent. We live in hope!

[r0cksteady] 28/8/2007 13:54

EOC - from what i can gather they discounted magners to Tesco UK a while ago, but rather than Tescos selling it all in the UK at discounted rate - tescos shipped it over to Ireland instead, trying to flog it to the Irish market. I dont think C&C's management were pleased with this move.

[lotire] 28/8/2007 13:22

And Guinness etc wasn't competition in Ireland???? I'm from Ireland as well.

in ireland Cider had as bad an image as in the UK ie there was a reason for no competition,, category by category

[eoc74] 28/8/2007 12:59

They didnt need to discount as there was no competition. Anyway, theyre already dicounting. Selling two pint bottles for €5 down in my local Tesco the other day. It was Magners and Im in Dublin. Are they dumping stock?

[lotire] 28/8/2007 09:12

it took them 7-10 years to change the image of "irish bulmers" in ireland and bring it to 10% of the LAD market.
They didn't do this by discounting

[eoc74] 27/8/2007 21:50

Fair assessment. Lets hope some of that brand awareness rubs off. I think the best we can hope for on Friday is that they tell us that they have seen a stabilisation of sales or even a slight improvement over the bank holiday weekend and a pickup in off sales. We have been told that they will say nothing about the trials until October. The worst case scenario is further deterioration at which stage €4 will loom large. Lets hope that we bounce strongly off €5 with a bold statement.

[eoc74] 27/8/2007 09:09

Im not being disingenuous dj. Im just angry that the board appear to be incompetent. Can you answer why theyve spent the entire summer advertising Cider over ice when its 10 degrees and raining outside? Im not an expert but with an internet connection and google, I was able to locate a long range weather forecast for the summer in the uk. That was in late June and it said the weather would not improve through July nor August. Yet they continued throwing money down the drain on ineffective advertising. Every large company dependent on the weather uses long range forecasting so what was Mr Pratt doing?

My interests are the same as yours although our timeframe may differ. I would like to see this succeed and am also convinced that it will happen down the road. However, we need strong leadership with bright ideas. Im hopeful that this summer has woken these guys up.

[djderry] 27/8/2007 01:14

You are being disingenous,the co.made substantial profits in'06.It now predicts a dramatic slow down in the current year,due in part to the weather and also to increased competition.As I pointed out,they are building a brand and this takes time and money.They are also testing the product in other markets.I'll be holding for the medium term(circa five years) and it should be clearer then if your view is the correct one.

[djderry] 26/8/2007 18:47

Perhaps it has escaped some poster's attention but this is a premium product,it sells (ready for this) at a premium to other products.The company is building a premium brand.If you don't have faith in the co,fine,don't buy the stock.I'll be adding again this week.Bring me your shares,o ye of little faith.