C&c Share Discussion Threads

[pcuser] 23/11/2007 11:27

Whadidyou expect ?

It produces cider

Bulmers was a dog of a share for years before it was put out of its misery

Y do U think C&C would be different?

Hope the redundant are suplied with decent cardboard boxes and a goodly supply of the local brew

Here is the way to do it :



"Llewellyn" Ah yes, such a common irish name. Was his real name Eddy O'Grundy ?

[eoc74] 23/11/2007 08:28

It is, isnt it!! The chart is one of the worst I have ever seen!

[analyst] 22/11/2007 18:38

What a shambles of a share price!

[eoc74] 13/11/2007 16:43

Me too finbarr. The most dissapointing thing of all is the inaction and lack of vision from the board in the face of competition. I want to see new initiatives, new ideas, agression. Not the same old tired advertising that worked 3 years ago. I have seen no evidence to suggest that Pratt and the board have come up with anything new. Whistling past the graveyard. I am just hoping the weather gets us out of this strife now!

[finbarr] 13/11/2007 16:32

eoc74,

I am one of the scared pi's you refer to. I have'nt sold but i am taking some serious pain. Glad to see today's resilience in light of the news out yesterday.

[eoc74] 13/11/2007 08:18

A lot of scared small investors out there judging by todays trades. Selling out at the bottom as most PI's do, I hope! Dont know why this has stayed sub-€5. Worst time of the year for the company I suppose and this really is now a bet on next summer's weather. I think anybody hoping Pratt would pull it out of the fire has long ago lost hope of that happening.

[eoc74] 07/11/2007 12:24

Another bounce off €4.94. I wonder if this is going to break down or if we will see a triple bottom. The only boost I can see ahead at the moment is whatever the company tell us about how theyre going to cut costs.

[itansey] 21/10/2007 13:03

Another new twist in C&C's British cider battle - Sunday Business Post
21 October 2007 By Richard Curran

After much speculation about a possible takeover of C&C, the latest turn of events suggests things may move in another direction altogether.

One of the most likely bidders for C&C has been British brewing giant Scottish & Newcastle (S&N). It owns the Bulmers brand in Britain and has been engaged in a tough dog fight against C&C in the cider market over there.

If C&C looks cheap at the current share price level of around €5.30, then S&N was seen as an obvious potential buyer of the Irish drinks group. A bid would have given S&N the Bulmers brand in Ireland, made it the number one cider player in Ireland and got rid of C&C in its own back yard in Britain.

Last week, everything changed when it emerged that Carlsberg and Heineken are preparing a joint bid for S&N. The thinking is that Heineken would get the British and some other European assets, while Carslberg would get the French and Greek business. Heineken's view on cider may be very different to S&N's.

If anything Heineken may be more likely to sell the HP Bulmers business in Britain. In theory this should have presented a buying opportunity for C&C.

As Paul Meade, analyst with NCB Stockbrokers, pointed out last week, such a move by C&C would have significant synergies through premium pricing and a reduction in competition. In other words, C&C could have it all its own way in Britain rather than the risk of it being the other way round.

C&C's balance she et has strengthened with the disposal of its soft drink business for €250 million. Net debt is forecast at year end of February 2008 to be €178 million and Ebitda is forecast to be €165 million, according to Meade.

C&C could raise additional funds for a Bulmers bid by selling its whiskey and liqueur business. Overall, this would require a much heavier gearing, but one wonders whether that €100 million share buy back waste will not really come home to roost. Diageo bought the Bushmills business from Pernot Ricard for just three times that amount.

Will the Heineken/Carlsberg acquisition of S&N be interpreted by C&C management as the disappearance of a possible buyer or will they see it as an opportunity that could have been?

The answer ultimately depends on whether Diageo group chief executive Paul Walsh was right earlier this summer when he questioned whether premium cider was just a fad. Based on the dreadful performance of the category this summer, he may be right.

[finbarr] 18/10/2007 09:55

fair enough.

[jonnyno1] 18/10/2007 08:34

the yes part is the consolidation in sector as you had pointed out.

[finbarr] 17/10/2007 14:51

jonnyno1,

you said "yes and no" you elaborated on the "no" part.Could you elaborate on the "yes" part please.

[jonnyno1] 17/10/2007 12:50

yes and no, consolidation in the sector is good but candc small fry so would not have much effect, the competition in the form of sandn's bulmers will not disappear overnight sadly and the other driving force is our weather which no one can do anything about!

[finbarr] 17/10/2007 12:01

c&c's major competitor is about to be taken over. I take that as a positive for c&c.

[jonnyno1] 15/10/2007 13:52

i agree, a good summation.

some of the problem lies with the whole Magners/Bulmers confusion, one which S&N have exploited extremely well. i remember buying a bottle of Bulmers in a scottish bar over a year ago and thinking it was irish bulmers smuggled in mainly because it had virtually the same design. i very quickly realised it wasn't , it truly is awful in comparison to Magners.

[r0cksteady] 15/10/2007 09:00

i think that article sums it up pretty well.

[itansey] 14/10/2007 13:42

Bulmers 'needs time' after sales downturn - Sunday Business Post

14 October 2007 By Samantha McCaughren

An ad for Irish cider Bulmers once said there was nothing added but time and in recent days Maurice Pratt, C&C chief executive, said time is exactly what the company needs to get its strategy back on track.

A restructuring plan has been flagged but as yet not detailed and it will be 2008 before the real benefits will feed through into the company's bottom line. Some analysts were disappointed to note that margins in the current half would see little benefit from the cost cutting.

''When you announce something it doesn't kick off from day one. It involves quite a degree of coordination and time, frankly," Pratt said last week.

He said a significant review would take place and would be outlined in November, and it is expected to make a financial impact on profit margins from the last quarter of the year. But it looks certain that further job losses will follow the 70 job cuts announced after two profit warnings in the summer.

Wednesday's interim results were eagerly anticipated by the market, more for the guidance provided by the comp any than the figures themselves.

The company irritated the market at the time of the profit warnings, which came closely together in July and August, with some brokers believing that most of the bad news could have been set out in the first warning. One Dublin analyst said the company now appeared to be taking a conservative approach to the months ahead.

After C&C briefed analysts last week, some believed the company was leaving the way open for cuts to the price of the premium cider.

Stockbrokers NCB gave an insight into how C&C's entry into a price war would be viewed. ''Any move away from the premium positioning of the product, supported by high advertising spend, would represent a volte-face from the company's stated strategy to date," said analyst Paul Meade.

But speaking to The Sunday Business Post, Pratt was anxious to play down any suggestion that there might be a u-turn on its pricing strategy.

''We have always been clear that our model is that of a premium brand," said Pratt.

As a review of the group gets underway, there is no doubt that the company will be dealing with the wet summer of 2007 for some time to come. It is unlikely that any measures will put a smile back on the faces of investors who bought in at up to €14 a share. Shares were hovering around €5 last Friday.

The company's badly-timed share buyback has been suspended but management have not given up on the idea despite spending over €100million at a time when the stock was falling like a Clonmel apple. Pratt said last week he plans to reactivate the share buyback once some price stability has returned.

Pratt and his team included slides showing weather patterns in Britain in their investor presentation, but other factors are weighing on the company. Although weather was good in August and September, these are not the so-called recruitment months for cider. ''September was quiet for the trade in general in Britain," Pratt said.

If things are going well for cider, customers should be tempted by the 'over ice' concept in the hot summer months. They will continue drinking into the autumn and some may even stay with the drink in the longer term. But during this summer C&C missed out on this chance to recruit these new customers. So the repercussions continue.

The company continues to face the relentless competitive tack being taken by Scottish and Newcastle (S&N). In Ireland, C&C uses the cider brand Bulmers but it is known as Magners in Britain. S&N owns the Bulmers name in Britain, although is a completely different, and C&C would argue, less attractive cider.

Citi analysts recently compared C&C's problem to that of Coca-Cola and Pepsi. ''If you ask for a Coke and were offered a Pepsi, are you likely to decline? Probably not. If you asked for Magners, and were offered a Bulmers, would you decline? Again, probably not," the Citi note commented.

So marketing will be a key factor in getting the demand right, and C&C has already spent huge sums on the brand in Britain. One analyst commented that the marketing spend was lost in 2007.

''All that marketing went through and they didn't see any of the benefits of it at all. so it was a complete waste of money in one sense," he said.

However, Pratt said that all research suggested that Magners was a strong brand in Britain and its profile should benefit sales in the summer of next year. There have been suggestions that the cost-cutting plan could opt to cut marketing budgets, but again this would be a deviation from the group's strategy and positioning.

Market sources doubt that marketing will face the chopping block in the cost saving programme.

In relation to the European tests, C&C said there seems to be a consumer opportunity in both markets but significant challenges lie ahead. C&C plans to remain in both markets and formulate a revised approach.

For now most of the optimism lies in the cost reduction plans which a London analyst described as the ''one positive'' in the results.

NCB's Meade said: ''We estimate that the company could potentially deliver annual cost savings of up to €30 million which would restore cider margins to 28 per cent assuming flat sales, or provide a cushion to deal with ongoing competition in the market place."

The company is expected to continue to reposition its marketing plans to get over the ''coke analogy''. It will be pushing home the message that Magners is better than rival ciders, is made from real apple juice rather than concentrate and is an Irish brand.

Its differences from the competition will become central to its sales strategy. But the real test will be the British summer in 2008 and with so much of the company's fortune in the hands of the weather gods, investors still feel uneasy.

[eoc74] 12/10/2007 12:13

To be fair, anybody who has followed this company will know about the capacity constraints of summer 2006. There simply was not enough booze being produced for the punters. They announced a €200m spend on extra capacity and admirably cut that to €115m on the back of this year's bad weather. They cut 70 staff in July and now possibly more. They moved quickly. While I may not be happy with other aspects of Pratt's performance, I think he has been spot on with this one.

[danwaits] 12/10/2007 10:48

Still, management are being proactive, this from the same source yesterday;

[danwaits] 12/10/2007 10:41

Last year the company expanded operations with big investments in additional production facilities and hired more workers to meet demand. Now from this mornings Irish Independent, it looks like they are about to start cutting staff numbers. Still leaves them with that extra production capacity, which is now surplus to requirements and costing money to service the borrowings used to put it in place.

[eoc74] 10/10/2007 10:30

As for that competition, I note with interest that C&C still has an 80% share of the On-Trade market for premium cider....Its down from 90% but certainly not the disaster that people seem to think is happening. I would have thought that S&N would have inflicted more damage there with their control of pubs and below cost selling. Like I said, theres plenty of room for both as the cider category is still growing quickly.

[eoc74] 10/10/2007 09:58

Market doesnt like it.

[r0cksteady] 10/10/2007 09:55

Accepted Jonny, but S&N have not got one product they can focus all their resources & attention on. I think the battle is only just beginning.

[jonnyno1] 10/10/2007 09:37

CandC dont have the same budget as SandN

[eoc74] 10/10/2007 08:09

Theres room in the market for more than one operator!