£100m bonanza for C&C shareholders

Magners producer C&C Group plans to return up to £102m of its surplus cash to investors by way of a share buyback programme.

The Irish drinks group last week announced that, given its "strong underlying cash flow capability" and current debt levels, it was proposing to return up to €150m to shareholders.

The amount represented the "approximate amount of retained income since the group's initial public offering in May 2004".

The buyback news came as C&C announced turnover for the year to February 28, 2007 of €981.4m (£667.4m), up 27 per cent.

Pre-exceptional operating profits increased 77 per cent to €212.6m (£144.6m), with a total dividend of 27 cents paid per share, up 80 per cent.

The rise in turnover and profitability was led, unsurprisingly, by the continued popularity of C&C's key Magners cider brand.

C&C said the improvement reflected growth in the group's cider division "arising from the excellent performance of Magners in the UK and Bulmers' continuing out-performance of the Irish long alcoholic drink (LAD) market".

Operating profit margins rose 6.1 percentage points thanks to growth in the high margin cider business, while the group's spirits & liqueurs and distribution businesses saw margin declines.

Cider sales rose 85.8 per cent on 2006's numbers to €517.9m (£353.2m), with volumes up 82 per cent. C&C noted that AC Nielsen figures revealed Magners had achieved a 1.7 per cent moving annual turnover share of the UK on-trade LAD market as at January 31 this year.

Operating profits at the cider division more than doubled to €178.9m (£121.7m).

There was less good news at the group's distribution business, which saw turnover fall more than 15 per cent to €199.2m (£135.5m). Operating profits slumped nearly 87 per cent to €0.7m (£476,000) as a result of the loss of Allied Domecq brands, weaker demand for premium wines and a reduced margin on LAD agency brands, the group said.

Turnover at C&C's soft drinks business fell 1.4 per cent to €185.2m (£126m), although operating profits grew 20.8 per cent to €15.3m (£104m) as margins benefited from a reduction in marketing expenditure.

C&C owns Magners in the UK and Bulmers in Ireland.