Tennent’s Lager maker C&C Group increased revenues from its core Scottish brand by more than 12% last year as it pushed the beer upmarket and increased exports to Italy and North America.
The company said the fizzing sales were the result of fewer off-licence offers and the renegotiation of low-margin contracts, as well as a “moderate premiumisation” of its portfolio.
But the strong performance of Scotland’s favourite lager only helped offset poor returns in “challenging” cider markets for C&C’s Magners and Gaymers brands.
Revenues climbed by a percentage point to 724.1m before excise duties but total volumes fell 4.7% to 4.3m cubic litres.
The group’s UK cider business was the worst performing, with volume down 15% or the equivalent of 37.7m pints.
Pre-tax profits fell from £110.9 million last year to £104.4m during the 12 months to the end of February, after exceptional charges related to the acquisition of the Vermont Hard Cider Company and Irish drinks-maker and distribution group Gleeson, restructuring and IT costs.
C&C said last year’s poor summer, which saw no uplift from either the Olympics or Euro 2012, had been allied to an increase in the number of competing cider brands on the market. It expects another “challenging” year ahead.
The equivalent of 5.6 million pints of Tennent’s was sent to new markets during the year, 3.5 million of it to Italy, as part of an overall C&C export business which grew volumes by 55%.
C&C said the growth of Tennent’s in Canada had also “impressed”, while there were “encouraging signs” from some US states and promised significant further exports in the present period.
The company said: “The Scottish heritage and authenticity of the brand is a marketable attribute that resonates in a range of international markets, suggesting that there could be reasonable growth potential for the next few years.”
C&C also hailed the success of its new Caledonia Best ale, the fastest-growing brand in Scottish bars, saying it demonstrated “the attractiveness of further diversification into multi-beverage in Scotland”.
In March the group announced its acquisition of a 50% interest in Ayr wine and spirits wholesaler Wallaces Express, for an undisclosed sum.
Chief executive Stephen Glancey said the results were in line with the firm’s expectations, despite market troubles, but warned of a transitional year to follow.
Directors received no bonus this year, but 43% of local level employees were rewarded for their performances with payments averaging £2,700.
Executive directors are to waive their share incentives in the coming year for redistribution to managers.
Shareholders’ full-year dividend will total 8.75p, up 7.1% on last year.