Scots alcohol pricing helps Tennent’s see trading gains
● Retreat of own brands helps lager up market share ● Tennent’s also aiming to expand in east of Scotland
Scots beer brand Tennent’s has hailed “excellent” trading – despite flat volumes – as it capitalised on the retreat of budget supermarket ownbrand lagers.
The update came in annual results to 28 February from listed Irish parent C&C Group.
Total group net revenue was up by 3.2 per cent to €1.57 billion (£1.38bn) while adjusted core earnings grew by 1.4 per cent to €120 million and operating profit lifted 3.3 per cent to €104.5m.
The group – which describes itself as the largest final-mile distributor to the on trade of alcohol and other drinks in the British Isles – also said basic earnings per share (eps) fell by 9.3 per cent 23.4 cents.
C&C highlighted Bulmers, Magners and Tennent’s see - ing revenue growth (up by 5.5 p er cent) in their key home markets.
Group chief executive Stephen Glancey welcomed a“transformation al” year for the company, noting that minimum unit pricing in Scotland “demonstrated the value of strong local brands against price-led competitors”.
C&C also said the Tennent’s brand had enjoyed an “excellent” trading period. Volumes in the year were flat but the brand gained“significant” share (24 percent to 26 per cent in the grocer y channel) “as weaker brands and private label lost ground”.
Additionally, the brand has been working to gain a stronger foothold in the east of Scotland“where Ten n en t’ s has traditionally under-indexed” – while it also highlighted its new visitor centre at Wellpark Brewery, where Hugh and Robert Tennent opened their first brewery in 1740. Billed as the UK’S largest beer attraction, the £1m Tennent’s Story heritage centre was opened in November and has w elcomed visitors including Line of Duty star Martin Compston, who was the first person to be shown around.
Other C&C milestones in the 12-month period include the acquisition of Matthew Clark and Bibendum – and it said the super-premium and craft portfolio now comprises 7.9 per cent of branded revenues.
C&C also said the group has seen a “solid” start to its current financial year, with trading in line with expectations. It is targeting double-digit eps growth in its current financial year and mid-to -high single digit thereafter.
Shore Capital analysts Alex Smith and Greg Johnson stated that the guide to mid-term eps growth in the mid to high single digits is ahead of their and consensus estimates of mid single, tapering off to low.
“We believe C& C to be emerging from a period of transition as a stronger business than currently reflected in the valuation. The group states it has had a strong start to [this financial year], with trading in line with expectations, which we interpret as an endorsement of the [full-year to 2020] consensus.”