Morning Equity Briefing
C&C
(GCC ID)
Irish bar sales in July decline 11.5% in volumes and 13.8% in value year-on-year
Barry Gallagher
| Closing Price: | 315c | Rating: | Outperform | 30/06/09 |
FACTS: Irish bar sales volumes declined 11.5% year-on-year (yoy) and 2.6% month-on-month (mom), and value sales declined 13.8% yoy and 2.5% mom.
ANALYSIS: The decline in the Irish on-trade continued in July. In the year-to-date, volumes in the on-trade are down 11.6% yoy. Note the overall performance for the Irish drinks market is not as poor. Volumes for the total market (on-trade and off-trade) for beer and cider in the year-to-date to June declined 0.2% and 3.9% yoy respectively – implying that the strong channel shift from on-trade consumption to off-trade consumption in Ireland is continuing.
DAVY VIEW: C&C is targeting to defend profitability in the Irish market. This was achieved last year when, despite an 8% decline in revenues, EBIT fell only 1% to €44m. We are forecasting a 5% decline in EBIT (€42m) in Ireland this year.