DUBLIN-Irish drinks group C&C said on Tuesday its trading performance deteriorated sharply in July, due mainly to poor weather, pushing shares in the maker of Magners cider as much as 28 percent lower.
C&C said it expected its first-half operating profit to fall by around 35 percent and that this was a worse performance than anticipated in a trading update given on July 13th, when it forecast a flat operating profit for the year to Feburary 28th, 2008.
"Trading performance deteriorated at an unexpected rate during the second half of July," C&C said in a statement.
"The impact of the extremely poor weather ... together with increased competition, leaves a degree of uncertainty in respect of the outlook for the second half year for the cider division."
Shares in C&C, which were up 1.6 percent before the statement, were trading 27 percent lower at 6 euros by 1540 GMT, having earlier slumped to 5.85 euros and their lowest point since April 2006.
The stock, which made its market debut in 2004 at just over 2 euros, surged to a life-time high just above 14 euros at the start of this year, driven by strong growth in Magners sales in the UK, but has more than halved since then.
Following a conference call with C&C, Bloxham Stockbrokers analyst Ross McEvoy said management had gone from over-optimistic earlier this year to pessimistic.
"They were not offering any guidance on H2, saying we would have to wait for the interim results in October, which suggests they have no visibility whatsoever," McEvoy said.
"But they see little improvement in August-they seem to be looking at the same rate of decline (in August) as they saw in July," he said.
C&C stock fell as much as 15 percent after its trading update on July 13th when it said it expected operating profit for the year to flat instead of an earlier target for annual growth of 15 to 20 percent.
A summer characterised by almost daily downpours and serious flooding has been in stark contrast to sweltering weather last year when Magners was rolled out across the UK.
In Tuesday's statement C&C said it planned to maintain its marketing investment programme while cutting costs in other areas and would give an outlook for the second half when it reports first-half results on October 10th.
A first-half trading statement is due on August 31st.
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