Annual Report 2014



C&C has made further progress this year in developing the business with the goal of building a sustainable international cider-led long alcoholic drinks company.

In our core markets, we have consolidated our multi-beverage strategy through the acquisition and integration of the Gleeson group in Ireland and our investment in Wallaces Express in Scotland, where we acquired full control after the year-end.

In the USA the integration of Vermont Hard Cider Company is being concluded and the new cidery is soon to come on stream. While this process has been disruptive to our performance in the short run, the potential of the market is being increasingly recognised.

Sales to other international markets have continued to expand, continuing the trend of recent years.

Our financial performance during the year was satisfactory. In Ireland we achieved our targeted synergy benefits with the integration of Bulmers and Gleeson creating a leading multi-beverage distribution model. In Scotland Tennent Caledonian continues to perform strongly and the recent full control of Wallaces Express will bring further synergy benefits. In Great Britain, Magners continued to face stiff competition from new entrants but we remain confident in the longer term potential of the brand. Our efforts in this market are now being supplemented by the early signs of progress from our Shepton Mallet Cider Mill brands.


Over the course of the year the Board continued to progressively refresh its composition. The year saw the retirement of John Burgess as a non-executive Director. John had been a member of the Board since C&C’s flotation in 2004 and been involved with the Company for a number of years prior to that. He made a significant and appreciated contribution throughout all that time. We are fortunate to welcome Emer Finnan to the Board and are confident that she will also make a valuable contribution to our deliberations.

Building talented local teams has been a feature of the Company’s success. The acquisition of Wallaces Express has further enhanced our team in Scotland. In Ireland the integration of the Bulmers sales operation with the Gleeson business led to a degree of inevitable disruption and a number of redundancies. The integrated management team illustrated its professionalism and potential with the management of such a sensitive challenge.

In Great Britain there was a reduction in numbers employed as we merged the operations of Tennent’s and Magners into one location in Glasgow. Whilst the resulting cost savings made these moves essential, we are aware that such times are stressful for all those involved and are appreciative of the spirit of co-operation shown by staff during this period.

In a market that is challenging and rapidly evolving, competitiveness is even more reinforced by the efforts and flexibility of employees and the Board would like to express its appreciation of the efforts of all employees during the year.


Operating profits for this financial year were within published guidance and executive Directors were paid bonuses of 15% of base salary. Approximately 30% of employees were awarded with bonuses at local level, with an average payment of just under €2,500.

The executive Directors have recommended to the Board, who are wholly supportive, that in FY2015 the annual bonus targets for key middle management and their business units should be focused on specific local business unit issues to closely align personal and business objectives. The Group executive Directors continue to be targeted on Group operating profit.


We remain committed to a progressive dividend policy and, recognising the continued financial strength and cash generation of the business, we propose to pay a final dividend of 5.7 cent per share, subject to shareholder approval. If approved, this will bring the Group’s full year dividend to 10.0 cent per share, a 14.3% increase. A scrip dividend alternative will also be available.

At the AGM we are also seeking the usual authority for the Company to purchase its own shares. Any authority given to the Company to purchase its own shares will only be exercised if the Board considers it would be in the best interests of the shareholders generally.


The Board and senior management team are committed to maintaining the highest standards of governance and ethical behaviour throughout the business. A statement of our main Governance principles and practice is provided on this page.

We work under the requirements of the 2012 UK Corporate Governance Code and the Irish Corporate Governance Annex. Last summer we upgraded the listing of our shares in London from a standard to a premium listing and are now working under the enhanced governance requirements expected from a premium listed company. The analysis of strategy and key performance indicators have been enhanced. The report on directors’ remuneration has been restructured this year having regard to best practice as set out in new UK statutory requirements. At this year’s AGM the remuneration policy will be submitted to an advisory vote of shareholders.

We take corporate responsibility seriously and our Corporate Responsibility Statement sets out our work this year. We are particularly proud of our support for Help for Heroes through a special edition lager launched by Tennent’s.


A statement of the principal risks and uncertainties faced by the Group is set out on this page.

Later this year a referendum is due to be held on Scottish independence. At the time of writing there is no clarity as to the outcome. Were the vote to go in favour of independence, a further period of uncertainty could be expected as negotiations to exit the UK get underway. The impact of such a vote on our business in Scotland is unclear, but it is certain that an independent Scotland would be a different trading environment from today, with some likely advantages and disadvantages. A lengthy period of uncertainty is in any case unhelpful to any business.


It has been a year of continuing development and consolidation for C&C, we believe that the restructured business model in our core markets will protect our investment and provide an improved basis for growth. In the short term our focus is on driving results out of the new structure and in delivering results from the USA and other international markets. One can never preclude other material acquisitions to our business portfolio as opportunities which deliver significant benefits to shareholders may arise but we have considerable opportunity to deliver growing profits and cash from our existing businesses. In these circumstances it is of course appropriate for the Board to continually review both the financial structure of the Group and its dividend policy in order to optimise shareholder value.

Sir Brian Stewart