C&C GROUP has hailed a strong performance by its Tennent's division in the Scottish independent free trade as it served up a 10.6 per cent rise in operating profits to euros 126.7 million.

The drinks company said its Tennent's UK arm, based at Wellpark Brewery in Glasgow, boosted operating profits by 18.9 per cent to euros 34.6m in the year ended February 28, in spite of a two per cent slide in revenue euros 216.2m.

C&C, which is also behind Celtic and Rangers shirt sponsors Magners and Blackthorn, said Tennent's had delivered impressive growth in market share and revenue in Scotland and Northern Ireland, noting it had bucked the trends with a 3.1 per cent rise on-trade volumes. This came as volumes declined by 7% across the Scottish on-trade.

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The company emphasised its commitment to the licensed trade in Scotland by extending its loan book to free-trade operators to £31m over the period. It said the bulk of investment totalling £10m made by the company last year had gone into its business in Scotland.

Chief financial officer Kenny Neison said: "We have had quite a long, sustained period of investing behind the on-trade in Scotland and the independent free trade in particular.

"We have put quite a lot of investment into the marketplace in training academies and [we have] a lot of trade lending out there.

"We have held our pricing flat for the independent free trade and I think our willingness to work with the trade and support the trade is beginning to pay dividends. "

C&C, which acquired Tennent Caledonian Breweries in 2009, highlighted the progress made by Caledonia Best. Introduced as a "credible" rival to dominant player Belhaven Best in late 2011, it now holds a 9.6% share on the on-trade ale market. C&C also reported good sales of Heverlee, its hand-crafted Belgian beer, in Scotland and Northern Ireland.

With the brewer now seeding Tennent's beer aged with whisky oak in selected outlets around Scotland, a new Tennent's Stout making its debut in Russia, and the recent launch of the lower-strength Tennent's Lemon T, chief executive Stephen Glancey said the continual pursuit of innovation is "key".

He described trading conditions for licensed trade operators as mixed, with some performing strongly and some traditional community pubs struggling.

Asked whether the forthcoming World Cup was likely to be a boon, he said C&C is more likely to benefit from the Commonwealth Games, Ryder Cup and events linked to the year of Homecoming.

On cider, C&C said its UK business had stabilised in the second half of last year, with Mr Glancey pointing to progress in Scotland, where there was a return to volume and value growth. He said Magners Golden Draught has grown to take a 20% market share and Blackthorn 6% from a "standing start" when C&C acquired Tennent's four years ago. While he said C&C has suffered in the UK as a flurry of new brands entered the market, he added: "We make 75% of our money from Ireland and Scotland, 13% from export and international markets and 13% from cider in England and Wales. It is not that critical to us anymore."