SHARES in Dublin-based C&C Group surged by four per cent after the brewer of Tennent’s Lager revealed plans to move its main stock market listing from Ireland to London.
The beer and cider maker said it is seeking inclusion to the FTSE UK Index Series, giving the stock access to a much broader pool of investors.
The move follows the company’s acquisition of wholesalers Matthew Clark and Bibendum last year, which means it now derives the majority of its revenues and earnings in the UK. That deal ramped up C&C’s route to market capability by giving its brands access to a further 25,000 outlets.
READ MORE: Tennent’s chief hails impact of major acquisition
C&C, which also makes Magners Irish Cider, had swooped to acquire the wholesalers last Easter from the administrators of previous owner Conviviality Group, saving 2,000 jobs in the process.
In a statement issued ahead of its annual meeting yesterday, C&C said it will seek to cancel the listing and trading of shares on Euronext Dublin to pave the way for its entry to the FTSE UK Index Series.
C&C is currently listed on and traded on the premium segment of The London Stock Exchange. It noted that it will remain domiciled and tax resident in Ireland, with its registered and corporate head office in Dublin. It retains a significant manufacturing, commercial and brand presence in Ireland.
READ MORE: Tennent's eyes post-Brexit brewing opportunity
Analyst Investec said in a note to investors: “We see this move as a logical progression for C&C given that after the MCB (Matthew Clark Bibendum) acquisition we forecast it will generate over 84 per cent of revenue and c.60% of FY20E operating profit in Great Britain.”
The announcement came as the firm said it had made a “solid start” to its current year, with trading to date in line with expectations in the period from March 1. C&C, which made an operating profit of €104.5 million in the 12 months to February 28, re-affirmed its target to achieve double-digit percentage, earnings per share growth for the current year.
Investec added: “Undoubtedly, good summer weather is positive for brewers in general and cider producers in particular, which boosted FY19A (actual) numbers for all in the sector.
READ MORE: Tennent's says Matthew Clark deal could be game-changer
“This possibly provides a difficult comparative for FY20E (expected) however, the summer for FY20 has not started off too badly, which could provide upside surprise to H120E expectations. At this stage of the summer, however, it is dependent on weather through the rest of the season, which has more than two months to play out.”
C&C chief executive Stephen Glancey said: “FY19 was a transformational year for the Group. The acquisition and subsequent performance of Matthew Clark & Bibendum contributed to earnings growth of over 20%.
“Reflecting the inherent strength of the C&C business today, our objective is to again deliver double digit EPS growth in FY20. Thereafter, we will target EPS growth in a mid to high single digit range.”
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