Thursday is my favorite day of the week here at Rock Your Stock because I get to blog about the food and beverage business, one that I have no trouble researching for companies to cover. In fact, in this instance I have very little difficulty going out there to do some fieldwork. The company I’ve picked today is one I’m familiar with but could always use some additional product indoctrination. I speak of C&C Group Plc (CCR), the Dublin-based producer of Magner’s Cider and Tullamore Dew Irish Whisky, as well as some other alcoholic and non-alcoholic drinks.

C&C dates back to 1850 but only went public in 2004 at €2.50 and currently trades for €12.50 or so, appreciating 400 percent in just three years. After today’s full year report, it’s clear the business expansion plan they undertook in 2006, that will continue through this year and into 2008, promises to add more to both to the top and bottom lines. Some highlights of this past year include:

• Total revenues were up 27 percent with a majority of it coming from the 85 percent increase in Magners sales, a result of the company’s national rollout of the product in March 2006 across Great Britain.

• Operating profits were up 77 percent to €212.6 million, accomplished through a six percent increase in operating margins to 21.7 percent.

• Earnings per share grew 84 percent to €0.55.

• The overall debt dropped by 20 percent or €78 million.

• Magners achieved a 1.7 percent market share in the beer and ciders market in the UK.

• Revenue in the spirits division were up 14 percent with Tullamore Dew performing exceptionally well, experiencing 21 percent growth in shipments and a 16 percent increase in depletions (product sold by distributors to customers).

• The company spent €80 million expanding the cider capacity. It intends to spend an additional €160 million, increasing cider production capabilities to 500 million liters, double its current level.

The table is set for a great year. If the company can produce similar numbers in terms of growth in 2007, and there is no reason to think they can’t given the capacity expansion underway, sales should be somewhere in the €1.3 billion range, producing €0.71 to the bottom line, an increase of 30 percent from 2006. Currently, the stock has a price to earnings ratio around 23. Up that to 30 and you get a stock price of €21.30.

I’ll definitely drink to that!  

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