C&C (CCR) €3.19

Loss to date: 4.5%

Original entry point: Buy at €3.34, 8 Nov 2018

ur positive call on Irish brewer C&C (CCR) continues to sit at a small loss, despite a positive update on 7 March from the Dublin-headquartered Bulmers and Magners maker. We’re calling time on the trade as life could get a lot harder from here for the business.

At face value there are several positive factors in its favour. C&C says earnings before interest and tax for the year to 28 February are expected to be ‘towards the upper end of current market estimates’ with annual adjusted earnings per share growth of around 20%.

‘Operational delivery, customer service and the underlying cash contribution of both Matthew Clark and Bibendum in the second half have continued to improve’, adds C&C which is now expecting year-end net debt below previous market estimates.

The Matthew Clark and Bibendum businesses have ‘significant underlying momentum’, but we are more cautious having digested the words of Berenberg, which views the recent positive share price performance as a good point to sell the shares.

The investment bank believes C&C has a challenging year to come given tough comparatives ‘coupled with negative consumer demographics, increased competition and cost inflation’.

SHARES SAYS: We’re mindful that the market remains sceptical towards the business despite some good news in recent months. We’re cutting our losses and moving on to fresh opportunities.

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