I am pleased to report that C&C has made significant progress in developing its strategic model this year, with our goal of building a sustainable international cider-led long alcoholic drinks business. Over the course of the year we substantially developed our international cider business with the acquisition of Vermont Hard Cider Company. We have also developed our multi-beverage strategy in core markets with the post year-end acquisition of the Gleeson Group in ROI and a recent joint-venture with Wallaces Express in Scotland.
Our financial performance during the year was satisfactory in challenging consumer markets. The resilience of our operating model again came to the fore despite poor summer trading in ROI and UK, increased competition in the UK cider category and ongoing weakness in underlying economies. Internationally we saw a significant increase in our volumes, both in cider and beer, and we continue to invest in our international infrastructure as we lay the foundation for longer term growth. The Group balance sheet remains conservatively geared, despite the significant acquisition spend this year, and we remain well positioned for the future.
As a result of our recent acquisitions, I am delighted to welcome the staff of Vermont Hard Cider Company and the Gleeson Group to C&C. The newly acquired businesses have already enhanced our Group with their talented management teams contributing to integration and business development. We look forward to working with them in the coming years.
Over the course of the year, the Board continued to progressively refresh its composition, with the orderly succession of appointments to reflect the current scale and internationalisation of the Group. Mr Joris Brams, the Managing Director of the Group’s International Business, was appointed to the Board. Joris has made a significant contribution to the development of our international cider and beer business since he joined the Group. In April last year we welcomed Mr Anthony Smurfit and Mr Stewart Gilliland as non-executive directors to the Board. The year also saw the retirement of Mr Phillip Lynch and the announced retirement of Mr John Burgess as non-executive directors. Both Phillip and John had been members of the Board since C&C’s flotation in 2004 and the Company thanks them for their significant contribution over many years.
While higher profile appointments are inevitably a focus of attention one of our key successes has been the recruitment and internal development of a depth and breadth of management to take the business forward. It’s also crucial that the entrepreneurial drive of the business is not dissipated. The executive directors have recommended to the Board, who are wholly supportive, a rebalancing this year of the overall incentive scheme towards the key middle management to maintain momentum and ensure the longer term success of the business.
The Board would like to express its appreciation for the efforts of all employees during a period of difficult trading conditions in our core markets and in meeting the challenges of integrating Vermont Hard Cider Company into the Group.
GOVERNANCE & CORPORATE RESPONSIBILITY
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 continued to work under the requirements of the UK Corporate Governance Code and the Irish Corporate Governance Annex. The Board also works to ensure its own effectiveness, by undertaking a regular evaluation of the performance of the Board and its committees.
We take corporate responsibility seriously and our Corporate Responsibility statement on this page sets out our work this year. Over the course of the year C&C continued to develop its Corporate Responsibility agenda, with Mr Paul Bartlett being appointed as Head of Corporate Affairs. A fundamental strength of our business lies in our sense of community and community values. You can hardly build a heritage business without that perspective.
DIVIDENDS & DIVIDEND POLICY
Last year we 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 4.75 cent per share, subject to shareholder approval. If approved, this will be an increase of 5.6% and will bring the Group’s full year dividend to 8.75 cent per share. 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.
BONUS & REWARDS
Sir Brian Stewart