LONDON (ShareCast) - Irish drinks group C&C said its first half financial performance is at the lower end of guidance, given in its last statement in July, and warned tough conditions will continue to pressure results.

The group said results were at the lower end of guidance because the expected return to volume growth in Britain in the second quarter failed to materialise.

“C&C expects the current difficult market conditions to continue throughout the second half of the year, which, notwithstanding the benefit of the roll out of draught Magners in Great Britain, will result in continued pressure on revenue and operating profit,” it said.

The group said revenue for the first half is expected to be down 8% though operating margin is seen around 1.5 percentage points higher, reflecting the successful restructuring programme

"The combined effect of revenue decline and margin improvement is expected to be a broadly unchanged operating profit for the half year relating to the same period in 2007," said the group.

Revenue for the Cider division in the first half is expected to be down approximately 11%. Bulmers cider volumes in the Republic of Ireland is seen 11% lower, while Magners volumes expected to fall 15%.

“The performance reflects a deteriorating economic environment in C&C’s principal markets and in particular the poor performance of the on-trade channel,” said C&C.

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