C&C Group, the Irish drinks maker behind Magners Cider, today warned investors that falling pub sales and exceptionally wet summers in Britain and Ireland would cut revenues and stall profit growth.

C&C warned today that an expected return to sales growth in the second quarter never materialised and cider revenues fell 11 per cent compared to the first half last year. The company will report first half results on Otober 9.

Volumes of Magners slumped by 15 per cent while Bulmers cider, which C&C competes with in Britain but distributes in the Republic of Ireland, fell 11 per cent in that market.

The Dublin-based company said worsening economies on both sides of the Irish Sea were behind the sales slump, in particular, poor sales in pubs. Magners is currently implementing a plan to supply cider on taps in pubs.

Three years ago Magners cider, which had reinvented itself as a summer drink to be consumed on ice, was growing quickly. But C&C believes two cold summers have hurt its plans. While Britain is on course for the wettest August on record, Ireland has also suffered a miserable summer.

Worse still for investors, C&C offered no prospect of a turnaround even if the weather clears.

"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," the company said.

Yesterday, the world's biggest alcoholic drinks maker, Diageo, lowered its growth forecast from 9 per cent to 7 per cent as people stay away from pubs during the economic downturn.

Commenting on the upcoming first half results, C&C said operating profit would be "broadly unchanged'' on the same period last year.

"The expected return to volume growth in Great Britain in Quarter two did not materialise due to the worsening economic environment, continuing competitive pressure and a slower realisation of the benefits from market initiatives," C&C said. "Performance in Ireland has, in addition to the economic environment, been affected by the cumulative impact of two consecutive poor summers on category recruitment."

Holding up overall sales, spirits and liqueurs shipments increased 3 per cent in the first half.

Shares in C&C have fallen by 20 per cent over the past four weeks but rose 5.6 per cent to €2.35 today. Traders said the rally reflected relief in some quarters that today's update was not worse.

Times Recommends

• Equitable Life halts £7bn sale on market turmoil
• Potential buyers emerge to save Woolworths staff
• Terrorist attacks close Bombay Stock Exchange