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C&C (LON:CCR) or (DUB:GCC)


Market Cap   €897 million              No. of Shares 312.7 million

Enterprise Value €1,050 million

Share Price 286p (+11.3%)

Bid/Offer 284c/288c

The shares are dual listed in Dublin and London. Shares are quoted in euros on both exchanges. C&C shares have a 1% stamp duty. Currency conversion costs come into play unless you have a multi-currency account with your broker. The spread was tighter in Dublin but international dealing costs with my iii broker firm cost almost 3 times more than they would be as a regular trader on the USA or the UK stock exchanges.

About the Company

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C&C Group plc is an Irish and UK based manufacturer involved in marketing and distributing branded long alcoholic drinks, including Magners cider. Manufacturing is carried out in Wellpark Brewery in Glasgow, Clonmel in Ireland, and Vermont in the USA.  

The C&C initials come from the founders Cantrell & Cochrane from way back. The company has a history of making bold acquisition moves but sooner rather than later they find themselves in retreat mode by selling off assets to normally reduce debt.

The Takeover of Conviviality plc

Completion of the acquisition of Matthew Clark Bibendum was announced yesterday afternoon.  These are mainly Conviviality's wholesale assets, now sold for a nominal sum of money for a cash generative business if not mismanaged. C&C have chosen to not bother with Conviviality's high street retail assets such as Wine Rack and Bargain Booze.

The benefits to C&C are obvious. The Board of Conviviality PLC stated that they expected that the adjusted EBITDA for the entire Conviviality group for the year ending 29 April 2018 to be in the range of £45.5 million to £46.0 million. Gross assets of approximately £230 million are expected to be acquired at completion. 

At completion, Matthew Clark Bibendum will have £102 million of working capital facilities provided by its current lender group, repayable in instalments over the 12 months following completion.

Walbrockresearch in their red flag article Conviviality Red Flags highlight that Conviviality wrote down the fair value of  assets now sold to C&C  to circa one-tenth of the price paid. Conviviality's own revised profit forecast for the assets earnings power becomes more…

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