C&C chief executive John Dunsmore was downbeat at the annual results presentation last week

C&C's executive team had some sobering news for investors who were hoping the cider maker would be returning to growth this year. Parachuted in to rescue the company 18 months ago, chief executive John Dunsmore and his close lieutenants, Stephen Glancey and Kenny Neison, have managed to halt the serious decline in cider volumes. But investors expecting sales of its flagship cider brands in Ireland and Britain to sparkle this year are in for some disappointment.

Dunsmore, the former Scottish & Newcastle CEO who took over from the perma-tanned Maurice Pratt in 2008, was in downbeat mood at the presentation of the company's annual results last week – covering the year to the end of February – even though the slide in sales volumes has eased since the disaster years of 2007 and 2008.

According to the results, cider revenue in Ireland was down 8.2% to €153m. Most of the drop was attributed to cuts in the price of Bulmers, though sales volumes of the cider were down a respectable 2.2% compared to the overall 6% drop in the Irish drinks market. In the UK, cider revenues were down 9.1%, again reflecting heavy price cuts. In the UK, Magners also managed to reverse some of the declines in recent years. Sales volumes fell almost 5%, much better than the 17% slump in the previous financial year.

Shares in C&C have jumped nearly 47% in the last year as the market expected C&C either to continue to add to its own portfolio of brands or to be acquired by one of the major international drinks companies, with the likes of Molson Coors, Carlsberg and SAB being linked with the company.

Today's C&C business is a shadow of the company that long-serving chairman Tony O'Brien and Pratt led to the market in 2004. Gone are many of the brands it was famous for. Tayto was sold to Ray Coyle's Largo Foods while Ballygowan and its other soft drinks brands are now owned by Britvic. Its spirits division, which ships the likes of Tullamore Dew and Carolans, is being sold for €300m. In their place has come Tennents, the most popular lager in Scotland, and British cider maker Gaymers.

Becoming purely a maker of cider and lager (or 'long alcoholic drinks' as they are known in the jargon) has prompted followers of the company to believe that an outright sale of C&C in the next couple of years is all but a certainty. That speculation has been dampened by the large payment in shares its executive team are entitled to if they can turn around its fortunes.

According to a circular sent to shareholders last week to approve the sale of the spirits division, the company wants to build a "substantial international cider-led... business over time through a combination of organic growth and selective acquisitions". But Dunsmore said this financial year is likely to see the company remain in a holding pattern and a further push of its cider brands into continental Europe and the US doesn't look likely in the short term.

"The main thing we have to announce is that we have nothing to announce," Dunsmore told reporters last week at a briefing on the results in Dublin.

Dunsmore says there is little the company alone can do to kick-start volume growth until the "choppy waters" ease. He says consumers are feeling the pinch in Ireland and Britain, and while the company has responded with price cuts and new products, including pear and berry flavours, it will have to wait until consumer sentiment rebounds and the market grows again, a view backed by analysts.

"The international expansion of cider remains an attractive possibility but, for now, 2011 is likely to be a year of consolidation, given the two acquisitions last year," analysts at Deutsche Bank in London wrote in a research note last week.

Drinks industry analysts at investment bank Nomura said: "We believe the company focus will be on integration and synergy delivery, rather than further corporate activity in the near term. Although the stock appears good value, market conditions in the core operating environment remain challenging and the company's earnings profile is skewed towards margin delivery rather than top-line growth."

In the meantime, the company said it will be focusing on paying down the debt pile built up with the takeovers of Tennents and Gaymers, and on getting further cost savings. About €245m from the proceeds of the sale of the spirits arm will be used to reduce the debt mountain, which stood at nearly €365m at the February financial year-end. Job cuts at its huge Bulmers production plant in Clonmel saved C&C €5m last year and the company says it has identified more "synergy benefits" for the current financial year.

For investors in the company, the biggest concern in the immediate future may be the weather. Dunsmore, who is based in Britain, quipped at the beginning of the media briefing last week that it was nice to be in Dublin on a warm day. Dunsmore will be all too well aware that two summers of persistent rain collapsed sales of Bulmers and Magners and led to him getting his job.

C&C Directors' pay halved

Directors' remuneration at C&C looks to have fallen by more than half in the last financial year.

According to a note to the annual results last week, salaries and payments to its 12 executive and non-executive directors fell to €3.7m in the year to end February 2010 from €8.8m. However, the previous year's figures were skewed by €4.4 termination payments to former executives including ex-CEO Maurice Pratt.

Salaries for directors totalled €2.2m, down from €2.6m. Post-employment benefits fell €100,000 to €400,000, while cash- and share-based payments were €1.1m, from €300,000 in the previous year. The accounts didn't disclose payments to individual directors. Its full report will be published later in summer.

CEO John Dunsmore, chief financial officer Stephen Glancey and strategy director Kenny Neison agreed to waive pay rises and bonuses in the year just ended. On their appointment in 2008, the company said a substantial portion of their compensation would be paid in C&C shares. The trio and other members of the senior management team are entitled to buy up to 16 million shares in the company if it hits certain financial targets.