C&C Group, the Irish maker of Magners cider, today issued its second profit warning this month, saying that it expects the washout summer to knock more than a third off its first-half profits compared with the same period last year.

The shares fell more than 26 per cent to €6, prompting speculation that the company could be vulnerable to a takeover bid. Analysts said possible suitors could include InBev, the Belgian owner of Stella Artois, and Molson Coors, the North American brewer.

At its annual meeting less than three weeks ago, the group gave warning that wet weather and a price war would flatten full-year profits. Before that, Dublin-based C&C had been forecasting profit growth of 15 to 20 per cent. Analysts are now pencilling in a full-year decline of 30 per cent, although the company itself said it would not be providing full-year guidance until October.

Its two profit warnings came despite a UK sales volume rise of 89 per cent in the three months to May 31. Today it revealed that volumes in Britain had fallen by 45 per cent in July, adding that it expected a knock-on effect on sales into August.

C&C said that it was also under pressure from rivals including Scottish & Newcastle, which relaunched Bulmers Original, another "over-ice" cider, last year. It admitted that it had probably underestimated the impact of competition. However, it insisted it would not be cutting its price to pub companies and retail customers as this risked damaging the Magners brand's premium positioning.

Today, C&C said that its trading performance deteriorated at an unexpected rate during the second half of July and it expects interim operating profit to fall by around 35 per cent on the previous year.

It added that overall cider volumes for July, including sales in Ireland, were down 30 per cent on the same month last year, when the UK basked in the sun. It estimated that full-year volumes would show a fall of about 2 per cent.

“The impact of the extremely poor weather on summer recruitment [of new drinkers], together with increased competition, leaves a degree of uncertainty in respect of the outlook for the second half year for the cider division,” it said today.

The group also attributed the expected slump in operating profit to substantially higher manufacturing and marketing costs. It said that although it would be maintaining marketing spend, it would be cutting costs, involving some redundancies at its plant in Clonmel, where it is spending €200 million expanding capacity.

Analysts said the two profit warnings and lack of visibility over future earnings had called into question both management's credibility and the company's future. However, Mr Pratt insisted: "We believe the model is intact."

The group's finance director, Brendan Dwan, said: "The interim dividend will be maintained. We will review the final dividend towards the end of the year."

Last year, C&C reported operating profit growth of 77 per cent, to €212.6 million, on sales up 27 per cent to €981.4 million.

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