MIDAS SHARE TIPS: Need a sharpener? This drinks group is tasting success 

Go into any Scottish pub and chances are that a good proportion of drinkers will be nursing a pint of Tennent’s. 

It is a national best-seller, with a near 50 per cent share of Scotland’s lager market.

In Ireland, Bulmers occupies a similar space in the cider market, while Magners – Bulmers’ doppelganger in Britain – has become a favoured brew across the UK.

All three tipples are owned by C&C Group, a drinks maker that can trace its roots to 19th Century Belfast. 

The shares are £3.77 and should rise, as the London-listed company is forging ahead and has significant potential for growth.

C&C’s founder, Dr Thomas Cantrell, is credited with inventing ginger ale and, with fellow Irishman Henry Cochrane, built Cantrell & Cochrane into the largest soft drinks maker in the world. 

Now known as C&C it has morphed into a FTSE 250 business, selling 44 million gallons of Tennent’s, Magners and Bulmers every year, equivalent to 950,000 pints a day.

The group is behind a range of other beverages, including premium brands such as Orchard Pig cider from Somerset and Scottish craft beer Drygate. 

It owns almost 50 per cent of Admiral Taverns, a 1,000-strong chain of community pubs. And, in 2018, chairman Stewart Gilliland acquired drinks distributors Matthew Clark and Bibendum, after their previous owner, Conviviality, collapsed into administration.

The deal was transformational. C&C has been distributing drinks for decades in Ireland and Scotland, and it has a close relationship with top brewer, AB InBev, whose brands include Budweiser, Corona and Stella Artois. 

But Matthew Clark is Britain’s top drinks distributor, selling to 25,000 pubs, hotels, restaurants and clubs nationwide. Bibendum complements Clark, with an emphasis on premium products and venues.

Both were in a sorry state when C&C acquired them. Stocks were low, debts were high and customers were worried. C&C’s managers took steps to bring the firms back to life, and they have made sterling progress.

Steve Thomson, who was chief executive of Matthew Clark before it was acquired by Conviviality in 2002, has rejoined the business and Bibendum’s founder, Michael Saunders, is back in the saddle too. 

Both have been in the drinks industry for decades, developed longstanding relationships with major customers and are now working hard to drive their respective divisions forward.

There is clear room for growth on three fronts. C&C can sell a wider range of drinks to existing clients. 

It can find new customers, and it can sign up new brands to its extensive roster of drinks, which includes 600 gins, wines and spirits, as well as a big range of soft drinks, as demand for non-alcoholic beverages rises.

C&C has done well with the integration of Matthew Clark and Bibendum, but last month it announced chief executive Stephen Glancey would be retiring with immediate effect.

Glancey was at the helm for nearly eight years and was widely respected, so this unsettled investors, especially as no reason was given. 

In recent weeks, however, leading investors seem to have been reassured that Glancey’s decision was personal and that the business is still doing well.

In the meantime, Gilliland is well advanced in his search for a successor. 

A list of about 20 candidates has been drawn up, interviews begin in the next few weeks and a successor should be announced within months.

A trading statement next month should provide further reassurance, as well as results for the year to February 28, 2019, released in May. 

Brokers expect a 6 per cent increase in turnover to €1.7billion (£1.4billion), with pre-tax profits up 12 per cent to €104.4million and an 11 per cent rise in the dividend to 17 cents (14p).

The results are in euros, as C&C used to be listed in Dublin. But UK shareholders receive their dividends in sterling and there should be good growth announced next year too.

Midas Verdict: C&C shares are £3.77 and were more than £4 before Glancey’s resignation. 

They should recover and increase further in value. 

The company is well positioned in the drinks business, with strong brands and an extensive distribution network. Gilliland is an experienced operator and a new chief executive is likely to deliver further progress. Buy.

A stark choice at Sirius   

For small shareholders, Sirius Minerals has been one of the greatest disasters in living memory. More than 80,000 have poured hard-earned cash into the project, lured by the idea of taking part in a world-class mining project, transforming the economic prospects of North Yorkshire and making money for themselves at the same time.

The first two ambitions remain a possibility. The third appears all but impossible. Chris Fraser, the chief executive of Sirius, has recommended a 5.5p-a-share offer from mining giant Anglo American and shareholders have just a few days left to back it or reject it.

Sirius shares have rollercoastered over the past decade, going from 5p to nearly 40p then back to 5p. However, most investors bought when the stock was in double digits so they will be nursing heavy losses if the Anglo deal goes ahead.

Life savings have been wiped out, hopes have been shattered and there is a palpable sense of anger across the small shareholder community. Many feel tempted to vote against the Anglo deal. Are they right?

MIDAS VERDICT: Sirius shareholders face three options: sell in the open market, vote for the admittedly low Anglo deal or reject it. 

In the absence of a counterbidder, a vote in favour is the logical choice. But thousands of investors are threatening to vote against, which could mean all shareholders are wiped out. 

Those wanting certainty may therefore prefer to sell in the open market – that way they will, at least, receive something.