Shares in drinks and snacks group C&C moved sharply higher yesterday after the firm flagged a 25 per cent jump in first-half cider sales.

In a pre-close trading update, C&C said its group turnover for the six months to the end of August would be ahead by about 8 per cent on the same period of 2004. The performance, which is ahead of the company's own expectations, owes much to summer sales of Bulmers in the Republic and a very successful launch of Magners in London.

C&C expects the strong performance of its cider division should continue over the second half of 2005. The firm pointed to "moderate" earnings growth for the whole year.

While cider has been been the highlight for C&C since the start of the year, the company has struggled with difficult markets for soft drinks and snacks.

Yesterday's statement pointed to volume declines in carbonated soft drinks and snacks as well as margin pressure in the bottled water market.

"C&C experienced some market share loss and half-year turnover for the division is expected to be unchanged," the company said. It plans to spend more on marketing in "growing segments of the market" over coming months.

A breakdown of the cider performance shows that sales volumes for Bulmers, C&C's cider brand in the Republic, increased by about 8 per cent in the first six months. The Irish growth came as the total market for long alcoholic drinks expanded by no more than 2 per cent, with C&C highlighting the warm summer weather as a reason for the outperformance.

Sales volumes for Magners, which was launched in London at the start of the year, more than doubled over the same period. While the increase came off a low base, it is indicative of the potential Magners has to become C&C's central growth driver.

Reviewing its performance in spirits and liqueurs, C&C said good growth from Tullamore Dew had offset weakness in Carolans Cream Liqueur. The company hopes to have new distribution agreements for the division in place by November.

In a research note issued yesterday, Merrion Stockbrokers analyst Robert Brisbourne said the cider performance would drive earnings upgrades for full-year numbers.

"We had expected strong results but, given the cautious nature of management guidance, did not expect upgrades to come through this early in the year," Mr Brisbourne noted.

Shares in C&C closed 29 cent higher at €4.60 last night.