C&C says battered Irish pubs may have turned the corner

(Corrects to show C&C makes one third, not just over 10 pct, of profit in Ireland (Other OTC: IRLD - news) )

* Irish pub market has suffered as consumers drink at home

* C&C sees operating profit rise by 7.9 pct, keeps guidance

* Shares up 3 percent

By Padraic Halpin

DUBLIN, Oct (KOSDAQ: 039200.KQ - news) 30 (Reuters) - Cider maker C&C said on Wednesday that the Irish pub market may have turned a corner after its volume of sales in bars there outperformed off-licences for the first time in seven years.

The maker of Magners and Bulmers saw its operating profit rise by 7.9 percent year-on-year to 71.1 million euros ($97 million) in the six months to the end of August and reaffirmed its guidance for full-year growth of between 10 and 16 percent.

It was particularly bullish on Ireland where bar sales have fallen by a third since 2007, according to the Drinks Industry Group of Ireland, as an economic crash led drinkers to choose cheaper supermarket beers over a night in the local pub.

C&C, which bought Ireland's leading beverage distributor Gleeson Group last year, said volumes in the Irish pub sector declined by 1 percent compared to a 2 percent fall in the off-trade channel. Price increases led to overall growth of 3 percent in value terms.

"The Irish pub market's had a difficult decade. It's maybe got a bit more to fall but you're starting to see investment come back into the channel, new pubs opening," C&C Stephen Glancey told reporters.

"The encouraging thing for us is that over the summer when the sun shone, that would normally send people back into the supermarkets to drink at home and have barbecues, and actually they went to the pub so it could well be the turning point."

The better outlook bodes well for Britain's JD Wetherspoon (LSE: JDW.L - news) which announced last month that it would open its first pubs in the Republic of Ireland later this year with the aim of expanding to up to 30 sites in the longer term.

Like many big Irish firms, C&C responded to the crisis that pushed the country into an EU/IMF bailout by expanding abroad. After adding Scottish beer Tennent's and U.S. cider Woodchuck to its portfolio, it now makes one third of its profit in Ireland compared to 71 percent in 2006.

Analysts said the momentum in C&C's Irish business was encouraging as sales growth of Woodchuck, a key part of the company's growth strategy, remained sluggish. Shares in the group were 3 percent higher at 4.1 euros by 0945 GMT.

"Having been bearish for two or three years on Ireland in terms of the economic cycle, we're bullish. The Irish consumer is certainly feeling a lot better. That's fundamentally very good news for us," Glancey said. ($1 = 0.7262 euros) (Editing by Tom Pfeiffer)