C&C Group, the drinks distributor and owner of the Bulmers and Tennent’s brands, confirmed yesterday that it would report improved annual results despite a “challenging trading backdrop”.
In a pre-close trading statement, the Ireland-based company expects to report net revenues up 18% to €1.69bn over the year to 28 February 2023, with volumes expected to have increased 4%. This follows a difficult period the year before when the business was hit hard by the pandemic-related shutdown of the hospitality sector.
Operating profits are expected to come in at €84m compared to €48m the previous year. In January, C&C had revised down market expectations to between €84m-€88m after experiencing a softer-than-expected Christmas trading and the impact of the various strikes in the UK.
The group revealed that it commenced a significant technology project in February for its British operations as part of a digital transformation and optimisation of the business. C&C said the implementation phase of the project was taking longer than originally envisaged, with some consequent impact on service and profitability. However, it noted that service levels have largely returned to normal levels.
Despite the tough trading conditions, the group stated that it was “pleased” with the performance of its core Bulmers and Tennent’s brands, which are both continuing to grow category share.
C&C highlighted that its balance sheet strength and cash generating capabilities are reflected in a significant reduction in net debt to approximately €150m, compared with €271m at the end of last year. As a result, the company intends to recommence dividend payments following the announcement of its full results and will evaluate the potential for further capital returns to shareholders in due course.
C&C said it would provide an update on its progress on strategic objectives when it posts its full results on 24 May 2023.
