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(Alliance News) - C&C Group PLC on Wednesday posted a swing to loss as revenue plunged during a virus-hit year, and the cider maker announced plans for a GBP151 million fundraise, to secure vital cash as Covid-19 curbs ease.
C&C shares were 12% lower at 268.40 pence each in London on Wednesday morning.
The Dublin-based drinks manufacturer and distributor said it will raise the money through a rights issue. New shares will be offered at a price of 186 pence per share on the basis of 6 new shares for every 23 existing shares.
"The rights issue is intended, alongside the other actions the group has already implemented, to reduce leverage and provide sufficient liquidity to manage near-term trading uncertainty, providing the group with the capital structure to support the business during further potential disruptions from Covid‑19 and to deliver on its strategy once unrestricted trading resumes," C&C said.
The Covid-19 pandemic meant bars and restaurants, important on-trade channels for the Magners and Bulmers maker, were forced to close.
As a result, C&C's revenue tumbled. In the financial year ended February 28, revenue dropped 56% to EUR736.9 million from EUR1.68 billion. The company swung to a pretax loss of EUR121.3 million from a EUR11.6 million profit.
"With approximately 80% of C&C's pre-Covid-19 net revenue derived from the hospitality sector, the pandemic has had an unprecedented impact on the group. Thanks to the prompt and decisive action of our team and our resilient business model, we have successfully navigated these challenges to date," Chief Executive Officer David Forde said.
C&C decided against an annual payout, after a 5.5 cents per share dividend a year earlier.
The company added: "The group is cautiously optimistic about trade recovering in the coming financial year and expects to continue to play an important role in the UK and Ireland drinks market with its brand and distribution assets appreciated by consumers, customers and brand owners alike."
By Eric Cunha; ericcunha@alliancenews.com
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