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(Alliance News) - C&C Group PLC on Wednesday reported a rise in profit in financial 2020 but noted it is currently burning through EUR7 million while pubs are shut due to the Covid-19 pandemic.
In the year ended February 29, the Magners cider manufacturers and distributor saw its pretax profit rise 12% to EUR104.1 million from EUR92.9 million the year before.
Net revenue - which excludes excise duties - improved 9.6% in financial 2020 to EUR1.72 billion from EUR1.57 billion. Total revenue grew 7.5% to EUR2.15 billion.
Volumes sold rose 4.2% to 1,416 hectolitres from 1,359 hectolitres the year before in Ireland, but slipped 2.7% in Great Britain to 2,626 hectolitres.
C&C declared a total dividend of 5.5 euro cents, unchanged on the year before.
Interim Executive Chair Stewart Gilliland said: "The group performed well in financial 2020, with revenue growth and operating profit ahead by 10% which is testament to the execution of our long-term strategy. This performance underpinned the delivery of our double digit EPS growth target, with adjusted diluted growth for the year at 11%, our second consecutive year of double digit EPS growth.
"The progress of the group in financial 2020 further strengthens our belief in the long-term strategy for the business. As the largest alcohol distributor in the UK and Ireland, we have secured a unique platform and our results for financial 2020 reflect the strength of this position."
Looking ahead, Gilliland said the Covid-19 pandemic presents a "challenge of unprecedented scale and uncertainty" for the industry.
"The ongoing closure of the hospitality sector has material implications for our business and earnings potential, with approximately 80% of our revenue derived from the on-trade channel. An emerging trend from this shutdown however has been an immediate shift in consumption dynamics, resulting in increased demand in the off-trade channel. To capitalise on this behavioural shift, we have reallocated resources behind our Take-Home proposition and seek to optimise our business model in this channel," he added.
In April and May, volumes for Bulmers were down 16%, but up 62% in the off-trade. Tennent's in Scotland saw total volumes were plunge 42%, but, again, rise sharply in the off-trade, growing 41%. Magners total volumes in Great Britain were down 7%, but up 25% in the off-trade.
C&C also noted its underlying cash burn is EUR7 million per month whilst on-trade is closed.
Gilliland added that C&C entered this crises with a "robust" balance sheet. Net debt stood at EUR233.6 million at February 29, while free cash flow was EUR136.5 million.
"In the short-term, execution of our strategy will be impacted by Covid-19, which has necessitated the temporary withdrawal of our future guidance. Trading since the lockdown measures were announced has clearly been challenging, however, our business is structurally integral to the markets we serve and, together with our local, fabric brands, puts us in a strong position to re-engage with customers and consumers once restrictions across pubs, bars and restaurants, are lifted," Gilliland added.
Shares in C&C Group were 5.2% higher in London on Wednesday at 208.50 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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