C&C Group confident despite fall in annual revenue, profit

(Sharecast News) - C&C Group reported lower annual revenue and profit on Tuesday, after the planned exit of Budweiser Brewing Group volumes in Ireland and challenging hospitality conditions weighed on its distribution business.

The FTSE 250 drinks group, which owns brands including Tennent's and Bulmers and operates a wholesale business across the UK and Ireland, said net revenue fell 5.7% to €1.57bn for the year ended 28 February, from €1.67bn a year earlier.

Adjusted EBITDA declined to €104.3m from €112.0m, while operating profit before exceptional items fell to €70.5m from €77.1m.

Profit before tax decreased to €49.8m from €55.9m, and adjusted basic earnings per share fell to 10.2 cents from 11.7 cents.

C&C said group operating margin was broadly flat at 4.5%, down 0.1 percentage point, despite reduced operating leverage and product mix pressures in distribution.

Free cash flow excluding exceptional items fell to €45.3m from €68.8m, while net debt excluding leases increased to €121.4m from €80.9m, taking leverage to 1.6 times from 0.9 times.

The board proposed a final dividend of 3.67 cents per share, down from 4.13 cents a year earlier.

The company said net revenue grew in its core Bulmers and Tennent's brands, while it made further progress in premium brands and launched new products including Tennent's Bavarian Pilsner.

Tennent's and Bulmers maintained their market-leading positions.

C&C said it had made progress on simplification, corporate restructuring and logistics optimisation during the year, while improving digital and commercial capabilities through enhanced CRM tools.

It also said service levels remained strong and health and safety improved, particularly across the logistics network.

The group confirmed a shift away from its previous 'One C&C' strategy towards two distinct operating models - C&C Brands and Matthew Clark Bibendum.

It said the focus would be on growth in the branded business and margin recovery at Matthew Clark Bibendum, with a more detailed update planned at a capital markets day in September.

Chief executive Roger White said the group had made "demonstrable progress" over the past 12 months and now had a more stable operating platform.

"We will continue to develop the growing C&C Brands portfolio, with our brand innovation pipeline now firmly established," he said.

"We anticipate a series of exciting brand initiatives and a strong promotional programme across the key summer months."

C&C said trading since the year end had been in line with expectations, although the important summer trading period remained ahead and the macroeconomic environment was still unstable.

It said it expected to meet its full-year financial objectives while progressing its refreshed strategy.

At 1035 BST, shares in C&C Group were up 2.02% at 111.2p.

Reporting by Josh White for Sharecast.com.

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