(Alliance News) - C&C Group PLC on Thursday said profit took a hit in the first half of its financial year from the costs of fixing problems with the roll out of a new enterprise resource planning system, but net revenue was down only slightly and the cider maker reinstated its dividend and committed to further shareholder returns.
Dublin-based C&C makes and distributes beer, cider, wine, spirits and soft drinks in Ireland and the UK. Its brands include Magners and Bulmers cider and Tennent's beer.
Pretax profit more than halved to EUR20.8 million in the six months that ended August 31 from EUR47.4 million a year before. Revenue edged down 3.4% to EUR872.5 million from EUR903.0 million.
Problems with the implementation of the ERP system in C&C's GB distribution business resulted in a one-off cost of EUR22 million. The hit was in line with the EUR25 million that C&C had flagged back in May.
The ERP setback slashed Distribution operating margin to 0.8% from 4.1% a year before. Branded products division's operating margin narrowed slightly as well, to 14.5% to 14.8%, leaving the overall C&C operating margin at 3.5%, squeezed from 6.0%.
More positively, C&C declared a 1.89 euro cent interim dividend, having paid none a year before. It also said it intends to distribute up to EUR150 million to shareholders over the next three financial years through dividends and other capital returns.
Looking ahead, C&C said service levels have been restored to pre-ERP implementation levels, and it aims in the second half of the year to win back customers.
"Operating environment challenges are expected to persist with continued cost pressure over the next 12 months, before some easing in FY2025, following which we target an increase in branded margins as we continue to take pricing and cost actions and improve operating efficiency," the company said.
C&C said it continues to look for a new chief financial officer. Former CFO Patrick McMahon was promoted to chief executive officer in May, after David Forde left the post amid the ERP roll-out fiasco.
C&C shares were up 0.1% at 139.60 pence on Thursday morning in London. The stock is down 16% over the past 12 months.
By Tom Waite, Alliance News editor
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C&C Group (CCR)