Last checked at 19 Sep 2023 07:00
FY2024 H1 pre-close Trading Statement
H1 operating profit expected to be in the range of €29m to €31m; service levels restored
C&C Group plc (‘C&C’ or the 'Group’) today issues a trading statement for the six-month period 1 March 2023 to 31 August 2023 (‘H1’).
In the six months to 31 August 2023, C&C expects to deliver net revenue of c.€870m(i), which is down c.1%(iv) on the comparable prior year period. Operating profit for H1 is expected to be in the range of €29-€31m(i) and includes the significant majority of the one-off profit impact associated with Enterprise Resource Planning (“ERP”) system implementation disruption in the Group’s GB distribution business, previously communicated on 19 May 2023.
Good progress has been made in resolving the ERP system implementation issues in the Group’s GB distribution business in line with internal expectations. On Time in Full (‘OTIF’) delivery metrics have returned to pre-ERP implementation levels.
Trading in H1 for our own brands in Ireland and Scotland was encouraging, with Net Sales Revenue for our branded business up c.6%(i) for the period. Trading at the start of H1 benefited from good weather, particularly in June, however poor weather in July and August combined with cost-of-living pressures, particularly in GB, resulted in a slowdown in the latter months of the period.
The Group’s leverage at the end of H1 is expected to be 2.1x(i) on a post IFRS16 basis(ii) and 1.6x(i) on a pre-IFRS 16 basis(iii). As previously guided, H1 leverage(ii) is marginally higher than our target range, due to the ERP system implementation issues, however we reaffirm our expectation that leverage(ii) will be within the Group’s stated range of 1.5x to 2x at the end of the financial year in February 2024. In addition to the reinstatement of the dividend earlier this year the Board continues to evaluate other forms of capital returns.
The Group’s process to recruit a new Group Chief Financial Officer is ongoing, in conjunction with an independent executive search firm, and an update will be provided in due course.
C&C will announce H1 results on Thursday, 26 October 2023.
Patrick McMahon, Group Chief Executive Officer, commented: “Set against a difficult market backdrop, we are pleased with the strength of the performance of our branded businesses in Ireland and Scotland in the period. We are particularly pleased with the progress we have made in restoring customer service levels following the ERP system implementation issues in our GB distribution business within our planned timeframe. Delivering outstanding service, winning back customers, continued business simplification and improved operating efficiency remain our top priorities and focus for the second half.”
This announcement is made in accordance with Listing Rule 9.6.11 and there is no further information to be disclosed pursuant to Listing Rule 9.6.13.
(i) Unaudited financials.
(ii) Leverage is defined as net debt to earnings before exceptional items, finance income, finance expense, tax, depreciation, amortisation and share of equity accounted investments profit after tax. Net debt comprises borrowings (net of issue costs), lease liabilities capitalised less cash.
(iii) Leverage on a pre-IFRS 16 basis is Leverage excluding leases.
(iv) On a constant currency basis.
ENDS
Contacts
C&C Group plc Riona Heffernan, Group Finance & Investor Relations Director Email: riona.heffernan@candcgroup.com
UK & International Media Richard Hayhoe Email: richard.hayhoe@candcgroup.com
Investors, Analysts & Irish Media FTI Consulting Jonathan Neilan / Paddy Berkery / Aline Oliveira Tel: +353 86 231 4135 / +353 86 602 5988 / +353 83 833 1644 Email: CandCGroup@fticonsulting.com
About C&C Group plc
C&C Group plc is a leading, vertically integrated premium drinks company which manufactures, markets and distributes branded beer, cider, wine, spirits, and soft drinks across the UK and Ireland.
C&C Group’s portfolio of owned/exclusive brands include: Bulmers, the leading Irish cider brand; Tennent’s, the leading Scottish beer brand; Magners the premium international cider brand; as well as a range of fast-growing, premium and craft ciders and beers, such as Heverlee, Menabrea, Five Lamps and Orchard Pig. C&C exports its Magners and Tennent’s brands to over 40 countries worldwide. C&C Group has owned brand and contract manufacturing/packing operations in Co.Tipperary, Ireland and Glasgow, Scotland. C&C is the No.1 drinks distributor to the UK and Ireland hospitality sectors. Operating through the Matthew Clark, Bibendum, Tennent’s and Bulmers Ireland brands, the Group has a market leading range, scale and reach including an intimate understanding of the markets it serves. Together this provides a key route-to-market for major international beverage companies.C&C Group is a FTSE 250 company headquartered in Dublin and is listed on the London Stock Exchange.
Note regarding forward-looking statements
This announcement includes forward-looking statements, including statements concerning current expectations about future financial performance and economic and market conditions which C&C believes are reasonable. However, these statements are neither promises nor guarantees, but are subject to risks and uncertainties, including those factors discussed in our FY2023 Annual Report that could cause actual results to differ materially from those anticipated.
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