FY2025 First-Half Trading Update
Earnings in line with expectations; underlying Operating Profit of €39m-€41m, Core Revenues in line
Dublin, London, 9 September 2024: C&C Group plc ('C&C' or the 'Group') announces that earnings in the first half of the financial year to 31 August 2024 have been in line with expectations, with Net Revenues expected to be -3%1, reflecting growth in Matthew Clark & Bibendum, in-line performance across our core and premium brands, offset by the impact from the disposal of our NAB business in Ireland, lower contract brewing volumes and softer cider volumes in GB. Underlying Operating Profit is expected in the range of €39m-€41m, in line with our expectations, principally reflecting the phased rebuilding of our Distribution business profitability following last year's ERP disruption.
Tennent's achieved volume and value share growth over the latest 12-weeks2, supported by targeted marketing campaigns around the Euro 2024 tournament and, despite mixed summer weather, Bulmers outperformed the cider market in Ireland3. Our Premium beer and cider brands, driven by Menabrea and Orchard Pig, continued to perform strongly, reporting double digit revenue growth.
Performance in our Matthew Clark and Bibendum business has also been encouraging with Net Revenues expected to be +2%. Recovery from lost distribution customers in FY2024 has been strong, with distribution points for Matthew Clark and Bibendum in August +10% compared to August 2023. This growth, together with the efficiency initiatives implemented in the year to date, is expected to result in improved distribution margins in H1 FY2025.
Distribution Agreement with Budweiser Brewing Group
C&C and Budweiser Brewing Group ('BBG'), part of AB InBev, have mutually agreed to restructure elements of our trading relationship. Effective from 1st January 2025, C&C will reassume control and distribution of the Group's cider portfolio, including Magners, in Great Britain. On the same date, AB InBev will assume control and distribution of its beer portfolio in the Off Trade in the Republic of Ireland. Bringing the sales, trade marketing and distribution responsibilities in house will provide both companies with the opportunity to strengthen their respective brand portfolios and distribution platforms.
Outlook and Capital Returns
While current market conditions remain challenging, improving efficiencies, business simplification, winning customers and brand distribution remain our top priorities. We remain confident on achieving our operating profit target for the current financial year and making progress towards the operating profit target of €100m by FY2027.
The Board reaffirms its intention to distribute at least €150million to shareholders over three years while maintaining the Group's financial leverage target of approximately 1x EBITDA on a pre-IFRS16 basis. The second €15m tranche of our share buyback programme will commence today, 9 September 2024.
Board and CEO Appointment Process
Since the Annual General Meeting on 15 August 2024, we have been pleased to welcome Feargal O'Rourke as Non-Executive Director of the Board. Prior to retirement Feargal was Managing Partner of PwC Ireland and brings his considerable financial expertise to C&C. As previously announced, we intend to make a further non-executive appointment to the Board in the near future. We have also commenced the recruitment process for the new Chief Executive Officer with the support of executive search firm Russell Reynolds Associates. A progress update on these appointments will be provided in due course.
1 On a constant currency basis
2 On-Trade - CGA OPM (BWS) 52 w/e 13/7/2024, Off-Trade - IRI (Circana) Total GB 52 w/e 13/7/2024.
3 CGA 13 w/e to 30.06.24 - Ireland Total Cider
ENDS
Contacts
C&C Group plc
Email: investor.relations@candcgroup.ie
Investors, Analysts & Media
FTI Consulting
Jonathan Neilan / Paddy Berkery / Niamh O'Brien
Tel: +353 86 231 4135 / +353 86 6025988 / +353 87 707 8379
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 and Tennent's, the leading Scottish beer 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 plc is an Irish incorporated FTSE 250 company headquartered in Dublin and is listed on the London Stock Exchange.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
