7th Jan 2022 11:21
(Alliance News) - C&C Group PLC on Friday said that government restrictions imposed in its fourth quarter have hurt profit, although the company noted that this came off a strong third quarter performance.
Shares were down 4.5% at 226.00 pence each on Friday morning in London.
The Dublin-based manufacturer, marketer and distributor of alcoholic drinks said that operating profit in the third quarter to end-November was "modestly" ahead of its guidance for the 2022 financial year.
In October, C&C said that, assuming current trading conditions prevailed, financial 2022 operating profit was expected to be between EUR50 million and EUR55 million.
The company put the good third quarter performance down to positive consumer sentiment and the return of customers to on-trade hospitality that lead to increased profit and cash generation.
Furthermore, the continued execution of its cost reduction programme that is expected to deliver full-year savings of EUR18 million, the implementation of a price increase to manage inflationary cost pressures and effective management of supply chain issues.
Nonetheless, C&C noted that trading conditions for its on-trade business in its fourth quarter were hurt by renewed government restrictions across the UK and Ireland.
The company traded directly with 81% of on-trade outlets compared to two years ago, delivering 64% of the volume against expectations of 90% for both on-trade outlets and volume.
This led to December's performance being behind expectations, but still generating a "modest profit for the month."
C&C expects second-half operating profit to be negatively affected by the nature, extent and duration of these government restrictions.
C&C said it will provide an updated operating profit range in its financial 2022 pre-close trading statement in March.
In the previous financial year, the company recorded revenue of EUR736.9 million and a pretax loss of EUR85.2 million.
By Abby Amoakuh; [email protected]
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