9th Sep 2024 09:12
(Alliance News) - C&C Group PLC on Monday expects first half underlying operating profit to be in line with expectations despite sales growth remaining sluggish.
The Dublin-based beer, cider, wine, spirits, and soft drinks maker and distributor across UK and Ireland said earnings in the first half of the financial year to August 31 have been in line with expectations.
Net revenue is expected to be down 3%, reflecting growth in Matthew Clark & Bibendum, in-line performance across core and premium brands, offset by the impact from the disposal of NAB business in Ireland, lower contract brewing volumes and softer cider volumes in GB.
C&C expects underlying operating profit in the range of EUR39 million to EUR41 million, in line with expectations.
Tennent's achieved volume and value share growth over the latest 12-weeks, and, despite mixed summer weather, Bulmers outperformed the cider market in Ireland, the firm said.
Premium beer and cider brands, driven by Menabrea and Orchard Pig, continued to perform strongly, reporting double digit revenue growth.
Performance in Matthew Clark and Bibendum business has also been encouraging with net revenues expected to be plus 2%, C&C said.
Recovery from lost distribution customers in financial 2024 has been strong, with distribution points for Matthew Clark and Bibendum in August up 10% compared to August 2023.
This growth, together with efficiency initiatives implemented in the year to date, is expected to result in improved distribution margin in the first half of 2025.
"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 EUR100 million by [financial 2027]."
C&C reaffirmed its intention to distribute at least EUR150million to shareholders over three years and said the second EUR15 million tranche of its share buyback programme will commence Monday.
The firm announced the buyback in August.
Shares in C&C Growth rose 1.3% to 153.00 pence in London on Monday.
By Jeremy Cutler, Alliance News reporter
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