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C&C's Full Year Operating Profits Soar By 75%

By Maev Martin
C&C's Full Year Operating Profits Soar By 75%

C&C is reporting an operating profit of €84.1 million for the year to the end of February, an increase of 75.6% compared to the same time last year.

Its results, which were published today, reveal that revenues rose by 18.4% to €1.689 billion.

However, the company expects the trading environment to remain challenging in the near term, particularly in Britain.

C&C said its margins were challenged by weakened consumer demand, due to cost of living pressures, various strikes in the UK, and Enterprise Resource Planning system implementation disruption in its UK distribution businesses.

C&C had previously stated that the implementation of the Enterprise Resource Planning system in the Matthew Clark and Bibendum business (MCB) was taking longer than expected. It said it was expecting a one-off impact of about €25 million associated with ERP system disruption in FY2024.

Progressive Dividend Policy

The drinks giant is proposing a full year dividend of 3.79 cent per share and announced its intention to adopt a progressive dividend policy in the future.

Patrick McMahon, C&C's chief executive, said that set against a challenging backdrop in FY2023, C&C delivered an improved performance against all financial measures.

"Increased balance sheet strength and inherently strong free cash flow characteristics have enabled C&C to return capital to shareholders through the re-instatement of dividends," he added.

 24% Net Revenue Increase In Ireland 

Net revenue at C&C’s Ireland division increased by 24.4% to €278.5 million in the year, driven by the re-opening of the on-trade business.

The Ireland division's operating profit increased by 48.7% to €28.1 million, with margins growing to 10.1% from 8.4% last year.

Despite the inflationary cost pressures being faced by the business and increased marketing investment, C&C said that a better channel mix because of the removal of Covid-19 trade restrictions, the introduction of Minimum Unit Pricing, and price increases helped improve margins year on year.

Meanwhile, its Great Britain division's net revenue increased by 17.2% to €1,410.5 million in the year, driven by the full re-opening of the on-trade and strong growth in its distribution business.

Operating profit in the division jumped by 93.1% to €56 million in the year on the back of volume, pricing growth and a more favourable channel mix.

Operating margins increased by 1.6 points with branded margins at 11.2% and distribution margin at 2.9%.

C&C noted that with a challenging market backdrop, distribution margins in H2 were negatively impacted by a weaker than expected Christmas trading period, various strikes, and operational leverage.

Last week, C&C said its chief executive David Forde was stepping down after three years in the position and Patrick McMahon, the company's Group CFO, was appointed Group CEO with immediate effect.

© 2023 Checkout – your source for the latest Irish retail news. Article by Maev Martin. Click subscribe to sign up for the Checkout print edition.


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