C&C Group is turning its attention to the off-trade to offset the impact of the coronavirus from the closure of the HoReCa channel.
Announcing its full-year 2020 results, the group said that its Bulmers brand saw a 16% decline in volumes in April and May, while Tennent's saw a 42% decline (in Scotland) and Magners saw a 7% decline (in GB).
At the same time, however, Bulmers' off-trade volumes were up 62% over the two months, while Tennent's was up 41% and Magners was up 25%, the group said.
"The ongoing closure of the hospitality sector has material implications for our business and earnings potential, with approximately 80% of our revenue derived from the on-trade channel," commented Stewart Gilliland, C&C's interim executive chairman.
"An emerging trend from this shutdown however has been an immediate shift in consumption dynamics, resulting in increased demand in the off-trade channel. To capitalise on this behavioural shift, we have reallocated resources behind our Take-Home proposition and seek to optimise our business model in this channel."
Full-Year Performance
In the full-year to 29 February, C&C Group said that net revenue was up 7.8% to €1.72 billion, while operating profit was up 10.4%.
It said that it saw a 'resilient brand performance' for its Tennent’s, Magners and Bulmers brands against challenging comparatives, while its Matthew Clark and Bibendum businesses posted operating margins of 2.4%.
Since year-end, the business has announced a multi-year partnership with AB InBev, which will see it obtain exclusive distribution of Budweiser and Bud Light in Ireland from 1 July.
COVID Impact
The COVID-19 pandemic, however, presented a 'challenge of unprecedented scale and uncertainty for our industry and supply partners', the group said.
It has undertaken an 'extensive' range of operational, financial and liquidity enhancing measures in order to reduce operating costs and maximise available cash flow.
"We entered this crisis with a robust balance sheet and have further strengthened that position with additional liquidity enhancing actions," commented Gilliland.
"The Board believes that its existing liquidity position is more than sufficient for the Group’s current and expected needs. We continue to work with our customers who face significant challenges to offer our support where possible to overcome these difficulties together."
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