C&C Group has posted a 55.4% net revenue decline in the first half of its financial year, compared to the same period last year, largely driven by the prolonged closure of bars and restaurants in its key markets.
The Bulmers maker reported revenue of €386.7 million in the six month period to 31 August, compared to €866.1 million in the first half of last year, as well as an operating loss of €11.7 million (compared to an operating profit of €64.4 million last year).
However, the cider maker said that off-trade sales were up 15.6% in the period, while profitability has shown signs of recovery.
“Driven by strong demand in the off-trade and the gradual reopening of the on-trade in our core markets, the business returned to profit generation in July through to September," commented Stewart Gilliland, C&C Group's interim executive chairman.
"Although we expect the pace of recovery will continue to vary, as the largest independent alcohol distributor across the UK and Ireland, our business is structurally integral to the markets we serve. Our near term focus is securing our position and enhancing the performance of the business, while positioning C&C to deliver for customers and shareholders over the long term,” he added.
The group said that supply chain and production facilities remained fully operational during the COVID-19 crisis, while it saw off-trade market share gains for its Tennent’s, Bulmers and Magners brands.
It also noted that its business remains 'well placed' to fund operations through what it said was an 'extraordinary' period, with its net debt rising from €326.9 million as at 29 February 2020 to €371.6 million as of the end of the half year.
In terms of its future outlook, it noted that while September continued a return to profitability for the group, October is proving more challenging due to further on-trade restrictions being implemented.
It said that the near-term outlook for the on-trade sector remains uncertain, but the off-trade channel is continuing to perform strongly, 'continuing to benefit from a temporary shift in consumption dynamics'.
"We expect to see reduced volumes in the on-trade continue for the near term partially offset by increases in the off-trade," said Gilliland. "We are adapting to this temporary change in consumption dynamics and whilst it will invariably reduce short term profitability, we fundamentally believe in the medium and long term outlook for the on-trade channel. The scale, reach and customer focus of the Group’s brand-led distribution model should, in time, enable us to translate any improvement within this channel into superior profitability.
"We remain confident in the inherent strength of our local brands, our unparalleled route to market and the medium to long term prospects for C&C.”
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