C&C Group has delivered a strong return to trading, driven by the gradual easing of on-trade restrictions since April 2021 and boosted further by a strong consumer response; summer of good weather; the European Football Championship and ‘staycations’, according to its financial results for the six months ending 31 August 2021.
This follows the gradual easing of restrictions and phased reopening of the hospitality sector across Ireland and the UK during the period.
Despite restrictions impacting indoor and outdoor hospitality in the first half of 2022, the group said it is 'pleased to report an improved performance for the first half of the financial year.'
'With indoor and outdoor hospitality open across its core markets for the last five weeks of H1 FY2022, it is pleased to serve 90% of the distribution points in August 2021 versus August 2019,' the company said.
The group's net revenue in the first half of 2022 is expected to be €657 million, compared with €398 million in the first half of 2021.
Looking ahead, the Bulmers-owner said that its operating profit for the first half of 2022 is expected to be €16 million, compared to a loss of €12 million in the first half of 2021 and a profit of €66 million in the first half of 2020.
David Forde, chief executive officer of C&C, commented, “Despite sector challenges, our business has shown its inherent strength and cash generation capability in the first half of FY2022."
"As the on-trade has progressively re-opened, we returned to profitability and worked closely with our customers to meet the resurgence in consumer demand," he said.
Key Distribution Businesses
C&C said that its key distribution businesses, Matthew Clark and Bibendum, returned to profitability in June and remained profitable over the key summer trading period.
The group said that it discontinued the use of government furlough support schemes in June 2021.
As widely publicised, the UK is experiencing a shortage of heavy goods vehicle drivers. However, with the group’s distribution network controlled in house, it has been partly insulated and as a consequence C&C has broadly met customer demand through the peak summer trading period.
C&C said it will continue to work closely with its partners to meet the resurgence in demand.
The group said it is committed to market leading customer service and is taking steps to create capacity and continue to fulfil demand. However, it will 'remain vigilant on the evolving situation.'
'Remain On Track'
It said that it will remain on track with its initiatives to deliver the €18 million in annualised cost savings announced in May 2021.
According to the report, its brand and system strength have been enhanced in the first half, with marketing investment in the core Tennent’s, Bulmers and Magners brands being a key part of its ‘Win in Cider’ strategy.
"We continue to invest in our brands, most notably with the recent launch of multi-channel advertising campaigns for our iconic Tennent’s, Bulmers and Magners brands. Our focus remains on building a better business by further developing our brand and system strength, while continuing to navigate the near-term capacity constraints our industry faces,” Forde added.
C&C said it will announce its result for the first half of its financial year 2022 on Thursday, 28 October 2021, at which time the group intends to reinstate guidance.