- Half- and full-year guidance confirmed
- Core brands hold up in soft markets
- Second tranche of buyback starts today
Shareholders in beer and cider producer C&C Group (CCR) celebrated a small win after the company confirmed its half-year profit forecast and continued its share buyback with a small but symbolic programme to buy €15 million (£12.7 million) of stock starting today.
The shares rose 2% to 154p, outpacing the FTSE 250 mid-cap benchmark which was up around 0.6% by late morning.
ON TARGET DESPITE SLUGGISH SALES
The Dublin-based group behind Tennent’s lager and Bulmer’s cider revealed operating earnings for the six months to the end of August would be in line with its guidance of around €40 million (£34 million) in spite of a 3% drop in net revenue.
While sales of its core and premium beer brands were in line with forecasts, lower contract brewing volumes and soft cider sales were behind the decline.
Tennent’s achieved volume and value share growth over the 12 weeks to the end of August thanks to targeted marketing during the Euro 2024 tournament, while mixed summer weather impacted sales of Bulmers, although the brand did outperform the Irish cider market in general, and premium brands Menabrea and Orchard Pig reported double-digit revenue growth.
During the period, C&C agreed to restructure its trading relationship with Budweiser Brewing Group (BBG), part of global drinks group AB Inbev (ABI:EBR), allowing C&C to retake control and distribution of the cider portfolio while BBG assumes control and distribution of the beer portfolio in the Irish off-trade starting from next year.
RETURNING CASH AS PROMISED
Management said that while market conditions were ‘challenging’, by focusing on simplifying the business and eking out efficiencies as well as winning customers it was confident of hitting its full-year earnings forecast and its medium-term (2027) operating profit target of €100 million ((£85 million).
The firm also reiterated its intention to return at least €150 million (£127 million) of cash to shareholders over three years by way of share buybacks while maintaining a low level of financial leverage, with a second tranche of €15 million being allocated to purchase shares from today.
