Shares in C&C Group PLC on Thursday fell sharply after it warned challenging markets and a cautious consumer will mean annual underlying operating profit will be below expectations.
The Dublin-based beer, cider, wine, spirits and soft drinks maker and distributor said revenue in the 12 months to February 28 is expected to be in line with last year’s €2.02 billion.
This reflects growth in the Distribution business offset by the impact of the disposal of the non-core soft drinks business in Ireland, the strategic exit of low margin contract brewing volume and softer GB cider sales during the important summer trading period.
But C&C, which sells Tennent’s lager and Bulmers cider, said the macroeconomic environment and UK October budget have impacted consumer confidence.
As a result, C&C expects to report underlying earnings before interest and tax between €76 million to €78 million, modestly below its target due to softer trading across the market in January and February.
Analysts at Shore Capital said this compared to its projection for underlying Ebit of €80 million.
This does, however, reflect ‘significant recovery’ versus the prior year’s earnings of €60 million, C&C pointed out.
‘The macroeconomic environment and UK October budget have placed a degree of additional pressure on our hospitality customers and impacted consumer confidence more generally,’ the firm said.
Shares in C&C were marked down 16% at 124.00 pence each in London on Thursday morning.
Operating margin is expected to be ahead of financial 2024 with positive progress in both the Branded and Distribution businesses.
C&C said it remains confident in the longer-term despite the ‘continued uncertainty for consumers’ and the ‘challenges’ of the hospitality sector.
It expects earnings in financial 2026 to be marginally ahead of 2025, reflecting ongoing investment in the business to enhance growth.
Shore Capital said market expectations were for a €10 million improvement.
C&C’s previously stated objective to deliver €100 million Ebit remains in place over the medium-term.
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