C&C says revenue stable, but delayed tech rollout hits operating profit

Drinks group C&C said net revenue was broadly in line with last year and branded revenues rose almost 7 per cent as the company got back on track following the delayed implementation of a new tech system.

But profit was down almost 43 per cent for the six months ended August 31st, 2023 – the first half of its 2024 fiscal year – with the bulk of that due to the disruption caused by the new system implementation, which delayed price increases, caused additional running costs and lost business as the company’s ability to deliver full orders on time was affected.

Operating profit was €30.5 million for the six months, down from €53.3 million a year earlier. The group’s distribution business in Britain broke even.

In the branded business, operating profit rose 4.6 per cent, with margins at 14.5 per cent.

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The drinks group said its Ireland and Scotland markets performed robustly, with Bulmers and Tennent’s revenue rising 9.1 per cent. Its premium beer portfolio saw revenue grow 23.1 per cent, while volumes were up almost 17 per cent.

Volumes in Magners fell almost 13 over cent, while revenue was down almost 8 per cent as bad weather hit the cider category.

“Set against a difficult market backdrop we are pleased with the strength of the performance of our branded businesses in Ireland and Scotland in the period,” said Patrick McMahon, C&C group chief executive. “We have made significant progress in restoring customer service levels following the ERP system implementation issues in our GB distribution business within our planned timeframe. Delivering outstanding service, winning customers, continued business simplification and improved operating efficiency remain our top priorities and focus for the second half.”

The company said its interim dividend would be 1.89 cent per share. C&C said the board plans to distribute up to €150 million to shareholders through dividends and other capital returns over the next three fiscal years.

Looking ahead the company said it expects to see continued challenges from costs in the next 12 months, before an easing in its 2025 financial year.

C&C is still on the lookout for a new chief financial officer, with recruitment at an “advanced stage”.