C&C halts dividend as it concentrates on cash conservation

Company cuts costs as pandemic continues to hit business

C&C said it would cut costs for the year as the Covid-19 pandemic restrictions hit business.  Photograph: Bryan O’Brien

C&C said it would cut costs for the year as the Covid-19 pandemic restrictions hit business. Photograph: Bryan O’Brien

 

Drinks group C&C has become the latest company to pause dividends during the coronavirus pandemic as it focuses on cash conservation to weather the crisis.

In an update to the stock market, the Bulmers maker said it had cut its capital spend significantly to between €7 million and €10 million for the fiscal year, reduced its marketing spend and implemented an average salary reduction of 20 per cent across its workforce. The executive team and board would take a cut of 30 per cent and 40 per cent respectively for three months, with the decision to be reviewed, and around 70 per cent of staff have been furloughed.

C&C said its current liquidity position of €570 million – €430 million of which is in cash – was sufficient for its needs. That includes the recently announced issue of €140 million in US private placement notes, and the full drawdown of its revolving credit facility. The company is also eligible for the Bank of England’s Covid-19 corporate financing facility.

C&C said it would reinstate its dividend policy when it was appropriate, but given its decision to avail of government support through this crisis, it was not prudent to declare a final dividend for fiscal year 2020. The group has deferred its full year preliminary results for the year ended February 29th 2020 to June 3rd 2020, and the annual general meeting will now take place on July 23rd.

The group issued a profit warning in March as the lockdown measures began to hit the pub trade. An increased demand for off-sales has seen C&C’s main production sites in Glasgow and Clonmel remain operational, with stringent social distancing and hygiene measures in place.

The group is still on the hunt for a new chief executive to replace Stephen Glancey, but the process is likely to be delayed as a result of lockdown measures.