Drinks company C&C saw trading bounce back last year as the restrictions imposed to help slow the spread of Covid-19 were eased, but warned of the increasing pressure from rising costs.
In the 12 months to the end of February 2022, revenue rose almost 88 per cent to €1.4 billion as the on-trade saw growth of more than 200 per cent. The on-trade was open for a total of 267 days of trading in the UK and Ireland last year, compared to 117 days in the previous fiscal year.
But despite the reopening of the on-trade, there was still a strong performance in off-trade, with net revenues falling only 3.4 per cent to €376.3 million.
Operating profit was €47.9 million, with free cash inflow of €28.4 million. Operating margins were 3.3 per cent for the year.
The group said it managed the challenging inflationary environment through the combination of its €18 million cost reduction plan, cost hedging for inputs and a price increase in November 2021.
Net debt was €271.3 million at year end. An exceptional credit of €11.3 million was primarily driven by the write back of previously created Covid-19 provisions.
C&C also said it had sold its entire minority interest in Admiral Taverns to Proprium Capital Partners for €65.8 million. The sale will be carried out in three tranches during the coming fiscal year, with the proceeds used to reduce net debt.
Looking ahead, C&C said the fiscal year had begun strongly, with net revenue up 12 per cent on pre-Covid levels for the two months to April 30th. The group warned further cost increases were also likely as it faced rising input cost pressures, particularly at its manufacturing facilities, will likely necessitate further price increases.
"Following a period of unprecedented challenges for the hospitality sector, we are delighted to be back serving our customers and delivering our iconic and much-loved brands to our on-trade and off-trade partners. Encouraged by the reaction and resilience of the industry, we are pleased with how trading has recovered and the subsequent strength of customer and consumer demand, which we believe reflects the enduring importance of the on-trade and the role that it plays in our society," said chief executive David Forde.
“Looking forward, we are operating in an evolving and challenging inflationary cost environment and will continue to monitor this closely over FY2023 and beyond. We have already taken action to afford the business a degree of protection, nevertheless we are susceptible to further increases in our cost base which would necessitate further price increases. Despite the current positive sentiment in the hospitality sector post reopening, we are mindful of the pressures being faced by consumers and its potential impact on future demand.”