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Tennents and super-premium brands drive performance at C&C
Branded cider, beer, wine and soft drinks company C&C Group issued a trading update for the 12 months ended 28 February on Tuesday, reporting that despite weather-related disruption, trading and cash generation was broadly in line with management expectations.
The London-listed firm said group operating profit was anticipated to be around 86m for the full year, with Admiral Taverns contributing an additional 1.1m to group earnings.
Cash conversion was expected to be within the board's guidance range, at around 60% of EBITDA.
Looking at its brands, C&C said Tennent's in Scotland and super-premium brands grew revenues strongly, while Magners returned to volume growth with momentum building through the first year of the company's cider distribution partnership with AB InBev.
Resilient trading was reported in off-trade and on-trade packaged in Ireland, but competitive pressures in draught remained "intense", the board said.
Currency translation of around 3m and one-off impacts relating to the new AB InBev arrangements negatively impacted full-year profitability as well.
During the year, C&C made a 42m investment in the UK on-trade through Admiral Taverns, and invested a further 12m on its craft brand portfolio.
In addition, it returned 73m to shareholders through a combination of share buy-back and dividends.
"The performance of our Scottish businesses and our growing super-premium portfolio has been encouraging in FY18 and both are well positioned to deliver further value growth in FY19," the board said in its statement.
"The introduction of minimum unit pricing of alcohol in Scotland this year may result in some short-term market disruption, but longer term will bring value to the category."
C&C said that, while competitive pressures remain in Ireland, it expected performance to improve next year.
"In the UK, our strengthened route-to-market platforms of Admiral Taverns and AB InBev are now well-embedded.
"The outlook for the UK high street and consumer spending remains challenging but our brands and the predominantly wet-led, community pubs we serve are proving resilient."