Beverage maker C&C returns to profitability after pandemic restrictions are lifted

Beverage group C&C saw its net income rise 87.8 percent to 1.4 billion euros in the 12 months to the end of February, as pandemic restrictions were lifted and floor prices per unit were introduced.

The sale of C&C’s UK pub business has helped reduce net debt, with the group intending to return to paying dividends “in due course”, a statement said today.

However, C&C warned of possible further price hikes as costs rise, saying the rising cost of living could affect future consumer demand.

The lifting of restrictions and the imposition of unit pricing in January helped boost operating margins by 14.2 percent through the end of February, according to C&C in its full-year 2022 results.

Operating profit was €47.9 million compared to a loss of €63.6 million in 2021, with an operating margin of 3.3 percent for the full year.

Revenue in “On Trade” – bars, restaurants and cafes – increased by 207.8 percent, with 150 more trading days compared to 2021.

People were still buying C&C products to consume at home, even though “outside the retail” performance fell by 3.4 percent compared to 2021, with net sales of 376.3 million euros.

Leading alcohol brands Bulmers and Tennent’s increased their share of off-trade volume, while premium beers performed well in Scotland.

The recovery was driven by a strong performance in the second half of the year, together with €18m of cost cutting, input cost hedging and a price increase in November 2021.

The sale of C&C’s entire minority stake in Admiral Taverns to US investment firm Proprium Capital Partners raised 65.8 million euros. C&C has also negotiated a long-term supply agreement for the Admiral estate, which includes its own and agency brands.

Liquidity at year-end was €438.7 million, up 39.4 percent from 2021, with net debt down 38.6 percent to €271.3 million

Adjusted earnings before interest, taxes, depreciation and amortization amounted to 79.7 million euros, after a loss of 31.7 million euros in the previous year.

Basic earnings per share rose to 9.9 cents compared to a loss of 31.1 cents last year, while diluted earnings per share rose to 7.5 cents compared to a loss of 21.1 cents last year .

“Following a period of unprecedented challenges for the hospitality industry, we are delighted to be returning to serving our customers and delivering our iconic and beloved brands to our trade and retail partners,” said Chief Executive Officer David Forde.

“Encouraged by the industry’s response and resilience, we are pleased at how trade has recovered and the subsequent strength in customer and consumer demand, which we believe underscores the continued importance of the hospitality industry and the role it plays in our society.” plays, reflects.”

However, he made money from the “evolving and challenging inflationary cost environment” that C&C would be monitoring closely over the next year.

“We have already taken steps to provide some level of protection for the business, however we are vulnerable to further increases in our cost base which would require further price increases.

“Despite the current upbeat sentiment in the hospitality sector post-reopening, we are aware of the pressures consumers are facing and its potential impact on future demand.”

C&C is hosting a Capital Markets Day for analysts and investors today.