C&C Group profits have climbed after the business sacrificed some sales in its lower-margin wholesale business to improve margins and cash generation.
The business behind brands including Tennent’s and Bulmers reported a 4% uplift in operating profits before exceptionals, to €43.4m, in the six months ended 31 August 2026. Profit before tax increased by 4% to €33.3m, reflecting “improved branded performance, favourable customer mix impact in Matthew Clark Bibendum (MCB) and disciplined cost control”, said C&C Group.
However, revenues fell organically by 3% to €794.9m, driven by a 5.7% dip in sales across its distribution arm. C&C Group attributed the slide to “the planned exit of specific lower-margin customer business alongside continued pressure on outlet numbers and certain drinks categories”.
As part of a drive to improve the quality of its wholesale customers, C&C Group struck a deal to acquire Asahi UK’s Nectar business last month. The acquisition was expected to be margin accretive thanks to Nectar’s “premium-leaning, managed-estate customer base”, Barclays analyst Laurence Whyatt said.
“C&C is effectively buying a customer book, not an asset base,” added Whyatt. “It gains supply to the Fuller’s estate of roughly 380 outlets and an independent free trade base of around 500 outlets, rising towards 900 in peak season.”
Challenged hospitality market
The UK hospitality market had “remained challenging but resilient” in the first six months of 2026, C&C Group said, pointing to “ongoing pressure on household budgets and elevated operating costs across the sector”. Favourable summer weather and the Fifa World Cup had “supported trading across a number of channels and regions”, however.
Consumers were “increasingly drinking earlier in the day, socialising more frequently around food-led occasions and adopting broader drink repertoires”, said C&C, adding this was providing a tailwind to categories including beer and cider.
However, wine and spirits “remained more subdued, particularly within hotels, restaurants and casual dining”.
Meanwhile, alcoholic drinks sales in the off-trade had “continued to outperform the wider grocery market, supported by growth in beer, cider and ready-to-drink categories”.
In March, C&C Group completed the pre-pack acquisition of Scottish brewer Innis & Gunn for a consideration of £4.5m. C&C had previously held a minority stake but already brewed the majority of Innis & Gunn’s volume.
The deal had already contributed towards a 3.8% uplift in branded revenues in H1, C&C said.
Innovation wins new customers
Meanwhile, innovation including Tennent’s Bavarian Pilsner, Tennent’s Tops and Tennent’s Stout were “attracting new consumers” to the brand, it added.
For the full-year, C&C Group reiterated it remained on track to deliver “full-year operating profit in line with market expectation”.
“We have delivered a solid first-half financial performance, reinforcing our actions to build resilience in our business,” said C&C Group CEO Roger White. “The general economic environment remains volatile, and we have the important festive trading period yet to deliver.
“However, we have strong trading plans in place for the balance of the year alongside a number of brand initiatives and the delivery of our developing innovation agenda, all of which give us confidence in our ability to meet market expectations for the full-year.”
Shares in C&C Group rose by nearly 4% in early morning trading on Wednesday (28 October).
“This is a more consistent and predictable C&C than the one investors have been used to,” noted Whyatt.
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