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Drinks supplier C&C Group has announced its full year profits will be in line with revised expectations and it will recommence dividend payments despite a “challenging trading backdrop”.
In a pre-close trading statement for the year to 28 February, the Bulmers and Tennent’s maker said it expects to report operating profits of €84m – having in January revised down market expectations for full year to between €84m-€88m.
The group said profitability was hit by a softer than expected Christmas trading and the impact of the various strikes in the UK.
Additionally, the group commenced a significant technology project in its GB operations in February and said the implementation phase of the project is taking longer than originally envisaged, with some consequent impact on service and profitability, however, service levels have largely returned to normal levels.
Nevertheless, the results mark a sharp increase on the €48m of operating profits in the previous financial year.
Net revenues are expected to be up 18% to €1.69bn, with volumes up 4%.
Despite a “challenging trading backdrop”, the group said it is pleased with the performance of core brands Bulmers and Tennent’s, which in the latest market share data are both continuing to grow category share.
C&C’s balance sheet strength and robust cash generating capabilities are reflected in a significant reduction in net debt to approximately €150m compared with €271m at the end of FY2022.
Given the strength of the balance sheet and cashflow generation, C&C intends to recommence dividend payments following the announcement of its 2023 results and will evaluate the potential for further capital returns to shareholders in due course.
C&C Group shares are up 3% this morning on the news to 154.3p.
Morning update
The Bank of England’s monetary policy committee will meet later this morning to decide whether to raise UK interest rates again – with the surprise rise in inflation earlier this week and another rate rise in the US yesterday adding to pressure to raise rates by a further 0.25 percentage points to 4.25%.
On a quiet morning for grocery news, the FTSE 100 is down 0.5% to 7,530.3pts.
Early fallers include THG, down 3.1% to 60.4p, British American Tobacco, down 2.3% to 2,921p and Deliveroo, down 2.2% to 86.8p.
Other than C&C Group, risers include Glanbia, up 5.5% to €13.57, Premier Foods, up 1.6% to 122.9p and Greencore, up 1.5% to 83p.
Yesterday in the City
The FTSE 100 recovered another 0.4% to end the day at 7,566.8pts after the third consecutive day of rebound from market falls due to worries over the banking sector.
Fever-Tree jumped 9.5% to 1,180p after it predicted a significant improvement in its profit margins from next year as it plans to raise prices to mitigate rising costs.
Other risers included THG, up 6.8% to 62.3p, Marks & Spencer, up 4.5% to 154.7p, Naked Wines, up 3.2% to 97p, PZ Cussons, up 2.5% to 178.4p, Ocado, up 1.9% to 435.1p, B&M European Value Retail, up 1.9% to 481.6p and Reckitt Benckiser, up 1.8% to 6,022p.
Yesterday’s fallers include McBride, down 3% to 26.2p, Supermarket Income REIT, down 2.9% to 86.6p, Glanbia, down 2.4% to €13.05, Wynnstay, down 1.6% to 460p, DS Smith, down 1.1% to 309.9p, Hotel Chocolat, down 1.1% to 185.5p and Just Eat Takeaway.com, down 0.9% to 1,544.4p.
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