C&C on track to meet expectations for full year

Drinks group C&C said it expected to beat expectations for its earnings marginally as it issued an update for the 12 months to February 29th, 2020.

But the company said its outlook for the coming months was based on no impact from the coronavirus outbreak, a situation it was continuing to monitor.

The group,which includes Bulmers in its product portfolio and recently signed a deal to distribute Budweiser in Ireland, said adjusted earnings per share growth of more than 10 per cent was in line with its 2020 guidance.

Free cash flow generation was strong, C&C said.

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Its Matthew Clark and Bibendum businesses performed well, the group said. reporting blended operating margins within the stated range of guidance.

In October, the company said revenue and profit rose in the first half of its financial year, but Irish revenue fell as the weather hit the off-trade. The company said net revenue for the six months ended August 31st, 2019, was up 13.5 per cent to €874.9 million, with operating profit at €63.8 million, a rise of 9.2 per cent year on year.

Like-for-like adjusted diluted earnings per share growth was 5.8 per cent, with basic earnings per share growing 7.5 per cent.

The company is searching for a new chief executive, with Stephen Glancey set to retire. Executive search firm Spencer Steward has now been formally engaged to help the process.

Looking ahead, C&C reaffirmed its medium-term guidance for the group of mid to high single-digit earnings per share growth, providing there is no material or prolonged impact from the coronavirus outbreak.

The update was described as “encouraging” by Goodbody analyst Patrick Higgins.

“Overall, we consider this to be a robust update from C&C,” he said. “While we remain positive on the medium term outlook for C&C ...we recognise increased risk associated with Covid-19.”