Magners and Tennent’s maker hit by strikes and cost of living in December
C&C Group said that it expects operating profit to reach between 84 million and 88 million euros (£75 million to £78 million) in the financial year.
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Your support makes all the difference.The company behind Magners cider and Tennent’s lager disappointed investors on Friday as it said that strikes and cost of living pressures had eaten into its performance in recent weeks.
C&C Group said that it expects operating profit to reach between 84 million and 88 million euros (£75 million to £78 million) in the financial year.
The company had already flagged that it expected a hit in its October update to shareholders. As costs across most categories grew, the business said that customers were likely to reconsider some of their spending.
However, compared to a year earlier, revenue actually jumped by around a fifth in December, C&C said.
“We believe consumer spending pressure is a driver behind this trading performance and will continue to be so in the near-term,” C&C said on Friday.
The business also said that cities had been less busy in December because of strikes in the UK.
It cited figures from trade body UKHospitality showing that around 30% of bookings were cancelled over the festive period, and walk-ins were also down.
“Further, trading has been significantly impacted by rail network strikes in the UK, reducing footfall in urban areas over the key festive trading period,” bosses told shareholders on Friday.
It hit the company’s shares, which dropped by more than 10% following the short trading update.
The company said: “Despite the near-term challenges, the group will continue to operate well within its stated leverage range (less than 2.0x) and this coupled with our strong free cash flow generation will ensure that our stated capital allocation objectives are maintained.
“C&C will continue to review and drive efficiencies throughout our business while ensuring we deliver a market leading offering to our customers and consumers.”