C&C swings into loss, warns of ‘uncertain’ short-term outlook

BULMERS owner C&C has swung into a loss for the six months to August 31, as pubs and restaurants across the UK and Ireland closed for varying periods due to measures aimed at limiting the spread of Covid-19.

The company said shortterm outlook for the on-trade sector “remains challenging and uncertain, with the key Christmas trading period likely to be impacted by continuing restrictions across the hospitality industry”.

C&C reported an operating loss of €11.7m for the six months with revenue falling 55pc to €386.7m, according to interim results.

The monthly earnings before tax loss was around €6m, according to analysts.

There was some consolation for the group from the off-licenses trade, where revenue increased 16pc.

In addition, the business returned to profit generation in July through to September on the back of strong demand in the off-trade and the gradual reopening of the on-trade in its core markets.

Importantly for the group, it has considerable liquidity with €387m in cash and its revolving credit facility.

C&C added that it is “well placed” to fund the business through the “extraordinary period” of restrictions due to the pandemic.

“While we retain our view that C&C is well positioned to recover strongly post the Covid-19 pandemic due to the strength of its vertically-integrated model, we expect the company and the wider industry will remain challenged for the duration of the crisis,” said Patrick Higgins, analyst at Goodbody.

“Furthermore, its robust liquidity position means it will be able to better navigate the near-term challenges, he added.

C&C’s net debt increased to €371.6m from €326.9m at the end of February.

Commenting on the update, Stewart Gilliland, C&C interim executive chairman, said: “Although we expect the pace of recovery will continue to vary, as the largest independent alcohol distributor across the UK and Ireland, our business is structurally integral to the markets we serve.

“Our near-term focus is securing our position and enhancing the performance of the business, while positioning C&C to deliver for customers and shareholders over the long term.”

In July, C&C announced the appointment of David Forde as its incoming chief executive, the former managing director of Heineken UK will take over the role by early next year.

Shares in C&C were trading up 3pc in London yesterday.