Drinks group C&C has today reported a sharp jump in profits for the year to the end of February but said it expects the trading environment to remain challenging in the near term, particularly in Britain.
The Bulmers-maker today reported an operating profit of €84.1m, an increase of 75.6% compared to the same time last year, while revenues rose 18.4% to €1.689 billion.
C&C said its margins were challenged by weakened consumer demand, due to cost of living pressures, various strikes in the UK and Enterprise Resource Planning system implementation disruption in its UK distribution businesses.
C&C manufactures, markets and distributes branded beer, cider, wine, spirits and soft drinks across Ireland and the UK.
As well as Bulmers, its other brands include Magners cider, Tennents and Five Lamps beer and Tipperary Water.
Last week C&C said its chief executive David Forde was stepping down after three years in the position and Patrick McMahon, the company's Group CFO, was appointed Group CEO with immediate effect.
The company also said that one of its units had faced delays in time and costs to integrate a business management software, which is expected to have a one-off impact on the group's profit in fiscal 2024.
It said the implementation of the Enterprise Resource Planning system in the Matthew Clark and Bibendum business (MCB) was taking longer than expected, which is now expected to impact the unit's profitability.
It said it was expecting a one-off impact of about €25m associated with ERP system disruption in FY2024.
C&C said today it was proposing a full year dividend of 3.79 cent per share and also announced its intention to adopt a progressive dividend policy in the future.
Patrick McMahon, C&C's chief executive, said that set against a challenging backdrop in FY2023, C&C delivered an improved performance against all financial measures.
"Increased balance sheet strength and inherently strong free cash flow characteristics have enabled C&C to return capital to shareholders through the re-instatement of dividends," he added.
C&C said its Ireland division's net revenue increased by 24.4% to €278.5m in the year driven by the re-opening of the on-trade business.
The Ireland division's operating profit increased by 48.7% to €28.1m with margins growing to 10.1% from 8.4% last year.
It said a better channel mix as a result of the removal of Covid-19 trade restrictions, the introduction of Minimum Unit Pricing and price increases helped improve margins year-on-year despite the inflationary cost pressures being faced by the business and the increased marketing investment.
Meanwhile, its Great Britain division's net revenue increased by 17.2% to €1,410.5m in the year, driven by the full re-opening of the on-trade and strong growth in its distribution business.
Operating profit in the division jumped by 93.1% to €56m in the year on the back of volume, pricing growth and a more favourable channel mix. Operating margins increased by 1.6 points with branded margins at 11.2% and distribution margin at 2.9%.
C&C noted that with a challenging market backdrop, distribution margins in H2 were negatively impacted by a weaker than expected Christmas trading period, various strikes and operational leverage.
