Shares in C&C Group sank in London trade today after the drinks group forecast lower full year profits.
In a trading update for the 12 months to the end of February, C&C Group said its annual revenues are expected to be in line with last year while its EBIT is expected to be modestly lower due to softer trading across the market in January and February.
C&C said it saw growth in its distribution business, but this was offset by the impact of the sale of its non-core soft drinks business in Ireland, the exit of low margin contract brewing volume and softer UK cider sales during what it called the important summer trading period.
C&C manufactures, markets and distributes branded beer, cider, wine, spirits and soft drinks across Ireland and the UK. Its brands include Bulmers and Magners cider and Tennent's and Five Lamps beer.
It said the macroeconomic environment and UK October Budget have placed a degree of additional pressure on its hospitality customers and impacted consumer confidence more generally.
The C&C said that despite these headwinds, the group has made good progress and expects to report underlying EBIT in the range of €76m - €78m.
It noted that although this is modestly below its target due to softer trading across the market in January and February, it marks a significant recovery compared to the previous year's earnings of €60m.
C&C said that operating margins are expected to be ahead of FY2024 with positive progress in both its Branded and Distribution businesses.
It also said its customer numbers grew by 7% in the second half of its financial year in its Matthew Clark Bibendum distribution business, reflecting further improved and consistently high service levels.
"We have invested in our brands and achieved market share value growth for Tennent's in both the on and off trade and for Bulmers in the ROI on trade," it added.
Looking ahead, C&C said it expects to see continued uncertainty for consumers alongside the impact of the well documented challenges of the hospitality sector.
"We expect earnings in FY2026 to be marginally ahead of FY2025, reflecting our ongoing investment in the business to enhance our growth potential," C&C said.
"The group remains well-positioned to navigate these challenging conditions and our previously stated objective to deliver €100m EBIT remains in place over the medium-term," it added.
Roger White, C&C's chief executive, said that while the market backdrop remains challenging, the company continues to support its customers, invest in the business and have some exciting plans to implement this year.
"I remain confident of the significant long-term opportunity within the business and I am fully focussed on delivering increased shareholder value," he added.
Mr White just joined the company as CEO in late January. He was formerly CEO of London-listed Irn-bru maker AG BARR from 2002 until May 2024.
