C&C share price fizzes on buoyant earnings outlook

C&C shares surged by nearly 7% on the back of the drinks group saying it had a strong Christmas trading period and that it remains on course to meet full-year targets.

In a short trading update, the Bulmers/Magners cider and Tennent’s lager maker said it still expects to deliver full-year results — for the 12 months to the end of February — in line with its expectations.

“Positive trading momentum has continued into the second half, with revenues tracking mid-single digit ahead of last year,” the group said.

At the end of October, C&C reported a strong set of first-half figures, including 16% growth in operating profit to €58.4m and annualised revenue growth of 186% to almost €834m. The latter figure was heavily boosted by a first contribution from leading independent UK pub sector drinks distributor Matthew Clark and Bibendum (MCB), which C&C bought last year. That business alone is expected to contribute up to €16m to overall group annual earnings in the current financial year.

“With service levels restored, we now have stable platforms with real growth potential and unparalleled market access to the UK on-trade. In Scotland and Ireland, our combination of leading brands and distribution assets is highly resilient, cash generative and delivering growth. With a strong balance sheet and normalised cash flow conversion of 60%-70% of Ebitda, we are poised to provide enhanced shareholder returns,” said CEO Stephen Glancey.

C&C’s shares have risen by over 9% in the past 12 months.

At the time of those results, C&C’s management said it was confident of seeing a return to full-year profit growth in the current financial year.

Last year, the company saw operating profits fall 7% and revenues decline 5%.

“We have momentum in our core business and good cash generation. We’re pretty confident on our full-year numbers,” Mr Glancey said at the halfway stage.

C&C is planning to invest in a new brewery in Dublin to increase capacity for its Five Lamps craft beer label and is eyeing both outsourced packaging and production business for non-EU drinks companies after Brexit.

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