Bulmers owner C&C targets profit recovery on summer reopening

Drinks group C&C is hopeful of seeing a significant bounce in profits on the back of Ireland's hospitality sector reopening next month.

The new chief executive of Bulmers cider owner C&C has said the group should return to profit this year on the back of Ireland’s hospitality sector reopening, even under restrictions.

David Forde, who replaced Stephen Glancey as C&C chief earlier this year, said the business returned to profit when hotels, pubs and restaurants temporarily emerged from lockdown over the course of last summer.

He said that indicates C&C will return to profit when hospitality, which is due to start reopening from next week, returns.

However, he said it will likely “take a bit of time” for the on-trade to return to normal levels, with no restrictions attached to pub and restaurant usage.

Mr Forde – who formerly headed up Heineken’s operations in the UK – was speaking on the back of C&C reporting heavy annual losses and significantly lower revenues after a year decimated by Covid restrictions.

C&C – which also owns Magners cider, the Five Lamps beer range and Tennent’s lager – said revenues slumped by over 56%, to just under €737m, in the 12 months to the end of February. For the year, the group made an operating loss of €59.6m, compared to a profit of nearly €119m 12 months earlier.

While its sales volumes from the off-trade – its products being bought in off-licences and supermarkets – jumped more than 21%, that performance didn’t offset the damage done by bars, restaurants and hotels being closed for much of the year. As much as 80% of C&C’s sales come directly from the on-trade.

C&C’s share price slumped as much as 13% on the back of the results. However, Mr Forde said the company’s planned rights issue – aimed at raising around €175m – will lower debt and shore up its financial defences against any future shocks.

He also said that C&C’s strategic review of its business in Ireland is complete and that the overall business has been “right-sized”. He said no further job cuts are planned, following 34 redundancies across the group’s Bulmers operations in the Republic and Tennent’s business in the North in March.

C&C’s UK revenues fell 36% in its latest financial year, with a 26.6% drop seen in Ireland. Two-thirds of its sales come from the UK, which has reopened its hospitality industry ahead of Ireland.