C&C Group (LSE:CCR), the owner of Tennent’s and Bulmers, saw its shares edge up 1.4% on Tuesday after reporting a 4% increase in operating profit to €41.9 million for the six months ended August 31, despite a 4% decline in net revenue to €825.7 million.
The revenue dip was mainly attributed to the transfer of Budweiser Brewing Group volume in the Republic of Ireland. Profit growth, however, was driven by improved operating margins in both the Branded and Distribution divisions. The operating margin rose 0.4 percentage points to 5.1%, supported by tight cost discipline and the exit from low-margin contracts.
The company highlighted a “challenging market backdrop” for the hospitality sector in the UK and Ireland but delivered a strong performance. Underlying free cash flow more than doubled to €41.7 million, and the half-year leverage ratio was held at 1.1x.
“We have delivered a solid first-half performance against a challenging market backdrop,” said Roger White, Chief Executive Officer. “We continue to invest in initiatives to support improved business performance — building brands, delivering service, range and value to customers and consumers.”
C&C’s flagship brands proved resilient, with Tennent’s and Bulmers achieving both net revenue growth and market share gains. Tennent’s outperformed the broader lager category in the Scottish On-Trade, adding 0.6 percentage points of market share, while Bulmers strengthened its position in Ireland’s Off-Trade segment.
The company declared an interim dividend of 2.08 cents per share, a 4% increase year over year, and completed a €15 million share buyback in September as part of its €150 million capital return program.
Looking ahead, the company reaffirmed its full-year earnings guidance. “We believe we are well prepared for the all-important festive trading period, and whilst we expect challenging economic conditions to persist, we remain committed to the delivery of our full-year earnings targets,” White added.
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