C&C Group PLC Expects H1 Operating Profit of €29-€31 Million, Restores Service Levels

C&C Group PLC has released a trading statement for the first half of the financial year 2024. The company expects to deliver net revenue of approximately €870 million, down 1% compared to the same period last year. Operating profit for the first half is projected to be in the range of €29 million to €31 million, including the majority of the one-off profit impact associated with the implementation of the Enterprise Resource Planning (ERP) system in the Group's GB distribution business. The company has made progress in resolving the ERP system implementation issues, with delivery metrics returning to pre-implementation levels.

Trading for C&C's own brands in Ireland and Scotland was encouraging, with net sales revenue for the branded business up approximately 6% for the period. However, poor weather in July and August, combined with cost-of-living pressures, particularly in Great Britain, resulted in a slowdown in the latter months of the period.

The company's leverage at the end of the first half is expected to be 2.1x on a post-IFRS16 basis and 1.6x on a pre-IFRS 16 basis. C&C reaffirms its expectation that leverage will be within the target range of 1.5x to 2x at the end of the financial year in February 2024. The company continues to evaluate other forms of capital returns in addition to the reinstatement of the dividend earlier this year.

C&C is currently in the process of recruiting a new Group Chief Financial Officer, and an update will be provided in due course. The company will announce its first-half results on October 26, 2023.

Patrick McMahon, Group Chief Executive Officer, commented on the performance of the company's branded businesses in Ireland and Scotland, stating, "Set against a difficult market backdrop, we are pleased with the strength of the performance of our branded businesses in Ireland and Scotland in the period. We are particularly pleased with the progress we have made in restoring customer service levels following the ERP system implementation issues in our GB distribution business within our planned timeframe."