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Wed 24th May 2023 - Update: C&C Group results, inflation falls to 8.7%
C&C Group – macroeconomic conditions continue to impact trading environment, full-year revenue up 18%: C&C Group has said macroeconomic conditions continue to impact the trading environment. which is expected to remain “challenging in the near term, particularly in the British market”. It comes as the business reported revenue increased 18% to €1,689.0m for the year ending 28 February 2023, driven by volume growth of 4.2% and price/mix growth of 14.2%. (2022: €1,427.1m). Operating profit increased 75.6% to €84.1m (2022: €47.9m) in line with guidance, delivered an operating profit margin of 5.0% (2022: 3.4%). It said second half margins were challenged by weakened consumer demand, due to cost-of-living pressures, various strikes in the UK and latterly Enterprise Resource Planning (ERP) system implementation disruption in the group’s British distribution businesses. The company stated: “During February 2023, the group implemented a complex ERP system upgrade in our Matthew Clark and Bibendum (MCB) business. The implementation of this advanced warehousing management technology is a key step in the group’s digital transformation of our GB operations, which will enhance customer service, improve efficiency and maximise capacity utilisation through more automated processes. The implementation process has taken longer than originally envisaged, with a consequent material impact on service and profitability within MCB. As announced on 19 May 2023 the group currently expects a one-off impact of circa €25m associated with the ERP system disruption in FY2024, reflecting the cost associated with restoring service levels and lost revenue. There is expected to be a consequential increase in working capital in FY2024, however leverage is expected to remain within the group’s stated range of 1.5 times to 2.0 times. Excluding the impact on MCB, the group is currently performing in line with management expectations for FY2024 and the board is confident in the group’s medium and long-term strategy and prospects.” The group has reinstated dividends. The company proposes an FY2023 dividend of 3.79 cent per share and intention to adopt a progressive dividend policy going forward. C&C Group said market share for Tennent’s and Bulmers improved year-on-year “maintaining clear market-leading positions”. Premium beer brand portfolio delivered on-trade volume growth of 44.1% in the year. The on-trade in Britain grew its revenue per customer year-on-year by 29.5% and increased the percentage of on-trade outlets stocking a C&C brand from 53% to 58%. Chief executive Patrick McMahon said: “Set against a challenging backdrop in FY2023, C&C delivered an improved performance against all financial measures. Increased balance sheet strength and inherently strong free cash flow characteristics have enabled C&C to return capital to shareholders through the re-instatement of dividends.”

Two days to go before release of updated Premium Database of Multi-Site Companies, 21 businesses being added: A total of 21 new multi-site companies, operating 145 sites, have been added to the next edition of the Propel Premium Database of Multi-Site Companies, which will be released on Friday (26 May), at midday. The updated Propel Multi-Site Database, which is produced in association with Virgate, includes regional restaurant operators, growing café brands, and expanding franchise operators. Premium subscribers will also receive a 1,300-word report on the new additions to the database. The comprehensive database is updated monthly and provides company names, the people in charge, how many sites each firm operates, its trading name and its registered name at Companies House if different. The database now features 2,853 companies. Premium subscribers will also receive the next edition of the New Openings Database on Friday, 2 June, at midday. It focuses on newly announced openings and upcoming launches in the sector and is updated every month. The next edition also includes a 5,000-word report on the new additions to the database. Premium subscribers also receive access to three other databases: the Propel Turnover & Profits Blue Book; the UK Food and Beverage Franchisor Database; and the Who’s Who of UK Food and Beverage. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email to upgrade your subscription. Premium subscribers are also to be given exclusive access to the recording and slides to Propel Multi-Club Conferences. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before; regular video content and regular exclusive columns from Propel group editor Mark Wingett.

Inflation falls to 8.7%: The rate of inflation is finally back in single digits for the first time since last summer, easing to 8.7% last month. The Office for National Statistics said the decline in the consumer prices index measure was mainly driven by gas and electricity costs remaining stable in April when compared with the unprecedented leap recorded in the same month last year. April 2022 saw the energy price cap lifted by 54% to £1,971 to reflect, for the first time, the impact of Russia’s war in Ukraine on European gas and electricity supplies. Energy costs have been the main source of the cost-of-living crisis since the invasion, fuelling not only household energy bills but also manufacturing and transport prices which continue to filter through the economy. But while the pace of price rises slowed it did not fall as much as economists polled by Reuters expected. A rate of 8.2% had been forecast. While the annual inflation rate has eased, there is no great relief in the squeeze on family budgets because earnings continue to lag the pace of price rises. The Bank of England has been trying to combat upwards pressure on prices through interest rate hikes to dampen demand in the economy. There is much speculation on whether interest rates will be raised further next month following 12 consecutive increases. In its latest assessment of the UK economy, the International Monetary Fund suggested more irate rises were needed as it significantly upgraded its expectations for economic growth. The Bank of England is worried about stubborn core inflation, which strips out volatile elements such as fuel and food. That core rate of inflation rose to 6.8% last month, the highest since 1992 and up from 6.2% in March.

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