Cider and beer maker C&C said net revenue more than halved in the six months to August 31st as the coronavirus pandemic chilled its markets. A gradual relaxation of restrictions saw the company return to profit in July.
Net revenue declined 55.4 per cent to €386.7 million in the first half of the company’s financial year, resulting in an operating loss of €11.7 million. That compared to a profit of €64.4 million a year earlier.
However, the Bulmers owner said the “off-trade” – sales outside pubs, hotels and restaurants – saw revenue growth of 15.6 per cent compared to the prior year, as pubs were shuttered for several weeks.
“The outbreak of Covid-19 coincided with our financial year end and has meant that the entire six-month performance being reported today, was impacted,” said Stewart Gilliland, C&C Group interim executive chairman.
“Although we expect the pace of recovery will continue to vary… our near term focus is securing our position and enhancing the performance of the business, while positioning C&C to deliver for customers and shareholders over the long term.”
The company said cost control measures, a reduction in capital investment and management of its working capital saw the outflow of free cash flow limited to €28.4 million.
Despite a return to profitability in July through to September, C&C said October was challenged by further restrictions for the on-trade sector in both Britain and Ireland. The key Christmas trading period is also likely to be hit by continuing restrictions, with Ireland entering Level Five restrictions for the next six weeks, and Britain also imposing tighter curbs.
“We expect to see reduced volumes in the on-trade continue for the near term, partially offset by increases in the off-trade. We are adapting to this temporary change in consumption dynamics and whilst it will invariably reduce short term profitability, we fundamentally believe in the medium and long term outlook for the on-trade channel,” said Mr Gilliland.
“Importantly, in terms of ensuring the group’s ability to trade effectively through this extraordinary period, we have enhanced our liquidity position, diversified our sources of funding, extended our borrowing facilities while reducing operating costs and maximising available cash flow.”
The group is also preparing for a no-deal Brexit on December 31st, with plans in place, C&C said.