Scotland's biggest-selling lager increased its market share over the summer, boosted by marketing activity surrounding Euro 2024.
Tennent’s Lager achieved volume and value share growth in the 12 weeks to August 31, despite the “mixed summer weather”, owner C&C Group has reported.
Dublin-based C&C said the Tennent’s brand benefited from targeting marketing campaigns around the Euro 2024 tournament in Germany, which saw the Scottish men’s team crash out after the group stages. The firm, which has owned Tennent Caledonian Breweries in Glasgow since 2009, also hailed a strong performance by Bulmers (sold under the Magners brand in the UK), noting that it had outperformed the cider market in Ireland.
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However, the company said it expects revenue for the first half of its financial year to be down 3%. Growth of its wine wholesaling business, Matthew Clark and Bibendum, and the “in-line” performance of its core and premium brands, such as Menebrea and Orchard Pig, will be offset by the impact of the disposal of its NAB (non-alcoholic beverage) business in Ireland, lower contract brewing volumes, and softer cider volumes in Great Britain.
The company said it remains on course to achieve operating profits of €100m by 2027.
The first-half trading update came as C&C bids to draw a line under a tumultuous period, which saw a botched IT project and accounting errors caused it to part company with two chief executives in little more than a year.
Complications arising from an upgrade to the ordering system for its wine wholesaling business led the firm to incur a one-off charge of €25 million in its accounts for 2023, which led to the exit of former chief executive David Forde in May 2023. Then, in June this year, Mr Forde’s successor Patrick McMahon quit after C&C was forced to make retrospective charges totalling €17m to its accounts for last year.
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The company, which installed chairman Ralph Findlay as interim boss following Mr McMahon’s departure, said yesterday that it has begun the recruitment process to find a new chief executive.
C&C has also in recent months faced calls for change from Engine Capital, which called for the business to be put up for sale, though the board and the activist investor have since signed a co-operation agreement.
The drinks business said yesterday that it expects to report underlying operating profits of €39m-€41m for the first half to August 31.
It highlighted an “encouraging” performance by Matthew Clark and Bibendum, which is expected to report net revenue growth of 2%. With recovery of distribution customers lost last year “strong”, and distribution points for Matthew Clark and Bibendum up 10% in August compared with the same month last year, C&C expects to report improve distribution margins for the first six months, alongside efficiency moves.
Meanwhile, the firm announced changes to its trading relationship with brewing giant AB InBev. C&C will from January 1 reassume control and distribution of its cider portfolio, including Magners, in Great Britain. At the same time, AB InBev will assume control and distribution of its beer portfolio in the off-trade in the Republic of Ireland.
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C&C said bringing the sales, trade marketing and distribution responsibilities in-house will provide both companies with the opportunity to strengthen their respective brand portfolios and distribution platforms.
Mulling the outlook, C&C declared: “While current market conditions remain challenging, improving efficiencies, business simplification, winning customers and brand distribution remain our top priorities. We remain confident on achieving our operating profit target for the current financial year and making progress towards the operating profit target of €100m by FY2027.”
The board reiterated its intention to return at least €150m to shareholders over three years. A second €15m tranche of the buyback programme began yesterday.
Shares in C&C closed up 1.6p at 152.6p.
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