Bulmers owner C&C warns over impact of second wave on cider sales
Bulmers and Magners owner C&C Group today warned that the second wave of the coronavirus pandemic could dent its recovery due to ongoing restrictions in the hospitality sector.
For the six months ended 31 August, the company swung from a €64.4m operating profit to a loss of €11.7m, due to the closure of pubs and restaurants from 23 March to 4 July.
It announced this morning that net revenue during the period more than halved from €866.1m in the first half of last year, to €386.7m in the first six months of 2020.
However C&C, which also owns Tennents lager, said it had returned to profitability between July and September following the reopening of pubs and restaurants across the UK.
But trade this month has been challenged by local lockdown restrictions in both the UK and Ireland, which is expected to have a “short-term” impact on profits.
The crucial Christmas trading period is also expected to be impacted by restrictions across the hospitality sector, it said.
Despite the slump in on-trade sales, trading in shops and supermarkets performed strongly, as the unit continued to benefit from a “temporary shift in consumption dynamics” caused by the pandemic.
C&C also said today that it had readied its plans for a potential no-deal Brexit on 31 December.
Interim executive chairman Stewart Gilliand said: “It is encouraging to see the business return to profit alongside the reopening of the on-trade in July. Our core local brands, Bulmers, Magners and Tennent’s, have demonstrated the inherent strength of their customer appeal, winning market share in the off-trade channel over the past six months.
“However, the outlook for the on-trade sector remains challenging with limited near-term visibility.
“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.
“The scale, reach and customer focus of the Group’s brand-led distribution model should, in time, enable us to translate any improvement within this channel into superior profitability.”