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C&C changes distribution deal with AB InBev
Irish drinks firm C&C Group has agreed to restructure its trading relationship with AB InBev as the firm also announced its financial results are in line with expectations.
The firm said that from 1 January 2025 it would be reassuming control and distribution of its cider portfolio, which includes 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.
In its statement, 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”.
It comes as the company announced earnings in the first half of the financial year to 31 August have been in line with expectations, with net revenues expected to be down 3%.
There has been growth in Matthew Clark and Bibendum, with net revenues up 2%, and in-line performance across its core and premium brands, which was offset by the impact from the disposal of its NAB business in Ireland, lower contract brewing volumes and softer cider volumes in Great Britain, it said.
Underlying operating profit is expected in the range of €39m-€41m.
Tennent’s achieved volume and value share growth over the latest 12 week period, supported by targeted marketing campaigns around the Euro 2024 tournament.
In addition, and despite mixed summer weather, Bulmers outperformed the cider market in Ireland, and its premium beer and cider brands, driven by Menabrea and Orchard Pig, reported double digit revenue growth.
Recovery from lost distribution customers in FY2024 has been “strong”, it said, with distribution points for Matthew Clark and Bibendum in August up 10% compared to August 2023. This growth, together with the efficiency initiatives implemented in the year to date, is expected to result in improved distribution margins in H1 FY2025.
The company said it remained confident on achieving its operating profit target for the current financial year, and making progress towards the operating profit target of €100m by 2027.
In addition, the financial statement said the board reaffirmed its intention to distribute at least €150million to shareholders over three years while maintaining the Group’s financial leverage target of approximately 1x EBITDA on a pre-IFRS16 basis. The second €15m tranche of its share buyback programme began yesterday (9 September 2024).
Feargal O’Rourke has also joined the board as non-executive director. Prior to retirement, he was managing partner of PwC Ireland. The firm said it also intends to make a further non-executive appointment to the board in the near future.
It also updated on the recruitment of a new CEO, following Patrick McMahon stepping down over an accounting error this summer, stating a firm had been employed to search for a replacement with progress to be announced “in due course”.
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