C&C Group Forecasts FY16 Profits Of €103 Million
C&C Group has issued a trading update for the 12 months ending February 29 2016, revealing that it expects operating profits for the year of around €103 million.
General trading for the company in Scotland picked up in the last quarter, as the impact of the tighter drink driving legislation brought in December 2014 fell out of the comparatives.
The share performance of C&C’s Tennent’s brand in the Independent Free Trade channel also improved in the second half of the year.
Cider brand Magners Original shipped 1 per cent more volume that in the previous year, and retail data shows it was strong in both the on- and off-trade.
It is expected that export of own brands should deliver 20 per cent volume growth for the group, which recently put in place new distributer partnerships for Magners with San Miguel in Thailand, and Coca Cola Amatil in New Zealand.
Meanwhile, the launch of Tennent’s in South Africa last November has so far seen encouraging results, and C&C plans to increase distribution across a number of African countries.
C&C says its cost reduction plans, which were announced in October 2015, are well advanced and it expects the targeted €15 million in savings to start to flow through in the coming year.
The FY16 results are forecast to reveal a year of strong cash generation. Previous guidance on conversion of Free Cash Flow (FCF)/EBITDA of 70 per cent is expected to achieved, and be further augmented by a new accounts receivable facility that should improve working capital by around €25 million.
Finally, the group says that the level of cash generated in FY16 should allow for the €115 million of capital to be absorbed with minimal change to the net debt position, meaning that the Group’s balance sheet can maintain its strength and flexibility.
The trading update was issued ahead of the group's Capital Markets Day being held in London today, March 10. Results for FY16 will be announced on May 11.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Jenny Whelan. To subscribe to ESM: The European Supermarket Magazine, click here.