C&C said the second half of the year saw margins challenged by weakened consumer demand, due to cost of living pressures, various strikes in the UK, and, latterly, Enterprise Resource Planning (ERP) system implementation disruption in the Group’s GB distribution businesses.
It noted that group branded operating margins were flat year-on-year, with volume/mix benefit and price actions being offset by increased marketing investment and inflationary impacts on the cost base.
New Chief Executive
The group announced on 19 May that David Forde, would be stepping down as chief executive officer. Patrick McMahon, Group CFO, was appointed Group CEO with immediate effect.
Ralph Findlay, chair, has been appointed executive chair to support the management transition as Patrick McMahon will also retain his responsibilities as CFO until a new CFO is appointed, the process for which will commence shortly.
C&C noted that it expects macroeconomic conditions continue to impact the trading environment which is expected to remain 'challenging' in the near term, particularly in the GB market.
“Set against a challenging backdrop in FY2023, C&C delivered an improved performance against all financial measures," said Patrick McMahon, C&C Group chief executive.
"Increased balance sheet strength and inherently strong free cash flow characteristics have enabled C&C to return capital to shareholders through the re-instatement of dividends.”
Commenting on the group's performance, analyst Cathal Kenny of Davy said, "C&C’s recent profit warning has clearly overshadowed the FY23 result. Nonetheless, key callouts from the FY23 result include (i) dividend reinstatement; (ii) significant progress on net debt reduction; (iii) market share gains for Tennent’s and Bulmers; and (iv) flat branded margins despite record cost inflation and brand reinvestment.
"Following the May 19th trading update, we intend to lower our FY24 EBIT forecast by €25m (estimated impact from system implementation challenges) to €55m. We will take a prudent stance on FY25 and lower our EBIT forecast from €93m to €80m."