Tennent's brewer C&C Group has reported a 56.1% drop in net revenue in its financial year to 28 February, as the COVID-19 pandemic heavily impacted its core on-trade channel.
The drinks firm, which also produces the Magners and Bulmers brands, reported off-trade growth of 14.2% in the period, as consumers switched to at-home drinking.
Net revenue for the year was €736.9 million (down from €1.68 billion the previous year), with the business posting an operating loss of €59.6 million, compared to a profit of €118.6 million in 2020, largely due to exceptional charges related to the pandemic.
"With approximately 80% of C&C’s pre COVID-19 net revenue derived from the hospitality sector, the pandemic has had an unprecedented impact on the group," commented David Forde, C&C Group chief executive. "Thanks to the prompt and decisive action of our team and our resilient business model, we have successfully navigated these challenges to date."
The group noted that it returned to profitability and underlying cash generation for a brief period last summer, during the easing of on-trade restrictions, 'demonstrating the operating leverage in the business to on-trade re-opening'.
This has also been evidenced by its performance in the UK in the period since hospitality partially reopened a month ago – the group noted that in the week ending 16 May 2021, sales were at 65% of the same level of the corresponding week in 2019.
On the positive side, the group said that it has signed a number of 'exclusive distribution deals' in the full-year period, including for Budweiser in Ireland, Tito's Handmade Vodka in the UK, and craft beer Innis & Gunn across the UK and Ireland.
It also disposed of a number of non-core assets, including including the Tipperary Water Cooler business in October 2020, for an initial consideration of €7.4 million, and the Vermont Hard Cider Company in April 2021 for a total consideration of $20 million.
"Our business model was proven during FY2021 as, during the periods of on-trade restrictions easing, we returned to profit and cash generation," said Forde. "C&C’s brand strength was demonstrated by our core brands growing off-trade share, reflecting their special relationship to the consumers they serve.
"We will build on this as the hospitality sector reopens, targeting cider share growth and building our share in premium beer which we continue to see as a significant market opportunity. Development and evolution of our branded portfolio will remain key for growth and we will enhance our wider portfolio with new agencies or equity for growth brands."