C&C Group is taking a "highly proactive" approach in preparing for the current lockdown environment, a leading industry analyst has said.
Cathal Kenny of Davy was commenting after C&C Group issued an update on operational measures it was implementing in the current challenged circumstances.
C&C Group said that it is reducing capital spend to between €7 and €10 million for the year, reducing marketing and discretionary spend, and introducing 'prudent and rigorous ' working capital management.
It is also reducing the average salary of its workforce by around 20%, with its executive leadership team and board seeing their pay cut by 30% and 40% respectively for an initial three months.
Some 70% of the business' employees have been placed on furlough, it said.
'Right-Sizing The Business'.
Commenting, Davy's Kenny said, "C&C is taking a highly proactive approach in right-sizing the business for the current lockdown environment. Tight control over cash and costs has resulted in only modest cash burn year-to-date.
"The group has ample liquidity and available cash to withstand any prolonged lockdown. As expected, C&C has cancelled its final dividend for FY2020."
C&C Group is still on the hunt for a new chief executive, following the departure of Stephen Glancey at the end of February, and has said that it expects that the conclusion of this process will be delayed in light of the current situation.
"The CEO search is progressing well and is in its final stages, although its conclusion will be conditional on the easing of travel restrictions," said Kenny.
Elsewhere, Goodbody analyst Patrick Higgins said, "Overall, while we note the extremely challenging trading conditions, we consider C&C's update this morning to be encouraging, outlining further detail on its strong focus on protection of profit and cash.
"This should enable C&C to navigate its way through this challenging period."
C&C Group added that its main production sites in Glasgow and Clonmel remain operational, with stringent hygiene measures in place, and its supply of Tennent's, Bulmers and Magners to the off-trade have remained steady.
'Our customers remain a priority during these difficult times and we are engaging where possible to support them as we overcome these challenges together,' it said.
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