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C&C Group Trading Update: What The Analysts Said

By Steve Wynne-Jones
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C&C Group Trading Update: What The Analysts Said

C&C Group, the maker of Tennent's lager and Magners cider, has issued a market update in which it said that trading in the four months to 31 December 2018 has been 'in line with expectations', with its Matthew Clark and Bibendum businesses performing strongly.

"Despite the current political uncertainty, the Group is increasingly well positioned going into 2019," commented chief executive Stephen Glancey.

Here's how leading industry analysts viewed the group's performance.

Cathal Kenny, Davy Stockbrokers

"The key takeaway from C&C’s trading statement is the achievement of operational and commercial progress at Matthew Clark Bibendum (MCB) during the key Christmas trading period. Strong execution is likely to prompt the initiation of the ‘simplification’ phase (including synergies) at MCB.

"Trading momentum for the core business was sustained into H2, reflecting platform resilience. As such, we envisage a slight upward revision to FY19 forecasts."

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Darren McKinley, Cantor Fitzgerald

"Post a solid interim 2019 result reported in October, within which C&C reported 4% organic growth and 20% earnings growth, C&C management released an upbeat trading statement for the four month period through December.

"We continue to rate C&C as an outperform offering 17% total return in 2019 from current levels. The rationale behind our bullish call is predicated on two focus points. Firstly, C&C’s core business has returned to growth driven by a combination of volume and price gains. Secondly, unlike with previous acquisitions we believe that C&C management have added significant value via acquiring Mathew Clarke Bibendum."

Patrick Higgins, Goodbody

"Overall, we consider this to be an encouraging update, particularly the strong operational performance in Matthew Clark and Bibendum with the businesses now stabilised and well positioned to drive profit growth in FY20.

"The continued momentum in the underlying business is also encouraging given the strong H1 performance benefitted from the excellent summer weather conditions. Consensus and Goodbody EBIT estimates currently stand at €104m, we will likely leave this number broadly unchanged."

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Investec

"Given that Matthew Clark and Bibendum were in the process of being stabilised after the extent of the disruption in the months prior to acquisition had been quantified and that Christmas is a key trading period for the business, it is heartening to note that operational delivery and customer service in both companies has been 'very strong and ahead of plan'.

"Across the rest of the Group, positive trading has continued with management guiding that revenue is tracking mid-single digit ahead of last year. [...] At the Group level, a strong balance sheet and normalised cash flow conversion of 60-70% of EBITDA has management noting that the company is 'poised to provide enhanced shareholder returns'."

© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.

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