Tennent’s owner C&C 'pleased' with lager sales despite challenging backdrop

Tennent’s lager owner C&C Group has flagged higher full-year revenues and operating profit despite a “challenging trading backdrop”, while resuming dividend payments later in the year.

In a trading update, the Irish drinks group, whose other brands include Bulmers cider and Heverlee and Menabrea beers, said it expects to report an 18 per cent year-on-year rise in revenues to around €1.69 billion (£1.5bn), with volumes likely to be 4 per cent higher. Full-year operating profit is expected to come in at €84m, up from €48m the year before.

The firm noted: “This outcome reflects a number of factors, including the previously noted softer than expected Christmas trading and the impact of the various strikes in the UK. Despite a challenging trading backdrop, we are pleased with the performance of our core brands, Bulmers and Tennent’s, which are both continuing to grow category share. Given the strength of the balance sheet and cash flow generation, C&C intends to recommence dividend payments following the announcement of its [full-year] results.”

Greg Johnson, an analyst at Shore Capital, said: “The full-year outturn is expected to be consistent with the revised guidance in early January albeit at the low end. We continue to see the key to the C&C investment case being demonstrating the capability to drive branded volume growth, rebuild margins and the capacity to exploit its market leading distribution-led drinks model. The balance sheet brings further optionality. We reiterate our ‘buy’ stance.”

Tennent's, which is brewed at the Wellpark brewery in Glasgow, is Scotland’s biggest selling lager brand.