Tennent’s owner C&C teases ‘exciting plans’ as new boss looks to drive growth

The owner of Scotland’s best-selling beer has warned of “additional pressure” on the hospitality sector and weaker consumer confidence in the wake of last October’s UK Budget, knocking its full-year profits.

Tennent’s parent company C&C Group said group revenues were expected to be in line with the year before while it expects to report underlying earnings before interest and tax (EBIT) in the range of €76 million (£64m) to €78m, “modestly below” its target due to softer trading across the market in January and February. That would still represent a gain on the previous year’s earnings haul of €60m.

The Irish group, whose other brands include Magners, Menabrea and Orchard Pig, said in a trading update that operating margins were expected to be ahead of the prior year with “positive progress” being made in both its branded and distribution businesses.

Tennent's, which is brewed in Glasgow, remains Scotland's best-selling beer brand.

It told investors: “The macroeconomic environment and UK October Budget have placed a degree of additional pressure on our hospitality customers and impacted consumer confidence more generally. Despite these headwinds, the group has made good progress.

“We have invested in our brands and achieved market share value growth for Tennent’s in both the on and off trade.

“Looking forward, we expect to see continued uncertainty for consumers alongside the impact of the well documented challenges of the hospitality sector. We remain confident in the longer term and will further invest in our customer proposition, brand innovation, systems and people.”

It expects earnings in its 2026 full financial year to be “marginally ahead” of 2025, “reflecting our ongoing investment in the business to enhance our growth potential”.

Roger White is the chief executive of C&C Group, having previously led Irn-Bru maker AG Barr.

The market update is the first to be overseen by C&C’s new chief executive Roger White, who took the helm towards the end of January, having led AG Barr, the Cumbernauld-headquartered maker of Irn-Bru, for 22 years until May last year.

White, who was one of Scotland’s longest-serving chief executives before he stepped down at the iconic soft drinks maker, said the group would continue to support its customers and invest in the business while he also alluded to “some exciting plans” that will be implemented later this year.

“We are not quite ready to pull the sheets off yet,” he added. “There have been people working on stuff and we are shaping it now and getting ready to go. There are lots of challenges around but there’s lots of good things happening as well.”

“Undoubtedly for a while it is going to be tough from a consumer perspective. Many of our customers are in the hospitality sector and they are staring into significant challenges from a cost perspective. Minimising the impact for them and supporting them is what we have to do as a primary supplier into the sector.”

C&C Group’s other brands include Orchard Pig cider. Picture: Ryan Johnston

The group is due to release full results for the 12 months to the end of February 2025 (its 2025 financial year) on May 28.

Greg Johnson, an analyst at brokerage Shore Capital, noted: “The group has recovered from the difficulties in GB Distribution last year, with robust growth in customer numbers in the second half (+7 per cent) and improved service levels. The shortfall versus our forecasts reflects soft trading conditions in the hospitality trade at the turn of the year, undoubtedly impacted by the weather.

“Although disappointing to be downgrading estimates, we believe the current valuation is yet to capture the medium term opportunity or the strengthening balance sheet.”

Deutsche Numis Research, which has a buy rating on the shares, added: “As frustrating as the downgrades are, C&C would appear to be in a much more stable position than it has been for some time and it can only be hoped that the new management can leverage the platform to drive the anticipated profit recovery.”

The trading update comes after October’s results revealed that Tennent’s “markedly outperformed” total beer performance in the on-trade pub and hospitality sector, increasing its market share by a further five percentage points in the 12-week summer period to August 10. Net revenues were broadly flat in the period with higher pricing offsetting an overall volume decline of 7 per cent.

Brand investment over the summer centred on the Euro 2024 football tournament, leveraging the Glasgow-brewed lager brand’s sponsorship of the Scottish FA team.

C&C noted: “Despite positive share gains for the brand, overall beer consumption in Scotland declined over the latest 12-week period, with volumes in the on-trade down 9.3 per cent. Whilst the inclement weather undoubtedly impacted beer consumption, the 200,000 Scottish fans who travelled to Germany will also have had a temporary impact on the market.”

Chairman Ralph Findlay said at the time: “It certainly wasn’t the best of summers. There has been a squeeze in terms of consumer confidence amid the cost of living pressures. Against that we had a pretty good performance.

“In terms of Tennent’s, to increase your market share by 5 per cent in the on-trade is actually quite an outstanding performance. Up until the Euros we had been trading ahead of the prior year and then the tournament came and we saw quite a dip.”

C&C’s interim results showed that the drinks maker and distributor generated net revenues of €861.4m in the six months to August 31, down 3 per cent on a year earlier. However, underlying group operating profits before exceptional items grew to €40.3m, after an efficiency drive boosted operating margins.

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