The owner of Glasgow’s Wellpark brewery, home of the Tennent’s lager brand, posted a strong performance in the first half of its financial year but warned of challenging times ahead as inflationary pressures eat away at profit margins and drain consumers’ disposable incomes.

Pre-profits at Ireland’s C&C Group surged to €47.4 million (£40.8m) during the six months to the end of August, up from €7.1m in the same period a year earlier when much of trading was impacted by Covid health restrictions. Revenues were up by more than a third at €903m.

C&C manufactures, markets and distributes branded beer, cider, wine, spirits, and soft drinks across the UK and Ireland. It supplies some 30,000 pubs, bars, restaurants and hotels through its Matthew Clark, Bibendum, Bulmers and Tennent’s brands.

Chief executive David Forde said the group is looking forward to its first unrestricted Christmas trading period for three years. This and the upcoming FIFA World Cup will “hopefully mitigate” against the squeeze on consumers’ finances caused by the cost-of-living crisis.

He added that despite difficult economic headwinds, the group aims to further expand its reach as a supplier to the on-trade.

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“We think that as the largest consolidator in the market – the company that can handle the broadest range of beverages in on-trade – that’s an opportunity for us to hopefully win new customers,” Mr Forde said. “Even if the market declines somewhat, we think we can grow our share of the customer base.”

He believes that well-documented staff shortages across the hospitality sector could play to C&C’s hand as pub and restaurant owners look to enhance efficiency. He suggests this could involve cutting down on the number of weekly deliveries that must be unloaded and accounted for, thus diverting employee resources.

“They simply don’t have enough staff at this moment in time and what we would say to them is use your staff where it’s really important, which is front of house focusing on your customer experience, and let us make the back of your house as efficient as possible, and one of the ways you can do that is by having one large consolidated delivery per week.”

Volume sales of Tennent’s recorded an 8.8 per cent increase compared to the same period a year earlier as on-trade sales soared by 53%.

The brand lost some share in both the on-trade and off-trade channels, with sales through pubs and restaurants 2.1 percentage points lower than a year earlier at 35.8% of the market by volume. Off-trade sales through supermarkets and shops stood at 23%, down from 24.3% a year earlier.

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C&C said share losses in the off-trade have narrowed in the latest three months. It also noted that in spite of these losses, Tennent’s volume sales still beat those of its two closest competitors by 20%.

Mr Forde said the cost pressures faced by C&C should be “manageable” following a recent 3.5% increase in prices charged to its customers. While petrol prices have eased, the cost of other goods such as aluminium, malted barley and glucose has remained stubbornly elevated.

“We think that the cost pressure that we face is manageable with reasonable price increases in the market,” he said. “We would love to reduce prices to customers, but certainly I think in the next six to 12 months we are going to see continued input cost pressure.”

He added: “The UK consumer in the last six or eight weeks has been most unsettled by the political uncertainty in Great Britain. Hopefully that is maybe past us but rising interest rates [and] threats of increases in mortgage levels is very unsettling so we are hoping there will now be a bit of stability and a more normalized Christmas trading period.”