SHARES in the drinks company that owns Glasgow-based Tennent’s Lager plunged nearly nine per cent after issuing a profit warning this morning.
Dublin-based C&C Group, which also makes Magners Irish cider, cited “consumer spending pressure” and the impact of rail strikes as drags on its performance in an update to the stock market this morning.
C&C said it now expects full-year operating profit to be in the range of €84-€88 million, despite year-on-year net revenue growth of around 20% in December. The previous consensus among analysts was for profits of €95m.
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The company said: “We believe consumer spending pressure is a driver behind this trading performance and will continue to be so in the near-term. Further, trading has been significantly impacted by rail network strikes in the UK, reducing footfall in urban areas over the key festive trading period.”
The update from C&C comes the hospitality industry continues to face acute pressure from a crippling cost crisis, which has largely arisen from the surge in energy bills following Russia's invasion of Ukraine.
Industry bodies reacted with disappointment earlier this week when Chancellor of the Exchequer Jeremy Hunt cut the amount of support for business from elevated energy bills.
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The Chancellor announced that the current energy relief scheme will be replaced by a new discount model based on the unit costs of gas and electricity, which the Federation of Small Businesses in Scotland said will mean “businesses are once more again at the mercy of the global events that drive those prices”.
The industry also reiterated concerns this week over a lack of relief from business rates and costs associated with the controversial deposit return scheme, which is due to go live in August despite widespread criticism over the proposals.
C&C added this morning: “Despite the near-term challenges, the group will continue to operate well within its stated leverage range (less than 2.0x) and this coupled with our strong free cash flow generation will ensure that our stated capital allocation objectives are maintained. C&C will continue to review and drive efficiencies throughout our business while ensuring we deliver a market leading offering to our customers and consumers.”
Shares in C&C were trading at 168.1p, down 15.7p or 8.54%, at 11.30am this morning.
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