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Bulmers-maker C&C returns to profit as restrictions ease

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Bulmers-maker C&C has refused to rule out price increases in the Irish market amid rising inflation.

In Britain, C&C, which manufactures, markets and distributes beer, cider, wine, spirits and soft drinks, earlier this month told customers it would be increasing prices by 3.5pc.

“There is no doubt that we are on the inflation upcycle, and you don’t need to be a rocket scientist to determine that oil prices have gone to the roof, gas prices are going through the roof, aluminium prices have exploded in the last number of months and… labour costs are on the way up,” said David Forde, chief executive of C&C.

“I don’t think that’s a surprise to our customers. They understand the input costs pressure is absolutely genuine, and in the way we have had to increase prices in the UK. I don’t think there is a significant difference in what is being experienced in the UK and what is being experienced in Ireland.”

Any potential price increase would come into effect “at the appropriate time”.

With supply chains under increasing pressure, Mr Forde said there is “certainly a challenge, more notably in the UK than in Ireland”. He said there is a shortage of staff across the market – although the shortage of HGV drivers is the headline .

“We are feeling it in truck drivers… in our warehouses, and we are having to work and collaborate with customers to address that.”

For the first half of its financial year 2022, C&C reported operating profit of €8.3m in Ireland, with net revenue up 26pc here to €115m, helped by an easing of Covid restrictions.

Compared to 2019, the Irish market is “around the 90pc range”.

“Broadly speaking… outlets that are trading are heading back up on an averaging basis in or around that level.”

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Overall, C&C group reported an operating profit of €16m for the six-months to August 31, a swing on the loss of €13.2m in the same period last year.

The profit includes furlough income and temporary salary reductions of €5.2m.

C&C discontinued the use of government furlough in June when the business returned to profit.

The company generated annualised savings of €9m in the first half of the year compared to its pre-Covid cost base. C&C has a target to deliver total of €18m annualised savings in its financial year 2022.

Net revenue increased 65pc to €657.3m, reflecting the progressive reopening of the hospitality sector during the middle of this year, according to interim results from the group.

“We are encouraged by how quickly the on-trade recovered and we are pleased to report that trading in the first half has been ahead of plan and our inherent cash-generating strengths are reflected in the return of the business to cash generation from June 2021,” Mr Forde said.

The company had net debt and liquidity of €245.8m and €474.9m respectively at the end of August.

Assuming current trading conditions remain, C&C expects to deliver financial year 2022 operating profit in the range of €50m-€55m.


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