REG - C&C Group Plc - Interim Results
29/10/2024 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241029:nRSc9444Ja&default-theme=true
RNS Number : 9444J C&C Group Plc 29 October 2024
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2024
Earnings in line and on track to meet full year expectations
Reconfirm commitment to returning €150m to shareholders over the next three
years
29 October 2024 | C&C Group plc ('C&C' or the 'Group'), a leading,
vertically integrated premium drinks company which manufactures, markets and
distributes branded beer, cider, wine, spirits and soft drinks across the UK
and Ireland announces results for the six months ended 31 August 2024
('HY2025'). The Group's portfolio includes market-leading brands such as
Tennent's, the #1 beer brand in Scotland, Bulmers the #1 cider brand in
Ireland, as well as a growing collection of curated premium craft beers and
ciders, together with Matthew Clark and Bibendum ('MCB'), the leading
distributor to the UK hospitality sector.
FINANCIAL HIGHLIGHTS
C&C is pleased to report results in line with expectations despite poor
summer weather and subdued market conditions in HY2025.
· Overall marginal net revenue decline of -3%(i) reflecting the
disposal of our non-core soft drinks business in Ireland, lower contract
brewing volumes and softer cider volumes in GB.
· Encouraging net revenue growth of +2%(ii) in Matthew Clark &
Bibendum demonstrating customer recovery and growth momentum in our
distribution channel.
· Underlying Group operating profit before exceptional items
increased +29% (+€9.1m) to €40.3m in HY2025(iii).
· Operating margins improve to 4.7% with initiatives to drive group
wide efficiencies underway and progressing well.
· Continued balance sheet strength with leverage ratio of 1.1x(iv)
and improvement in free cashflow generation.
OPERATING HIGHLIGHTS
· Core brands Tennent's and Bulmers gain on-trade market share(vi)
further cementing market-leading positions.
· Premium brands delivered double-digit revenue growth with
Menabrea +17% and Orchard Pig +20%.
· MCB August customer numbers +10%(v) year on year with high
customer retention levels.
· Distribution service levels consistently high, >97% deliveries
made On Time and >95% delivered In Full(vii); transition to a new state-of
the-art depot facility at Orbital West, London facilitating subsequent service
level improvements.
OUTLOOK & CAPITAL RETURNS
· On track to achieve €80m operating profit for FY2025 with cost
efficiencies in H1 to further enhance margins in H2.
· We retain a target of €100m operating profit in FY2027.
· Interim dividend of 2.00c (HY2024: 1.89c) up 6% vs prior year,
demonstrating commitment to a progressive dividend policy.
· Share buybacks and dividends announced to date represent €38m
of our commitment to return a minimum of €150m to shareholders over the next
three years.
· Appointed Feargal O'Rourke (15 August 2024) and Sanjay Nakra (19
September 2024) as Non-Executive Directors.
· The recruitment process for a new CEO is underway.
FINANCIAL KPIs
€m HY2025 HY2024 Previously Published vs HY2024 Previously Published HY2024 Restated* vs HY2024 Restated
Net Revenue 861.4 886.9 (25.5) 879.1 (17.7)
Adjusted EBITDA 57.0 46.6 10.4 54.1 2.9
Operating Profit before Exceptional Items 40.3 31.2 9.1 38.7 1.6
Operating Margin 4.7% 3.5% +1.2 ppts 4.4% +0.3 ppts
Profit Before Tax 28.6 21.4 7.2 28.9 (0.3)
Basic Earnings per Share 3.3c 3.2c 0.1c 4.7c (1.4c)
Adj. Earnings per Share 5.9c 4.0c 1.9c 5.7c +0.2c
Free cash flow (excluding exceptionals) 19.4 0.7 18.7 0.7 18.7
Net Debt (including leases) 203 190 13 193 10
Net Debt (excluding leases) 81 108 (27) 107 (26)
Net Debt / Adj. EBITDA (excluding leases) 1.1x 1.6x (0.5x) 1.5x (0.4x)
Constant currency basis
* As previously reported in June 2024, the Group identified a number of
accounting errors which have resulted in the restatement of results for the 31
August 2023 (HY2024) reporting period. The net result of these restatements
has been the reallocation of €7.6m of operating profit from H2 to H1 in
FY2024. Further details of this are provided in Note 15.
Ralph Findlay, Chair and Chief Executive Officer, commented:
"I am pleased to report earnings in-line with expectations in HY2025 as we
rebuild performance and momentum within the business. Despite unfavourable
summer weather, our brands demonstrated inherent appeal and resilience with
both Tennent's and Bulmers growing market share and Menabrea and Orchard Pig
achieving double digit revenue growth.
I am also encouraged that we achieved significant growth in distribution in
Matthew Clark and Bibendum with customer numbers in August +10% vs the prior
year. We continue to make improvements with regards to customer service, which
underpins our customer acquisition strategy.
As we enter the busy Christmas and New Year trading period, we are committed
to delivering outstanding service, winning customers, continuing to simplify
the business and to further improve operating efficiency."
ENDS
Notes to Highlights
(i.-)3% vs previously published net revenue on constant currency basis, -2% vs
restated net revenue on constant currency basis.
(ii.)+2% vs previously stated net revenues on constancy currency basis
(iii.)+29% vs previously published operating profit on constant currency
basis, +4% vs restated operating profit on constant currency basis
(iv.)Net Debt / Adjusted EBITDA post-IFRS 16
(v.)England & Wales on trade delivered outlets Aug-24 vs Aug-23
(vii.)CGA Scotland On Trade Beer 28 w/e 07.09.24, CGA Ireland Total Cider On
Trade 26 w/3 31.08.24
(viii.)On-Time and On-Time In-Full Metrics from 1.03.24 - 31.08.24
OPERATING REVIEW
BRANDED
Branded business revenue declined 9.1% in the period to €172.3m. This
reflects a stable performance from our core brands and growth in our premium
brand portfolio, offset by decline in the GB cider portfolio and lower
contract manufacturing volume. Operating profit was €26.1m up +1.1% year
on year against previously published results and down 30% against the restated
comparator which reallocated profit from H2 to H1 (see note 15).
€m HY2025 HY2024 Previously Published vs HY2024 Previously Published HY2024 Restated vs HY2024 Restated
Constant currency
Net revenue 172.3 189.5 -9.1% 181.7 -5.2%
- Price / mix impact 16.2
- Volume impact (33.4)
Operating profit 26.1 25.8 1.1% 37.3 -30%
Operating Margin 15.1% 13.6% +1.5 ppts 20.6% (5.4 ppts)
GB
Tennent's markedly outperformed total beer performance in the on-trade
channel, increasing market share by a further 5ppts in the latest 12-week
summer period(i) to 10 August 2024. Tennent's net revenues were broadly flat
in the period with pricing offsetting a volume decline of 7%. Brand investment
in the period centred on the Euro 2024 football tournament, leveraging
Tennent's sponsorship of the Scottish FA team. 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 -9.3%. Whilst the inclement
weather undoubtedly impacted beer consumption, the 200,000 Scottish fans who
travelled to Germany(ii) will also have had a temporary impact on the market.
From 1 January 2025, we will reassume control and distribution of Magners and
our wider cider portfolio in Great Britain as part of a wider reorganisation
of our trading relationship with BBG. This will provide us with the
opportunity to strengthen cider brand performance as we plan to stabilise and
enhance performance. Magners volumes have remained under pressure in the
period, down 10%, with the lack of sunshine in the summer months influencing
cider consumption in GB, particularly in the off-trade channel where total
cider volumes are -8.5%(iii) in the most recent 12-week period.
Our premium brands delivered significant revenue growth in the period, with
Menabrea +17% and Orchard Pig +20%. Development of these brands, particularly
in England and Wales, remains a strategic focus for the business, with the
white-space opportunity representing meaningful value growth. Accordingly, we
are currently increasing investment in these brands as we seek to capitalise
on growth in the premium segment of the market.
Ireland
Bulmers net revenues in the period were -3.5%. As in GB, the summer weather
in Ireland was poor and affected total cider market volumes, with both on and
off trade volumes in decline at -13.5% and -8.1% respectively in the latest
12-weeks(iv). Positively, Bulmers has offset some of the category declines
with share gains in HY2025 in the on-trade(v)..
Operational
As part of our objective to streamline and simplify business operations, we
disposed of our soft drinks business in the period by way of a management
buy-out. This portfolio was becoming increasingly peripheral to our strategic
ambitions and presented an opportunity to remove complexity from our network.
DISTRIBUTION
Performance in Distribution has been encouraging in HY2025 with recovery in GB
following last year's ERP disruption. Ongoing commitment to improving customer
service and experience underpins our customer acquisition strategy. Volume
performance was influenced by category mix changes as consumers gravitated
towards beer at the expense of higher margin categories including wines and
spirits. Despite this, operating profit margins improved in the first half
as we rebuild towards a 3.5% target.
€m HY2025 HY2024 Previously Published vs HY2024 Previously Published HY2024 Restated vs HY2024 Restated
Constant currency
Net revenue 689.1 697.4 (1.2%) 697.4 (1.2%)
- Price / mix impact (41.7)
- Volume impact 33.5
Operating profit 14.3 5.4 164% 1.4 952%
Operating Margin 2.1% 0.8% +1.3 ppts 0.2% +1.9 ppts
GB
Net revenue of the GB distribution business was broadly flat year on year,
reflecting sales mix changes offset by significant volume growth, as described
above. We expect momentum to continue into the second half-year,
underpinning our expectations for a more significant H2 weighting in terms of
profit, supported by the cost efficiency actions, initiated in H1.
Matthew Clark and Bibendum customer numbers were +10% as at 31 August 2024,
with high customer retention, customer gains and expansion of key customers
such as Admiral Taverns contributing to this positive performance. While
customer service is a major factor, product range is also important and in the
first half-year we introduced the award-winning Sir Davis Whiskey by Beyoncé
on an exclusive basis to the off trade in Scotland, demonstrating our
outstanding distribution capability.
In the wider market GB on trade volumes were down 2.8% on an MAT basis, with
declines in wine (-7.9%) and spirits (-10.7%) reflecting pressure on
discretionary spend. Encouragingly, C&C outperformed the market with share
of GB on trade volume up 0.7ppts on an MAT basis, and by 0.9% in the past
12-weeks (+0.9ppts)(vi.)
Ireland
Net revenue of the Ireland ("IOI") distribution business was down 6.5% with
volumes down 10.1% driven primarily by the performance of Budweiser Brewing
Group ("BBG") brands. As previously announced, we have reviewed our trading
relationship with BBG such that we will transfer control and distribution of
BBG's brands in the IOI off trade to BBG and reclaim control and distribution
of our cider brands (including Magners) in England and Wales from January
2025. We will continue to supply BBG products exclusively in the on trade and
to select customers in the off trade. We plan to reinvest in Magners in the
second half, ready for the summer season and invigorate this brand back into
growth.
Performance in our wines and spirits wholesale business have been good, with
net revenues up 6% on modest volume growth of 2%. This is supported by the
continued roll-out of our Bibendum range in the Republic of Ireland, including
several 5-star hotels (Shelbourne Hotel - Dublin, Intercontinental Hotel -
Dublin, and Dromoland Castle - Clare).
Operational
Optimisation and investment in our distribution infrastructure remains a
critical component of our capital allocation framework and we were pleased to
transition to our new, state-of the-art Orbital West depot facility in London
in February 2024. The move has supported a sustained improvement in services
levels in HY2025. The 114k square feet site provides us with capacity to
grow our customer base in the London area and beyond. In time, this depot
will develop into our South network 'hub', allowing us to realise further
working capital efficiencies through improved stock management.
CURRENT TRADING & OUTLOOK
Trading conditions remain tough, and sentiment regarding the UK autumn Budget
(30 October 2024) has generated some consumer caution however, positively, we
have well executed plans in place for the Christmas and New Year period, as
well as encouraging trading momentum.
Furthermore, we look forward to regaining control of our cider portfolio in GB
from January and are focused on investment plans and strategic initiatives to
reinvigorate the Magners brand. More generally, we are focused on achieving
our targets for the current financial year and generating value for our
shareholders over the longer term.
About C&C Group plc
C&C Group plc is a leading, vertically integrated premium drinks company
which manufactures, markets and distributes
branded beer, cider, wine, spirits, and soft drinks across the UK and Ireland.
· C&C Group's portfolio of owned/exclusive brands include:
Bulmers, the leading Irish cider brand; Tennent's, the leading Scottish beer
brand; Magners the premium international cider brand; as well as a range of
fast-growing, premium and craft ciders and beers, including Menabrea and
Orchard Pig. C&C exports its Magners and Tennent's brands to over 40
countries worldwide.
· C&C Group has owned brand and contract manufacturing/packing
operations in Co. Tipperary, Ireland and Glasgow, Scotland.
· C&C is the No.1 drinks distributor to the UK and Ireland
hospitality sectors. Operating through the Matthew Clark, Bibendum, Tennent's
and Bulmers Ireland brands, the Group has a market-leading range, scale and
reach including an intimate understanding of the markets it serves. Together
this provides a key route-to-market for major international beverage
companies.
C&C Group is a FTSE 250 company headquartered in Dublin and is listed on
the London Stock Exchange.
Notes to Operating Review
(i.)Scotland On Trade CGA OPM, 12 w/e 10.08.24
(ii.)www.bbc.com (http://www.bbc.com) ; www.thescottishsun.co.uk
(http://www.thescottishsun.co.uk)
(iii.)CGA OPM (BWS) 12 w/e 10.08.24
(iv.)ROI On Trade CGA OPM 12 w/e 31.08.24, ROI Off Trade CGA OPM 12 w/e
31.08.24
(v.)CGA Ireland Total Cider On Trade 26 w/3 31.08.24
(vi.)CGA OPM (BWS) 52 w/e 10.08.24; C&C GB distribution (BWS) 52 w/e
10.08.24
Note regarding forward-looking statements
This announcement includes forward-looking statements, including statements
concerning current expectations about future financial performance and
economic and market conditions which the Group believes are reasonable.
However, these statements are neither promises nor guarantees, but are subject
to risks and uncertainties, that could cause actual results to differ
materially from those anticipated.
Certain figures contained in this announcement, including financial
information, may have been subject to rounding adjustments and foreign
currency conversions. Accordingly, in certain instances, the sum or percentage
change of the numbers contained in this announcement may not conform exactly
to the total figure given.
Webcast Details | Analysts & Institutional Investors
C&C Group plc will host a webcast for analysts and institutional
investors, today, 29 October 2024, at 0830 hours. Please contact
candccapmkts@instinctif.com (mailto:candccapmkts@instinctif.com) for webcast
joining details.
Contacts
C&C Group plc
Email: investor.relations@candcgroup.ie
(mailto:investor.relations@candcgroup.ie)
Investors, Analysts & UK Media:
Instinctif Partners
Justine Warren / Hannah Scott / Amelia Thorn
Tel: 020 7457 2020
Email: C&CGeneral@instinctif.com (mailto:C&CGeneral@instinctif.com)
Irish Media
FTI Consulting
Jonathan Neilan / Paddy Berkery / Niamh O'Brien
Tel: +353 86 231 4135 / +353 86 602 5988 / +353 87 707 8379
Email: C&CGroup@fticonsulting.com (mailto:C&CGroup@fticonsulting.com)
Financial Review
A summary of results for the six months ended 31 August 2024 is set out in the
table below:
Period ended 31 August 2024(i) Period ended 31 August 2023(i CC Period ended 31 August 2023(i)(ii)
(Restated) (Restated)
€m €m €m
Net revenue 861.4 864.8 879.1
Operating profit 40.3 38.1 38.7
Net finance costs (11.7) (9.8)
Profit before tax 28.6 28.3
Income tax expense (5.9) (6.1)
Profit for the financial period 22.7 22.2
Basic EPS 3.3 cent 4.7 cent
Adjusted basic EPS(vii) 5.9 cent 5.7 cent
Diluted EPS 3.3 cent 4.6 cent
Adjusted diluted EPS(iii) 5.9 cent 5.7 cent
Net revenue decreased 0.4% on a reported basis or 2.0% on a constant currency
basis to €861.4m. Revenue growth reflects gains in market share for
Tennent's and Bulmers and strong growth in premium brands, together with
customer expansion and improved service levels across the Group's Distribution
business. The operating profit of the Group, before exceptional items, for the
six-month period to 31 August 2024 was €40.3m compared to €38.1m in the
prior period aided by the Group's Transformation programme driving
efficiencies and improving productivity.
The Group maintains a robust liquidity((vi)) position with available
liquidity((vi)) of €367.9m at 31 August 2024 (31 August 2023: €341.6m).
The reported net debt: Adjusted EBITDA ratio was 2.1x. The Group's financial
covenants are calculated on a pre-IFRS 16 basis, and the outcomes for these as
at 31 August 2024 were net debt (excluding leases): Adjusted EBITDA ratio of
1.1x and an interest cover ratio of 4.6x.
Basic EPS has decreased by 29.8% compared to the same prior financial period,
with adjusted diluted EPS increasing by 5.4%.
Prior year results have been restated as previously described in the Group's
FY2024 Annual report published on 27 June 2024. These adjustments in aggregate
represented an underlying operating profit adjustment credit of €7.6m before
exceptional items and further detail is provided in Note 15 of these interim
financial statements.
Finance costs, income tax and shareholder returns
Net finance charges before exceptional items of €11.7m (31 August 2023:
€9.8m) were incurred in the six months ended 31 August 2024. Of the €11.7m
net finance cost, €2.8m relates to the Group's debtor securitisation
facility (31 August 2023: €2.3m), €1.9m relates to USPP notes (31 August
2023: €1.8m), €3.5m relates to the Group's main bank lending facilities
(31 August 2023: €2.3m), €3.6m relates to lease interest (31 August 2023:
€1.6m), €0.4m relates to amortisation of prepaid debt issue costs (31
August 2023: €0.9m) and (€0.5m) relates to other interest income (31
August 2023: €0.9m).
The Group also recorded a net €0.1m (31 August 2023: €0.9m) of exceptional
finance costs which comprised €0.2m of costs associated with the interest
discount impact on onerous contract provisions from prior periods, offset by
€0.1m of income earned on the promissory notes which were a component of the
consideration on disposal of the Group's US subsidiary, Vermont Hard Cider
Company. In the period to 31 August 2023, exceptional finance charges of
€1.0m were incurred directly associated with increased utilisation of the
Group's debtor securitisation facility as a consequence of increased cash
requirements from the impact associated with the ERP system implementation
disruption in the Group's GB distribution business.
Income tax expense for the period, excluding the impact of exceptional items,
was €5.9m (31 August 2023: €6.1m). The income tax credit with respect to
exceptional items was €2.4m (31 August 2023: €1.0m). In line with IAS 34
Interim Financial Reporting the effective tax rate for the period ended 31
August 2024 was 21.3% (31 August 2023: 21.8%). The effective tax rate is
influenced by several factors including the mix of profits and losses
generated across the main geographic locations.
The Board declared a full and final dividend of 3.97 cent per ordinary share
(2023: 3.79 cent per ordinary share) which was paid to shareholders on 23
August 2024 equating to a distribution of €13.4m (2023: €14.9m), all of
which was paid in cash.
The Board has announced an interim dividend of 2.00 cent per share for the
period ended 31 August 2024. Payment will be on 13 December 2024 to ordinary
shareholders registered at the close of business on 15 November 2024. Using
the number of shares in issue at 31 August 2024 and excluding those shares for
which it is assumed that the right to dividend will be waived, this would
equate to a distribution of €7.7m. There is no scrip dividend alternative
proposed
Exceptional items
The Group has incurred an exceptional charge on a before tax basis of €12.2m
in the current financial period including €7.6m in respect of strategic
restructuring programmes for logistics (€4.2m) and group transformation
(€3.4m). The logistics charge follows the closure of two distribution
centres in the UK, Crayford and Newbridge, during the period and group
transformation costs include the closure of the Group's Borrisoleigh depot in
Ireland following its exit from the soft drinks business during FY24 and
further on-going redundancy costs for right-sizing of the business moving
forward. An additional €4.2m of cost was incurred for risk management and
control reviews arising from restatement issues associated with prior
reporting periods, further detail of which is set out in note 4 of these
interim financial statements.
Cashflow
Summary cash flow for the six months ended 31 August 2024 is set out in the
table below. Free cashflow has improved by €15.8m compared to the prior
period, which was significantly impacted by disruption resulting from issues
with the ERP system implementation in the Group's GB distribution business.
The Group generated a free cash inflow of €19.4m pre-exceptional and a
related free cash flow conversion of 34%.
The Group maintains a £150.0m receivables securitisation facility (£120.0m
committed, £30.0m uncommitted) renewable annually in May. As at 31 August
2024, €115.6m of this facility was drawn (29 February 2024, €105.9m; 31
August 2023 €121.7m).
Six months ended 31 August 2024 Six months ended 31 August 2023
(Restated)
€m €m
Operating profit 28.5 34.1
Exceptional items 11.8 4.0
Operating profit before exceptional items 40.3 38.1
Amortisation and depreciation charge 16.7 15.4
Adjusted EBITDA((iv)) 57.0 53.5
Cash flow summary 57.0 53.5
Adjusted EBITDA((iv))
Tangible / intangible net expenditure (9.3) (12.4)
Advances to customers 1.1 (0.9)
Working capital movement (15.3) (27.8)
Income taxes paid (3.2) (2.9)
Exceptional items paid (7.1) (3.2)
Net finance costs paid (11.4) (9.0)
Exceptional finance costs paid - (1.0)
Pension contributions paid (0.2) (0.2)
Other* 0.7 0.4
Free Cash Flow((v)) 12.3 (3.5)
Free Cash Flow((v)) exceptional cash outflow 7.1 4.2
Free Cash Flow((v)) excluding exceptional cash outflow 19.4 0.7
Reconciliation to Condensed Consolidated Cash Flow Statement
Free Cash Flow((v)) 12.3 (3.5)
Proceeds from sale of asset held for sale 1.2 -
Dividends paid (13.4) (14.9)
Payment of lease liabilities (8.9) (10.9)
Drawdown of debt 5.0 10.0
Payment of debt issue costs - (2.3)
Share sale/buy back (14.8) -
Net (decrease)/increase in cash (18.6) (21.6)
* Other primarily relates to the add back of share options, pensions debited
to operating profit, and net profit on disposal of property, plant and
equipment.
Pensions
In compliance with IFRS, the net assets and actuarial liabilities of the
various defined benefit pension schemes operated by Group companies, computed
in accordance with IAS 19 Employee Benefits, are included on the Condensed
Consolidated Balance Sheet as retirement benefits.
At 31 August 2024 the Group had a retirement benefit surplus of €33.9m (31
August 2023 net surplus: €37.8m, 29 February 2024 net surplus: €34.3m).
All schemes are closed to new entrants. There are 2 active members in the
Northern Ireland ('NI') scheme and 44 active members (less than 10% of total
membership) in the Republic of Ireland ('ROI') schemes. The Group has an
approved funding plan in place, the details of which are disclosed in Note 11
of the Condensed Consolidated Interim Financial Statements. The most recent
actuarial valuations of the ROI defined benefit pension schemes were carried
out with an effective date of 1 January 2024 while the date of the most recent
actuarial valuation of the NI defined benefit pension scheme was 31 December
2023.
Arising from the formal actuarial valuations of the Group's staff defined
benefit pension scheme, the Group committed to contributions of €287,000 per
annum commencing in 2024 and increasing at a rate of 2.3% each year
thereafter. This will be reviewed at the next actuarial valuation, which is
due to be completed in the normal course of events on 31 October 2027. There
is no funding requirement with respect to the Group's ROI executive defined
benefit pension scheme or the Group's NI defined benefit pension scheme, both
of which are in surplus.
The key factors influencing the change in valuation of the Group's defined
benefit pension scheme obligations are as outlined below:
€m
Net surplus at 29 February 2024 34.3
Employer contributions paid 0.2
Current service cost (0.2)
Net interest cost on scheme liabilities/assets 0.7
Experience gains and losses on scheme liabilities (0.1)
Effect of changes in financial assumptions -
Actual return less Interest income on scheme assets (1.1)
Translation adjustment 0.1
Pension surplus at 31 August 2024 33.9
The decrease in the net surplus of the Group's defined benefit pension schemes
from the 29 February 2024 to 31 August 2024, as computed in accordance with
IAS 19 Employee Benefits relates to an increase in liabilities due to a
marginal decrease in bond yields over the six-month period.
Foreign currency and comparative reporting
Six month period ended Six month period ended 31 August 2023
31 August 2024
Translation exposure EUR:GBP 0.841 0.868
EUR:USD 1.109 1.089
Comparisons for revenue, net revenue and operating profit before exceptional
items for each of the Group's reporting segments are shown at constant
exchange rates for transactions by subsidiary undertakings in currencies other
than their functional currency and for translation in relation to the Group's
sterling (GBP) and US dollar (USD) denominated subsidiaries by restating the
prior period at current period effective rates.
The impact of restating currency exchange rates on the results for the period
ended 31 August 2023 is as follows:
Period ended
Period ended 31 August 2023
31 August 2023 (Restated)
(Restated) Constant currency
€m €m
Revenue
Branded 269.5 273.1
Distribution 786.4 799.7
Total 1,055.9 1,072.8
Net revenue
Branded 179.3 181.7
Distribution 685.5 697.4
Total 864.8 879.1
Operating profit((i))
Branded 36.8 37.3
Distribution 1.3 1.4
Total 38.1 38.7
Relative foreign exchange rate movements in the 6-month period would give rise
to a negligible transactional foreign exchange impact.
Notes to the Financial Review are set out below
(i) Before exceptional items.
(ii) H1 FY2023 comparative adjusted for constant currency
(H1 FY2023 translated at H1 FY2024 FX rates) as outlined on page 10.
(iii) Adjusted diluted earnings per share ('EPS') exclude
exceptional items, as outlined in Note 5 of the Group's Condensed Consolidated
Interim Financial Statements.
(iv) Adjusted EBITDA is earnings before exceptional items,
finance income, finance expense, tax, depreciation, amortisation charges and
equity accounted investments' profit/(loss) after tax. A reconciliation of the
Group's operating profit to adjusted EBITDA is set out on page 8.
(v) Free Cash Flow ('FCF') that comprises cash flow from
operating activities net of tangible and intangible cash outflows/inflows
which form part of investing activities. FCF highlights the underlying cash
generating performance of the ongoing business. FCF benefits from the Group's
purchase receivables programme which contributed €115.6m (29 February 2024:
€105.9m; 31 August 2023: €121.7m) to cash in the period. A reconciliation
of FCF to net movement in cash per the Group's Cash Flow Statement is set out
on page 8.
(vi) Liquidity is defined as cash plus undrawn amounts under
the Group's revolving credit facility.
(vii) Adjusted basic earnings per share ('EPS') exclude
exceptional items, as outlined in Note 5 of the Group's Condensed Consolidated
Interim Financial Statements.
Principal risks and uncertainties
We have an established risk management process to identify, assess and monitor
the principal risks that we face as a business. We have performed a robust
assessment of the principal risks facing the Group, including those that would
threaten its business model, future performance, solvency or liquidity.
The Directors consider that the principal risks and uncertainties which could
have a material impact on the Group's performance in the remaining 26 weeks of
the financial year remain substantially the same as those stated on pages 34
to 40 of the Group's Annual Financial Statements for the year ended 29
February 2024, which are available on the Group's website,
http://www.candcgroupplc.com.
Directors' responsibility statement in respect of the half-yearly financial
report for the six months ended 31 August 2024
We confirm our responsibility for the half-yearly financial report in
accordance with the Disclosure Guidance and Transparency Rules ('DTR') of the
Financial Conduct Authority ('FCA') and with IAS 34 Interim Financial
Reporting as adopted by the EU, and that to the best of our knowledge:
· the condensed set of financial statements comprising the
Condensed Consolidated Income Statement, the Condensed Consolidated Statement
of Comprehensive Income, the Condensed Consolidated Balance Sheet, the
Condensed Consolidated Cash Flow Statement, the Condensed Consolidated
Statement of Changes in Equity and the related notes have been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by the EU;
· the interim management report includes a fair review of the
information required by:
(a) DTR 4.2.7R,
· being an indication of important events that have occurred during
the first six months of the financial year and their impact on the condensed
set of financial statements; and,
· a description of the principal risks and uncertainties for the
remaining six months of the year; and
(b) DTR 4.2.8R,
· being related party transactions that have taken place in the
first six months of the current financial year and that have materially
affected the financial position or performance of the Group during that
period; and,
· any changes in the related party transactions described in the
last Group Annual Financial Statements that could have a material effect on
the financial position or performance of the Group in the first six months of
the current financial year.
The Directors of C&C Group plc, and their functions, are listed in the
Group's Annual Financial Statements for the year ended 29 February 2024, with
the exception of the following changes:
· Andrew Andrea was appointed as Chief Financial Officer and as an
Executive Director on 1 March 2024. In addition, on 11 July 2024, Andrew was
appointed to the newly established role of Chief Financial and Transformation
Officer;
· Patrick McMahon stepped down as Chief Executive Officer on 6 June
2024;
· Ralph Findlay was appointed as Chief Executive Officer and
stepped down as Chair of the Nomination Committee on 7 June 2024;
· Chris Browne was appointed as Chair of the Nomination Committee
on 7 June 2024;
· Feargal O' Rourke was appointed as an independent, Non-Executive
Director and a member of the Audit and Nomination Committee's on 15 August
2024 and 23 October 2024 respectively;
· Sanjay Nakra was appointed as an independent, Non-Executive
Director on 19 September 2024 and a member of the ESG and Audit Committee's on
23 October 2024.
The Group's auditor has not audited or reviewed the Condensed Consolidated
Interim Financial Statements or the remainder of the half-yearly financial
report.
On behalf of the Board
Ralph Findlay
Andrew
Andrea
Chair & Chief Executive
Officer
Chief Financial & Transformation Officer
29 October 2024
Condensed Consolidated Income Statement (unaudited)
for the six months ended 31 August 2024
Six months ended 31 August 2024 Six months ended 31 August 2023
(Restated)
Notes Before Exceptional Before Exceptional
exceptional items exceptional items
items (Note 4) Total items (Note 4) Total
€m €m €m €m €m €m
Revenue 2 1,040.9 - 1,040.9 1,055.9 - 1,055.9
(179.5) - (179.5) (191.1) - (191.1)
Excise duties
861.4 - 861.4 864.8 - 864.8
Net revenue 2
Operating costs (821.1) (11.8) (832.9) (826.7) (4.0) (830.7)
Group operating 40.3 (11.8) 28.5 38.1 (4.0) 34.1
Profit 2
Disposal Group impairment 4 - (0.3) (0.3) - - -
1.1 0.1 1.2 - 0.1 0.1
Finance income
Finance expense (12.8) (0.2) (13.0) (9.8) (1.0) (10.8)
Profit before tax 28.6 (12.2) 16.4 28.3 (4.9) 23.4
Income tax (expense)/credit 3 (5.9) 2.4 (3.5) (6.1) 1.0 (5.1)
22.7 (9.8) 12.9 22.2 (3.9) 18.3
Group profit for the financial period attributable to equity shareholders
Basic earnings per share (cent) 3.3c 4.7c
5
Diluted earnings per share (cent) 3.3c 4.7c
5
All of the results are related to continuing operations.
Condensed Consolidated Statement of Comprehensive Income
for the six months ended 31 August 2024 (unaudited)
Notes Six months ended Six months ended
31 August 2024 31 August 2023 (Restated)
€m
€m
Other comprehensive income:
Items that may be reclassified to Income Statement in subsequent years:
Foreign currency translation differences arising on the net investment in 6.9 10.1
foreign operations
(Loss)/gain relating to cash flow hedges - (0.6)
Items that will not be reclassified to Income Statement in subsequent years:
Actuarial loss on retirement benefits 11 (0.8) (5.4)
Deferred tax credit/(charge) on actuarial (loss)/gain on retirement benefits 0.2 0.7
Net gain/(loss) recognised directly within Other Comprehensive Income 6.3 4.8
Group profit for the financial period 12.9 18.3
19.2 23.1
Total comprehensive income for the financial period
Condensed Consolidated Balance Sheet (unaudited)
as at 31 August 2023
Notes As at
As at 31 August 2023 As at
31 August 2024 (Restated) 29 February 2024
€m €m €m
ASSETS
Non-current assets
Property, plant & equipment 6 264.7 229.2 247.7
Goodwill & intangible assets 7 525.7 649.5 521.9
Equity accounted investments/financial assets 1.4 1.4 1.4
Retirement benefits 11 33.9 37.8 34.3
Deferred tax assets 30.3 25.6 29.4
Financial assets 4.8 5.3 4.9
Trade & other receivables 35.9 42.6 37.0
896.7 991.4 876.6
Current assets
Inventories 171.8 190.5 170.7
Trade & other receivables 195.0 264.9 149.1
Current income tax assets 1.7 1.8 2.0
Financial assets 0.7 0.7 0.7
Cash 142.9 96.6 160.1
512.1 554.5 482.6
Assets held for sale 7.6 - 8.4
519.7 554.5 491.0
1,416.4 1,545.9 1,367.6
TOTAL ASSETS
EQUITY
Equity share capital 4.0 4.0 4.0
Share premium 347.2 347.2 347.2
Other reserves 97.4 91.5 89.2
Treasury shares (36.3) (36.2) (36.3)
Retained income 167.0 324.9 182.9
Total Equity 579.3 731.4 587.0
LIABILITIES
Non-current liabilities
Lease liabilities 103.3 67.5 90.8
Interest bearing loans & borrowings 8 225.0 204.0 218.7
Other financial liabilities 6.0 - 5.8
Provisions 8.4 15.5 7.9
Derivative financial liabilities - 0.4 -
Deferred tax liabilities 36.7 37.0 35.7
379.4 324.4 358.9
Current liabilities
Lease liabilities 18.3 18.9 19.3
Derivative financial liabilities 0.2 - 0.2
Other financial liabilities 0.8 - 1.0
Trade & other payables 434.5 464.5 397.6
Provisions 2.2 7.2 2.2
Current income tax liabilities - (0.5) -
456.0 490.1 420.3
Liabilities associated with assets held for sale 1.7 - 1.4
837.1 814.5 780.6
Total liabilities
1,416.4 1,545.9 1,367.6
TOTAL EQUITY & LIABILITIES
Condensed Consolidated Cash Flow Statement (unaudited)
for the six months ended 31 August 2024
Six months ended Six months ended
Notes 31 August 2024 31 August 2023
(Restated)
€m €m
CASH FLOWS FROM OPERATING ACTIVITIES
Group profit for the financial period 12.9 18.3
Finance income (1.2) (0.1)
Finance expense 13.0 10.8
Income tax expense 3 3.5 5.1
Depreciation of property, plant & equipment 6 15.5 14.2
Amortisation of intangible assets 7 1.2 1.2
Disposal group impairment 4 0.3 -
Net profit on disposal of property, plant & equipment 6 (0.3) (0.1)
Charge for equity settled share-based payments 1.3 1.1
Pension charged to Income Statement less contributions paid 11 (0.5) (0.9)
45.7 49.6
Increase in inventories (1.1) (24.7)
Increase in trade & other receivables (44.7) (101.8)
Increase in trade & other payables 35.8 98.0
Increase / (decrease) in provisions 0.5 0.7
36.2 21.8
Interest and similar costs paid (11.4) (10.0)
Income taxes paid (3.2) (2.9)
Net cash inflow from operating activities 21.6 8.9
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant & equipment 6 (9.3) (12.2)
Purchase of intangible assets 7 - (0.3)
Net proceeds on disposal of asset held for sale 6 1.2 -
Net proceeds on disposal of property, plant & equipment 6 - 0.1
Net cash (outflow)/inflow from investing activities (8.1) (12.4)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid 12 (13.4) (14.9)
Drawdown of debt 5.0 10.0
Share sale/buy back (14.8) -
Payment of debt issue costs - (2.3)
Payment of lease liabilities (8.9) (10.9)
Net cash outflow from financing activities (32.1) (18.1)
Net (decrease)/increase in cash (18.6) (21.6)
Reconciliation of opening to closing cash
Cash at beginning of year 160.1 115.3
Translation adjustments 1.4 2.9
Net (decrease)/increase in cash (18.6) (21.6)
Cash at end of period 142.9 96.6
A reconciliation of Net Debt is presented in Note 9.
Condensed Consolidated Statement of Changes in Equity
for the six months ended 31 August 2024
Equity share capital Share premium Other capital reserves Cash flow hedge reserve Share-based payments reserve Currency Revaluation reserve Treasury shares Retained Total
translation reserve income
€m €m €m €m €m €m €m €m €m €m
At 1 March 2024 4.0 347.2 25.8 0.3 5.6 43.1 14.4 (36.3) 182.9 587.0
Profit for the financial period - - - - - - - - 12.9 12.9
Other comprehensive income/(expense) - - - - - 6.9 - - (0.6) 6.3
Total comprehensive income - - - - - 6.9 - - 12.3 19.2
Dividend on ordinary shares (13.4) (13.4)
Purchase of own shares - - - - - - - - (14.8) (14.8)
Sale of treasury shares/purchases of shares to satisfy employee share - - - - - - - - - -
entitlements
Equity settled share-based payments - - - - 1.3 - - - - 1.3
Total transactions with owners - - - - 1.3 - - - (28.2) (26.9)
4.0 347.2 25.8 0.3 6.9 50.0 14.4 (36.3) 167.0 579.3
At 31 August 2024
Condensed Consolidated Statement of Changes in Equity - continued
for the financial year ended 29 February 2024
Equity share capital Share premium Other capital reserves Cash flow hedge reserve Share-based payments reserve Currency Revaluation reserve Treasury shares Retained
translation reserve income Total
€m €m €m €m €m €m €m €m €m €m
At 28 February 2023 (previously stated) 4.0 347.2 25.8 1.1 5.3 33.9 14.2 (34.1) 341.8 739.2
Prior period restatements 0.8 (2.3) (15.6) (17.1)
Profit for the financial period (restated) - - - - - - - - 18.3 18.3
Other comprehensive income / (expense) - - - (0.6) - 10.1 - - (4.7) 4.8
Total comprehensive income - - - (0.6) - 10.1 - - 13.6 23.1
Dividend on ordinary shares - - - - - - - - (14.9) (14.9)
Reclassification of share-based - - - - (0.2) - - - 0.2 -
payments reserve
Sale of treasury shares/purchases of shares to satisfy employee share - - - - - - - 0.2 (0.2) -
entitlements
Equity settled share-based payments - - - - 1.1 - - - - 1.1
Total transactions with owners - - - - 0.9 - - 0.2 (14.9) (13.8)
At 31 August 2023 (restated) 4.0 347.2 25.8 0.5 7.0 44.0 14.2 (36.2) 324.9 731.4
Profit for the financial period - - - - - - - - (131.8) (131.8)
Other comprehensive income/(expense) - - - (0.2) - (0.9) 0.2 - (4.0) (4.9)
Total comprehensive income / (expense) - - - (0.2) - (0.9) 0.2 - (135.8) (136.7)
Dividend on ordinary shares - - - - - - - - (7.5) (7.5)
Reclassification of share-based payments reserve - - - - (1.5) - - - 1.5 -
Sale of treasury shares/purchases of shares to satisfy employee share - - - - - - - (0.3) (0.2) (0.5)
entitlements
Transfer of Treasury Shares - - - - (0.2) - - 0.2 - -
Equity settled share-based payments - - - - 0.3 - - - - 0.3
Total transactions with owners - - - - (1.4) - - (0.1) (6.2) (7.7)
At 29 February 2024 4.0 347.2 25.8 0.3 5.6 43.1 14.4 (36.3) 182.9 587.0
Notes to the Condensed Consolidated Interim Financial Statements
for the six months ended 31 August 2024
1. Basis of preparation and accounting policies
The interim financial information presented in this report has been prepared
in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
The accounting policies and methods of computation adopted in preparation of
the Condensed Consolidated Interim Financial Statements are consistent with
the recognition and measurement requirements of IFRS as endorsed by the EU
Commission and those set out in the Consolidated Financial Statements for the
year ended 29 February 2024 and as described in those Financial Statements on
pages 189 to 204, except for the adoption of new standards, interpretations
and standard amendments effective as of 1 March 2024.
Adoption of IFRS and International Financial Reporting Interpretations
Committee (IFRIC) Interpretations
The following new standards, interpretations and standard amendments became
effective for the Group as of 1 March 2024:
· IFRS 7 Financial Instruments and IAS 7 - Statement of Cashflows -
Supplier Finance Arrangements
· IFRS 16 Leases - Lease liability in a sale and leaseback
· IAS 1 Presentation of financial statements - classification of
liabilities as current or non-current and non-current liabilities with
covenants
The new standards and standard amendments did not result in a material impact
on the Group's results.
Basis of preparation
The preparation of the interim financial information requires management to
make judgements, estimates and assumptions that affect the application of
policies and reported amounts of certain assets, liabilities, revenues and
expenses together with disclosure of contingent assets and liabilities.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised, if the revision affects only that period, or in the
period of the revision and future periods if the revision affects both current
and future periods.
These Condensed Consolidated Interim Financial Statements should be read in
conjunction with the Group's Annual Report for the year ended 29 February 2024
as they do not include all the information and disclosures required by
International Financial Reporting Standards (IFRS). The accounting policies
and methods of computation and presentation adopted in the preparation of the
Condensed Consolidated Interim Financial Statements are consistent with those
described and applied in the Annual Report for the financial year ended 29
February 2024.
The interim financial information for both the six months ended 31 August 2024
and the comparative six months ended 31 August 2023 are unaudited and have not
been reviewed by the auditors. The financial information for the year ended 29
February 2024 represents an abbreviated version of the Group's financial
statements for that year. Those financial statements contained an unqualified
audit report and have been filed with the Registrar of Companies.
The financial information is presented in Euro millions, rounded to one
decimal place. The exchange rates used in translating Balance Sheet and Income
Statement amounts were as follows:
Six months to Six months to Year ended
31 August 2024 31 August 2023 29 February 2024
Balance Sheet (Euro:Sterling closing rate) 0.841 0.857 0.857
Income Statement (Euro:Sterling average rate) 0.851 0.868 0.865
Balance Sheet (Euro:USD closing rate) 1.109 1.087 1.083
Income Statement (Euro:USD average rate) 1.084 1.089 1.083
Going concern
The Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for at least 12 months from the
date of this report. Liquidity of the Group, defined as cash and undrawn
credit facilities, as at 31 August 2024 was €367.9m.
Accordingly, the Directors continue to adopt the going concern basis in
preparing the Condensed Consolidated Interim Financial Statements.
2. Segmental reporting
The Group's business activity is the manufacturing, marketing and distribution
of branded beer, cider, wine, soft drinks and bottled water. Two operating
segments have been identified in the current financial year; Branded and
Distribution.
The Group continually reviews and updates the manner in which it monitors and
controls its financial operations, resulting in changes in the manner in which
information is classified and reported to the Chief Operating Decision Maker
("CODM"). The CODM, identified as the Executive Directors, assesses and
monitors the operating results of segments separately via internal management
reports in order to manage the business and allocate resources effectively.
Following a change in executive leadership and realignment of business
strategy, the Group has changed its operating segments from a geographical
basis to an operational methodology in the current period. The previous
segments of Ireland and Great Britain have been replaced by two new segments,
Branded and Distribution. The revised basis of segmentation reflects the
operating model of the business and in all instances the changes were deemed
necessary to better enable the CODM to evaluate the results of the business in
the context of the economic environment in which the business operates, to
make appropriate strategic decisions and to more accurately reflect the
business model under which the Group now operates in both areas. All
comparative amounts have been restated to reflect the new basis of
segmentation. The reclassification had no impact on revenue, net revenue or
operating profit reported by the Group. The identified business segments are
as follows:
(i) Branded
This segment is defined as brands either fully owned by C&C or sold by
C&C as part of a long-term distribution deal, whereby C&C are
responsible for the marketing as well as sale of the brand in the associated
geography. It includes the financial results from sale of own branded products
being principally Bulmers, Tennent's, Magners and the growing portfolio of
premium beers and ciders including Drygate Brewing, Five Lamps, Heverlee,
Menebrea and Orchard Pig.
(ii) Distribution
This segment is defined as third-party brands sold through the Group's
distribution businesses and brands where C&C act as an exclusive agent for
a brand in a specific geography. It includes the results from the Matthew
Clark and Bibendum ("MCB") business which includes third party brand
distribution, wine wholesaling and distribution, together with distribution of
private label products.
The analysis by segment includes both items directly attributable to a segment
and those, including central overheads, which are allocated on a reasonable
basis in presenting information to the CODM.
Inter-segmental revenue is not material and thus not subject to separate
disclosure.
(a) Analysis by reporting segment
Six months to 31 August 2024 Six months to 31 August 2023
Revenue Net revenue Operating profit/(loss) Revenue Net revenue Operating profit/(loss)
(Restated)
€m €m €m €m €m €m
Branded 254.5 172.3 26.1 269.5 179.3 36.8
Distribution 786.4 689.1 14.3 786.4 685.5 1.3
Total before exceptional items* 1,040.9 861.4 40.3 1,055.9 864.8 38.1
Exceptional items (Note 4) - - (11.8) - - (4.0)
Group operating profit - - 28.5 - - 34.1
Disposal Group Impairment - - (0.3) - - -
Finance income - - 1.1 - - 0.1
Finance expense - - (12.8) - - (9.8)
Exceptional finance items - - (0.1) - - (1.0)
1,040.9 861.4 16.4 1,055.9 864.8 23.4
*operating profit rounding difference Branded €26.07m; Distribution
€14.26m = €40.34m
Of the exceptional items in the current financial period, €4.9m charge
relates to Distribution (31 August 2023: €nil) and €2.5m charge relates to
Branded (31 August 2023: €2.0m charge) and €4.4m was unallocated as it did
not relate to any particular segment (31 August 2023: €2.0m).
An impairment loss of €0.3m has been recognised in the period related to the
Group's Portuguese business which was classified as a disposal group as at 29
February 2024. An agreement for sale has been reached during the period with
the transaction expected to complete in November 2024.
(b) Geographical analysis of non-current assets
Ireland Great Britain International Total
€m €m €m €m
31 August 2024
Property, plant & equipment 77.3 185.3 2.1 264.7
Goodwill & intangible assets 156.3 347.5 21.9 525.7
Equity accounted investments/financial assets 0.5 0.7 0.2 1.4
Total 234.1 533.5 24.2 791.8
Ireland Great Britain International Total
€m €m €m €m
31 August 2023
Property, plant & equipment 80.4 141.6 7.2 229.2
Goodwill & intangible assets 156.7 467.6 25.2 649.5
Equity accounted investments/financial assets 0.7 0.5 0.2 1.4
Total 237.8 609.7 32.6 880.1
The geographical analysis of non-current assets, with the exception of
Goodwill & intangible assets, is based on the geographical location of the
assets. The geographical analysis of Goodwill & intangible assets is
allocated based on the country of destination of sales at date of acquisition.
Cyclicality of interim results
Under a normal trading environment, Branded within the Group's portfolio,
particularly its cider brands, tend to have higher consumption during the
summer months, which fall within the first half of the financial year. In
addition, external factors such as weather and significant sporting events,
which traditionally take place in the summer months, will have a greater
impact on first half trading. Accordingly, trading profit is usually higher
in the first half than in the second. For Distribution, the most important
trading period in terms of sales, profitability and cash flow has been the
Christmas season, in which case the second half of the year will have a
greater impact on the Group's distribution business.
3. Income tax expense
Income tax expense for the period, excluding the impact of exceptional items,
was €5.9m (31 August 2023: €6.1m). The income tax credit with respect to
exceptional items was €2.4m (31 August 2023: €1.0m).
In line with IAS 34 Interim Financial Reporting the effective tax rate for the
period ended 31 August 2024 was 21.3% (31 August 2023: 21.8%). The effective
tax rate is influenced by several factors including the mix of profits and
losses generated across the main geographic locations.
4. Exceptional items
Six months to
Six months to 31 August 2023
31 August 2024 (Restated)
€m €m
Operating costs
Strategic programmes - logistics restructuring (a) (4.2) -
Strategic programmes - group transformation (b) (3.4) (1.5)
Professional fees - risk management and control reviews (c) (2.9) -
Director settlement arrangements (d) (1.3) (2.0)
Deposit return scheme (Scotland) (e) - (0.5)
Operating loss exceptional items (11.8) (4.0)
Disposal Group Impairment (f) (0.3) -
Finance income (g) 0.1 0.1
Finance charges (h) (0.2) (1.0)
Loss before tax (12.2) (4.9)
Income tax credit (i) 2.4 1.0
(9.8) (3.9)
Total loss after tax
a) Strategic Programmes - Logistics
As part of the previously announced long-term strategic programme to
transition to a single-tier distribution network, the Group announced the
closure of two distribution centres in Crayford and Newbridge. A charge of
€4.2m has been recognised in the period, which includes €2.6m of
redundancy costs with the balance related to dual running, stock transfer and
decommissioning costs. A total of €2.9m of this amount was paid during the
period.
b) Strategic Programmes - Group Transformation
The strategic review of the Group's structure and operations has continued
during the period related to right-sizing of the business and enabling a more
efficient governance and reporting structure. Costs of €3.4m were incurred
during the period, including redundancy costs of €2.8m and a total of
€2.2m was paid during the period. In the prior period costs of €1.5m were
incurred including redundancy costs of €0.6m and €0.9m of costs associated
with onerous contracts for apple growers were incurred,
c) Professional Fees associated with Risk Management and Control reviews
The Group incurred significant costs associated with the control issues
notified to the market on 7 June 2024 which caused the Group to defer
publication of its FY2024 annual results. The internal and external review
work and associated costs totalled €2.9m, of which €1.6m was paid during
the period.
d) Director Settlement arrangements
On 7 June 2024, it was announced that Patrick McMahon would step down as CEO
and that Ralph Findlay, in addition to his duties as Chair of the Board would
be appointed CEO. Mr McMahon agreed to remain as an employee until the end of
September to facilitate a smooth transition. The Group accrued €1.3m of
costs related to Mr McMahon stepping down as CEO. The termination arrangements
reflected the legal advice received by the Company and were consistent with
the Directors' Remuneration Policy approved by shareholders at the Annual
General Meeting in July 2021. We will engage with shareholders during the
coming months to provide further information in relation to the approach.
Similar costs of €2.0m were incurred in the prior period.
e) Deposit Return Scheme - Scotland
In the prior period, the Group wrote off balances paid during the period of
€0.5m associated with the Deposit Return Scheme ('DRS') in Scotland
following the announcement by the Scottish Government in June 2023 that the
scheme would be delayed until at least October 2025.
f) Disposal Group Impairment
Following a reassessment of the Group's supply and logistics operations for
raw materials inputs, the Group classified its Portuguese businesses, which
produce fruit concentrates, as a disposal group held for sale as at 29
February 2024. The sale agreement was signed on 11 July 2024. The sale was
approved by the Portuguese Competition Authority on 7 October 2024 and the
transaction is expected to complete in November 2024. An impairment loss of
€0.3m has been recognised in respect of the disposal group during the
period.
g) Finance income exceptional items
The Group earned finance income of €0.1m in the current financial period (31
August 2023: €0.1m) relating to promissory notes issued as part of the
disposal of the Group's subsidiary Vermont Hard Cider Company in FY2022.
h) Finance expense exceptional items
Finance charges of €0.2m have been recorded in the period reflecting the
interest impact on discounted cashflows related to the onerous contracts
provision for apple growers recorded in prior periods. In the period to 31
August 2023, the Group incurred costs of €1.0m directly associated with
increased utilisation of the Group's receivables securitisation facility as a
consequence of increased cash requirements from the impact associated with the
ERP system implementation disruption in the Group's GB distribution business.
i) Income tax credit
The tax credit in the current financial period with respect to exceptional
items was €2.4m (31 August 2023: credit €1.0m).
5. Earnings per ordinary share
Denominator computations
31 August 31 August
2024
2023
Number
Number
'000
'000
Number of shares at beginning of period 402,709 402,007
Number of shares at end of period 395,480 402,007
Weighted average number of ordinary shares, excluding treasury shares (basic) 386,690 390,992
Adjustment for the effect of conversion of options 1,323 2,010
Weighted average number of ordinary shares, including options (diluted) 388,013 393,002
Profit for the period attributable to ordinary shareholders
Six months to 31 August 2023
Six months to 31 August 2024 (Restated)
€m €m
Profit attributable to equity holders of the parent 12.9 18.3
Adjustments for exceptional items, net of tax (Note 4) 9.8 3.9
Earnings as adjusted for exceptional items,
net of tax 22.7 22.2
Basic earnings per share Cent Cent
Basic earnings per share 3.3 4.7
Adjusted basic earnings per share 5.9 5.7
Diluted earnings per share
Diluted earnings per share 3.3 4.7
Adjusted diluted earnings per share 5.9 5.6
Basic earnings per share is calculated by dividing the profit attributable to
the equity holders of the parent by the weighted average number of ordinary
shares in issue during the period, excluding ordinary shares purchased/issued
by the Company and accounted for as treasury shares (31 August 2024: 11.2m
shares; 31 August 2023 restated: 11.0m shares).
Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares outstanding to assume conversion of all dilutive
ordinary shares. The average market value of the Company's shares for purposes
of calculating the dilutive effect of share options was based on quoted market
prices for the period that the options were outstanding.
Employee share awards (excluding awards which were granted under plans where
the rules stipulate that obligations must be satisfied by the purchase of
existing shares), which are performance-based, are treated as contingently
issuable shares because their issue is contingent upon satisfaction of
specified performance conditions in addition to the passage of time. In
accordance with IAS 33, these contingently issuable shares are excluded from
the computation of diluted earnings per share where the vesting conditions
would not have been satisfied at the end of the reporting period. If dilutive
other contingently issuable ordinary shares are included in diluted EPS based
on the number of shares that would be issuable if the end of the reporting
period was the end of the contingency period. Contingently issuable shares
excluded from the calculation of diluted earnings per share totalled 2,251,203
at 31 August 2024 (156,699 at 31 August 2023).
6. Property, plant & equipment
Acquisitions and disposals
During the current financial period, the Group acquired assets of €10.0m (31
August 2023 total additions: €6.7m). Total cash outflow in the period in
relation to the purchase of property, plant & equipment amounted to
€9.3m (31 August 2023 total cash outflow: €12.2m) - the cash flows vary
from the additions as a result of the movement in accruals relating to capital
expenditure.
In the current financial period, the Group disposed of assets from the Clonmel
site with a net book value of €0.9m, for cash proceeds of €1.2m and
realised a profit of €0.3m on the disposal. These assets were classified as
assets held for sale as at 29 February 2024. In the prior financial period,
the Group disposed of assets from the Wellpark site with a net book value of
€nil, for net cash proceeds of €0.1m and realised a profit of €0.1m on
the disposal.
The Group's depreciation charge for six months to 31 August 2024 amounted to
€15.5m (31 August 2023: €14.2m).
Impairment
The carrying value of items of land & buildings and plant & machinery
are reviewed and tested for impairment at each financial year end date or more
frequently if events or changes in circumstances indicate that their carrying
value may not be recoverable. There was no impairment during the current
financial period.
7. Goodwill & intangible assets
Goodwill Brands Other intangible assets Total
€m €m €m €m
Cost
At 1 March 2023 restated 598.6 321.1 46.3 966.0
Additions - - 0.3 0.3
Reclassification to Property, plant & equipment - - (0.1) (0.1)
Translation adjustment 3.6 2.4 0.4 6.4
At 31 August 2023 602.2 323.5 46.9 972.6
Additions - - 1.7 1.7
Impairment of assets held for sale (3.3) - - (3.3)
Translation adjustment 0.1 0.1 - 0.2
At 29 February 2024 599.0 323.6 48.6 971.2
Additions - - - -
Translation adjustment 2.8 2.0 0.2 5.0
At 31 August 2024 601.8 325.6 48.8 976.2
Amortisation and impairment
At 1 March 2023 (76.2) (214.6) (31.1) (321.9)
Charge for the period ended 31 August 2023 - - (1.2) (1.2)
At 31 August 2023 (76.2) (214.6) (32.3) (323.1)
Impairment charge for the period (125.0) - - (125.0)
Charge for the period ended 29 February 2024 - - (1.2) (1.2)
At 29 February 2024 (201.2) (214.6) (33.5) (449.3)
Charge for the period ended 31 August 2024 - - (1.2) (1.2)
At 31 August 2024 (201.2) (214.6) (34.7) (450.5)
Net Book Value at 31 August 2024 400.6 111.0 14.1 525.7
Net Book Value at 29 February 2024 397.8 109.0 15.1 521.9
Net Book Value at 31 August 2023 526.0 108.9 14.6 649.5
The amortisation charge for the financial period ended 31 August 2024 was
€1.2m (31 August 2023: €1.2m; year ended 29 February 2024: €2.4m). Other
intangible asset additions of €0.3m in the prior period related to the ERP
upgrade in the Group's Distribution segment.
Brands and goodwill assets considered to have an indefinite life are reviewed
for indicators of impairment regularly and are subject to impairment testing
on an annual basis unless events or changes in circumstances indicated that
the carrying values may not be recoverable and impairment testing is required
earlier.
The value of brands and goodwill considered to have an indefinite life were
assessed for impairment at 29 February 2024 and given no material changes in
circumstances since that date, they will be formally assessed again at 28
February 2025.
8. Interest bearing loans & borrowings
31 August 2024 31 August 2023 29 February 2024
€m €m €m
Issue costs presented as assets
Unsecured loans repayable on maturity 0.6 0.6 0.6
Private Placement notes repayable on maturity 0.1 0.1 0.1
0.7 0.7 0.7
Non-current liabilities
Unsecured loans repayable on maturity (125.0) (104.7) (120.0)
Unsecured loans repayable by instalment - issue costs 2.0 1.8 2.4
Private Placement notes repayable by instalment - issue costs 0.6 0.8 0.7
Private Placement notes repayable on maturity (102.6) (101.9) (101.8)
(225.0) (204.0) (218.7)
Total borrowings (224.3) (203.3) (218.0)
Covenants
The Group's multi-currency debt facility incorporates the following financial
covenants:
· Interest cover: The ratio of Adjusted EBITDA to net interest for
a period of 12 months ending on each half-year date will not be less than
3.5:1
· Net debt (excluding leases): Adjusted EBITDA: The ratio of net
debt on each half-year date to Adjusted EBITDA for a period of 12 months
ending on a half-year date will not exceed 3.5:1
All covenants are calculated on a pre-IFRS 16 Leases basis.
The net debt (excluding leases): Adjusted EBITDA (12 month trailing) ratio was
1.1x, with interest cover (12 month trailing) of 4.6x at the current financial
period end.
9. Analysis of net debt
1 March 2024 Translation adjustment Additions/ Cash flow, net Non-cash changes €m 31 August 2024
€m €m disposals/ €m €m
remeasurement
€m
Interest bearing loans & borrowings* (218.0) (0.9) - (5.0) (0.4) (224.3)
Cash 160.1 1.4 - (18.6) - 142.9
Net debt excluding leases (57.9) 0.5 - (23.6) (0.4) (81.4)
Lease liabilities (110.1) (2.0) (18.3) 12.4 (3.6) (121.6)
Net debt including leases (168.0) (1.5) (18.3) (11.2) (4.0) (203.0)
*Interest bearing loans & borrowings as at 31 August 2024 are net of
unamortised issue costs of €3.3m.
Unamortised borrowing costs of €0.7m are presented within financial assets.
1 September 2023 restated Translation adjustment Additions/ Cash flow, net Non-cash changes €m 29 February 2024
€m €m disposals/ €m €m
remeasurement €m
Interest bearing loans & borrowings* (203.3) (0.7) - (13.9) (0.1) (218.0)*
Cash 96.6 (1.0) - 64.5 - 160.1
Net debt excluding leases (106.7) (1.7) - 50.6 (0.1) (57.9)
Lease liabilities (85.9) (0.5) (33.0) 12.5 (3.2) (110.1)
Net debt including leases (192.6) (2.2) (33.0) 63.1 (3.3) (168.0)
*Interest bearing loans & borrowings at 29 February 2024 are net of
unamortised issue costs of €3.8m.
Unamortised borrowing costs of €0.7m are presented within financial assets.
1 March 2023 restated Translation adjustment Additions/ Cash flow, net Non-cash changes €m 31 August 2023 restated
€m €m disposals/ €m €m
remeasurement
€m
Interest bearing loans & borrowings (194.2) (0.5) - (7.7) (0.9) (203.3)
Cash 115.3 2.9 - (21.6) - 96.6
Net debt excluding leases (78.9) 2.4 - (29.3) (0.9) (106.7)
Lease liabilities (76.6) (1.4) (18.8) 12.5 (1.6) (85.9)
Net debt including leases (155.5) 1.0 (18.8) (16.8) (2.5) (192.6)
* Interest bearing loans & borrowings as at 31 August 2023 are net of
unamortised issue costs of €3.3m.
Unamortised borrowing costs of €0.7m are presented within financial assets.
During the period to 31 August 2024, the lease in respect of the Cambuslang
depot came to an end and was renewed on similar terms. During the period to 31
August 2024, leases in respect of kegs came to an end and were renewed on the
same terms. There were no other significant changes and the movement in leases
was otherwise in line with expectations based on the current lease portfolio.
The non-cash changes for interest bearing loans & borrowings in the
current and prior financial periods relate to the amortisation of issue costs.
The non-cash changes for lease liabilities in the current and prior financial
periods relate to discount unwinding.
10. Financial assets and liabilities
The carrying and fair values of financial assets and liabilities at 31 August
2024 and 31 August 2023 were as follows:
31 August 2024 Carrying Fair
Value value
€m €m
Financial assets:
Cash* 142.9 142.9
Trade receivables* 152.8 152.8
Advances to customers* 38.0 38.0
Promissory Note* 4.3 4.3
Derivative contracts** 0.5 0.5
Financial liabilities:
Interest bearing loans & borrowings* (224.3) (227.6)
Trade & other payables* (434.5) (434.5)
Provisions (10.6) (10.6)
Derivative contracts** (0.2) (0.2)
(331.1) (334.4)
*At amortised cost
** Derivatives designated as hedging instruments
31 August 2023 (Restated) Carrying Fair
Value value
€m €m
Financial assets:
Cash* 96.6 96.6
Trade receivables* 203.7 203.7
Advances to customers* 41.6 41.6
Financial assets* 4.4 4.4
Derivative contracts** 0.9 0.9
Financial liabilities:
Interest bearing loans & borrowings* (203.3) (206.6)
Trade & other payables* (464.5) (464.5)
Derivative contracts (0.4) (0.4)
(321.0) (324.3)
*At amortised cost
** Derivatives designated as hedging instruments
Determination of Fair Value
Set out below are the main methods and assumptions used in estimating the fair
values of the Group's financial assets and liabilities. There is no material
difference between the fair value of financial assets and liabilities falling
due within one year and their carrying amount as, due to the short-term
maturity of these financial assets and liabilities, their carrying amount is
deemed to approximate fair value.
Short term bank deposits and cash
The nominal amount of all short-term bank deposits and cash is deemed to
reflect fair value at the balance sheet date.
Advances to customers
Advances to customers, adjusted for advances of discount prepaid, is
considered to reflect fair value.
Trade & other receivables/ payables
The nominal amount of all trade receivables/trade & other payables after
provision for impairment is deemed to be approximate to fair value at the
balance sheet date.
Interest bearing loans & borrowings
The fair value of all interest-bearing loans & borrowings has been
calculated by discounting all future cash flows to their present value using a
market rate at the balance sheet date (Level 2).
Derivative contracts
Derivative contracts are initially recognised at fair value on the date on
which a derivative contract is entered into and are subsequently remeasured at
fair value. Derivatives are carried as financial assets when the fair value is
positive and as financial liabilities when the fair value is negative. The
fair value of derivative contracts that are not traded in an active market
(for example, over-the-counter derivatives) is determined by using valuation
techniques. Such valuation techniques maximise the use of observable market
data, where available, and rely as little as possible on the Group's
estimates. The fair value of the forward foreign exchange contracts is
determined using forward exchange rates at the date of the statement of
financial position, with the resulting value discounted as relevant (Level 2).
11. Retirement benefits
As disclosed in the Annual Report for the year ended 29 February 2024, the
Group operates a number of defined benefit pension schemes for certain
employees, past and present, in the Republic of Ireland (ROI) and in Northern
Ireland (NI), all of which provide pension benefits based on final salary and
the assets of which are held in separate trustee administered funds. The Group
closed its defined benefit pension schemes to new members in March 2006 and
provides only defined contribution pension schemes for employees joining the
Group since that date.
There are no active members remaining in the Group's executive defined benefit
pension scheme (31 August 2023: no active members) while there are 44 active
members (31 August 2023: 45 active members), representing less than 10% of
total membership, in the ROI Staff defined benefit pension scheme and 2 active
members in the NI defined benefit pension scheme (31 August 2023: 2 active
members).
The Balance Sheet valuation of the Group's defined benefit pension schemes'
assets and liabilities have been remeasured as at 31 August 2024 to reflect
movements in the fair value of assets and changes in the assumptions used by
the schemes' actuaries to value the liabilities.
The key factors influencing the change in valuation of the Group's defined
benefit pension scheme obligations are as outlined below:
Period ended 31 August 2024 Period ended 31 August 2023 Year ended 29 February 2024
€m €m €m
Retirement benefit surplus at beginning of period 31.2 38.6 38.6
(ROI schemes)
Retirement benefit surplus at beginning of period 3.1 3.6 3.6
(NI scheme)
Current service cost (0.2) (0.2) (0.3)
Net interest income on scheme liabilities/assets 0.7 0.9 1.7
Experience gains and losses on scheme liabilities (0.1) (1.9) (2.6)
Effect of changes in financial assumptions - (2.7) (4.0)
Effect of changes in demographic assumptions - - -
Actual return less Interest income on scheme assets (1.1) (0.8) (3.3)
Employer contributions 0.2 0.2 0.4
Translation adjustment 0.1 0.1 0.2
Net pension surplus before deferred tax 33.9 37.8 34.3
Retirement benefit surplus at end of period 30.8 34.4 31.2
(ROI schemes)
Retirement benefit surplus at end of period 3.1 3.4 3.1
(NI scheme)
Related deferred income tax liability (4.6) (5.5) (4.6)
Net pension surplus 29.3 32.3 29.7
The decrease in the net surplus of the Group's defined benefit pension schemes
from the 29 February 2024 to the 31 August 2024, as computed in accordance
with IAS 19 Employee Benefits relates to an increase in liabilities due to a
marginal decrease in bond yields over the six-month period.
The discount rate assumptions used by the Group's actuaries in the computation
of the defined benefit liabilities arising on pension schemes are as follows:
Period ended 31 August 2024 Period ended 31 August 2023 Year ended 29 February 2024
ROI NI ROI NI ROI NI
Discount rate 3.6% - 3.7% 5.0% 4.1% - 4.2% 5.3% 3.8% 5.2%
12. Dividends
In order to achieve better alignment of the interest of share-based
remuneration award recipients with the interests of shareholders, shareholder
approval was given at the 2012 AGM to a proposal that awards made and that
vest under the LTIP incentive programme should reflect the equivalent value to
that which accrues to shareholders by way of dividends during the vesting
period. The Deferred Bonus Plan and the Buy-Out Awards also accrue dividends
during the vesting period.
A final dividend of 3.97 cent per ordinary share (2023: 3.79 cent per ordinary
share) was paid to shareholders on 23 August 2024 equating to a distribution
of €13.4m (2023: €14.9m), all of which was paid in cash.
The Board has announced an interim dividend of 2.00 cent per share for the
period ended 31 August 2024. Payment will be on 13 December 2024 to ordinary
shareholders registered at the close of business on 15 November 2024. Using
the number of shares in issue at 31 August 2024 and excluding those shares for
which it is assumed that the right to dividend will be waived, this would
equate to a distribution of €7.7m. There is no scrip dividend alternative
proposed.
Final dividends on ordinary shares are recognised as a liability in the
financial statements only after they have been approved at an Annual General
Meeting of the Company. Interim dividends on ordinary shares are recognised
when they are paid.
13. Related parties
The principal related party relationships requiring disclosure under IAS 24
Related Party Disclosures pertain to the existence of subsidiary undertakings
and equity accounted investments, transactions entered into by the Group with
these subsidiary undertakings and equity accounted investments and the
identification and compensation of, and transactions with, key management
personnel.
Transactions
Transactions between the Group and its related parties are made on terms
equivalent to those that prevail in arm's length transactions.
Subsidiary undertakings
The Condensed Consolidated Interim Financial Statements include the financial
statements of the Company and its subsidiaries. Sales to and purchases from
subsidiary undertakings, together with outstanding payables and receivables,
are eliminated in the preparation of the Condensed Consolidated Interim
Financial Statements in accordance with IFRS 10 Consolidated Financial
Statements.
Key management personnel
For the purposes of the disclosure requirements of IAS 24 Related Party
Disclosures, the Group has defined the term 'key management personnel', as its
Executive and Non-Executive Directors. Executive Directors participate in the
Group's equity share award schemes and are covered for death in service by an
insurance policy. Executive Directors may also benefit from medical insurance
under a Group policy (or the Group offers a cash alternative). No other
non-cash benefits are provided. Non-Executive Directors do not receive
share-based payments nor post-employment benefits.
Compensation with respect to key management personnel included in the Income
Statement was €2.2m for the six months ended 31 August 2024 including
accrued severance and termination costs, all of which relates to
non-share-based payment compensation. (31 August 2023: €3.1m of which
€2.8m related to non-share-based payment compensation and €0.3m with
respect to share-based compensation).
Equity accounted investments, Associates and Financial assets
The Group's Equity accounted investments, Associates and Financial assets
remain the same as those described on pages 262 to 265 of the Group's Annual
Financial Statements for the year ended 29 February 2024, which are available
on the Group's website, http://www.candcgroupplc.com.
Other
Loans extended by the Group to equity accounted investments are considered
trading in nature and are included within advances to customers in Trade &
other receivables.
All outstanding trading balances with equity accounted investments, which
arose from arm's length transactions, are to be settled in cash within 60 days
of the reporting date.
Details of transactions with equity accounted investments during the period
and related outstanding balances at the period end are as follows:
Joint ventures Associates
31 31 31 August 31
August 2024 August 2023 2024 August 2023
€m €m €m €m
Net revenue 0.5 0.6 0.2 0.3
Trade & other receivables 0.7 1.0 - 0.1
Purchases 0.6 0.8 0.3 0.4
Trade & other payables - 0.1 - 0.1
Loans 0.6 1.3 0.3 0.6
There have been no other related party transactions that could have a material
impact on the financial position or performance of the Group for the first six
months of the financial year.
14. Events after the balance sheet date
On 9 September 2024, the Group announced that it will commence a Share Buyback
Programme to repurchase ordinary shares of the Group up to a maximum aggregate
consideration of €15 million (the "Programme").The Programme forms part of
the Group's plan to return up to €150 million to shareholders over the next
three fiscal years ending in February 2025, 2026 and 2027 through a
combination of dividends and share buybacks. The Programme is underpinned by
the Board's continued confidence in the medium-term outlook for the business
and its strong cash generation capabilities. The Board also believes that the
Programme represents the most effective use of capital in the current
environment.
There were no other material events subsequent to the balance sheet date of 31
August 2024 which would require disclosure in this report.
15. Prior year restatements
Impact on the Consolidated Income Statement for the period ended 31 August
2023
31 August 2023 Previously published Adjustments 31 August 2023 Restated
Before exceptional items Exceptional items Total Before exceptional items Exceptional items Total Before exceptional items Exceptional items Total
€m €m €m €m €m €m €m €m €m
Revenue 1,058.1 - 1,058.1 (2.2) - (2.2) 1,055.9 - 1,055.9
Excise duties (185.6) - (185.6) (5.5) - (5.5) (191.1) - (191.1)
Net revenue 872.5 - 872.5 (7.7) - (7.7) 864.8 - 864.8
Operating costs (842.0) (3.1) (845.1) 15.3 (0.9) 14.4 (826.7) (4.0) (830.7)
Group operating profit 30.5 (3.1) 27.4 7.6 (0.9) 6.7 38.1 (4.0) 34.1
Finance income - 0.1 0.1 - - - - 0.1 0.1
Finance expense (9.7) (1.0) (10.7) (0.1) - (0.1) (9.8) (1.0) (10.8)
Profit before tax 20.8 (4.0) 16.8 7.5 (0.9) 6.6 28.3 (4.9) 23.4
Income tax expense (4.9) 0.8 (4.1) (1.2) 0.2 (1.0) (6.1) 1.0 (5.1)
Group profit for the financial period 15.9 (3.2) 12.7 6.3 (0.7) 5.6 22.2 (3.9) 18.3
Impact on basic earnings per share (cent) 3.2 1.5 4.7
Impact on diluted earnings per share (cent) 3.2 1.5 4.7
Impact on the Consolidated Statement of Comprehensive Income for the period
ended 31 August 2023
31 August
31 August 2023 as published Adjustments 31 August 2023 (Restated)
€m €m €m
Group profit for the financial period 12.7 5.6 18.3
Total comprehensive income for the financial period* 17.5 5.6 23.1
+ The table above includes only those financial statements line items which
have been restated. The total comprehensive income for the financial period
does not therefore represent the sum of the line items presented above.
Impact on the Consolidated Balance Sheet as at 31 August 2023
31 August 2023 (previously published) Adjustments 31 August 2023
(restated)
€m €m €m
Non-current assets
Property, plant & equipment 226.0 3.2 229.2
Deferred tax 24.3 1.3 25.6
Total non-current assets* 986.9 4.5 991.4
Current assets
Inventories 192.3 (1.8) 190.5
Trade & other receivables 265.1 (0.2) 264.9
Financial assets - 0.7 0.7
Current income tax assets 1.5 0.3 1.8
Total current assets* 555.5 (1.0) 554.5
TOTAL ASSETS 1,542.4 3.5 1,545.9
EQUITY
Capital and reserves
Treasury shares (33.9) (2.3) (36.2)
Other reserves 90.7 0.8 91.5
Retained income 334.9 (10.0) 324.9
Total equity* 742.9 (11.5) 731.4
LIABILITIES
Non-current liabilities
Provisions 5.0 10.5 15.5
Lease liabilities 63.8 3.7 67.5
Deferred tax liabilities 35.5 1.5 37.0
Total non-current liabilities* 308.7 15.7 324.4
Current liabilities
Lease liabilities 19.3 (0.4) 18.9
Trade & other payables 466.9 (2.4) 464.5
Interest bearing loans and borrowings (0.7) 0.7 -
Provisions 5.3 1.9 7.2
Current income tax liabilities - (0.5) (0.5)
Total current liabilities* 490.8 (0.7) 490.1
Total liabilities* 799.5 15.0 814.5
TOTAL EQUITY & LIABILITIES 1,542.4 3.5 1,545.9
+ The table above includes only those financial statement line items which
have been restated. The total non-current assets, current assets, equity,
non-current liabilities, current liabilities and total liabilities do not
therefore represent the sum of the line items presented above.
Adjustments in respect of the Group
As noted earlier in this report, the Group has identified a number of
accounting errors which have resulted in the restatement of results for the 31
August 2023 (HY2024) reporting period. These errors arose from mistakes and
errors of judgement and an explanation of the individual items is given below:
i) Property, plant and equipment (PPE) was understated by €3.2m
at HY2024 in respect of leases for plant, machinery and equipment not
capitalised correctly in accordance with IFRS 16.
ii) Inventory at was overstated by €1.8m at HY2024, which arose
from the incorrect accounting treatment applied to inventory of branded
glassware.
iii) Trade and other receivable balances were overstated by €0.2m at
HY2024 due to incorrect accounting treatment applied to supplier incentive
bonus payments.
iv) The Group's Partnership and Matching Share Schemes in respect of
UK and ROI employees were incorrectly accounted for as cash-settled schemes,
whereas they should have been accounted for as equity settled schemes. This
resulted in an understatement of Treasury shares of €2.3m at HY2024 and an
understatement of other reserves of €0.8m.
v) Lease liabilities were understated by €3.3m at HY2024
(non-current €3.7m, offset by an overstatement in current of €0.4m)
following the incorrect accounting treatment adopted in respect of the lease
contracts. The Income Statement impact for HY2024 was (€0.1m).
vi) Trade and other payable balances were overstated by €2.4m at
HY2024 due to errors of judgement applied in respect of accounting for goods
received not invoiced (GRNI), customer discount liabilities, deferred income
and other general accruals.
vii) Provisions were understated in HY2024 by €12.4m due to onerous
contracts in respect of the Group's suppliers of apples for use in cider
production not being recognised in the appropriate accounting period
(non-current: €10.5m and current: €1.9m).
viii) Revenue was overstated in HY2024 by €2.2m due to the incorrect
timing of release of customer discount liabilities.
ix) Excise duties were understated by €5.5m in HY2024. This
comprises a reclassification of duty charges incorrectly included within
operating costs of €3.7m and an accrual release of €1.8m previously
recognised in the incorrect accounting period.
x) The tax impact of these adjustments at HY2024 was a charge of
€1.0m. Deferred tax assets were understated by €1.3m at HY2024 and
deferred tax liabilities were understated by €1.5m. Current income tax
assets were understated by €0.3m and current income tax liabilities were
overstated by €0.5m.
xi) The cumulative retained income impact of these adjustments at 31
August 2023 was €10.0m, with the impact on the consolidated Income Statement
in HY2024 being €5.6m.
16. Board approval
The Board approved the financial report for the six months ended 31 August
2024 on 28 October 2024.
17. Distribution of interim report
This report, and further information on C&C, is available on the Group's
website (http://www.candcgroupplc.com).
Supplementary financial information
Alternative performance measures
The Directors have adopted various alternative performance measures ('APMs')
to provide additional useful information on the underlying trends, performance
and position of the Group. These measures are used for performance analysis.
The alternative performance measures are not defined by IFRS and therefore may
not be directly comparable with other companies' alternative performance
measures. These measures are not intended to be a substitute for, or superior
to, IFRS measurements. The key APMs of the Group are set out below:
· Operating profit before exceptional items: Operating profit for
the period as adjusted for exceptional items.
· Adjusted EBITDA: Adjusted EBITDA is earnings before exceptional
items, finance income, finance expense, tax, depreciation and amortisation
charges.
· Constant currency: Prior period revenue, net revenue and
operating profit for each of the Group's reporting segments are shown at
constant exchange rates for transactions by subsidiary undertakings in
currencies other than their functional currency and for translation in
relation to the Group's non-Euro denominated subsidiaries by restating the
prior period at current period effective rates. Refer to page 10 for constant
currency table.
· Exceptional items: The Group has adopted an accounting policy and
Income Statement format that seeks to highlight specific significant items of
income and expense within the Group results for the year. The Directors
believe this provides a more useful analysis. These significant items are
determined based on the following qualitative and quantitative framework. The
Group considers items which are significant either because of their size or
their nature, and which are non-recurring. For items to be considered
significant, it must initially meet at least one of the following criteria:
· Non-recurring items - these are events/transactions that are
infrequent and unusual, or one-off in nature. These include items such as
restructuring and integration projects, litigation costs and settlements,
impairment of assets, COVID-19, acquisition related costs, and gains/losses
from the sale of assets or businesses.
· Inconsistent items - these are items which are inconsistent
amounts year-on-year (where applicable) such as revaluation gains/losses.
· For an item to be deemed exceptional, it must have a significant
effect on C&C's profitability and should therefore be separately
disclosed. For the purposes of the current financial period, the Group
determined a material amount that would influence the economic decisions of a
user of the financial statements.
If an item meets at least one of the criteria, the Directors then exercise
judgement evaluated based on the above criteria as to whether the item meets
the Group definition of significant.
· Free Cash flow: Free Cash Flow (FCF) is a measure that comprises
cash flow from operating activities net of capital investment cash inflows and
outflows which form part of investing activities. Free Cash Flow highlights
the underlying cash generating performance of the ongoing business. A
reconciliation of FCF to net movement in cash per the Group's Cash Flow
Statement is set out on page 8.
· Interest cover: Calculated by dividing the Group's Adjusted
EBITDA excluding exceptional items and discontinued activities by the Group's
interest expense, excluding IFRS 16 Leases finance charges, issue cost
write-offs, fair value movements with respect to derivative financial
instruments and unwind of discounts on provisions, for the same period.
· Net debt: Net debt comprises borrowings (net of issue costs) less
cash plus lease liabilities capitalised under
IFRS 16 Leases. Refer to Note 9 of the Condensed Consolidated Interim
Financial Statements.
· Net debt (excluding leases): Net debt excluding leases comprises
borrowings (net of issue costs) less cash. Refer to Note 9 of the Condensed
Consolidated Interim Financial Statements.
· Net revenue: Net revenue is defined by the Group as revenue less
excise duty. The duty number disclosed represents the cash cost of duty paid
on the Group's products. Where goods are bought duty paid and subsequently
sold, the duty element is not included in the duty line but within the cost of
goods sold. Net revenue therefore excludes duty relating to the brewing and
packaging of certain products. Excise duties, which represent a significant
proportion of revenue, are set by external regulators over which the Group has
no control and are generally passed on to the consumer.
· Adjusted basic earnings per share: Is calculated by dividing
earnings as adjusted for exceptional items net of tax, by the weighted average
number of ordinary shares in issue during the period, excluding ordinary
shares purchased/issued by the Company and accounted for as treasury shares.
· Adjusted diluted earnings per share: Is calculated by dividing
earnings as adjusted for exceptional items net of tax, by the adjusted
weighted average number of ordinary shares excluding treasury shares
outstanding during the period, assuming the conversion of all dilutive
ordinary shares.
· Operating margin: Operating margin is based on operating profit
before exceptional items and is calculated as a percentage of net revenue.
Refer to the operating review for operating margin calculations.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR PPGGUUUPCGBRRecent news on C&C
See all newsREG - C&C Group Plc - Transaction in Own Shares
AnnouncementREG - C&C Group Plc - Total Voting Rights
AnnouncementREG - C&C Group Plc - C&C Group launches share buy-back of up to EUR 15m
AnnouncementREG - C&C Group Plc - Director/PDMR Shareholding
AnnouncementREG - C&C Group Plc - Holding(s) in Company
Announcement