29-05-2025
- Business
- The Herald Scotland
Tennent's chief pins hopes on Scotland's 'resilient' pubs
Profits were up from €60m the year before, underlining C&C's continuing recovery from several major internal challenges, including a botched upgrade to the ordering system for its wine and spirits wholesaling business, Matthew Clark Bibendum. The company is guiding the City on profits rising 'marginally' in the current year.
Despite an 'encouraging' start to the current year, boosted by the recent spell of warm sunny weather, Mr White said the challenges facing the industry are 'writ large'.
Mr White, who led Irn-Bru maker AG Barr for two decades before joining C&C, told The Herald: 'We've got costs which are challenging for them [hospitality operators] coming through in terms of [increases in employer] national insurance and minimum wage. It is tough for consumers to make ends meet. Despite the recent weeks of decent weather, it will continue to have a dampening effect on the industry.
'But, you know, it is a pretty resilient industry as well. I think we are cautious, but we remain optimistic that the hospitality industry will work its way through.'
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C&C Group, which is headquartered in Dublin, reported that net revenue increased by 13% to €1.665 billion for the year ended February 28, in line with expectations. Growth in distribution was offset by the disposal of its non-core soft drinks business in Ireland, lower contract volumes, and a softer cider market in the UK and Ireland attributed to poor summer weather in 2024.
Mr White said that flagship brands Tennent's, Scotland's highest-selling lager, and Bulmers Irish cider (sold under the Magners brand in Great Britain) had gained market share last year, and noted that the company sees 'future growth opportunities for both'.
Although last year saw the men's Euro 2024 football championship take place in Germany - the type of event which brings a natural boost to beer volumes - Mr White is not concerned about C&C's results for this year being affected by tough comparisons with last time. With an estimated 200,000 to 300,000 Scotland fans having travelled to Germany for the tournament last summer, this meant the Tennent's brand was without a 'lot of core consumers for a fairly important part of the year' in its domestic market.
'So I don't think that the 'comps' [comparisons] are particularly impacted by the football of last year,' Mr White added.
C&C also signalled that it was recovering customer momentum within Matthew Clark Bibendum, following the upheaval arising from the flawed implementation of an ERP (enterprise resource planning) system in May 2023.
Mr White said: 'I think the actual issues that were ERP implementation related are past us now. We're still building confidence with those customers who had a tougher time at that difficult period, but I've been encouraged in all my conversations with our customers that our service level is now back to where they would want it to be.
'I don't think we are where we would want to be yet, but we are certainly a lot better and giving people a really strong service and our objective now is just to keep that going consistently for the summer and the balance of the year.'
Deutsche Bank Group said in a research note for investors: 'We think C&C's FY25 results highlight an improved 2H delivery against a challenging backdrop. FY25 operating profit of €77.1m was 2% ahead of consensus, reflecting improved margins across both the branded and distribution businesses.
'Notwithstanding some of the industry headwinds we think C&C has stabilised.'
The note added: 'FY26 expectations are unchanged and current trading is 'encouraging'. We think the new management team are well placed to drive shareholder value creation from here.'
Shares in C&C Group, which is listed in London, closed up 3.23%, or 5p, at 159.8p.
