C&C Group PLC (LSE:CCR) said it expects interim profits and sales to increase and be “broadly in-line” with pre-Covid numbers but cautioned on-trade momentum slowed in the second-quarter as customers tighten their belts due to rising inflation.
The maker of Bulmers cider and Tennent’s larger expects net revenues in the six months to the end of August to be around €900mln, approximately 35% higher than last year and broadly in line with the comparable period before Covid-19.
Operating profit for the first half of fiscal 2023 is expected to be in the range of €52-55mln, compared to €16mln in the prior year, though lower than €64mln recorded in first half of fiscal 2020.
In a trading update, the group said trading in the first half saw demand return robustly at the start of the period, however, consistent with the wider market and the impact of inflation on discretionary consumer spending, the group has seen a slowdown in on-trade momentum over the second-quarter 2023.
The company anticipates a net debt to adjusted EBITDA ratio of approximately 1.5x, which is in line with its previously stated goal.
In addition to the positive cash flow generated by the business over first half of fiscal 2023, the company said the further reduction in leverage multiple reflects the benefit of €43mln from the sale of Admiral Taverns' first two tranches of three equal tranches.
As a result of the company's strong balance sheet and "strong cash flow", the board intends to consider "return of capital to shareholders, including dividends," in second half of fiscal 2023.