By Frank Prenesti
Date: Friday 13 Jan 2023
LONDON (ShareCast) - (Sharecast News) - Bulmers cider maker C&C Group said annual results would be hit by the cost of living crisis affecting consumers.
Despite year-on-year net revenue growth of around 20% in the key trading month of December, the company said it now expected operating profit in the year to February of €84-88m against consensus estimates of €95m.
"As outlined in first half results, our outlook for H2 noted a potential significant impact from the continuing cost of living pressures facing consumers," C&C said.
"We believe consumer spending pressure is a driver behind this trading performance and will continue to be so in the near-term."
"Further, trading has been significantly impacted by rail network strikes in the UK, reducing footfall in urban areas over the key festive trading period."
Analysts at Shore Capital had pencilled in a profit of around €90m, with the pick-up in December "less than hoped for - we would have anticipated +30%".
"The middle of the range would be equivalent to a 5% cut in our current forecast. From a read across perspective, we would expect that city and metropolitan centres have been hit harder than suburban, noting Mitchells & Butlers solid update across its broad estate."
Shore rated the stock as a 'buy', despite the disappointing update, saying the current valuation of eight times core earnings "reflects the progress the group is making".
"Distribution margins at around 4% is a base on which profitability can build over time as branded margins recover. We would see continued evidence of sustained market share growth in cider and premium beer as catalyst for a re-rating, whilst the balance sheet retains significant optionality."
Reporting by Frank Prenesti for Sharecast.com
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Currency | UK Pounds |
Share Price | 159.40p |
Change Today | 1.60p |
% Change | 1.01 % |
52 Week High | 176.60 |
52 Week Low | 123.40 |
Volume | 2,548,071 |
Shares Issued | 386.84m |
Market Cap | £616.62m |
RiskGrade | 222 |
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Final | Interim | |
Ex-Div | 18-Jul-24 | 09-Nov-23 |
Paid | 23-Aug-24 | 01-Dec-23 |
Amount | 3.97¢ | 1.89¢ |
Time | Volume / Share Price |
16:35 | 349,314 @ 159.40p |
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16:35 | 8,756 @ 159.40p |
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