TIDMCCR
RESULTS FOR THE SIX MONTHSED 31 AUGUST 2023
Solid underlying performance with branded businesses performing
strongly
Intention that EUR150m will be distributed to shareholders over
the next three fiscal years whilst maintaining leverage target of
1.5x to 2.0x
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 2023 ('H1 FY2024').
H1 FY2024 FINANCIAL OVERVIEW
H1 FY2024 H1 FY2023 Change
EUR'm except per share items EUR'm EUR'm %
Net revenue(i) 872.5 883.4 (1.2%)
Adjusted EBITDA(i)(ii) 45.9 69.0 (33.5%)
Operating profit (i)(iii) 30.5 53.3 (42.8%)
Operating margin(i)(iii) 3.5% 6.0% (2.5ppts)
- Branded Operating margin(i)(iii) 14.5% 14.8% (0.3ppts)
- Distribution Operating margin(i)(iii) 0.8% 4.1% (3.3ppts)
Basic EPS (cent) 3.2c 9.6c (66.7%)
Adjusted diluted EPS (cent)(iv) 4.0c 9.5c (57.9%)
Exceptional charge (pre-tax) 4.0 0.3 1,233.3%
Dividend per share (cent) 1.89c - NM
Free cash inflow(iii)(v) 0.7 55.3 (98.7%)
Free cash inflow(iii)(v) (% conversion) 1.5% 78.0% (76.5ppts)
Net Debt(vi) 189.8 179.7 5.6%
Net Debt(vii) (excluding lease
liabilities) 106.7 104.5 2.1%
FINANCIAL SUMMARY
-- Net revenue broadly in line with H1 FY2023 despite one-off disruption
of the ERP System implementation ('ERP'). Strong performance in branded
revenues which increased 6.9%.
-- Operating profit of EUR30.5m(iii), down EUR22.8m(i) principally driven
by a one-off c.EUR22m ERP impact. The Group's GB distribution business
was breakeven in H1 FY2024 despite these challenges.
-- Operating profit in the branded business was up 4.6%(i) to
EUR25.2m(iii). Branded margins were solid at 14.5%(iii) as pricing
actions offset most of the inflationary impacts on the Group's cost
base.
-- Net debt(vi) to adjusted EBITDA(ii) of 2.1x is marginally higher than
our target range, due to the one-off ERP impact. Group leverage target of
1.5x to 2.0x for February 2024 reaffirmed. Net debt excluding leases(vii)
to adjusted EBITDA(ii) was 1.6x in H1 FY2024.
OPERATING HIGHLIGHTS
-- Robust performance in Ireland and Scotland. Bulmers and Tennent's
delivered revenue growth of 9.1%, maintaining clear market-leading
positions(viii)(xii)(xiii).
-- Premium beer portfolio recorded revenue growth of 23.1% with volume
growth of 16.8%.
-- Service levels, defined as On-Time-In-Full ('OTIF'), now restored to
pre-ERP implementation levels in GB Distribution business.
-- Continued progress in delivering the Group's ESG and sustainability
agenda, including the commissioning of a 1 MW heat pump system in our
Clonmel site.
DIVID AND CAPITAL RETURNS
-- Interim dividend of 1.89 cent per share.
-- Reflecting the Board's confidence in the business and its strong cash
generation characteristics, the Board intends to distribute up to EUR150m
to shareholders over the next three fiscal years, through dividends and
other capital returns as deemed appropriate at the time, while
maintaining leverage target(vi)(ii) of 1.5x to 2.0x.
OUTLOOK
-- Service levels have been restored to pre-ERP implementation levels and
our priority in H2 FY2024 will be ensuring we deliver outstanding service
to our customers, win back customers and improve operating efficiency.
-- Operating environment challenges are expected to persist with continued
cost pressure over the next 12 months, before some easing in FY2025,
following which we target an increase in branded margins as we continue
to take pricing and cost actions and improve operating efficiency.
-- We are at an advanced stage of the CFO recruitment process, and we will
provide an update in due course.
Patrick McMahon, C&C Group Chief Executive Officer,
commented:
"Set against a difficult market backdrop we are pleased with the
strength of the performance of our branded businesses in Ireland
and Scotland in the period. We have made significant progress in
restoring customer service levels following the ERP system
implementation issues in our GB distribution business within our
planned timeframe. Delivering outstanding service, winning
customers, continued business simplification and improved operating
efficiency remain our top priorities and focus for the second half.
We are also pleased to announce today our intention to distribute
up to EUR150m to shareholders over the next three fiscal years
through dividends and capital returns, while maintaining
leverage(vi)(ii) within our target range of 1.5x to 2.0x."
S
OPERATING REVIEW
GREAT BRITAIN
EURm Great Britain
Constant currency(i) H1 FY2024 H1 FY2023 Change %
Net revenue 710.7 733.6 (3.1%)
of which Branded 111.5 104.6 6.6%
- Price / mix impact 10.8%
- Volume impact (4.2%)
of which Distribution 588.5 615.6 (4.4%)
- Price / mix impact (4.4%)
- Volume impact -
of which Co-pack / other 10.7 13.4 (20.1%)
Operating profit (iii) 10.7 34.5 (69.0%)
Operating margin 1.5% 4.7% (3.2ppts)
of which Branded 10.7 10.3 3.9%
of which Distribution - 24.2 (100.0%)
Volume -- (kHL) 2,346 2,386 (1.7%)
- of which Tennent's 497 495 0.4%
- of which Magners 279 320 (12.8%)
As previously communicated, the implementation of a complex ERP
system upgrade in our Matthew Clark and Bibendum ('MCB') business
had a material impact on the performance of the GB distribution
business in H1. Net revenue of the Group's GB distribution business
was down 4.4%(i) compared to the prior period, with operating
profit down EUR24.2m(iii) . Approximately EUR22m was as a direct
consequence of the ERP system upgrade issues.
The branded business performed well in H1 FY2024, with net
revenue up 6.6%(i) on H1 FY2023 and operating profit up 3.9%(i) to
EUR10.7m(iii) , delivering an operating margin of 9.6%.
Brands
Tennent's outperformed the market in H1 with MAT volumes up 9.1%
year-on-year, gaining 4.0ppts share of Scotland's on-trade beer
channel(viii) . Tennent's share of total on-trade beer in Scotland
is now 40.2%(viii) . Investment behind the brand continued in the
period. A new brand platform of 'Raised in Scotland' led to an
investment in an 'OOOFT!' campaign which launched in July, across
TV, Out of home & digital media channels. The campaign is on
track to reach 92% of all Scottish adults at a frequency of 11
times, driving the brands quality credentials via the iconic moment
of the first sip of a pint of Tennent's. We also continued to
activate our partnership with the Scottish Rugby Union, in the lead
up to and during the Rugby World Cup.
Magners volume was down 12.8% in the period with revenue down
7.9%(i) . Inclement weather disproportionately impacted the overall
cider category with volumes down 14.7% in the four-week period to
12 August 2023 compared to the same period last year(ix) . Because
of this performance, we will evaluate the levels of brand marketing
investment in the cider category in H2 FY2024.
Our Premium beer brands delivered volume growth of 21.0% and net
revenue growth of 24.3%(i) in the period. Menabrea volumes were up
29.3% with net revenue growth of 27.3%(i) . Heverlee delivered
volume growth of 9.0% and net revenue growth of 16.7%(i) relative
to H1 FY2023.
Investment behind our Premium brands continued in the period. In
2023 Menabrea launched its first full above the line advertising
campaign with its new 'Italian Alpine Birra' positioning. We also
activated first class experiences at Taste Festival, Regents Park
and Big Feastival in Kingham, Oxfordshire and hosted three sold out
Apericena elevated dining events across the UK. 2023 saw Heverlee
champion its skim serve in the 'It's Got the Edge' campaign focused
on the brand's heartland in Scotland. The brand also partnered with
the Melting Pot Festival in Glasgow, further strengthening a link
to credible music and activated sampling around the festival.
Distribution
The implementation of a complex ERP system upgrade in our
Matthew Clark and Bibendum ('MCB') business had a material impact
on the performance of the GB distribution business in H1. Net
revenue of the Group's GB distribution business was down 4.4%(i)
relative to the prior period with operating profit down
EUR24.2m(iii) of which c.EUR22m was as a direct consequence of the
ERP system upgrade issues. Encouragingly good progress has been
made in resolving those issues, in line with internal expectations
and OTIF service levels have now been restored to pre-ERP
implementation levels. The Group's focus for H2 is to win market
share and customers and improve operating efficiency. As previously
communicated, the Group expects a one-off impact of c.EUR25 million
associated with the ERP system disruption in FY2024, of which
c.EUR22m was incurred in H1 FY2024.
From a market perspective, GB on-trade volumes were down 2.6%
and value down 1.5% in the half-year to August 2023(x) , relative
to the comparative period, as cost of living pressures impacted the
sector. Demand for spirits has fallen behind pre-pandemic levels
with MAT volumes down 2.7% in the GB on-trade compared to the same
period four years ago(viii) . The cider category in GB on-trade saw
an improvement on last year with MAT volumes +4.1% however poor
summer weather negatively impacted the category with volumes down
14.7% in the four-week period to 12 August 2023 compared to the
same period last year(xi) . The beer category experienced growth
through the period, with MAT volumes in GB on-trade up 0.6% and
value up 5.3%(viii) .
International
Our international business has performed satisfactorily in the
period, across both beer and cider. We are particularly pleased
with progress in Italy, working with our new Tennent's distributor,
where we are on track to double our business in this financial
year. Tennent's volumes in our international business was up 4% in
the period with revenue growth of 13.0%.
Operational
We continue to grow the level of business we conduct through our
e-commerce platforms, consistently delivering +70% of our on-trade
revenues through online orders. Order values continue to be higher
when compared with traditional contact centre orders.
Investment in the sustainability programme at Wellpark, our
Glasgow-based manufacturing facility, continued in the period. We
have commenced the transition to 18 tonne electric delivery
vehicles and will introduce these into our fleet in 2024. Our
supplier engagement programme has increased carbon reporting by
50%, as we work towards our Scope 3 reduction target. Our
association with the Big Issue continues and several of our
colleagues participated in the 3 Peaks Challenge to raise funds on
their behalf.
IRELAND
EURm Ireland
Constant currency(i) H1 FY2024 H1 FY2023 Change %
Net revenue 161.8 149.8 8.0%
of which Branded 62.8 58.4 7.5%
- Price / mix impact 12.3%
- Volume impact (4.8%)
of which Distribution 97.0 90.4 7.3%
- Price / mix impact 10.6%
- Volume impact (3.3%)
of which Co-pack / other 2.0 1.0 100.0%
Operating profit(iii) 19.8 18.8 5.3%
Operating margin 12.2% 12.6% (0.4ppts)
of which Branded 14.5 13.8 5.1%
of which Distribution 5.3 5.0 6.0%
Volume -- (kHL) 767 800 (4.1%)
- of which Bulmers 188 204 (7.8%)
Completely unaffected by the ERP issues in GB, our Ireland
division's net revenue increased by 8.0%(i) in the period to
EUR161.8m. Operating profit up 5.3%(i) year-on-year to
EUR19.8m(iii) . Operating margin decreased slightly by 0.4ppts to
12.2% as inflationary cost pressures outweighed the benefit of
pricing actions in the branded business. Distribution margins were
flat relative to prior period.
Brands
The summer period in Ireland was challenging from a weather
perspective, however despite this Bulmers net revenue increased
6.8%(i) in the period. Sustained investment behind the Bulmers
brand continued. Our Bulmers Secret Orchard campaign ramped up in
2023 with close to 20,000 consumers signing up for tickets via our
online platform to exclusive Bulmers music events that showcased
homegrown Irish talent. This activity ran in conjunction with our
brand building 'alchemy' TV ad. We also have further activity
planned for H2 FY2024 to ensure Bulmers is top of mind beyond the
traditional summer cider months. Our sustained investment programme
continues to bear fruit as evidenced by the brand's growth in
market share. In ROI, Bulmers MAT total cider volume share is at
59.8% which is up 0.4ppts on prior period(xii)(xiii) . The Bulmers
brand MAT off-trade cider volume share has grown year-on-year to
57.5%(xiii) which is up significantly on pre COVID-19 levels.
Between the on and off-trades, Bulmers clearly remains the largest
and most popular cider brand in Ireland(xii)(xiii) .
Distribution
Aided by both execution of our core agency premium beer brands
and pricing actions, Net revenue of the distribution business grew
7.3%(i) relative to the comparative prior period on volumes that
were down 3.3%. We were particularly pleased with the performance
of Corona where net revenue grew by 22.1%(i) relative to the prior
period. Corona is now the No 1 Premium Lager in the ROI off-trade
with a market share of 16.2%(xiii) . Within the ROI on-trade we are
seeing positive impact from the rollout of Corona Draught(xii) .
San Miguel and Five Lamps also performed strongly in ROI on-trade
with volume growth of 33% and 16% respectively, albeit from a low
base.
Operational Summary
Delivering market-leading customer service is core to the
Group's success as a brand-led distributor and we are pleased to
note that average OTIF at the end of August 2023 was 98.3% in the
Republic of Ireland and 97.7% in Northern Ireland. We continue to
see more of our customers ordering online through our ecommerce
platform with 83% of our on-trade customers now ordering online in
August compared to 81% in February 2023 and 71% twelve months
ago.
Building on the work undertaken in previous years to reduce our
Clonmel manufacturing site's energy usage, a 1 MW heat pump system
was commissioned in our Clonmel site in H1. We estimate that it
will reduce the site's gas consumption by 40% and reduce our CO2
emissions by 1,800 tonnes per annum. We also announced an extension
of the Group's long association with Inner City Enterprise, the
not-for-profit charity advising and assisting unemployed people in
Dublin's inner city to set up their own business or create their
own self-employment.
Notes to Operating Review are set out below
1. On a constant currency basis; H1 FY2023 comparative adjusted for
constant currency (H1 FY2023 translated at H1 FY2024 FX rates) as
outlined on pages 10-11.
2. Adjusted EBITDA is earnings before exceptional items, finance income,
finance expense, tax, depreciation and amortisation. A reconciliation of
the Group's operating profit to adjusted EBITDA is set out on page 9.
3. Before exceptional items.
4. Adjusted basic/diluted earnings per share ('EPS') excludes exceptional
items. Please see note 5 of the Condensed Consolidated Financial
Statements.
5. Free Cash Flow ('FCF') that comprises cash flow from operating
activities net of tangible and intangible cash outflows 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 EUR121.7m (FY2023 H1:
EUR109.7m as reported or EUR110.0m on a constant currency basis). A
reconciliation of FCF to net movement in cash per the Group's Cash Flow
Statement is set out on page 9.
6. Net debt, including the impact of IFRS 16, comprises borrowings (net of
issue costs), lease liabilities capitalised less cash. Please see note 8
of the Condensed Consolidated Financial Statements.
7. Net debt is net debt excluding the impact of IFRS 16 lease liabilities.
Please see note 8 of the Condensed Consolidated Financial Statements.
8. CGA OPM 52 weeks to 12.08.2023.
9. CGA OPM 4 weeks to 12.08.2023.
10. CGA OPM 2023 Period 2 to period 8 (29.01.2023 to 12.08.2023).
11. CGA OPM 12 weeks to 12.08.2023.
12. CGA OPM 52 weeks to 31.08.2023.
13. NielsenIQ 52 weeks to 10.09.2023.
Conference Call & Webcast Details | Analysts &
Institutional Investors
C&C Group plc will host a live conference call and webcast,
for analysts and institutional investors, today, 26 October 2023,
at 08:30 BST (03:30 ET). Dial-in details are below for the
conference call.
Conference Call:
Ireland: +353 (0) 1 436 0959
UK: +44 (0)33 0551 0200
USA: +1 786 697 3501
Passcode: Please quote 'C&C H1' when prompted.
For all conference call replay numbers, please contact FTI
Consulting at candcgroup@fticonsulting.com
Webcast:
The Webcast can be accessed at
https://candcgroupplc.com/investors/
Contacts
C&C Group plc
Riona Heffernan, Group Finance & Investor Relations
Director
Email: riona.heffernan@candcgroup.com
UK & International Media
Richard Hayhoe
Email: richard.hayhoe@candcgroup.com
Investors, Analysts & Irish Media
FTI Consulting
Jonathan Neilan / Paddy Berkery / Aline Oliveira
Tel: +353 86 231 4135 / +353 86 602 5988 / +353 83 833 1644
Email: CandCGroup@fticonsulting.com
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, such as Heverlee,
Menabrea, Five Lamps 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.
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 C&C
believes are reasonable. However, these statements are neither
promises nor guarantees, but are subject to risks and
uncertainties, including those factors discussed on page 12 that
could cause actual results to differ materially from those
anticipated.
Financial review
A summary of results for the six months ended 31 August 2023 is
set out in the table below:
CC Period
Period ended 31 ended 31
August 2023 Period ended 31 August
(i) August 2022(i) 2022(i)(ii)
EURm EURm EURm
Net revenue 872.5 903.0 883.4
Operating profit 30.5 54.9 53.3
Net finance costs (9.7) (7.5)
Profit before tax 20.8 47.4
Income tax
expense (4.9) (10.0)
Profit for the
financial
period 15.9 37.4
Basic EPS 3.2 cent 9.6 cent
Adjusted basic 4.1 cent 9.6 cent
EPS(vii)
Diluted EPS 3.2 cent 9.5 cent
Adjusted diluted 4.0 cent 9.5 cent
EPS(iii)
Net revenue decreased 3.4% on a reported basis or 1.2% on a
constant currency basis to EUR872.5m reflecting the previously
communicated issues regarding the one-off impact associated with
the Enterprise Resource Planning ('ERP') system implementation
disruption in the Group's GB distribution business. The operating
profit of the Group, before exceptional items, for the six-month
period to 31 August 2023 was EUR30.5m compared to EUR54.9m in the
prior period.
The Group maintains a robust liquidity(vi) position with
available liquidity(vi) of EUR341.6m at 31 August 2023 (31 August
2022: EUR486.4m). The net debt: Adjusted EBITDA (12 month trailing)
ratio was 2.1x. The Group's financial covenants are calculated on a
pre-IFRS 16 Leases basis, and the outcomes for these at 31 August
2023 were the net debt (excluding leases): Adjusted EBITDA (12
month trailing) ratio was 1.6x and interest cover (12 month
trailing) was 4.6x.
Basic EPS has decreased by 66.7% compared to the same prior
financial period, with adjusted diluted EPS decreasing by
57.9%.
Finance costs, income tax and shareholder returns
Net finance charges before exceptional items of EUR9.7m (31
August 2022: EUR7.5m) were incurred in the six months ended 31
August 2023. Of the EUR9.7m net finance cost, EUR2.3m relates to
the Group's debtor securitisation facility (31 August 2022:
EUR1.3m), EUR1.8m relates to USPP notes (31 August 2022: EUR1.6m),
EUR2.3m relates to the Group's main bank lending facilities (31
August 2022: EUR0.9m), EUR1.6m relates to lease interest (31 August
2022: EUR1.5m), EUR0.9m relates to amortisation of prepaid issue
costs (31 August 2022: EUR0.4m) and EUR0.8m relates to other
interest costs (31 August 2022: EUR1.8m).
Exceptional finance charges of EUR1.0m (31 August 2022: EUR2.0m)
were also incurred in the current financial period being finance
charges 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. The Group also recorded EUR0.1m (31 August 2022: EUR0.1m)
of exceptional finance income with respect to interest earned on
the promissory notes which were a component of the consideration on
disposal of the Group's US subsidiary, Vermont Hard Cider
Company.
Income tax expense for the period, excluding the impact of
exceptional items, was EUR4.9m (31 August 2022: EUR10.0m). The
income tax credit with respect to exceptional items was EUR0.8m (31
August 2022: credit EUR0.3m). In line with IAS 34 Interim Financial
Reporting the effective tax rate for the period ended 31 August
2023 was 23.6% (31 August 2022: 21.1%). The effective tax rate is
influenced by several factors including the mix of profits and
losses generated across the main geographic locations. The increase
in UK corporation tax rates effective from April 2023 has also had
an impact on the tax charge.
The Board declared a full and final dividend of 3.79 cent per
share for the financial year ended 28 February 2023, representing a
pay-out of 28.3% of the full year reported FY2023 adjusted diluted
EPS(iii) . The dividend was paid to shareholders on 21 July 2023
and the full distribution of EUR14.9m was settled in cash. Due to
the impact of COVID-19, total dividends for the prior financial
year were EURnil.
The Board has declared an interim dividend of 1.89 cent per
share for the financial year ending 29 February 2024. Payment will
be on 1 December 2023 to ordinary shareholders registered at the
close of business on 10 November 2023. Using the number of shares
in issue at 31 August 2023 and excluding those shares for which it
is assumed that the right to dividend will be waived, this would
equate to a distribution of EUR7.5m. There is no scrip dividend
alternative proposed.
Exceptional items
The Group has incurred an exceptional charge on a before tax
basis of EUR4.0m in the current financial period. This includes
EUR1.0m of exceptional finance charges and EUR0.1m of exceptional
finance income as outlined above.
The Group wrote off a balance of EUR0.5m associated with the
Deposit Return Scheme in Scotland, following the announcement by
the Scottish Government in June 2023 that the scheme would be
delayed until at least October 2025. In addition, the Group
incurred EUR2.0m of costs related to David Forde stepping down as
Group Chief Executive Officer, in line with his service agreement
and the Directors' Remuneration Policy approved by shareholders at
the Annual General Meeting in July 2021. Further details will be
set out in the 2024 Annual Report. The Group also recognised a
charge of EUR0.6m in the current financial period in relation to
restructuring costs.
Cashflow
Summary cash flow for the six months ended 31 August 2023 is set
out in the table below. Reflecting the previously communicated
issues regarding the one-off impact associated with the ERP system
implementation disruption in the Group's GB distribution business,
there was free cash outflow of EUR0.7m pre-exceptional and a
related free cash flow conversion of 1.5%.
The increase in the Group's receivables purchase programme, as a
direct consequence of increased cash requirements related to the
one-off impact associated with the ERP system implementation
disruption in the Group's GB distribution business, is a key factor
in minimising the working capital outflow in the period. The
contribution to period end Group cash from the receivables purchase
programme was EUR121.7m compared to EUR94.1m (EUR95.2m on a
constant currency basis) at 28 February 2023 -- a cash inflow of
EUR26.5m on a constant currency basis in the six month period to 31
August 2023.
Six months ended Six months ended
31 August 2023 31 August 2022
EURm EURm
Operating profit 27.4 54.8
Exceptional items 3.1 0.1
Operating profit before exceptional items 30.5 54.9
Amortisation and depreciation charge 15.4 16.0
Adjusted EBITDA(iv) 45.9 70.9
Cash flow summary
Adjusted EBITDA(iv) 45.9 70.9
Tangible / intangible net expenditure (12.4) (7.6)
Advances to customers (0.9) 2.0
Working capital movement (20.2) (0.9)
Income taxes paid (2.9) (3.4)
Exceptional items paid (3.2) (0.8)
Net finance costs paid (9.0) (7.3)
Exceptional finance costs paid (1.0) (2.3)
Pension contributions paid (0.2) -
Other* 0.4 1.6
Free Cash Flow(v) (3.5) 52.2
Free Cash Flow(v) exceptional cash outflow 4.2 3.1
Free Cash Flow(v) excluding exceptional
cash outflow 0.7 55.3
Reconciliation to Condensed Consolidated Cash Flow Statement
Free Cash Flow(v) (3.5) 52.2
Proceeds from sale of business - 0.7
Proceeds from sale of asset held for sale - 42.8
Dividends paid (14.9) -
Payment of lease liabilities (10.9) (11.1)
Drawdown of debt 10.0 38.5
Payment of debt issue costs (2.3) -
Repayment of debt - (56.6)
Net (decrease)/increase in cash (21.6) 66.5
* 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 2023, the Group is reporting a retirement benefit
surplus of EUR37.8m (31 August 2023 net surplus: EUR45.0m, 28
February 2023 net surplus: EUR42.2m). All schemes are closed to new
entrants. There are 2 active members in the Northern Ireland ('NI')
scheme and 45 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 2021
while the date of the most recent actuarial valuation of the NI
defined benefit pension scheme was 31 December 2020.
Arising from the formal actuarial valuations of the Group's
staff defined benefit pension scheme, the Group committed to
contributions of EUR418,000 per annum commencing in 2021 and
increasing at a rate of 1.4% each year thereafter. This will be
reviewed at the next actuarial valuation, which is due in the
normal course of events at 1 January 2024. 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:
EURm
Net surplus at 28 February 2023 42.2
Employer contributions paid 0.2
Current service cost (0.2)
Net interest cost on scheme liabilities/assets 0.9
Experience gains and losses on scheme liabilities (1.9)
Effect of changes in financial assumptions (2.7)
Actual return less Interest income on scheme assets (0.8)
Translation adjustment 0.1
Pension surplus at 31 August 2023 37.8
The decrease in the net surplus of the Group's defined benefit
pension schemes from the 28 February 2023 to 31 August 2023, as
computed in accordance with IAS 19 Employee Benefits is due to an
increase in liabilities due to a marginal decrease in bond yields
over the six-month period and as well as experience losses.
Foreign currency and comparative reporting
Six month period Six month period
ended 31 August ended 31 August
2023 2022
Translation exposure EUR:GBP 0.868 0.846
EUR:USD 1.089 1.055
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 2022 is as follows:
Period ended
31 August 2022
Constant
Period ended 31 FX FX currency
August 2022 Transaction Translation comparative
EURm EURm EURm EURm
Revenue
Ireland 209.9 - (1.0) 208.9
Branded 85.5 - (0.5) 85.0
Distribution 122.6 - (0.5) 122.1
Co-pack/ Other 1.8 - - 1.8
Great Britain 891.3 - (22.4) 868.9
Branded 169.0 - (4.1) 164.9
Distribution 707.3 - (18.0) 689.3
Co-pack/Other 15.0 - (0.3) 14.7
Total 1,101.2 - (23.4) 1,077.8
Net revenue
Ireland 150.7 - (0.9) 149.8
Branded 58.7 - (0.3) 58.4
Distribution 90.8 - (0.4) 90.4
Co-pack/ Other 1.2 - (0.2) 1.0
Great Britain 752.3 - (18.7) 733.6
Branded 107.1 - (2.5) 104.6
Distribution 631.8 - (16.2) 615.6
Co-pack/Other 13.4 - - 13.4
Total 903.0 - (19.6) 883.4
Operating
profit(i)
Ireland 19.0 (0.1) (0.1) 18.8
Branded 14.0 (0.1) (0.1) 13.8
Distribution 5.0 - - 5.0
Great Britain 35.9 (0.3) (1.1) 34.5
Branded 10.7 - (0.4) 10.3
Distribution 25.2 (0.3) (0.7) 24.2
Total 54.9 (0.4) (1.2) 53.3
Notes to the Finance 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 pages 10-11.
(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
9.
(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 EUR121.7m
(28 February 2023: EUR94.1m; 31 August 2022: EUR109.7m) 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 9.
(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, other
than those noted below, remain substantially the same as those
stated on pages 32 to 38 of the Group's Annual Financial Statements
for the year ended 28 February 2023, 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
2023
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 28 February 2023, with the exception of the following
changes:
-- Helen Pitcher stepped down as Independent Non-Executive Director on 13
July 2023;
-- Jim Thompson stepped down as Independent Non-Executive Director on 13
July 2023;
-- Angela Bromfield was appointed as Independent Non-Executive Director on
13 July 2023;
-- Sarah Newbitt was appointed as Independent Non-Executive Director on 31
August 2023; and
-- Chris Browne was appointed as Independent Non-Executive Director on 2
October 2023.
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
R. Findlay
Executive Chair
P. McMahon
Group Chief Executive Officer
26 October 2023
Condensed Consolidated Income Statement
for the six months ended 31 August 2023
Six months ended 31 August 2023 Six months ended 31 August 2022
(unaudited) (unaudited)
Exceptional Exceptional
Before items Before items
exceptional (Note 4) Total exceptional (Note 4) Total
Notes items EURm EURm EURm items EURm EURm EURm
Revenue 2 1,058.1 - 1,058.1 1,101.2 - 1,101.2
Excise duties (185.6) - (185.6) (198.2) - (198.2)
Net revenue 2 872.5 - 872.5 903.0 - 903.0
Operating costs (842.0) (3.1) (845.1) (848.1) (0.1) (848.2)
Group operating
Profit 2 30.5 (3.1) 27.4 54.9 (0.1) 54.8
Profit on disposal 4 - - - - 1.7 1.7
Finance income - 0.1 0.1 - 0.1 0.1
Finance expense (9.7) (1.0) (10.7) (7.5) (2.0) (9.5)
Profit before tax 20.8 (4.0) 16.8 47.4 (0.3) 47.1
Income tax
(expense)/credit 3 (4.9) 0.8 (4.1) (10.0) 0.3 (9.7)
Group profit for
the financial
period
attributable to
equity
shareholders 15.9 (3.2) 12.7 37.4 - 37.4
Basic earnings 3.2c 9.6c
per share 5
(cent)
Diluted earnings 3.2c 9.5c
per share 5
(cent)
All of the results are related to continuing operations.
Condensed Consolidated Statement of Comprehensive Income
for the six months ended 31 August 2023
Six months ended
Six months ended
31 August 2023 31 August 2022
(unaudited) (unaudited)
Notes EURm EURm
Other comprehensive income:
Items that may be reclassified to
Income Statement in subsequent
years:
Foreign currency translation
differences arising on the net
investment in foreign operations 10.1 (10.1)
Foreign currency recycled on
disposal of equity accounted
investment - (1.0)
(Loss)/gain relating to cash flow
hedges (0.6) 0.8
Deferred tax liability relating to
cash flow hedges - (0.2)
Items that will not be reclassified
to Income Statement in subsequent
years:
Actuarial (loss)/gain on retirement
benefits 11 (5.4) 7.5
Deferred tax credit/(charge) on
actuarial (loss)/gain on
retirement benefits 0.7 (0.6)
Net gain/(loss) recognised directly
within Other Comprehensive Income 4.8 (3.6)
Group profit for the financial
period 12.7 37.4
Total comprehensive income for the
financial period 17.5 33.8
Condensed Consolidated Balance Sheet
as at 31 August 2023
As at 31 As at 31 August As at 28
August 2023 2022 February 2023
(unaudited) (unaudited) (audited)
Notes EURm EURm EURm
ASSETS
Non-current assets
Property, plant &
equipment 6 226.0 207.4 210.3
Goodwill & intangible
assets 7 649.5 649.1 645.5
Equity accounted
investments/financial
assets 1.4 1.3 1.3
Retirement benefits 11 37.8 45.0 42.2
Deferred tax assets 24.3 22.8 25.0
Derivative financial
assets 5.3 5.4 5.6
Trade & other
receivables 42.6 35.9 38.0
986.9 966.9 967.9
Current assets
Inventories 192.3 174.4 174.9
Trade & other
receivables 265.1 256.6 164.1
Current income tax
assets 1.5 - 0.7
Cash 96.6 131.8 115.3
555.5 562.8 455.0
Assets held for sale - 21.3 -
555.5 584.1 455.0
TOTAL ASSETS 1,542.4 1,551.0 1,422.9
EQUITY
Equity share capital 4.0 4.0 4.0
Share premium 347.2 347.2 347.2
Other reserves 90.7 89.0 80.3
Treasury shares (33.9) (35.4) (34.1)
Retained income 334.9 329.6 341.8
Total Equity 742.9 734.4 739.2
LIABILITIES
Non-current
liabilities
Lease liabilities 63.8 57.2 57.1
Interest bearing loans
& borrowings 8 204.0 237.2 100.0
Provisions 5.0 3.7 4.9
Deferred tax
liabilities 35.5 31.5 34.2
Derivative financial
liabilities 0.4 - -
308.7 329.6 196.2
Current liabilities
Lease liabilities 19.3 18.0 16.7
Trade & other payables 466.9 459.1 370.7
Interest bearing loans
& borrowings 8 (0.7) (0.9) 94.2
Provisions 5.3 4.3 5.4
Current income tax
liabilities - 6.5 0.5
490.8 487.0 487.5
Total liabilities 799.5 816.6 683.7
TOTAL EQUITY &
LIABILITIES 1,542.4 1,551.0 1,422.9
Condensed Consolidated Cash Flow Statement
for the six months ended 31 August 2023
Six months ended Six months ended
31 August 2023 31 August 2022
(unaudited) (unaudited)
Notes EURm EURm
CASH FLOWS FROM OPERATING
ACTIVITIES
Group profit for the financial
period 12.7 37.4
Finance income (0.1) (0.1)
Finance expense 10.7 9.5
Income tax expense 3 4.1 9.7
Profit on disposal of asset held
for sale 4 - (1.0)
Depreciation of property, plant &
equipment 6 14.2 14.8
Amortisation of intangible assets 7 1.2 1.2
Profit on disposal of a subsidiary 4 - (0.7)
Net profit on disposal of
property, plant & equipment 6 (0.1) -
Charge for equity settled
share-based payments 1.1 1.6
Pension charged to Income
Statement less contributions
paid 11 (0.9) (0.1)
42.9 72.3
Increase in inventories (14.8) (9.6)
Increase in trade & other
receivables (101.1) (73.2)
Increase in trade & other payables 95.0 87.4
Decrease in provisions (0.2) (4.1)
21.8 72.8
Interest and similar costs paid (10.0) (9.6)
Income taxes paid (2.9) (3.4)
Net cash inflow from operating
activities 8.9 59.8
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of property, plant &
equipment 6 (12.2) (5.5)
Purchase of intangible assets 7 (0.3) (2.1)
Sale of business 4 - 0.7
Net proceeds on disposal of asset
held for sale 4 - 42.8
Net proceeds on disposal of
property, plant & equipment 6 0.1 -
Net cash (outflow)/inflow from
investing activities (12.4) 35.9
CASH FLOWS FROM FINANCING
ACTIVITIES
Dividends paid 13 (14.9) -
Drawdown of debt 10.0 38.5
Repayment of debt - (56.6)
Payment of debt issue costs (2.3) -
Payment of lease liabilities (10.9) (11.1)
Net cash outflow from financing
activities (18.1) (29.2)
Net (decrease)/increase in cash (21.6) 66.5
Reconciliation of opening to
closing cash
Cash at beginning of year 115.3 64.7
Translation adjustments 2.9 0.6
Net (decrease)/increase in cash (21.6) 66.5
Cash at end of period 96.6 131.8
A reconciliation of Net Debt is presented in Note 9.
Condensed Consolidated Statement of Changes in Equity
for the six months ended 31 August 2023
Cash
Equity Other flow Share-based Currency
share Share capital hedge payments translation Revaluation Treasury Retained
capital premium reserves reserve reserve reserve reserve shares income Total
EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm
At 28 February
2023 4.0 347.2 25.8 1.1 5.3 33.9 14.2 (34.1) 341.8 739.2
Profit for the
financial
period - - - - - - - - 12.7 12.7
Other
comprehensive
income/(expense) - - - (0.6) - 10.1 - - (4.7) 4.8
Total
comprehensive
income - - - (0.6) - 10.1 - - 8.0 17.5
Dividend on
ordinary shares (14.9) (14.9)
Reclassification
of share-based
payments
reserve - - - - (0.2) - - - 0.2 -
Sale of treasury
shares/purchases
of shares to
satisfy employee
share
entitlements - - - - - - - 0.2 (0.2) -
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 4.0 347.2 25.8 0.5 6.2 44.0 14.2 (33.9) 334.9 742.9
Condensed Consolidated Statement of Changes in Equity -
continued
for the financial year ended 28 February 2023
Cash
Equity Other flow Share-based Currency
share Share capital hedge payments translation Revaluation Treasury Retained
capital premium reserves reserve reserve reserve reserve shares income Total
EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm
At 1 March 2022 4.0 347.2 25.8 (0.1) 4.4 53.3 14.9 (36.0) 285.5 699.0
Profit for the
financial
period - - - - - - - - 37.4 37.4
Other
comprehensive
income - - - 0.6 - (11.1) - - 6.9 (3.6)
Total
comprehensive
income - - - 0.6 - (11.1) - - 44.3 33.8
Reclassification
of share-based
payments
reserve - - - - (0.4) - - - 0.4 -
Sale of treasury
shares/purchases
of shares to
satisfy employee
share
entitlements - - - - - - - 0.6 (0.6) -
Equity settled
share-based
payments - - - - 1.6 - - - - 1.6
Total
transactions
with owners - - - - 1.2 - - 0.6 (0.2) 1.6
At 31 August 2022 4.0 347.2 25.8 0.5 5.6 42.2 14.9 (35.4) 329.6 734.4
Profit for the
financial
period - - - - - - - - 14.5 14.5
Other
comprehensive
income/(expense) - - - 0.6 - (8.3) (0.7) - (2.2) (10.6)
Total
comprehensive
income - - - 0.6 - (8.3) (0.7) - 12.3 3.9
Reclassification
of share-based
payments
reserve - - - - (1.2) - - - 1.2 -
Sale of treasury
shares/purchases
of shares to
satisfy employee
share
entitlements - - - - - - - 1.3 (1.3) -
Equity settled
share-based
payments - - - - 0.9 - - - - 0.9
Total
transactions
with owners - - - - (0.3) - - 1.3 (0.1) 0.9
At 28 February
2023 4.0 347.2 25.8 1.1 5.3 33.9 14.2 (34.1) 341.8 739.2
Notes to the Condensed Consolidated Interim Financial
Statements
for the six months ended 31 August 2023
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 28 February 2023 and as described in
those Financial Statements on pages 154 to 169, except for the
adoption of new standards, interpretations and standard amendments
effective as of 1 March 2023.
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 2023:
-- IFRS 17 Insurance Contracts;
-- Disclosure of Accounting Policies -- Amendments to IAS 1 and IFRS
Practice Statement 2;
-- Definition of Accounting Estimates -- Amendments to IAS 8; and
-- Deferred Tax related to Assets and Liabilities arising from a Single
Transaction -- Amendments to IAS 12.
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 28 February 2023 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 28 February 2023.
The interim financial information for both the six months ended
31 August 2023 and the comparative six months ended 31 August 2022
are unaudited and have not been reviewed by the auditors. The
financial information for the year ended 28 February 2023
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 2023 31 August 2022 28 February 2023
Balance Sheet
(Euro:Sterling closing
rate) 0.857 0.860 0.877
Income Statement
(Euro:Sterling average
rate) 0.868 0.846 0.860
Balance Sheet (Euro:USD
closing rate) 1.087 1.000 1.0619
Income Statement
(Euro:USD average rate) 1.089 1.055 1.0438
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 2023 was EUR341.6m.
Accordingly, the Directors continue to adopt the going concern
basis in preparing the Condensed Consolidated Interim Financial
Statements.
2. Segmental analysis
The Group's business activity is the manufacturing, marketing
and distribution of branded beer, cider, wine, spirits and soft
drinks. Two operating segments have been identified in the current
and prior financial period: Ireland and Great Britain.
The Group continually reviews and updates the manner in which it
monitors and controls its financial operations resulting in changes
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.
The identified business segments are as follows:
(i) Ireland
This segment includes the financial results from sale of the
Group's own branded products across the island of Ireland,
principally Bulmers, Magners, Tennent's, Five Lamps, Clonmel 1650,
Heverlee, Dowd's Lane, Finches and Tipperary Water. The Group also
operates the Bulmers Ireland drinks distribution business, a
leading distributor of third-party drinks to the licenced on and
off-trades in Ireland. The Group distributes San Miguel and
Budweiser Brewing Group's portfolio of beer brands across the
island of Ireland on an exclusive basis. The Group's primary
manufacturing plant in this segment is located in Clonmel, Co.
Tipperary, with major distribution and administration centres in
Dublin and Culcavy, Northern Ireland.
(ii) Great Britain (GB)
This segment includes the financial results from the sale of the
Group's own branded products in Scotland, with Tennent's, Caledonia
Best and Heverlee being the main brands. This division includes the
sale of the Group's portfolio of owned cider brands across the rest
of GB, including Magners, Orchard Pig, K Cider and Blackthorn which
are distributed in partnership with Budweiser Brewing Group. The
Group's primary manufacturing plant in this segment is the Wellpark
Brewery in Glasgow, with major distribution and administration
centres in Glasgow, Bristol and London.
The division includes Tennent's Direct, Scotland's leading
drinks distributor which serves the Scottish on-trade with an
unrivalled range of drinks led by beer and cider, and includes
exclusive distribution of Moët Hennessy products, such as Moët and
Glenmorangie, and UK distribution of international brands Tsingtao
and Menabrea.
The segment includes the financial results from Matthew Clark,
the largest independent distributor to the GB on-trade drinks
sector. Matthew Clark delivers a market-leading composite drinks
range across Wine, Spirits, beer, cider, and softs including a
number of exclusive distribution agreements with wine producers and
third-party brands.
In addition, it includes Bibendum, the UK's leading independent
wine specialist servicing customer across the on-trade, independent
retail (through Walker & Wodehouse) and off-trade nationwide.
Bibendum has a portfolio of market-leading premium wines from a
selection of exclusive, globally recognised, artisan and innovative
wine producers.
The Group's Tennent's Direct, Matthew Clark and Bibendum
distribution businesses operate a nationwide distribution network
serving the independent free trade, national accounts, independent
retail and off-trade customers.
This segment also includes the financial results from the sale
and distribution of the Group's own branded products, principally
Magners and Tennent's, outside the UK and Ireland. The Group
exports to over 40 countries globally, notably in continental
Europe, North America, Asia and Australia. The Group operates
mainly through local distributors in these markets and regions.
This segment also includes the sale of the Group's cider and beer
products in the US and Canada.
The Group's 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 2023 Six months to 31 August 2022
Net Operating Net Operating
Revenue revenue profit/(loss) Revenue revenue profit/(loss)
EURm EURm EURm EURm EURm EURm
Ireland 217.9 161.8 19.8 209.9 150.7 19.0
Great
Britain 840.2 710.7 10.7 891.3 752.3 35.9
Total before
exceptional
items 1,058.1 872.5 30.5 1,101.2 903.0 54.9
Exceptional
items (Note
4) - - (3.1) - - (0.1)
Group
operating
profit - - 27.4 - - 54.8
Profit on
disposal - - - - - 1.7
Finance
income - - 0.1 - - 0.1
Finance
expense - - (9.7) - - (7.5)
Finance
expense
exceptional
items - - (1.0) - - (2.0)
1,058.1 872.5 16.8 1,101.2 903.0 47.1
Of the exceptional items in the current financial period, EURnil
charge relates to Ireland (31 August 2022: EUR0.2m credit), EUR1.1m
charge relates to Great Britain (31 August 2022: EUR0.3m charge)
and EUR2.0m was unallocated as it did not relate to any particular
segment (31 August 2022: EURnil).
The profit on disposal of EUR1.7m in the prior financial period
consisted of EUR1.0m relating to the disposal of Admiral Taverns
within the Great Britain operating segment and EUR0.7m further
consideration received in relation to the disposal of the Group's
non-core Tipperary Water Cooler business in FY2021 attributable to
the Ireland operating segment.
(b) Geographical analysis of non-current assets
Ireland Great Britain International Total
EURm EURm EURm EURm
31 August 2023
Property, plant &
equipment 77.2 141.6 7.2 226.0
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 234.6 609.7 32.6 876.9
Ireland Great Britain International Total
EURm EURm EURm EURm
31 August 2022
Property, plant &
equipment 72.7 130.1 4.6 207.4
Goodwill & intangible
assets 157.2 466.7 25.2 649.1
Equity accounted
investments/financial
assets 0.7 0.4 0.2 1.3
Total 230.6 597.2 30.0 857.8
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.
(c) Disaggregated net revenue
In the following table, net revenue is disaggregated by
principal activities and products.
Principal activities and products -- Net revenue
Ireland Great Britain Total
31 August 2023 EURm EURm EURm
Branded* 62.8 111.5 174.3
Distribution** 97.0 588.5 685.5
Co pack/Other 2.0 10.7 12.7
Net revenue 161.8 710.7 872.5
* Branded is defined as being 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.
** Distribution 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.
Ireland Great Britain Total
31 August 2022 EURm EURm EURm
Branded* 58.7 107.1 165.8
Distribution** 90.8 631.8 722.6
Co pack/Other 1.2 13.4 14.6
Net revenue 150.7 752.3 903.0
* Branded is defined as being 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.
** Distribution 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.
Cyclicality of interim results
Under a normal trading environment, Branded (excluding
Distribution) 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 EUR4.9m (31 August 2022: EUR10.0m). The
income tax credit with respect to exceptional items was EUR0.8m (31
August 2022: credit EUR0.3m).
In line with IAS 34 Interim Financial Reporting the effective
tax rate for the period ended 31 August 2023 was 23.6% (31 August
2022: 21.1%). The effective tax rate is influenced by several
factors including the mix of profits and losses generated across
the main geographic locations. The increase in UK corporation tax
rates effective from April 2023 has also had an impact on the tax
charge.
4. Exceptional items
Six months to Six months to
31 August 2023 31 August 2022
EURm EURm
Operating costs
COVID-19 (a) - 0.4
Restructuring costs (b) (0.6) (0.6)
Other (c) (2.5) 0.1
Operating loss exceptional items (3.1) (0.1)
Profit on disposal (d) - 1.7
Finance income (e) 0.1 0.1
Finance charges (f) (1.0) (2.0)
Loss before tax (4.0) (0.3)
Income tax credit (g) 0.8 0.3
Total loss after tax (3.2) -
(a) COVID-19
The Group continues to account for the ongoing effect of
COVID-19 as an exceptional item and, in that regard, in the prior
financial period realised an exceptional credit of EUR0.4m from
operating activities. In the prior financial period, the Group
reviewed the recoverability of its debtor book and booked a credit
of EUR0.4m with respect to its provision against trade debtors.
(b) Restructuring costs
The Group incurred costs of EUR0.6m in relation to redundancy
costs in the current financial period (31 August 2022:
EUR0.6m).
(c) Other
In the current financial period, the Group wrote off balances of
EUR0.5m associated with the Deposit Return Scheme in Scotland,
following the announcement by the Scottish Government in June 2023
that the scheme would be delayed until at least October 2025. In
addition, the Group incurred EUR2.0m of costs related to David
Forde stepping down as Group Chief Executive Officer, in line with
his service agreement and the Directors' Remuneration Policy
approved by shareholders at the Annual General Meeting in July
2021. Further details will be set out in the 2024 Annual Report.
During the prior financial period, the Group released EUR0.1m of
legal costs previously provided as it was concluded that a
proportion of these costs would no longer be required.
(d) Profit on disposal
Admiral Taverns was classified as an asset held for sale in
FY2022 and during the prior financial year, the Group completed the
sale this asset held for sale to Proprium Capital Partners for a
total consideration of EUR63.6m (GBP55.0m), in three tranches. The
sale of the first two tranches was completed by 31 August 2022 and
realised a profit on disposal of EUR1.0m, but this reduced to a
profit on disposal of EUR0.4m by 28 February 2023 with the disposal
of the third and final tranche.
Also in the prior financial period, the Group received further
consideration of EUR0.7m in relation to the disposal of its
non-core Tipperary Water Cooler business in FY2021 due to certain
revenue targets being achieved.
(e) Finance income exceptional items
The Group earned finance income of EUR0.1m in the current
financial period (31 August 2022: EUR0.1m) relating to promissory
notes issued as part of the disposal of the Group's subsidiary
Vermont Hard Cider Company in FY2022.
(f) Finance expense exceptional items
In the current period, the Group incurred costs of EUR1.0m
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.
In the prior financial period, the Group incurred costs of
EUR2.0m directly associated with the covenant waivers secured due
to the impact of COVID-19. These costs included waiver fees,
increased margins payable and other professional fees associated
with the covenant waivers.
(g) Income tax credit
The tax credit in the current financial period with respect to
exceptional items was EUR0.8m (31 August 2022: credit EUR0.3m).
5. Earnings per ordinary share
Denominator computations
31 August 31 August
2023 2022
Number Number
'000 '000
Number of shares at beginning of period 402,007 401,914
Number of shares at end of period 402,007 401,914
Weighted average number of ordinary shares, excluding
treasury shares (basic) 391,878 391,268
Adjustment for the effect of conversion of options 2,010 1,560
Weighted average number of ordinary shares, including
options (diluted) 393,888 392,828
Profit for the period attributable to ordinary shareholders
Six months to 31 August Six months to 31 August
2023 EURm 2022 EURm
Profit attributable to
equity holders of the
parent 12.7 37.4
Adjustments for
exceptional items, net
of tax (Note 4) 3.2 -
Earnings as adjusted for
exceptional items, net 15.9 37.4
of tax
Basic earnings per share Cent Cent
Basic earnings per share 3.2 9.6
Adjusted basic earnings per share 4.1 9.6
Diluted earnings per share
Diluted earnings per share 3.2 9.5
Adjusted diluted earnings per share 4.0 9.5
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 2023: 10.1m shares; 31
August 2022: 10.5m shares, 28 February 2023: 10.2m 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 of the year 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 156,699 at 31 August 2023
(156,699: 31 August 2022).
6. Property, plant & equipment
Acquisitions and disposals
During the current financial period, the Group acquired assets
of EUR6.7m (31 August 2022 total additions: EUR4.3m). Total cash
outflow in the period in relation to the purchase of property,
plant & equipment amounted to EUR12.2m (31 August 2022 total
cash outflow: EUR5.5m) -- the cash flows being greater than the
additions as a result of a decrease in accruals relating to capital
expenditure. Additionally, during the current financial period,
EUR1.5m of assets were reclassified from Other intangible assets to
Property, plant and equipment.
In the current financial period, the Group disposed of assets
from the Wellpark site with a net book value of EURnil, for net
cash proceeds of EUR0.1m and realised a profit of EUR0.1m on the
disposal. In the prior financial period, the Group disposed of no
Property, plant and equipment.
The Group's depreciation charge for six months to 31 August 2023
amounted to EUR14.2m (31 August 2022: EUR14.8m).
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
Other intangible
Goodwill Brands assets Total
EURm EURm EURm EURm
Cost
At 1 March 2022 606.3 326.4 43.2 975.9
Additions - - 2.1 2.1
Translation adjustment (4.7) (3.2) (0.4) (8.3)
At 31 August 2022 601.6 323.2 44.9 969.7
Additions - - 3.0 3.0
Translation adjustment (3.0) (2.1) (0.2) (5.3)
At 28 February 2023 598.6 321.1 47.7 967.4
Additions - - 0.3 0.3
Reclassification to
Property, plant &
equipment - - (1.5) (1.5)
Translation adjustment 3.6 2.4 0.4 6.4
At 31 August 2023 602.2 323.5 46.9 972.6
Amortisation and
impairment
At 1 March 2022 (76.2) (214.6) (28.6) (319.4)
Charge for the period
ended 31 August 2022 - - (1.2) (1.2)
At 31 August 2022 (76.2) (214.6) (29.8) (320.6)
Impairment charge for
the year - - - -
Charge for the period
ended 28 February
2023 - - (1.3) (1.3)
At 28 February 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)
Net Book Value at 31
August 2023 526.0 108.9 14.6 649.5
Net Book Value at 28
February 2023 522.4 106.5 16.6 645.5
Net Book Value at 31
August 2022 525.4 108.6 15.1 649.1
Other intangible asset additions for the financial period were
EUR0.3m relating to the ERP upgrade in GB (31 August 2022: EUR2.1m;
year ended 28 February 2023 EUR5.1m) and the amortisation charge
for the financial period ended 31 August 2023 was EUR1.2m (31
August 2023: EUR1.2m; year ended 28 February 2023 EUR2.5m).
Additionally, during the current financial period, EUR1.5m of
assets were reclassified from Other intangible assets to Property,
plant and equipment.
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 28 February 2023
and given no material changes in circumstances since that date,
they will be formally assessed again at 29 February 2024.
8. Interest bearing loans & borrowings
31 August 2023 31 August 2022 28 February 2023
EURm EURm EURm
Current liabilities
Unsecured loans repayable by
one repayment on maturity 0.6 0.8 (95.0)
Unsecured loans repayable by
instalment - - 0.7
Private Placement notes
repayable by one repayment
on maturity 0.1 0.1 0.1
0.7 0.9 (94.2)
Non-current liabilities
Unsecured loans repayable by
one repayment on maturity (102.9) (94.7) -
Private Placement notes
repayable by instalment - - 0.6
Private Placement notes
repayable by one repayment
on maturity (101.1) (142.5) (100.6)
(204.0) (237.2) (100.0)
Total borrowings (203.3) (236.3) (194.2)
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 1.6x, with interest cover (12 month trailing)
of 4.6x at the current financial period end.
9. Analysis of net debt
Additions/ Cash 31
1 March Translation disposals/ flow, Non-cash August
2023 adjustment remeasurement net changes 2023
EURm EURm EURm EURm EURm EURm
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 (73.8) (1.4) (18.8) 12.5** (1.6) (83.1)
Net debt
including
leases (152.7) 1.0 (18.8) (16.8) (2.5) (189.8)
*Interest bearing loans & borrowings as at 31 August 2023
are net of unamortised issue costs of EUR3.3m.
** Payments are apportioned between Finance charges EUR1.6m and
payment of lease liabilities EUR10.9m in the Condensed Consolidated
Cash Flow Statement.
1 Additions/ Cash 28
September Translation disposals/ flow, Non-cash February
2022 adjustment remeasurement net changes 2023
EURm EURm EURm EURm EURm EURm
Interest
bearing
loans &
borrowings (236.3) 1.3 - 41.9 (1.1) (194.2)*
Cash 131.8 (1.9) - (14.6) - 115.3
Net debt
excluding
leases (104.5) (0.6) - 27.3 (1.1) (78.9)
Lease
liabilities (75.2) 1.5 (11.5) 13.0 (1.6) (73.8)
Net debt
including
leases (179.7) 0.9 (11.5) 40.3 (2.7) (152.7)
*Interest bearing loans & borrowings at 28 February 2023 are
net of unamortised issue costs of EUR1.4m.
Additions/ Cash 31
1 March Translation disposals/ flow, Non-cash August
2022 adjustment remeasurement net changes 2022
EURm EURm EURm EURm EURm EURm
Interest
bearing
loans &
borrowings (256.0) 2.0 - 18.1 (0.4) (236.3)*
Cash 64.7 0.6 - 66.5 - 131.8
Net debt
excluding
leases (191.3) 2.6 - 84.6 (0.4) (104.5)
Lease
liabilities (80.0) 2.1 (8.4) 12.6** (1.5) (75.2)
Net debt
including
leases (271.3) 4.7 (8.4) 97.2 (1.9) (179.7)
* Interest bearing loans & borrowings as at 31 August 2022
are net of unamortised issue costs of EUR2.5m.
** Payments are apportioned between Finance charges EUR1.5m and
payment of lease liabilities EUR11.1m in the Condensed Consolidated
Cash Flow Statement.
During the period to 31 August 2023, 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 2023 and 31 August 2022 were as follows:
Derivative Other Other
31 August
2023 financial financial financial Carrying Fair
instruments assets liabilities Value value
EURm EURm EURm EURm EURm
Financial
assets:
Cash* - 96.6 - 96.6 96.6
Trade
receivables* - 203.7 - 203.7 203.7
Advances to
customers* - 41.6 - 41.6 41.6
Derivative
contracts** 0.8 - - 0.8 0.8
Financial
liabilities:
Interest
bearing loans
&
borrowings* - - (203.3) (203.3) (206.6)
Trade & other
payables* - - (466.9) (466.9) (466.9)
Derivative
contracts** (0.4) - - (0.4) (0.4)
0.4 341.9 (670.2) (327.9) (331.2)
*At amortised cost
** Derivatives designated as hedging instruments
Derivative Other Other
31 August
2022 financial financial financial Carrying Fair
instruments assets liabilities Value value
EURm EURm EURm EURm EURm
Financial
assets:
Cash* - 131.8 - 131.8 131.8
Trade
receivables* - 209.5 - 209.5 209.5
Advances to
customers* - 37.8 - 37.8 37.8
Derivative
contracts** 0.7 - - 0.7 0.7
Financial
liabilities:
Interest
bearing loans
&
borrowings* - - (236.3) (236.3) (238.8)
Trade & other
payables* - - (459.1) (459.1) (459.1)
0.7 379.1 (695.4) (315.6) (318.1)
*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 reflect 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 28 February
2023, 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 2022: no active members)
while there are 45 active members (31 August 2022: 48 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 2022: 2 active
members).
The Balance Sheet valuation of the Group's defined benefit
pension schemes' assets and liabilities have been marked-to-market
as at 31 August 2023 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:
Year ended 28
Period ended 31 Period ended 31 February 2023
August 2023 EURm August 2022 EURm EURm
Retirement benefit
deficit at
beginning of period
(ROI schemes) - - -
Retirement benefit
surplus at
beginning of
period (ROI
schemes) 38.6 31.1 31.1
Retirement benefit
surplus at
beginning of
period (NI
scheme) 3.6 6.5 6.5
Current service
cost (0.2) (0.3) (0.6)
Net interest cost
on scheme
liabilities/assets 0.9 0.4 0.7
Experience gains
and losses on
scheme
liabilities (1.9) (1.3) (4.2)
Effect of changes
in financial
assumptions (2.7) 28.9 42.4
Effect of changes
in demographic
assumptions - - -
Actual return less
Interest income on
scheme assets (0.8) (20.1) (33.9)
Employer
contributions 0.2 - 0.5
Translation
adjustment 0.1 (0.2) (0.3)
Net pension surplus
before deferred
tax 37.8 45.0 42.2
Retirement benefit
surplus at end of
period (ROI
schemes) 34.4 40.0 38.6
Retirement benefit
surplus at end of
period (NI
scheme) 3.4 5.0 3.6
Related deferred
income tax
liability (5.5) (6.7) (6.1)
Net pension surplus 32.3 38.3 36.1
The decrease in the net surplus of the Group's defined benefit
pension schemes from the 28 February 2023 to the 31 August 2023, as
computed in accordance with IAS 19 Employee Benefits is due to an
increase in liabilities due to a marginal decrease in bond yields
over the six-month period as well as experience losses.
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 Period ended 31 Year ended 28
2023 August 2022 February 2023
ROI NI ROI NI ROI NI
Discount
rate 4.05%-4.15% 5.30% 3.45%-3.55% 4.30% 4.30% 5.0%
12. Dividend
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 3.79 cent per ordinary share (2022: EURnil)
was paid to shareholders on 21 July 2023 equating to a distribution
of EUR14.9m (2022: EURnil), all of which was paid in cash.
An interim dividend of 1.89 cent per share for payment on 1
December 2023 is declared to be paid on to ordinary shareholders
registered at the close of business on 10 November 2023. Using the
number of shares in issue at 31 August 2023 and excluding those
shares for which it is assumed that the right to dividend will be
waived this would equate to a distribution of EUR7.5m. 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 EUR3.1m for the six months ended 31
August 2023 (31 August 2022: EUR2.0m) of which EUR2.8m pertains to
non share-based payment compensation (which includes payments of
EUR1.8m to David Forde as a consequence of him stepping down as
Group Chief Executive Officer, in line with his service agreement
and the Directors' Remuneration Policy approved by shareholders at
the Annual General Meeting in July 2021) and EUR0.3m is with
respect to share-based payment compensation (31 August 2022:
EUR1.0m pertains to non share-based payment compensation and
EUR1.0m 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 page 231 of
the Group's Annual Financial Statements for the year ended 28
February 2023, 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 2023 August 2022 2023 August 2022
EURm EURm EURm EURm
Net revenue 0.6 0.2 0.3 0.2
Trade & other
receivables 1.0 0.5 0.1 0.1
Purchases 0.8 0.3 0.4 0.3
Trade & other
payables 0.1 - 0.1 0.1
Loans 1.3 1.4 0.6 0.8
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
There were no material events subsequent to the balance sheet
date of 31 August 2023 which would require disclosure in this
report.
15. Board approval
The Board approved the financial report for the six months ended
31 August 2023 on 26 October 2023.
16. 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, amortisation charges
and equity accounted investments' profit/(loss) after tax.
-- 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 pages 10-11 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') 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 EUR121.7m
(28 February 2023: EUR94.1m or EUR95.2m on a constant current basis; 31
August 2022: EUR109.7m or EUR110.0m on a constant currency basis) to cash
in the period (this represents a cash inflow of EUR26.5m on a constant
currency basis in the six-month period to 31 August 2023). A
reconciliation of FCF to net movement in cash per the Group's Cash Flow
Statement is set out on page 9.
-- 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.
View source version on businesswire.com:
https://www.businesswire.com/news/home/20231025810462/en/
CONTACT:
C&C Group PLC
SOURCE: C&C Group PLC
Copyright Business Wire 2023
(END) Dow Jones Newswires
October 26, 2023 02:00 ET (06:00 GMT)
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