Approximately four-fifths of drinks group C&C’s (CCR) revenues stem from the on-trade channel – pubs, bars and restaurants. It has, thus, been badly affected by coronavirus, with most facets of the hospitality industry put on ice.
Indeed, C&C is burning through €7m (£6.3m) in cash every month. The group has also booked an exceptional charge of €47.6m, reflecting – among other encumbrances – the closure of on-trade premises and expected credit loss provisions from its debtor book.
That said, the group has taken steps to protect funds. It has drawn down its debt facilities, knocked salaries by about a fifth and furloughed more than two-thirds of employees. It has also suspended the dividend and has received a waiver on its debt covenants for 2021, to be swapped with a minimum liquidity covenant and monthly gross debt cap.
Meanwhile, the off-trade channel – supermarkets and stores – has enjoyed greater demand. In April and May, off-trade volumes for C&C’s Bulmers brand were up 62 per cent, up by a quarter for Magners and up 41 per cent for Tennent’s in Scotland.
Still, the Covid-19 impairment costs, along with other expenses, knocked operating profits for the 12 months to February from £96.7m to £29.8m. Broker Investec expects adjusted EPS to shrink to 4.6¢ in FY2021, down from 29.6¢ in 2020.
| C&C (CCR) | ||||
| ORD PRICE: | 205p | MARKET VALUE: | £636m | |
| TOUCH: | 205.5-206.5p | 12-MONTH HIGH: | 417p | LOW:141p |
| DIVIDEND YIELD: | nil | PE RATIO: | 78 | |
| NET ASSET VALUE: | 179¢* | NET DEBT: | 59%** | |
| Year to 29 Feb | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
| 2016 | 0.95 | 56.3 | 14.4 | 13.65 |
| 2017 | 0.86 | -62.9 | -23.5 | 14.33 |
| 2018 | 0.81 | 85.5 | 25.8 | 14.58 |
| 2019 | 2.00 | 81.8 | 23.4 | 15.31 |
| 2020 | 2.15 | 11.6 | 2.9 | nil |
| % change | +7 | -86 | -88 | - |
| Ex-div: | na | |||
| Payment: | na | |||
*Includes intangible assets of €653m, or 210¢ per share **Includes lease liabilities of €93.3m £1 = €1.11 | ||||
