Shares in C&C Group rose by close to 4% on Thursday (23 March) after the Dublin-based drinks company said it intends to resume dividend payments for the first time in two years in May.
Issuing a pre-close update for the financial year ended 28 February, the Magners brand owner said it expected to report annual net revenue of EUR1.69bn (US$1.84bn), up 18% from the year prior. Volume growth is expected to be around 4%.
Operating profits, meanwhile, are expected to be EUR84m, at the lower end of its guidance of EUR84-88m.
C&C Group’s shares had previously tumbled in January after the group issued a trading update in which it published a forecast for annual operating profit that fell below market expectations.
In a statement, C&C Group said its full-year profits were down on the back of “softer than expected“ trading conditions in the run-up to Christmas.
Despite this, the company said it expects to resume dividend payments to shareholders upon publishing its full-year financial results in May. C&C Group has not paid a dividend for the past two financial years, a fact it has blamed on the Covid-19 pandemic.
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“Despite a challenging trading backdrop, we are pleased with the performance of our core brands, Bulmers and Tennent’s, which… are both continuing to grow category share,” the group said.
In an upbeat note to investors, Greg Johnson of Shore Capital said the broker was maintaining its own FY24 estimates for both revenues and operating profit.
“Encouragingly, key brands continue to take share, debt is better than expected and the dividend is to be reinstated,” Johnson wrote. “At this stage, with the FY23 outturn broadly consistent with expectations, and… with an end to the rail strikes on the horizon, we maintain our FY24 estimates, along with the assumption of a return to growth from FY25F”.
Last May, C&C Group struck a deal to offload its minority stake in Admiral Taverns, five years after investing in the 1,600-site UK community pub operator.