Dublin-headquartered drinks distributor C&C (CCR) cut its profit guidance, leaving investors nursing a heavy hangover. The premium cider, beer and spirits maker downgraded FY 2026 earnings guidance and warned of flat profits to come next year. Shares in the drinks giant fell 10% to 116p in early dealings.
| Share price: 116p (-10%) | PE: 14.9x |
| Market cap: £435m | Yield: 4.4% |
The Magners and Bulmers brewer pinned the blame for the earnings alert on last November’s UK Budget. The firm said consumer confidence was weak during the Christmas run-in and blighted trading across November and early December.
SOFTER HOSPITALITY DEMAND
‘Our business performance was driven primarily by softer than anticipated demand in hospitality, alongside adverse product mix, as consumers continue to move away from the consumption of wine and spirits, in favour of beer, across the market,’ explained C&C. The company recruited well-regarded drinks industry executive Roger White to drive a turnaround of the business a year ago.
‘However, trading across the Christmas fortnight was in line with expectations. In January to date we have seen continued softness of consumer demand in the market and anticipate that this will continue for the balance of the current financial year.’
LACKING NEAR-TERM FIZZ
Despite a modest improvement in performance over the Christmas period, C&C now expects year-to-February 2026 adjusted operating profit to be in the €70 million to €73 million range. That is well below last year’s €77.1 million figure and reflecting lower operating profits in the company’s Distribution business.
Encouragingly for the long term, C&C stressed that Scottish beer brand Tennent’s and leading Irish cider tipple Bulmers ‘performed strongly’ across the festive period. Both ‘delivered well’ against new innovation objectives, while cash-generative C&C stressed it remains committed to its capital return plans.
Despite also owning premium and craft ciders and beers such as Heverlee, Menabrea and Orchard Pig, C&C currently expects to generate flat profits in full-year 2027 ‘reflecting the impact of planned reductions in volumes through the Distribution channel as less profitable business is exited’.
We are fans of former AG Barr (BAG) boss Roger White and believe he’ll boost growth at C&C over the long term. However, C&C shares are languishing at a six-month low for a reason.
Cost-of-living pressures are currently hammering consumers, the hospitality industry is in turmoil and the backdrop for selling premium drinks is likely to remain challenging near term.
Read the press release here: https://candcgroupplc.com/investors/
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