Tivez owner C&C Group warned trading conditions were “significantly affected” by the reintroduction of Covid-19 restrictions in December, causing shares to fall nearly 6% at the start of trading this morning.
The stock exchange’s update for the period following its last earnings statement on Oct. 28 explained that third-quarter trading was “slightly ahead” of reported operating profit guidance in the $ 50 million range. euros to 55 million euros.
During the key festive trading period, C&C traded directly with 81% of outlets in the market from 2020, delivering 64% of volume against a 90% expectation.
“While December’s performance was therefore below expectations, the group generated modest profit for the month,” the statement read.
Last month, Public Health Scotland and the Scottish Government advised people not to attend Christmas celebrations over concerns over the Omicron variant, which has resulted in a significant reduction in party bookings in the hospitality industry.
This was followed by the introduction of new restrictions on December 27, which saw the closure of nightclubs for a period of three weeks and the reintroduction of a physical distance of one meter in hospitality establishments and entertainment, while table service is now also required when alcohol is served for consumption on site.
“The operating profit for the period S2 of fiscal 2022 will be affected by the nature, extent and duration of government restrictions,” C&C said, adding that an updated operating profit range will be announced in a pre-closing press release in March.
The beverage group said it was pursuing a cost-cutting program to achieve € 18 million in savings in 2022, with the implementation of price increases to manage inflationary cost pressures, as well as ‘well-publicized’ effective management ‘of UK supply chain disruption.
The statement concluded that C&C has a “strong capital structure” that provides adequate liquidity to meet current and expected business needs, as well as free cash flow generation and conversion characteristics.
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