Slimmed-down Tennent’s owner 'primed and ready' to serve on-trade customers when hospitality sector reopens
Tennent’s owner C&C Group said it was “primed and ready” to serve its on-trade customers when the hospitality sector is allowed to reopen as it outlined millions of pounds in cost savings.
Releasing a trading update for the 12 months to the end of February, the Irish drinks firm said the pandemic has had an “unprecedented impact” on the broader hospitality sector and C&C specifically.
As a result of evolving national lockdowns and regional trading restrictions, the group has not been in a position to provide guidance on profits and formally withdrew guidance at the start of June.
It has taken a series of steps to mitigate, where possible, the negative financial and operational impacts of the coronavirus crisis.
A cost reduction programme is expected to deliver annualised savings of €18 million (£15.5m) against the group’s pre-Covid cost base.
That cost programme includes an “acceleration in the optimisation of the English and Scottish delivery networks” which is scheduled to be completed in the first quarter of the new financial year. This will consolidate volumes from three separate networks into two.
C&C has also postponed non-committed capital expenditure, undertaken temporary management salary and director fee reductions and “significantly” reduced discretionary spending.
It has tapped into furlough schemes to support 2,000 jobs that were directly and adversely impacted by the pandemic and restrictions on the hospitality sector over the past 12 months.
Updating investors, the group said its off-trade volume share in its three core brands had grown over the period. Tennent’s Scottish lager volume share of 26.6 per cent for the 12-month period ended January 24, represents growth of 1.2 percentage points.
C&C Group chief executive David Forde said: “While our ability to trade has been severely restricted in hospitality, our brands have performed strongly in the off-trade.
“The group has been working hard to ensure that we are primed and ready to serve our on-trade customers as and when the hospitality sector is allowed to reopen, from a more streamlined base and with new brand partners, in the post-pandemic market.”
The group is due to announce full-year results on May 26.