Tennent’s revenue driven by pricing as volumes dip – Daily Business

Tennent’s outperformed the Scottish lager market during the summer months, though revenue rose on the back of higher prices which offset lower volumes.

Parent group C&C benefited from the hot summer the World Cup which drove a 4% rise in half-year operating profit to €43.4 million.

Stout remained one of the strongest-performing categories, supported by strong growth among younger adult consumers. The company said this reinforces the opportunity for Tennent’s Stout which launched after the period end.

Tennent’s gained share in the Scottish on-trade. Net revenue increased, with pricing offsetting overall market-driven lower volumes. Tennent’s Bavarian Pilsner was launched last year and Tennent’s Tops earlier this year, attracting new consumers.

The brand and associated intellectual property of Scottish business Innis & Gunn was acquired in March and has been integrated into the group, further broadening C&C’s premium portfolio. The full integration of Matthew Clark and Bibendum has been completed in the period, to create MCB.

C&C’s acquisition of Asahi UK’s wholesale interests was completed this month, following the period end. Customer and supplier onboarding into MCB is under way.

Figures for the six months to 31 August show an operating margin improvement of 40 basis points to 5.5%, despite a 3% decrease in net revenue on a constant currency basis. Distribution revenue declined 4% due to the planned exit of lower-margin business.

The Dublin-based company declared an interim dividend of 2 cents per share.

At the Capital Markets Day last month the group set out how it is transitioning to operate as two business units: C&C Brands and MCB. The medium-term priorities comprise volume growth in C&C Brands and margin expansion in MCB, alongside strong cash generation and disciplined capital allocation. The group is targeting operating profit of €85m in FY2030.

Roger White, chief executive, said: “We have delivered a solid first-half financial performance, reinforcing our actions to build resilience in our business.

“We outlined our key areas of strategic focus at our recent Capital Markets Day, and I am pleased to report that we are seeing early signs of improved momentum across the business.

“The general economic environment remains volatile, and we have the important festive trading period yet to deliver.

“However, we have strong trading plans in place for the balance of the year alongside a number of brand initiatives and the delivery of our developing innovation agenda, all of which give us confidence in our ability to meet market expectations for the full-year.”

‘Best is yet to come’ from low-alcohol push

Speaking afterwards to Daily Business, Mr White said the de-alcoholisation plant being built at the Wellpark brewery in Glasgow should be complete by early next year.

The plant, costing about £2 million, will play a key role in the company’s ‘low-and-no’ versions of Tennent’s, Magners, Bulmers and other brands as it expects the category to become a “meaningful” part of the business.

He said it would increase to a “mid single digit” contribution in a relatively short period. This is a response to changing drinking habits, with consumers choosing to drink with food, consume more tea and coffee in bars, or choose cocktails.

“We have done well with Bulmers Zero in the Republic and we have reformulated Tennent’s Zero but our best is yet to come,” he said. “We have work to do, but we are pushing at an open door.”

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