An expected €43m to €44m in first-half underlying operating profit keeps C&C Group on course to meet full-year market consensus, the UK-listed drinks company reported Thursday alongside an agreement to acquire Asahi Group Holdings' Nectar Imports wholesale and distribution business in the UK for nominal consideration. Net revenue for the six months to 31 August fell 3% year on year: branded revenue rose 2%, distribution revenue dropped 4%. C&C called the Nectar Imports acquisition an attractive opportunity to structurally grow its Matthew Clark Bibendum wholesale operation.
| Revenue segment | H1 YoY (reported) |
|---|---|
| Net revenue | -3% |
| Branded | +2% |
| Distribution | -4% |
Distribution is the drag on the headline number. Adding Nectar Imports' route-to-market assets and customer base pushes volume into Matthew Clark Bibendum precisely at the segment that is underperforming.
Route-to-market: what transfers, what Asahi keeps
MCB acquires the lease on Nectar Imports' depot in Hindon, Wiltshire, assumes supply arrangements for the Fuller, Smith & Turner on-trade estate, and inherits the direct distribution customers Asahi UK had been serving from the Griffin Brewery in west London. Asahi ends its direct distribution from the Griffin Brewery site; those activities transfer to MCB under the terms of the deal. Roger White, C&C Group's chief executive, said the transaction would deliver a significant number of new customers to MCB while bringing immediate scale and efficiency to group operations.
Asahi retains full ownership and operational control of Griffin Brewery, London Pride production included. Tim Clay, Asahi UK's managing director, said MCB was the right long-term home for Nectar Imports following "a thorough review of Nectar Imports and the evolving market landscape." The Japanese brewer's stated aim is to concentrate on brewing, brand building, and consumer engagement. Clay added that the agreement creates what Asahi sees as the best outcome for its customers while strengthening the company's route-to-market.
C&C said it remains on track to deliver full-year operating profit in line with market expectations. The company flagged one caveat: market conditions remain volatile ahead of the Christmas trading period.