Bibendum and Matthew Clark owner C&C hails ‘transformational year’

C&C, the Irish drinks group that rescued Bibendum and Matthew Clark following the collapse of Conviviality last year, has seen pre-tax profits rise 17% to €92.9m following a “transformational year”.

Group net revenue at the Magners and Tennants brand owner grew 188.1%, with operating profits up 21.5%, it reported.

The core C&C business saw organic turnover at the group rose 3.2% to 1,574.9m – with the combined Matthew Clarke (MCW) and Bibendum businesses accounting for around 64% (15.7m) of that total figure over the 11 months.

Although the company said the performance of the combined MCW and Bibendum businesses in the 11 months to 29 February 2019 had been severely impacted by the business disruption linked to the collapse of the Conviviality Group, in April 2018 , trading had stabilised across the division in the second half of the year, generating EBIT (earnings before interest and tax)  of €15.7m for the 11 month period and an EBIT margin of 1.6%.

Group CEO Stephen Glancey said the acquisition had changed the dynamic of the business by giving it unparalleled access to the profitable on-trade channel.

“FY2019 was a transformational year for the company. Despite strong multi beverage brand led positions in Ireland and Scotland, access to the wider UK on-trade had always been a challenge. The acquisition of Matthew Clark and Bibendum changes this dynamic,” he said.

He said the recovery and performance of Matthew Clark and Bibendum since acquisition was “particularly pleasing”, contributing to earnings growth of 20% in FY2019, but the plan was to “steadily restore the equity value” of the acquired businesses rather than to chase short term growth or synergy.

“Value and earnings from a low cost base will take priority and our focus will be on low risk, high value product and customers,” he said, acknowledging that “everyone associated with Matthew Clark and Bibendum from employees through to suppliers and customers” had had a pretty difficult year.

“The key to restoring long term confidence is in the skill set of our managers and their colleagues and this will require shareholder support and patience,” he said.

In March Matthew Clark’s managing director David Philips told the drinks business the company had been quietly working to get back on track and safeguard the business for the future, following the collapse of Conviviality including rebuilding wine stocks back to normal levels, consolidating the range, replaying debt and restructuring of the business.

Bibendum CEO Michael Saunders told the drinks business in December the company had “its mojo” back, and he was confident about the present and future health of the business.