Business

Tennent's toasts 10 per cent sales rise - but profits leave bitter taste

Some of the Tennent's NI portfolio of brands
Some of the Tennent's NI portfolio of brands Some of the Tennent's NI portfolio of brands

BOSSES at drinks firm Tennent’s having been raising a glass to the company's trading performance in the north after it served up a 10 per cent rise in overall sales to £55.7 million, according to figures filed at Companies House in Belfast.

But a bitter taste was left in their mouths as the firm - which claims to have the widest reach and frontline sales coverage of any Northern Ireland licensed trade supplier - saw operating profit slip back 2 per cent to £6.1m after operating costs rose from just shy of £41m to more than £43.5m.

Tennent's NI, part of the Dublin-headquartered C&C Group, sells a portfolio of beer and cider brands to the licensed on-trade and off-trade throughout the north.

In the year to February its turnover, after paying more than £6 million in excise duties (which was nearly twice that of the previous period), rose to £49.7m million from £47.2m a year earlier.

But operating profit on continuing operations slipped back from £6.2m to £6.1m, although on a bottom line basis it rose from £4.4m to £4.9m.

The company's operating costs rose by nearly £3m over the year, even though they paid less for raw materials and operating lease rentals.

Staff costs rose to £4.1m, despite the company's payroll dropping over the year from 109 to 104 people.

Based at Dargan Road in Belfast, the Tennent's NI portfolio of beer and cider brands is led by Tennent's Lager, Magners Cider and Heverlee, and includes Budweiser (packaged), Stella Artois, Beck's, Bass Ale and speciality beers like Leffe and Hoegaarden.

Meanwhile in its current half year trading to August 31, Dublin-listed C&C Group reported a revenue growth of 13.5 per cent while operating profits were ahead by 9.2 per cent, despite what the firm said were challenging year-on-year comparatives (2018 was exceptional with a World Cup and a hot summer boosting demand).

Group chief executive Stephen Glancey said: “Despite the economic uncertainties linked to macro and political issues, current trading is in line with expectations. Accordingly, we remain on track to deliver double digit growth in FY2020 and on our steady state forward earnings targets.

“We have significant balance sheet strength to support our targeted growth range. C&C is committed to effective capital allocation and progressive capital returns. In the first half of the year, we have invested €3.5m in a range of business return projects."

C&C Group said in September that was discontinuing its Irish stock market listing and switch its financial reporting from euros to sterling from October as it seeks admission to London’s FTSE UK Index Series and hopes to be included on the FTSE All-Share Index and the FTSE 250.