C&C swings to operating loss due to pandemic, announces rights issue

Drinks company C&C posted a drop in full-year revenues on Wednesday and said it swung to an operating loss as it took a hit from the pandemic, as it announced a rights issue.

In the year to 28 February, the company swung to an operating loss of €59.6m from a profit of €118.6m the year before, with revenues down 56.1% to €736.9m. C&C said the operating loss was "a direct result of the impact of Covid-19".

Chief executive officer David Forde said: "FY2021 has presented an extraordinary set of circumstances which have challenged our business, and our industry, at every level. With approximately 80% of C&C’s pre Covid-19 net revenue derived from the hospitality sector, the pandemic has had an unprecedented impact on the group.

"Our business model was proven during FY2021 as, during the periods of on-trade restrictions easing, we returned to profit and cash generation. C&C’s brand strength was demonstrated by our core brands growing off-trade share, reflecting their special relationship to the consumers they serve. We will build on this as the hospitality sector reopens, targeting cider share growth and building our share in premium beer which we continue to see as a significant market opportunity."

The company also announced a rights issue to raise gross proceeds of around £151m as it looks to reduce leverage and provide sufficient liquidity to manage near-term trading uncertainty. Shareholders will receive six rights for every 23 C&C shares they own. They can take up their allocation for 186p per new share.

C&C said the proceeds will give it the capital structure to support the business during further potential disruptions from the pandemic and to deliver on its strategy once unrestricted trading resumes.

At 0945 BST, the shares were down 16% at 256.56p.