(Sharecast News) – C&C Group said in a trading update on Tuesday that it expected its first-half operating profit to fall between €29m to €31m.
The FTSE 250 drinks maker said it anticipated net revenue of €870m for the six months ended 31 August, marking a decrease of around 1% compared to last year.
That expected operating profit encompassed most of the singular profit impacts from the disruption caused by implementing its new enterprise resource planning (ERP) system in the Great Britain distribution division – a matter that C&C had disclosed in May.
Nevertheless, C&C announced that considerable strides had been made in rectifying the ERP system’s implementation issues.
Its ‘On Time in Full’ (OTIF) delivery metrics were now back to their levels before the ERP system was implemented.
While the company experienced encouraging sales from its brands in Ireland and Scotland, with a 6% increase in net sales revenue for its branded business during the period, it did face some challenges.
The first half of trading began strongly, buoyed by favourable weather in June.
However, the later months experienced setbacks due to inclement weather in July and August and the economic pressures related to the cost of living, especially in Britain.
On the financial front, C&C’s leverage at the close of the first half was predicted to be 2.1x post-IFRS 16 and 1.6x pre-IFRS 16.
Although that leverage would be slightly higher than its target, mainly attributed to the ERP system challenges, C&C said it was confident in bringing it within its aimed range of 1.5x to 2x by the end of the financial year in February.
In addition to resuming dividend payouts earlier in the year, C&C’s board said it was also considering other avenues for capital returns.
Finally, C&C said it was recruiting a new group chief financial officer, partnering with an independent executive search agency.
Updates regarding the recruitment will be made in the coming days.
“Set against a difficult market backdrop, we are pleased with the strength of the performance of our branded businesses in Ireland and Scotland in the period,” said group chief executive officer Patrick McMahon.
“We are particularly pleased with the progress we have made in restoring customer service levels following the ERP system implementation issues in our GB distribution business within our planned time frame.
“Delivering outstanding service, winning back customers, continued business simplification, and improved operating efficiency remain our top priorities and focus for the second half.”
C&C said it would announce its first-half results on 26 October.
STEM-focused recruitment firm SThree said it remains on track for the full year but reported a continued decline in net fees in its third quarter as the placing of permanent jobs continued to decline.
The company, whose biggest markets are the Netherlands, Germany and the US, said net fees for the third quarter were down 7% year-on-year at £103m, due to a strong comparative period in 2022 and “ongoing global macro-economic weakness”. Fees were down 7% in the second quarter too.
SThree is transitioning more of its business to cover Contract work placings, which now represent 84% of the group’s total net fees compared with 77% the same time last year. Contract net fees were flat year-on-year, a slight improvement from the 1% decline in the second quarter.
However, the decline in Permanent net fees worsened to -31%, from -25%, which SThree said “reflect[s] global market conditions and the strategic transition from Permanent to Contract in several markets, with average Permanent headcount for the quarter down 21% YoY.”
“We continue to deliver a resilient performance, underpinned by the group’s strategic focus on Contract,” said chief executive Timo Lehne.
“While the wider environment remains uncertain, we are encouraged by our sequentially improving new placement performance and strong Contract extensions, demonstrating our clients’ sustained demand for critical STEM skills.”
FTSE 250 (MCX) 18,469.10 0.11%
FTSE 250 – Risers
C&C Group (CDI) (CCR) 139.80p 5.91%
Ceres Power Holdings (CWR) 358.40p 5.35%
SThree (STEM) 375.00p 4.46%
Bridgepoint Group (Reg S) (BPT) 195.40p 3.55%
TUI AG Reg Shs (DI) (TUI) 480.60p 2.91%
CLS Holdings (CLI) 125.20p 2.62%
Hipgnosis Songs Fund Limited NPV (SONG) 84.00p 2.44%
Dr. Martens (DOCS) 147.80p 2.07%
Future (FUTR) 751.00p 1.97%
SSP Group (SSPG) 243.00p 1.84%
FTSE 250 – Fallers
Marshalls (MSLH) 261.20p -3.26%
888 Holdings (DI) (888) 116.60p -2.83%
Essentra (ESNT) 145.20p -2.55%
Helios Towers (HTWS) 81.40p -2.10%
Auction Technology Group (ATG) 652.00p -2.10%
Bytes Technology Group (BYIT) 476.00p -2.06%
IWG (IWG) 157.60p -1.93%
International Distributions Services (IDS) 257.40p -1.87%
easyJet (EZJ) 426.00p -1.87%
Elementis (ELM) 111.60p -1.76%