Acquisitions not key focus as CEO Roger White says drinks group ‘needs to love what we have got a bit more first’
Roger White, who has been in post for 132 days, said criticism that C&C’s branded drinks portfolio, which also includes Tennent’s lager, had been stagnant for some time “were valid”.
“I think it is an indication that we need to love what we have got a bit more first,” he told the Sunday Independent.
“I think the criticism, as you suggested, is valid. I don’t think we have done anything of any material nature to stretch the brands we have got, to develop them to bring customers and consumers anything new and exciting.
Last year shareholder Engine Capital called for a sale of the business, describing it as a ‘perennial underperformer’
“It doesn’t need to be strategically earth-shattering, just stretching Bulmers and Tennent’s,” he added. “These are brands that can carry innovation, that can carry new things into the market, that can carry limited editions. They just need a bit of ‘new news’. We need to keep them fresh and at the centre of consumers’ minds.”
White said the UK-listed drinks group had a strong balance sheet capable of making acquisitions. However, this was not his “primary objective” at the moment, with the current focus on improving what C&C already owns.
“I think it would be stupid of me to say that we are definitely not doing anything because we have got the financial capacity, and if the right thing comes along that creates the right amount of value for shareholders, then it is incumbent on us to fully review it,” he said about acquisitions. “But it is not our primary focus.”
White was speaking after C&C released its results for the year ended February 28. While revenue was flat at €1.66bn, pre-exceptional operating profit jumped 29pc to €77.1m, with Tennent’s and Bulmers securing market share gains.
White said C&C’s results for the year were ‘solid rather than outstanding’
The positive results come after a turbulent period for C&C. Last year, the Bulmers maker’s former CEO, Patrick McMahon, stood down following accounting errors at the company. Shareholder Engine Capital also called for a sale of the business, describing it as a “perennial underperformer”.
White said C&C’s results for the year were “solid rather than outstanding” as the business looks to bounce back from previous problems.
“I think this is a bit of a recovery year,” he said. “We are happy that we put in a solid, resilient performance across the group. It is good to see customer service levels across our business recovering, giving our customers increased levels of support.
“My focus is really on simplification, focusing on execution, getting everybody focused on their customers and trying to get hold of what are great brands and make them even better by developing them and bringing something new to customers in all our markets. Something that is valuable to them, tangible and will improve all their businesses.”
Asked what the market could see C&C do with its brands, White said some examples could include enhancing its low and no-alcohol offerings and bringing “excitement and interest both in the liquid and the packaging to bear”.
Magners, the UK equivalent of Bulmers, is currently undergoing a revamp in the market. White said this would include a new marketing campaign, refreshed packaging, and improving the zero-alcohol proposition “in the short term”.
“I don’t think there is any particular rocket science,” he said. “It is just giving the brand the love it needs.
“It is a brand with lots of equity. So consumers know the brand, they recognise it, and there is no awareness issue with it. We just need to move it back up their purchase intent. That is about getting front of mind and reminding people what is great about the brand.”
C&C also owns the Five Lamps lager brand in Ireland, which has been marketed as a Dublin-brewed craft beer-style product.
The craft beer industry has undergone its own challenges in recent years. How will C&C enhance the Five Lamps brand?
White said there was “work to do”.
“We need to be really clear how we are going to support and get behind some of these smaller brands like Five Lamps. I think the product is good.
“If I was brutally honest, I don’t think there has been a particularly well-thought-through plan of how we are going to grow and develop some of these smaller brands.”
Following last year’s calls from Engine Capital for C&C to sell some of its assets, the drinks group struck a deal with the US-based activist investor that would see it appoint a new non-executive director.
I’ve still got to fully understand how the business all works, how it all fits together
White said there are no reviews about selling brands.
“As far as I’m concerned, we have got a clean slate. From my point of view, that is why I took this job. I’ve still got to fully understand how the business all works, how it all fits together, what we can do with our brands and how we can create value over the long term for shareholders.
“I would say I have plenty of work to do to get my head around that. But, we are focused on the basics just at the minute.”
Looking to the year ahead, there appears to be some optimism around C&C, reflected in its share price jumping by over 3pc in London at one stage following its results announcement.
We have had a nice few weeks of weather, which always makes you feel a little bit better
White, who was the boss of Irn Bru maker AG Barr, is well-versed in leading a business through a period of transformation. He is now looking forward to working on his plan, no matter the challenges that come his way.
“We have had a nice few weeks of weather, which always makes you feel a little bit better about life,” he said.
“It has been an encouraging start to the year. But, we are still very conscious that hospitality in all geographies is tough.”
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