Core Viewpoint - C&C Group has lowered its fiscal 2026 profit forecast due to weakened consumer confidence following the UK Budget, resulting in a significant drop in share prices to a near 17-year low [1]. Group 1: Profit Forecast and Market Expectations - C&C Group now anticipates an adjusted operating profit of €70-73 million for the fiscal year ending in February, which is below the market consensus expectation of €79.4 million [1]. Group 2: Consumer Behavior and Spending Trends - Tax increases from the UK autumn budget have constrained household budgets, causing consumers to reduce spending on essentials and shift from higher-cost items like wine to cheaper alternatives [2]. - The company reported that demand in the hospitality sector was softer than expected, with consumers favoring beer over wine and spirits [3]. Group 3: Business Strategy and Performance - C&C Group is exiting less profitable businesses and reducing distribution volumes, but it cautioned that the lag between revenue declines and cost reductions will keep fiscal 2027 profits at similar levels [4]. - Despite meeting expectations during the Christmas trading period, January demand has remained weak and is expected to continue through the end of the financial year in February [3].

Core Insights - C&C Group reported a 4% decline in first-half revenues on a constant-currency basis, generating €861.4 million ($1.1 billion) in the first half of the 2024/25 financial year [1][2] - The expected revenue decline is attributed to lower distribution revenues following the transfer of control of AB InBev off-trade beer distribution in Ireland and the planned exit from some lower-margin businesses [2] - Underlying operating profit is projected to be between €41.5 million and €42 million, consistent with the group's expectations, while the prior six-month period saw a 29% increase in underlying operating profit before exceptional items to €40.3 million [2] Management Changes - CFO Andrew Andrea, who is also the chief transformation officer, will step down to take the CFO role at Domino's Pizza Group, with a search for a new CFO currently underway [3] Brand Performance - C&C Group's core brands, Tennent's and Bulmers, showed solid revenue growth during the six-month period [3] - Following the transfer of control of Magners UK back to C&C Group, the company has initiated a multi-year program to reinvigorate the brand, starting with a new marketing campaign and initial distribution gains in the off-trade [4] Investment and Outlook - Despite a challenging macroeconomic environment, C&C Group is committed to further investments to support growth and remains on track to achieve operating profit in line with market expectations [5]