C&C to sell stake in Admiral Taverns for £55m

Drinks company C&C Group has announced the sale of its entire minority interest in Admiral Taverns to Proprium Capital Partners, with whom it originally invested into Admiral Taverns in September 2017, in a deal worth £55m.

It also confirmed the sale of the shares will be completed and consideration will be paid in three tranches during FY2023. C&C said it estimates that the disposal represents an FY2023 EBITDA multiple of 10.9x. The aggregate proceeds receivable are expected to be used to reduce net debt and contribute to the delivery of its stated medium-term debt/EBITDA target.

As part of the divestment, C&C has also negotiated a long-term supply agreement into the Admiral estate which includes its owned and agency brands.

The announcement came as part of the company’s trading update for the year ended 28 February 2022. The group saw revenues increase 87.8% to £1.2bn.

It added the performance driven by 207.8% growth in on-trade net revenue as a consequence of fewer trading restrictions in the year. There were 267 days of trading where the on-trade was open across Ireland and the UK, compared with 117 days in FY2021.

David Forde, C&C Group CEO, said: “Following a period of unprecedented challenges for the hospitality sector, we are delighted to be back serving our customers and delivering our iconic and much-loved brands to our on-trade and off-trade partners.

“Encouraged by the reaction and resilience of the industry, we are pleased with how trading has recovered and the subsequent strength of customer and consumer demand, which we believe reflects the enduring importance of the on-trade and the role that it plays in our society.”

He added: “Looking forward, we are operating in an evolving and challenging inflationary cost environment and will continue to monitor this closely over FY2023 and beyond. We have already taken action to afford the business a degree of protection, nevertheless we are susceptible to further increases in our cost base which would necessitate further price increases.

“Despite the current positive sentiment in the hospitality sector post reopening, we are mindful of the pressures being faced by consumers and its potential impact on future demand. The group continues to play a key role in the UK and Ireland drinks market and is well positioned, with a market leading platform and a position of financial strength to drive sustainable growth and create long-term returns for our shareholders.”