C&C Group, the owner of the Tennent's and Bulmers drinks brands, has reported higher first-half profit and margins despite lower revenue.
Operating profit before exceptional items rose 4% to €43.4 million in the six months to 31 August.
Operating margin improved by 40 basis points to 5.5%.
Net revenue fell 3% at constant currency to €794.9 million.
The company said trading since the period end was in line with expectations, and it expects full-year operating profit to match market forecasts.
It warned that conditions remain volatile and that the important Christmas trading period lies ahead.
Brands grow, distribution shrinks
Branded revenue rose 3.2% at constant currency to €176.5 million, helped by warm summer weather, the FIFA World Cup, brand investment and new products.
Branded operating profit climbed 9.4% to €29.2 million, with margin up 0.8 percentage points to 16.5%.
C&C bought the Innis & Gunn brand in March for €5.1 million, and launched Tennent's Stout after the period end.
Distribution revenue fell 4.2% at constant currency, as C&C deliberately walked away from some lower-margin customers.
Falling outlet numbers and weak wine and spirits sales also weighed.
Distribution operating profit fell 6.6% to €14.2 million, with margin flat at 2.3%.
Cash and Asahi deal
Underlying free cash flow rose 18% to €36.9 million.
Net debt excluding leases fell to €113.7 million, and leverage was 1.4 times, against 1.1 times a year earlier.
The interim dividend is 2.00 cent a share, down from 2.08 cent.
On 20 October, C&C completed the purchase of Asahi UK's wholesale interests, for nominal consideration, to be folded into its Matthew Clark and Bibendum (MCB) wholesale arm.
At a capital markets day on 24 September, the group targeted operating profit of €85 million in the 2030 financial year.
Roger White, chief executive, said C&C had delivered "a solid first-half financial performance".
