The event was a further blow to the company’s reputation after a costly botched IT upgrade at the wine wholesaler led to the departure of former CEO David Forde last year.
It means that C&C will be looking for a new CEO for the second time in about a year.
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Mr. McMahon has been replaced by Chairman Ralph Findlay on an interim basis to “ensure continuity of executive leadership.” Mr Findlay, a Scot and former CEO of Marston, is expected to serve as CEO for 12 to 18 months, subject to the appointment of a long-term successor to Mr McMahon. The recruitment process will start in the fall.
C&C said: “The board has regretfully agreed that it would be in the best interests of the group for Patrick to do this. It has been agreed that he will remain employed until the end of September to ensure a smooth transition. The group thanks Patrick for his contribution and services over many years.”
Dublin-based C&C, which also makes Magners Irish cider, said the various adjustments to the previous year’s accounts included a charge of €12 million relating to onerous apple contracts. The charges were initially expected to be recorded in fiscal 2024, which ended Feb. 29.
C&C said the total value of the adjustments, underlying plus exceptional, amounts to 17 million euros and that there will “clearly also be an impact” on its fiscal 2024 results, which it will set out when it releases its 2025 interim results publishes in October. .
The adjustments were made after the company “conducted detailed internal and external reviews of inventory and balance sheet reconciliations after discrepancies were reported to the audit committee earlier this year” and appointed an independent accounting firm to investigate.
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The company noted: “In addition to the accounting and judgment errors underlying these historical issues, the investigations carried out also reveal that there were deficiencies in the group’s reporting framework and that behavior in parts of the organization did not comply with the level of transparency. So much was demanded and demanded that opportunities were missed to identify and appropriately address the relevant issues.”
C&C has released an unaudited summary of its financial performance for the year ended February 29, 2024, showing that group revenues are expected to be “broadly in line” with last year, down 2% to €1.65 billion, despite the one-time disruption of upgrading the wine wholesaler’s ordering software.
“Given a difficult market backdrop, we are pleased with the performance of our brands in financial year 2024, with Tennent’s and Bulmers continuing to gain market share in Scotland and the Republic of Ireland respectively,” C&C said.
However, Magners volumes fell by 18% in Britain, forcing the company to record a €125 million goodwill impairment charge related to its C&C Brands business. The company said it expects a pre-tax loss of €111 million, after an exceptional charge of €150 million, following a profit of £52 million the year before.
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C&C said: “As previously communicated, the implementation of a complex Enterprise Resource Planning (ERP) system upgrade in our Matthew Clark and Bibendum operations had a material impact on the performance of the GB distribution business and, as a result, on the Group in FY2024.
“However, we are pleased that we have been able to restore service levels to pre-ERP implementation levels, and we are confident that our service levels over the key Christmas period were industry leading.”
Shares closed down 7.6% or 12.8p at 156.4p.