C&C, the beverage producer, saw a drop in shares on Friday following the sudden departure of its CEO and the subsequent revision of its profits for the past three years, incurring a core charge of €5 million.
The company communicated that Patrick McMahon, its top executive who had been in position for just a year, had stepped down effective immediately.
Based on inventory and balance sheet items, C&C assured that prior year accounting adjustments were projected to take place, with no variances to its profit predictions for the years 2024-2027. The adjustments, equating to a core operating profit adjustments cost of €5 million, is slated to affect the formerly published financial reports.
Shares in the company took a dip of 10.2 per cent in the initial London trades, reaching 152 pence.
Before CFO McMahon designated the financial function to someone else in March of this year, he controlled the finances for the company since May 2020. The company highlighted that the identified inadequacies occurred while he was in charge of the group’s finances.
In an agreement, McMahon will maintain his position till September ends to ensure a seamless transition. Ralph Findlay, the chairman of the company, has been appointed as CEO to maintain the stability in executive leadership. His tenure is expected to last between 12 to 18 months until a successor is chosen.
The producer of Bulmers cider in Ireland and Magners in the UK, amongst others, declared that the reforms included a €1 million adjustment cost in 2023, a €3 million adjustment credit in 2022, and a €7 million adjustment cost in 2021.
Furthermore, C&C anticipates registering an extraordinary prior year (2023) charge of €12 million pertaining to burdensome apple contracts, which was initially planned to be noted down in 2024. The total amount of the adjustments (core and extraordinary) is €17 million.
Two weeks after its original schedule, C&C unveiled its unaudited full-year results. The reason for the delayed results, due to accounting problems, was announced last month by the company.
The firm anticipates a net turnover of €1.65 billion for the entirety of 2024, indicating a decrease of 2% from the previous year. The operating earnings before taking into account exceptional items are projected to reach €60 million, while the overall profit, once finance income and expenses, tax, depreciation, and amortisation charges are deducted, before any exceptional items, is forecasted to be €94 million.
Despite the challenging market conditions, the company reported satisfaction with its 2024 full-year brand performance. Tennent’s and Bulmers were highlighted as having increased their share in the Scottish and Irish markets correspondingly.
C&C expressed its strategic positioning to benefit from the forthcoming summer period, notably the Euro ’24 tournament featuring the participation of the English and Scottish football squads.
Although a level of scepticism about the consumer outlook for the coming year was expressed, the changing market dynamics suggest consumers are looking for reasonably priced indulgences such as pub and restaurant visits.