C&C Group CEO Patrick McMahon has resigned “with immediate effect”, the Ireland-based company said today (7 June) as it reported financial mistakes made during his time as CFO.
In a stock-exchange filing, the Tennent’s brewer said it had reviewed its inventory and balance-sheet reconciliations after its board was notified of "discrepancies" earlier this year.
"In addition to accounting mistakes and errors of judgement underlying these historic issues, it is clear from the reviews undertaken that there were failures in the group's reporting framework and that, in parts of the organisation, behaviours fell short of the levels of transparency demanded and required such that opportunities were missed to identify and appropriately address the relevant issues," C&C said.
The Magners brewer said McMahon had acknowledged the “relevant shortcomings occurred at a time when he had overall responsibility for the group's finance function.”
McMahon has consequently informed the C&C board he is stepping down as CEO. He will remain with the company until September to “facilitate a smooth transition”.
The adjustments total a charge of €5m ($5.5m) across its financial years 2021, 2022 and 2023. The group said the adjustments will not change its “expected earnings” for its current financial year.
“These adjustments relate principally to five items, inventory related matters at Clonmel (€10m charge), goods received not invoiced (€3m credit), the timing of release of customer discount liabilities (€3m credit), change in accounting treatment of glassware (€1m charge) together with additional items (net €nil) over the three-year- period in question,” C&C outlined in an investor update.
C&C board chairman Ralph Findlay has been appointed as group CEO with immediate effect. The company said it expects him to remain in the position for 12 to 18 months.
C&C had delayed the release of its 2023/24 financial results, which had been originally scheduled for 23 May. The company said at the time of the delay it was conducting "a review of certain non-cash accounting measurements relating to previous financial periods".
It now “expects” to issue its audited annual report for its 2024 financial year before the end of June.
C&C today posted unaudited financial results for the year ended 29 February 2024. The group's net revenue was €1.65bn, down from €1.68bn the previous year. It reported a pre-tax profit of €39m, down from €66m year on year.
The group has reiterated its underlying operating profit guidance of circa €60m ($65m), alongside an intention to return €150m to shareholders over the next three years.
For the opening six months of the year, C&C returned an operating profit of €30.5m, down 42.8% on the previous year. Net revenue fell 1.2% to €872.5m while adjusted EBITDA sank 33.5% to €45.9m as the company blamed the “one-off disruption of the ERP system implementation” in 2023.
The Dublin-headquartered group’s 2023 performance was impacted by a botched software upgrade at its Matthew Clark and Bibendum businesses.
