Shares in premium drinks company C&C Group sunk 12 per cent on Friday after it announced the immediate resignation of its chief executive in the wake of recent financial errors that occurred during his tenure as chief financial officer.
Patrick Mcmahon was chief financial officer during the accounting shortcomings, which span multiple fiscal years and involve significant adjustments to the group’s financial statements. He has informed the board that he will step down as chief executive and a director immediately.
The manufacturer of drinks, such as Tennent’s beer and Magners and Bulmers cider, said that accounting corrections would affect its previously reported financial statements.
These include a total underlying operating profit adjustment of €5m (£4.3m) and an exceptional charge of €12m (£10.2m), related to “onerous apple contracts”.
The board of C&C said on Friday it has agreed “with regret” that it would be in the company’s best interests for Mcmahon to step down, although he will remain as an employee until the end of September to “facilitate a smooth transition”.
Ralph Findlay, chair of the board, has been appointed interim chief with immediate effect. Findlay is expected to serve in the role for 12 to 18 months, during which time the search for Mcmahon’s long-term successor will commence.
C&C has tried to reassure stakeholders, saying that there is no change to the expected earnings for 2024 to 2027 despite the corrections.
As a result of the fiasco, C&C said there was a delay in the preparation of the group’s annual report.
In a “summary” of its unaudited results for the full year 2024, it said it expects revenue to be down two per cent on the previous year.
Earnings before interest, tax, depreciation and amortisation (EBITDA) fell to €94m (£80m), down from €115m (£98m) in 2023. Underlying operating profit also dropped year on year, down to €60 (£51m) in 2024 from €82m (£70m).