THE chief executive of Tennent’s Lager owner C&C Group has quit as the company reported it had “encountered significant challenges” over the upgrade of a complex resource planning system at its wine wholesaling business.
David Forde has stepped down with immediate effect as C&C told the City it expects the disruption to cost it €25 million, reflecting costs associated with restoring service levels and lost revenue.
Shares closed the day down nearly 15 per cent at 131p.
“The implementation process has taken longer and been significantly more challenging and disruptive than originally envisaged, with a consequent material impact on service and profitability within MCB (Matthew Clark and Bibendum, C&C's wine and spirits wholesaling business).
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“Service levels had largely returned to normal levels by the pre-close trading statement of 23 March 2023, however continuing system implementation challenges, impacted by greater seasonal trading volume, saw a deterioration in service levels in April.
"An improvement through May is being achieved by investing in material additional cost and resources, ahead of a system fix being implemented to permanently restore service to normal levels.”
C&C said Mr Forde, who has ceased to be a director with immediate effect, has been succeeded as chief executive by Patrick McMahon, formerly the group’s chief financial officer.
Glasgow-born chairman Ralph Findlay, the former chief executive of pub giant Marston’s, has been appointed executive chairman to support the management transition while Mr McMahon temporarily holds the CEO and CFO roles.
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Mr Findlay said: "David has informed the board that he believes that now is the right time for him to step down as CEO and to allow the business to go forward under new leadership. The board recognises and thanks David for his contribution to the group throughout a challenging period for our industry.
"As part of our ongoing succession planning we keep internal and external candidates for all key positions under review and we are pleased to have someone with Paddy McMahon's skillset and knowledge of the business to step into that role."
C&C said that excluding the impact on MCB it was currently performing in line with expectations for its 2024 financial year and declared that the board remains “confident in the group’s medium and long-term strategy and prospects”.
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It reaffirmed its expectation of achieving an operating profit of €84m this year and signalled that it would also be able to reinstate dividends to shareholders in respect of its 2023 financial year.
Mr Forde said: "It has been a privilege to lead such a great business as C&C. I am grateful to all C&C colleagues for their dedication, resilience and commitment in recent years. I wish the group all the best for the future under Ralph’s and Paddy’s strong leadership."
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