LAGER and cider maker C&C Group has certainly had choppy waters to navigate in recent months, most notably this spring’s disastrous implementation of a complex enterprise resource planning (ERP) system upgrade in its Matthew Clark and Bibendum (MCB) wine wholesale business in Great Britain.
This botched IT upgrade saw its chief executive David Forde quit in the immediate aftermath but with former chief financial officer Patrick McMahon now installed at the helm and with a “robust performance” in Scotland and Ireland from its market-leading Tennent’s and Magners brands in the six months to the end of August, the business is being steered on much calmer seas.
The Dublin-based and London-listed firm also saw its share price slump in January after issuing a profit warning as it revised down its earnings expectations for the full year 2023, highlighted continuing cost of living pressures and the impact of rail strikes on footfall in urban areas during the crucial festive period last year.
Owner of Scottish lager giant issues profit warning
Admittedly, trading conditions remain challenging – for C&C and its competitors – and there will no doubt be a lingering hangover for the thousands of bars, restaurants and hotels across the UK which depend on Matthew Clark and Bibendum for supplies of wine and spirits and saw service levels deteriorate amid the software chaos earlier this year.
However, the group, which owns brands including Bulmers Irish ciders, Heverlee, Caledonia Best and Addlestones cider, said service levels had now been now restored to pre-ERP implementation levels – and CEO McMahon pledged that “delivering outstanding service, winning customers, continued business simplification and improved operating efficiency” remain top priorities for the second half.
“Set against a difficult market backdrop we are pleased with the strength of the performance of our branded businesses in Ireland and Scotland in the period,” he noted. “We have made significant progress in restoring customer service levels following the ERP system implementation issues in our GB distribution business within our planned timeframe.”
Tennent's Lager chief quits with immediate effect
As previously indicated by the firm, operating profit of €30.5 million was down €22.8m, principally driven by the one-off €22m impact of the botched IT upgrade. The company also revealed that it had written off a balance of €0.5m associated with the deposit return scheme in Scotland, following the announcement by the Scottish Government in June that the scheme would be delayed until at least October 2025.
However, the Tennent’s Lager owner C&C unveiled net revenue of €872.5m for the six months – down 1.2% on the same period last year – and it is clearly making a good recovery having put its IT problems behind it, working hard to restore customer confidence and hailing a positive outlook for the full year.
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