C&C Group posts £96m loss following accounting errors

C&C Group, which manufactures Tennent’s lager and Magners and Bulmers cider, has recorded a €114m (£96m) loss for the financial year ended 29 February 2024, after taxation and exceptional costs.

The considerable change in fortunes following a €40m (£34m) profit in the 2023 financial year follows the discovery of “accounting mistakes and errors” in its previous results, which prompted then-chief executive Patrick McMahon to stand down from his role at the beginning of this month.

In the 2024 financial year, the Ireland-headquartered firm generated nearly €1,653m (£1.4b) in revenue, broadly in line with the prior year. Profit before taxation and exceptional items was €39m (£33m), 41% down on €66m (£56m) in 2023.

Exceptional operating costs totalled €144m (£122m), with €125m (£106m) of that relating to a non-cash reduction in the Magners brand’s intangible assets in the UK.

Other exceptional costs include €8m (£6m) of restructuring costs from C&C’s exit from its Park Royal depot in London and the opening of a larger London premises, together with redundancy and other costs associated with restructuring the business.

Chief executive Ralph Findlay wrote in the group’s latest annual report: “The board regret the impact of the accounting issues highlighted in this report and have moved swiftly and decisively to address this serious matter. With my colleagues on the board, we are working to significantly improve standards of corporate governance and ethical leadership.”

He added that Bulmers and Tennent’s performed strongly in their respective markets, with both brands gaining market share. Volumes of other premium beers including Menabrea, Five Lamps and Heverlee were up 18%.

Earlier this week, group shareholder and private investor Engine Capital published an open letter that claimed C&C suffered from “structural and self-inflicted problems” and is a “perennial underperformer”, and urged the business to conduct a strategic review and consider a sale.

In response, the C&C board stated that it welcomed the feedback, while its annual report now details that its current intention is to return €50m (£42m) to shareholders in the current financial year ending February 2025.

Findlay added: “At the same time, we remain alert to the potential for other organic or acquisitive growth opportunities which strengthen our market position, improve performance and create value for shareholders.”