Another year, another C&C chief executive leaves under a cloud.
Barely 12 months into the role Patrick McMahon is stepping down with immediate effect after the owner of Bulmers cider in Ireland was forced to restate three years’ worth of accounts resulting in a net charge of €5 million. The restatement came after accounting errors that occurred during McMahon’s time as chief financial officer.
The press release announcing McMahon’s departure made it clear the buck stops with him: McMahon “acknowledges that the relevant shortcomings occurred at a time when he had overall responsibility for the group’s finance function”, the company said.
The drama, though, leaves other questions for C&C.
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Chairman Ralph Findlay, who will now become CEO for the next 12 to 18 months, led the nomination committee that would have been instrumental in appointing McMahon last year. He has left that committee now. While Findlay led UK pub and brewery firm Marstons for 20 years, C&C shareholders will rightly wonder how he could have made such a bad call on the CEO and if he is the right man to lead the company now.
Perhaps more importantly for C&C, McMahon only came into the job after his predecessor David Forde left, also with immediate effect, after the business took a €25 million charge around the implementation of a new planning system. That’s two CEOs gone in barely 12 months and both have left on a negative note. Is there a cultural issue at the company that goes beyond the CEO, whoever they are?
Perhaps lost amid Friday’s shake-up the overall business appears to be performing in line with expectations, although issues with its Magners cider in the UK appear to be deepening.
The company took a €125 million goodwill charge on Magners UK after volumes fell by almost a fifth. It’s a “modest” contributor to the bottom line these days despite being one of its four core UK brands, but a €125 million writedown is not to be sniffed at for a company with a market cap of £656 million (€771m).
The most important thing for C&C now, though, is to right the ship. As a company it really can’t afford to get its next CEO pick wrong.
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