Drinks group C&C has said it will pay a €1.3 million settlement to its former chief executive, who stepped down suddenly earlier this year after the Bulmers Irish Cider-maker had to restate three years of earnings due to accounting errors.
In interim results published on Tuesday, C&C said it will engage with shareholders over the coming months to “provide further information” in relation to its “approach” to the fee to be paid to Patrick McMahon, who resigned after just a year at the helm of the business.
The fee – which is not material for C&C, based on an assessment of group materiality last year included in its most recent annual report – is less than the €1.9 million termination payment the C&C proposed to pay Mr McMahon’s predecessor, David Forde.
Shareholders voted by 59.5 per cent to 40.5 per cent to reject that €1.9 million payment as part of the group’s directors’ pay report at its annual general meeting in August. After leading the business through the Covid-19 pandemic, Mr Forde stepped down in August 2023 with Mr McMahon, then chief financial officer, stepping into the role.
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Mr McMahon’s sudden departure was announced in June 2024, as the group restated three years of its earnings due to accounting errors that occurred during his time as chief financial officer, resulting in an underlying charge of €5 million.
On Tuesday, C&C said it “accrued €1.3 million of costs” over the six months to the end of August related to Mr McMahon’s resignation.
“The termination arrangements reflected the legal advice received by the company and were consistent with the directors’ remuneration policy approved by shareholders at the AGM in July 2021. We will engage with shareholders during the coming months to provide further information in relation to the approach.”
Meanwhile, the group said its search for Mr McMahon’s permanent replacement as chief executive was ongoing.
His departure, which initially crashed the group’s share price, led to activist shareholder Engine Capital launching a campaign to have the group put up for sale. Engine’s push came to an end in August when the board agreed, among other things, to appoint a new non-executive director, with former PwC Ireland managing partner Feargal O’Rourke subsequently joining the board.
On Tuesday, interim chief executive Ralph Findlay said the group continues to “rebuild” momentum. “Despite unfavourable summer weather, our brands demonstrated inherent appeal and resilience, with both Tennent’s and Bulmers growing market share,” he said.
Sales of Bulmers cider fell sharply over the summer, one of the coolest in nearly a decade in Ireland, C&C said.
The group, which also makes and distributes Tennent’s lager, said it remains on-track to deliver full-year operating profits of around €80 million – in line with the market’s expectations – after pretax profits topped €40 million over the six months to the end of August.
In Britain, sales of Magners cider – down 10 per cent over the period – “remained under pressure”, C&C said, “with the lack of sunshine in the summer months influencing cider consumption”. This was particularly the case in the off-trade, where sales down 8.5 per cent over the period.
Earlier this year, the group said it had decided to reassume control and distribution of Magners cider in the UK from Budweiser. The mutual agreement will also see AB InBev, Budweiser’s parent, take back will control and distribution of its own beer portfolio in the off trade in the Republic from C&C, which will continue to supply Budweiser products to pubs.
C&C hopes the move will reinvigorate Magners in the UK and said it plans to “reinvest in the brand” in the second half of its financial year, in time for summer 2025.
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