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C&C Group has announced a change in leadership as it revealed to the City it faces a €25m charge associated with a problematic upgrade of its software for its distribution operations.

David Forde has informed the board that he wishes to step down as CEO and ceases to be a director with immediate effect.

He will be replaced by group CFO Patrick McMahon and will be “available to help ensure a smooth handover of responsibilities”.

Ralph Findlay, current chair, has been appointed executive chair to support the management transition, as McMahon will also retain his responsibilities as CFO until a new CFO is appointed.

The changes come amid C&C Group revealing that it faces a one-off €25m charge related to disruption related to the implementation of a enterprise resource planning (ERP) system upgrade in the Matthew Clark and Bibendum businesses in Great Britain.

It said that the process had led to “significant challenges, in terms of time, cost and customer service”.

“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 Matthew Clark and Bibendum,” it said.

Service levels had largely returned to normal levels by March. 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.

Excluding the impact of the one-off €25m charge on the MCB business, C&C is currently performing in line with management expectations for its 2024 financial year and the board remains “confident in the group’s medium and long-term strategy and prospects”.

Ralph Findlay, chair of C&C, commented: “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.”

Forde commented: “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.”

C&C Group shares have dropped 16.8% this morning back to 128p.

Morning update

UK consumer confidence is slowly building, despite the soaring cost of living, according to GfK’s Consumer Confidence Index.

The overall confidence score increased three points to –27 in May with all measures were up in comparison to last month.

The index measuring changes in personal finances during the past 12 months is up one point at –20, while the forecast for personal finances over the next 12 months increased five points to –8, which is 17 points higher than this time last year.

The measure for the general economic situation of the country during the past 12 months is up one point at –54, nine points higher than in May 2022.

Meanwhile, expectations for the general economic situation over the next 12 months have increased by four points to –30, up 26 points from May 2022.

Joe Staton, client strategy director, GfK, said: “The cost of living crisis has been part of our daily financial reality for a long time, with double-digit inflation and record-high food prices. But despite those pressures, May sees an encouraging three-point uptick in consumer confidence. This is the fourth monthly increase in a row from January’s score of –45.

“While Brits have little control over the general economy, it’s good to see further improvement in how people view their personal finances in the next 12 months. This measure most keenly reflects our hopes and fears for the coming year, and it underpins our ability to spend on goods and services that drive our economy.

“Of course, the headline score of –27 means we’re still deep in negative territory and a long way from any ‘sunny uplands’. However, the overall trajectory this year is positive and might reflect a stronger underlying financial picture across the UK than many would think. But everybody must hold on tight as it could still be a rocky ride out of these tough times.”

On the markets this morning, the FTSE 100 is up 0.3% to 7,766pts.

Risers include Nichols, up 3.5% to 1,050p, Marks & Spencer, up 1.6% to 164.5p and PayPoint, up 1.2% to 431p.

Fallers, along with C&C Group, include Kerry Group, down 3.8% to €94.42, Bakkavor, down 3% to 91.6p and Deliveroo, down 1.7% to 107.3p. 

Yesterday in the City

The FTSE 100 closed down 0.4% yesterday at 7,723.2pts.

Premier Foods was up 2.5% yesterday to 132.8p after beating profit expectation on double-digit sales annual growth, particularly strong in the fourth quarter, and maintaining margin through pricing and cost savings.

The shares set a multi-year high of 138.8p during the course of the day.

Other risers included THG, up 3.1% to 61.4p, Pets at Home, up 1.6% to 388p and SSP Group, up 1.5% to 267.6p.

Marston’s was down 2.8% to 34.2p after announcing the disposals of more pubs.

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