FTSE 250 movers: C&C staggers as CEO departs after accounting issues

7th Jun 2024 14:25

(Sharecast News) - FTSE 250 (MCX) 20,547.88 -0.81%

C&C Group shares plunged on Friday after the drinks maker said chief executive Patrick McMahon would be stepping down after accounting errors in the last three years when he was chief finance director.

The company, which makes brands such as Magners cider and Tennents beer, said corrections to the accounts would result in an aggregate underlying operating profit adjustment charge of €5m. Shares fell 8.35% in early trade.

Chair of the board Ralph Findlay has been appointed Group CEO with immediate effect "to ensure continuity of executive leadership" and is expected to remain in post as for between 12 and 18 months.

C&C released unaudited results for the year to February 29 revealing a loss before tax of €111m compared with a profit of €52m a year earlier.

"The adjustments have been made following detailed internal and external reviews of inventory and balance sheet reconciliations after discrepancies were notified to the audit committee earlier this year," C&C said in a statement on Friday.

"An independent accounting firm was appointed to investigate the relevant issues and to determine any potential financial impact and the time period over which the issues extended."

"In addition to accounting mistakes and errors of judgement underlying these historic issues, it is clear from the reviews undertaken that there were failures in the group's reporting framework and that in parts of the organisation behaviours fell short of the levels of transparency demanded and required such that opportunities were missed to identify and appropriately address the relevant issues."

C&C said it would release more detail within the group audited accounts which is expected to be issued before the end of June 2024.

The restatements comprised a €1m adjustment charge in 2023, a €3m adjustment credit in 2022 and a €7m adjustment charge in 2021.

In addition, the company is expecting to record an exceptional prior year (2023) charge with respect to onerous apple contracts of €12m which was initially expected to be recorded in 2024. The total value of the adjustments (underlying plus exceptional) is €17m, it said.

Housebuilder Bellway has kept its guidance for housing completions this fiscal year but has lifted its forecast for pricing.

The company now expects selling prices to average £305,000 for the 12 months to 31 July, down from £310,306 last year but ahead of previous guidance of £295,000 due to changes in product mix.

The company said it has seen stronger trading through the spring selling seasons, with improved affordability supporting an increase in customer confidence and reservation rates compared to the first half of the financial year.

"Customer demand has benefitted from an improvement in affordability, driven by a moderation of both mortgage interest rates and consumer price inflation and an increase in wages. Overall, the backdrop of market stability has led to headline pricing and the level of targeted incentives remaining stable across our regions," the company said.

Private reservations per outlet have averaged 0.62 per week in the period between 1 February and 2 June, up 6.9% on last year, despite the number of outlets rising to 245 from 239.

Bellway is now fully sold for the current financial year, and has seen a substantial increase in its forward order book since the start of the period, from 4,411 to 5,346.

"Bellway has delivered a solid trading performance supported by improved affordability and a seasonal uplift through the spring, and we remain on track to deliver full year volume output of around 7,500 homes," said chief executive Jason Honeyman.

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