REG - C&C Group Plc - PY Accounting Adjustments and Directorate Changes

C&CAnnouncement

07/06/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240607:nRSG4994Ra&default-theme=true

RNS Number : 4994R  C&C Group Plc  07 June 2024

Prior Year Accounting Adjustments and Directorate Changes

 

This announcement contains inside information.

 

Dublin, London 7 June 2024: C&C Group plc ('C&C' or the 'Group')
announces that, as reflected in the financial update RNS released this
morning, prior year accounting adjustments are expected to be made in respect
of inventory and balance sheet items. There is no change to the Group's
expected earnings for FY24-FY27, however they do impact previously reported
financial statements as summarised below.

 

Prior Year Accounting Adjustments

These adjustments in aggregate represent an underlying operating profit
adjustments charge of €5m. By year, the restatements comprised a €1m
adjustment charge in FY2023, a €3m adjustment credit in FY2022 and a €7m
adjustment charge in FY2021. In addition, the Group is expecting to record an
exceptional prior year (FY2023) charge with respect to onerous apple contracts
of €12m which was initially expected to be recorded in FY2024. The total
value of the adjustments (underlying plus exceptional) is €17m.  There will
clearly also be an impact on the unaudited FY2024 Interim Results, details of
which will be set out in the FY2025 Interim Results in October.

These adjustments relate principally to five items, inventory related matters
at Clonmel (€10m charge), goods received not invoiced ("GRNI") (€3m
credit), the timing of release of customer discount liabilities (€3m
credit), change in accounting treatment of glassware (€1m charge) together
with additional items (net €nil) over the three-year period in question.
These adjustments are set out in more detail in the Summary of FY2024
Financial Performance (Unaudited) update announcement released separately this
morning. Neither that announcement, nor the financial information set out in
this announcement, is, nor is it intended to be, a preliminary statement of
annual results given they each contain unaudited financial information which
has not been agreed with the auditors as would be required for a preliminary
statement of annual results.

 

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. 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. The issues that were identified were then considered in
detail by both the Group's Audit Committee (the 'Committee') and the Board, as
part of the finalisation of the Group's FY2024 Annual Report and Accounts.

 

The Board and Audit Committee have considered the background to these items in
detail, including representations and accuracy of information provided to the
external auditors and to the Committee and the Board at the time the items
arose and in subsequent financial years. 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. Further details
relating to the underlying issues and the consequent actions and improvements
to the controls and governance frameworks that have been and are being taken
to ensure that there is no repetition of these issues will be set out within
the Group Audited Annual Report and Accounts which is expected to be issued
before the end of June 2024 and the Board will also ensure that the Company
complies with all related legal and regulatory requirements.

Directorate Changes

The Group's Chief Executive Officer, Patrick McMahon, was Chief Financial
Officer during the periods to which these adjustments relate and acknowledges
that the relevant shortcomings occurred at a time when he had overall
responsibility for the Group's finance function. Accordingly, he has informed
the Board that he will step down as CEO and as a director with immediate
effect. The Board, with regret, has agreed that it would be in the best
interests of the Group for Patrick to do so. It has been agreed that he will
remain as an employee until the end of September to facilitate a smooth
transition. The Group thanks Patrick for his contribution and service over
many years.

In addition to his duties as Chair of the Board, Ralph Findlay has been
appointed Group CEO with immediate effect to ensure continuity of executive
leadership. It is expected that he will remain in post as Group CEO for
between 12 and 18 months, subject to the timing of the recruitment of
Patrick's long-term successor with the relevant search to commence in the
autumn.

 

In light of his appointment as Group CEO, Ralph Findlay has stepped down as
Chair of the Nomination Committee and the Senior Independent Director, Chris
Browne, has been appointed Chair of the Nomination Committee with immediate
effect.

 

Executive Arrangements

 

All remuneration arrangements for Ralph Findlay are consistent with the terms
of the Directors' Remuneration Policy approved by shareholders at the AGM in
July 2021 (the 'Policy'). As Group CEO, Ralph Findlay will receive an annual
base salary of €702k, a pension allowance of 5% of salary in line with the
contribution available for the Group's employees, a benefit allowance of 7.5%
of salary and maximum annual bonus opportunity of 125% of salary.

 

Patrick McMahon's remuneration and severance terms will be in line with his
service agreement and the Policy.

 

END

 

 

 

Contacts

 

C&C Group plc

Email: investor.relations@candcgroup.ie
(mailto:investor.relations@candcgroup.ie)

 

Investors, Analysts & Media

 

FTI Consulting

Jonathan Neilan / Paddy Berkery

Tel: +353 86 231 4135 / +353 86 6025988

Email: CandCGroup@fticonsulting.com (mailto:CandCGroup@fticonsulting.com)

 

About C&C Group plc

C&C Group plc is a leading, vertically integrated premium drinks company
which manufactures, markets and distributes branded beer, cider, wine,
spirits, and soft drinks across the UK and Ireland.

·      C&C Group's portfolio of owned/exclusive brands include
Bulmers, the leading Irish cider brand and Tennent's, the leading Scottish
beer brand; as well as a range of fast-growing, premium and craft ciders and
beers, such as Heverlee, Menabrea, Five Lamps and Orchard Pig. C&C exports
its Magners and Tennent's brands to over 40 countries worldwide.

·      C&C Group has owned brand and contract manufacturing/packing
operations in Co. Tipperary, Ireland and  Glasgow, Scotland.

·      C&C is the No.1 drinks distributor to the UK and Ireland
hospitality sectors. Operating through the Matthew Clark, Bibendum, Tennent's
and Bulmers Ireland brands, the Group has a market leading range, scale and
reach including an intimate understanding of the markets it serves. Together
this provides a key route-to-market for major international beverage
companies.

 

C&C Group plc is an Irish incorporated FTSE 250 company headquartered in
Dublin and is listed on the London Stock Exchange.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  STRQKABBDBKBDAK