C&C Group’s performance remains behind expectations for the year following ERP issues in May, the company said in a trading update today (13 July).
Shares in the Bulmers and Magners maker tumbled in May following a botched software upgrade at its Matthew Clark and Bibendum businesses.
The group predicted it would face a one-off hit of around €25m (then-$27m) following the disruption, which impacted trading volumes and saw some customers jump ship.
Speaking ahead of the group’s AGM today, CEO Patrick McMahon said: “We are… reporting progress on the resolution of the ERP system implementation issues.
“However, the group’s performance is not at the level we planned, because of the ERP issues, and resolving them fully, including the permanent restoration of OTIF metrics, remains our immediate objective and focus”.
The group noted “encouraging” performance in early financial year 2024, with net sales revenue of its branded business up 10% in the four months to the end of June. Net sales revenue of its core brands, principally Tennent’s and Bulmers, were up 9% in the same period, it said.
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The group is also in the process of hiring a CFO to replace McMahon, who was promoted to CEO in May following the resignation of David Forde.
Ireland-based C&C Group acquired Bibendum and Matthew Clark in 2018 from the sinking Conviviality ship.
The disruption to the pair in May was blamed on “significant challenges” following the introduction of an Enterprise Resource Planning system upgrade.
In a stock exchange filing at the time, C&C Group said: “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.”
The Ireland-based company said it was expecting a one-off impact of circa €25m in FY2024, off the back of the ERP disruption, but was aiming to solve the software problems by the end of the first half of its fiscal 2024.
Roughly €10m of that fee has been allocated to a loss of customers, but McMahon said he was confident of winning them back in the second half of the company’s 2023/2024 financial year.