The chief executive of Tennent’s owner C&C Group has stepped down following a botched system upgrade.
David Forde has been replaced in the top job by former group chief financial officer Patrick McMahon, with immediate effect.
Chairman Ralph Findlay has been appointed executive chair to support the management transition, as McMahon will retain his finance responsibilities until his replacement is found.
The group, which manufactures, markets and distributes beer, cider, wine, spirits and soft drinks across the UK and Ireland, announced to the stock exchange that it "has encountered significant challenges, in terms of time, cost and customer service" in the implementation of an Enterprise Resource Planning (ERP) system upgrade in its Matthew Clark and Bibendum (MCB) businesses.
"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 MCB," read the statement.
Service levels had largely returned to normal levels by the pre-close trading update on 23 March, however continuing system implementation challenges - impacted by greater seasonal trading volume - saw a deterioration in service levels during April.
An improvement through May has been achieved by investing additional cost and resources, ahead of a system fix being implemented to permanently restore service to normal levels.
C&C currently expects a one-off impact of circa €25m associated with ERP system disruption in the next full-year results, reflecting the cost associated with restoring service levels and lost revenue.
There is also expected to be a consequential increase in working capital, however leverage is expected to remain within the group’s previously stated range.
Excluding the impact on MCB, C&C is currently performing in line with management expectations and the board is confident in its medium and long-term prospects.
They re-affirmed March guidance, with the group still expecting to report operating profit of €84m.
Findlay 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 added: "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."
The group will issue its full year results on 24 May.
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