MARKET REPORT: C&C shares tumble after drinks company behind Magners warns it is likely to take a £22m hit after botched software upgrade
Shares in C&C plummeted after the drinks company behind Bulmers and Magners ciders warned it was likely to take a £22 million hit following a botched software upgrade.
Another blow to the FTSE 250 group is that boss David Forde has decided to step down after almost three years at the helm. Shares fell 14.8 percent, or 22.8 pence, to 131 pence.
The Dublin-based group, which also owns Tennent’s lager, launched a major technology project at its UK beverage distribution businesses Matthew Clark and Bibendum in February.
But it has faced major challenges in implementing a system upgrade that has taken longer than expected.
Such setbacks mean the group now expects a one-off profit of around £22m for the financial year to the end of February 2024.
Blow: The group launched a major technology project at its UK beverage distribution businesses Matthew Clark and Bibendum, but faced major challenges
That comes after an estimated profit of £73 million last year. He will report the final result next week.
A new board of directors will be tasked with reversing C&C’s fortunes after Forde, who became CEO in November 2020, quit his job. Forde, whose previous roles included Managing Director of Heineken UK, will be replaced by CFO Patrick McMahon. Ralph Findlay, Chairman of C&C, will serve as Executive Chairman to oversee the management transition.
The FTSE 100 rose 0.2 percent, or 14.57 points, to 7756.87, but the FTSE 250 fell 0.05 percent, or 9.15 points, to 19289.1. Global equity markets were positive. In Europe, the main benchmark in Germany reached an all-time high. Japan’s Nikkei 225 hit its highest level since August 1990.
On Wall Street, the tech-heavy Nasdaq was also trading at levels last seen in August last year. US officials are expected to work through the weekend to reach a deal on extending the debt ceiling before the June 1 deadline.
Oil prices rose with Brent Crude around $76 a barrel.
Royal Mail owner International Distributions Services suffered another blow after UBS cut its price target from 265 pence to 240 pence.
It capped off a dismal week for IDS in which Royal Mail reported annual losses in excess of £1bn. Shares fell 2.2 percent, or 4.5 pence, to 204.4 pence.
Things fared much better for engineering and industrial technology specialist Smiths Group, which raised its annual sales forecast for the third time in five months.
The upgrade came after sales rose 13.4 percent in the nine months to the end of April. The company now expects sales to grow about 10 percent for the year to the end of July, compared to a previous estimate of about 8 percent. Shares rose 0.4 percent, or 6.5 pence, to 1,711 pence.
The chairman of Vanquis Banking Group ends his five-year term of office. Patrick Snowball, who landed the job, will stay on until a replacement is found this year. Shares fell 2.6 percent, or 6 pence, to 224 pence.
Unbound, the parent company of Hotter Shoes, has put itself up for sale as part of a strategic review of the company. The bid to raise new funds took a hit earlier this month after Marwyn Investment Management reversed its decision to buy £10 million worth of new shares. Shares fell 23.1 percent, or 0.75 pence, to 2.5 pence.
Future’s boss has gained nearly £1 million worth of shares on the day the magazine’s publisher issued a gloomy annual forecast and warned of declining online ratings, according to a stock market filing.
Jon Steinberg, who took over last month, bought 90,617 shares for 886p on Thursday. Shares rose 1.8 percent, or 16 pence, to 896 pence.
There was little rest for Burberry as it ended the week in the red. The luxury fashion company disappointed investors on Thursday after failing to raise its full-year profit forecast as many had hoped. Shares fell 4.1 percent, or 99p, to 2290p.