Troubled C&C Group saw a further share price fall on the news its CEO has stepped down and a huge €125m writedown of its Magners cider brand.

The drinks supplier and distributor announced the departure of its CEO Patrick McMahon last Friday, after outlining a number of accounting errors that took place under his time as CFO.

Posting delayed accounts due to the discovery of these accounting errors, the group announced adjustments to historic accounts amounting to €5m, going back to 2021.

Consequently McMahon stepped down as CEO with immediate effect, with chair Ralph Findlay stepping in as group CEO while a long-term successor is found – a period expected to take between 12 and 18 months.

Meanwhile, the group posted delayed unaudited accounts that show a sharp drop in profits following disruption to its distribution business.

The group expects to report net revenue for the year to 28 February of €1.65bn, representing a 2% decline, largely due to issues with an ERP system upgrade in its Matthew Clark and Bibendum distribution businesses.

Nevertheless it was “pleased” with the performance of key brands, with Tennent’s and Bulmers gaining share in Scotland and the Republic of Ireland respectively. However, Magners volumes in GB declined 18%, which resulted in a non-cash exceptional charge of €125m.

Operating profit before exceptional items in the year is expected to be €60m, down from €82m. But the huge Magners exceptional charge will see the group post a statutory pre-tax loss of €111m in the period, down from a profit of €52m.

More positively, the group said trading in the first quarter of its new financial year had been “encouraging” and was in line with expectations.

C&C Group shares fell back 7.6% on the announcement to 156.4p and were trading at 155p by Thursday, their lowest level since mid-March.

However, broker Shore Capital suggested the shares may be oversold. “We believe the focus today should be on the outlook… The current valuation arguably implies limited recovery beyond what is baked into near-term estimates, let alone the potential to use its balance sheet and unique last-mile distribution capabilities to further strengthen its offering.”

It added the new leadership team, including recently appointed CFO Andrew Andrea, represent an “experienced and safe pair of hands”.

“We see the writedown on the Magners brand as a reflection of the ongoing focus on the strength of its core brands, Bulmer’s and Tennent’s, and the opportunity across its build premium brand portfolio,” Shore said.