C&C boss to step down
Pollaers (Foster’s), Artemiev (Baltika) and Dunsmore (C&C Group): it must be the season for golden handshakes. The Chief Executive of Irish drinks and cider group C&C (Magners, Bulmers, Tennent’s) John Dunsmore will be in line for a multi-million euro payout after he unexpectedly announced his resignation on 19 October 2011.
Mr Dunsmore, who took over three years ago, could cash in to the tune of some EUR 8 million (USD 11.2 million) by the end of C&C’s fiscal year when he formally steps down from the board in February 2012. It has since transpired that Mr Dunsmore has a non-compete clause preventing him from joining a rival for just six months.
So come September next year and Mr Dunsmore could return to the drinks industry, perhaps even with former rival Diageo which is said to be desperate to build up a cider business.
Mr Dunsmore surprised the industry when he announced he would step down at the end of the year and would leave the board at the end of the firm’s financial year in February.
His resignation prompted the company to deny reports of a boardroom bust-up over the direction of the company.
Ever since Mr Dunsmore and his management team arrived from Scottish & Newcastle in 2008 (where he was CEO from 2007 to 2008) and focused the company on the cider and beer market while raising C&C’s share price over 40 percent, there has been speculation that the firm could be sold, with AB-InBev and Molson Coors repeatedly connected to the company.
Mr Dunsmore, however, has always denied he planned to sell.
His resignation was announced as C&C reported half-year results that were described as “robust” given the state of the economy and ongoing declines in Ireland.
Operating profit rose 7.8 percent to EUR 67.4 million (USD 94.5 million) despite revenue falling 9.3 percent year-on-year to EUR 399.3 million, though this was offset by an improvement in operating margin which was up 3.1 percentage points to 25.1 percent.
Sales of Magners cider grew 4.9 percent, mainly driven by a 22.7 percent growth in Magners exports, particularly to Australia and the United States. Sales of Magners in the UK 2.9 were percent higher, which was not bad but still lower than expected.
A decline in cider sales in Ireland – Bulmers volume was down 3.5 percent – was offset by a greater contribution from beer sales.
While the results were broadly in line with expectations, the loss of Mr Dunsmore was seen as a blow to the company.
Mr Dunsmore will be replaced by C&C’s Chief Operating Officer and Finance Director Stephen Glancey.
