Another outsider to run Distillers: Guinness defends decision to recruit a second managing director from another sector

GUINNESS has filled the vacant managing director's chair at United Distillers a year after Crispin Davis, who oversaw the reduction in strength of Gordon's gin, left with pounds 670,000 compensation. He spent just 15 months in the job.

The company has again hired someone from outside the drinks industry to run the largest Scotch whisky company in the world. Finn Johnsson, chief executive of Euroc, the leading building products group in Scandinavia, will replace Mr Davis, who came from Procter & Gamble, the food company.

Tony Greener, chairman of Guinness, stood firmly behind the decision to recruit top management from outside the industry again.

'I looked for somebody able to run businesses around the world, and to run businesses in highly competitive markets,' he said.

The appointment was announced with the company's results for the first half of this year. Pre-tax profits rose 5 per cent to pounds 320m.

While the result matched analysts' forecasts there was concern over an unexpected slump in Venezuela, where inflation is rampant and incomes are being squeezed by high taxation. Profits from the country may drop this year by pounds 20m, which analysts reckon is a 60 per cent decline.

Overall profits from the spirits business fell from pounds 270m to pounds 258m. Volume sales dropped by 5 per cent to 21 million nine-litre cases and profit margins remain under pressure. Excluding exchange rate gains, margins eased from 24 to 23 per cent.

United Distillers had several problems. The first quarter was hit doubly by extreme weather in the US and over- ordering at Christmas by British supermarkets, while trading in France, Japan and Germany remained difficult.

Brewing, led by further growth in sales of Guinness stout, increased profits from pounds 99m to pounds 108m. The result was achieved despite a further downturn in Spain, where the Cruzcampo operation saw profits fall from pounds 9m to pounds 7m.

Moet Hennessy, the 34 per cent-owned associate, saw a strong recovery in champagne and wine sales and contributed pounds 24m to profits.

Mr Greener said he expected the company to report modest growth for the year. Analysts slightly trimmed forecasts to around pounds 915m, which compares with the pounds 875m made in 1983. The interim dividend is lifted 8 per cent to 3.9p.

The shares fell 13p to 448p.