Clark brings in consultants

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The Independent Online
Matthew Clark, Britain's number two cider firm, is on the verge of appointing management consultants to advise on a "root and branch" overhaul of marketing strategy after its shock profits warning two weeks ago.

The group hopes to make an appointment this week in the first major move to allay City investors' wrath.

Institutions were furious at the surprise warning, which the firm blamed on a dramatic fall in sales of Diamond White and K premiums ciders and Babycham following the success of new alcoholic soft drinks - "alcopops" - over the summer.

Chief executive Peter Aikens, whose job is under threat, is leading a hectic tour of institutions to calm the storm.

By the end of last week, 26 visits had been made to the biggest investors, who include PDFM, with a 20 per cent stake, Robert Fleming, M&G, Jupiter, Prudential and BZW.

Last week, chairman Michael Cottrell admitted the firm had been caught on the hop by alcopops. "We have no answers yet, except that our marketing strategy, especially for Diamond White, has not worked," he said.

The firm denied speculation about management and accounting problems, following rapid growth since 1992, culminating in last November's pounds 275m purchase of Taunton Cider.

Finance director Hugh Ether-idge objected strongly to suggestions that the company may have made use of pounds 32m of provisions to mask underlying problems.

All were earmarked for specific uses, he said, and last year in its accounts the group had actually released pounds 2.2m, which had been overprovided against 1994's acquisition of Gaymer's Cider.

The group rejected criticism that its brands had been damaged by aggressive advertising cuts to boost profits and please the City. "We have increased advertising and promotion budgets. But what was right at the beginning of the year is not appropriate now," Mr Etheridge said.

The group also rejected industry talk of problems in integrating its Freetraders whole- saling business with Griersons, which was bought for pounds 23m from Forte last year. Former Griersons' executives said last week that sales of around pounds 90m a year had suffered from a lack of strategy.

Neither Matthew Clark nor Freetraders management communicated with Griersons directors after the deal and financial reporting and management controls had been absent, they said.

The different nature of the businesses also belied apparent "synergy". Griersons specialises in quality wines to hotels and restaurants, while Freetraders is strong in beer, ciders and soft drinks to pubs and clubs.

Matthew Clark admitted that Griersons had seen some fall-off in sales, but said this was anticipated and the wholesaling business is now performing to budget.