Distillers top job appointment near: Guinness profits fall after exceptional costs

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The Independent Online
GUINNESS is close to appointing a replacement for Crispin Davis, who resigned as the pounds 250,000-a-year head of the company's United Distillers spirits arm in October.

Tony Greener, chairman of Guinness, said yesterday: 'We have a number of candidates and good progress has been made.'

Guinness, however, still declined to disclose how much compensation had been paid to Mr Crispin, who was on a two-year rolling contract. The amount will be revealed in the annual report next month.

The company yesterday lived up to expectations by reporting a 5 per cent fall in annual profits before exceptional items to pounds 875m. Guinness shares, though, lost 18p to 484p as the stock market digested the company's cautious remarks on trading.

Pre-tax profits were 12 per cent lower at pounds 702m after pounds 173m of exceptional costs for the recent restructuring of the company's tie with LVMH of France.

LVMH, the luxury goods group, yesterday reported static net profits of Fr3bn ( pounds 349m) for 1993.

At Guinness, Mr Greener was guarded on prospects for United Distillers: 'In the short term we face very competitive markets with low inflation impacting directly on pricing. Consumer confidence remains depressed and prospects for our markets will be constrained until it improves.

'At this point of the year there is no sign of generally improved market conditions compared with last year. We expect a modest improvement in profits in 1994.'

Analysts' profit forecasts for Guinness this year range between pounds 920m and pounds 940m before tax.

Volume sales of spirits in 1993 rose 1 per cent to 52 million cases, but trading profits dropped 9 per cent to pounds 701m. Sales of Johnnie Walker Red Label, the world's best- selling Scotch, climbed 6 per cent to 7 million cases. Trading profits from brewing dipped 7 per cent to pounds 237m, mainly due to a sharp fall in returns from pounds 41m to pounds 21m by the Cruzcampo operation in Spain.

Mr Greener said that progress had been made at Cruzcampo through the closure of two breweries, property sales and merging regional entities into one.

A final dividend of 9.18p lifts the total 8 per cent to 12.8p.

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