Matthew Clark regains some fizz
Wednesday 15 January 1997
They are still less than half the 801p reached last May before Clark shocked the City with a warning that sales of its premium bottled ciders, Diamond White and K, had fallen 50 per cent as its predominantly young, female drinkers turned instead to the new alcoholic "soft" drinks known as alcopops.
Mr Aikens said the company had drawn up an action plan that would see advertising spend rise fourfold to between pounds 8m and pounds 10m. The lion's share of that is to be spent on Clark's Blackthorn brand, which has fallen behind rival Bulmer's Strongbow cider. A "creamflow" version of Blackthorn, with a beer style head, is to be launched as Blackthorn Gold.
Other plans include a pounds 2m advertising campaign to boost Diamond White's flagging fortunes and attempt to regain the young women who had turned to alcopops such as Bass's Hooper's Hooch and Merrydown's Two Dogs. A lower alcohol version, Diamond Lite, is to be re-trialed after a previous inconclusive survey. Mr Aikens said Clark was taking the lead in a effort to end the bitter price war in mainstream ciders that has seen it fighting with HP Bulmer for control of a market the two companies dominate.
He added that the appointment of a new marketing director was imminent, with a shortlist of five candidates being interviewed. In addition, 40 new vacancies had been created in an expanded sales and marketing department.
Clark presented a contrite face to the City yesterday, admitting it had misjudged the need to defend its brands with advertising support. It estimated the full-year impact of declining Diamond White profits at pounds 11m. Other problems, such as the price war and a loss of market share in the on-trade are expected to cost another pounds 11m.
In the six months to October, pre-tax profits rose 40 per cent to pounds 21.6m (pounds 15.4m) on sales 69 per cent higher at pounds 293m. The result was boosted by the inclusion for the first time of Taunton and the shares issued for that purchase reduced earnings per share 26 per cent to 16.8p.
Mr Aikens refused to comment on speculation that a takeover approach had been made by Guinness or Philip Morris.
Investment column, page 18
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