Bulmer to lay off 230 in two-year restructuring aimed at saving £4m

HP Bulmer, the drinks group that controls two-thirds of the UK cider market, will axe about 230 jobs in the next two years in a restructuring drive to save £4m a year.

The company, which makes Strongbow and Scrumpy Jack cider, will take a one-off charge of £10m over two years to cover the job cuts, which will affect 10 per cent of Bulmer's 2,300 workers. Mike Hughes, chief executive of Bulmer, said: "We have doubled the number of people working for us in the last two or three years, when others, such as Scottish & Newcastle, have cut jobs. It's a sad fact that a company has to reduce costs year on year to stay competitive."

He commented as the company reported pre-tax profits before exceptionals for the 12 months to 27 April of £28.6m, up 1 per cent. Sales leapt 57 per cent to £527m. Exceptional items totalled £4.3m and related to costs tied to acquisitions and profits from disposals.

Mr Hughes said Bulmer's 16 per cent increase in operating profits was affected by the doubling of interest costs, following acquisitions in the previous year, including American Hard Cider. "We had a good year in the context of a tough UK market, with awful weather, foot-and-mouth and the rest," he said.

Bulmer's branded cider products bucked the 2 per cent decline in the UK beer and cider market to climb 3 per cent, with Strongbow 9 per cent ahead. But analysts were disappointed with the company's overseas performance. Profits were down in the US and Belgium, along with losses in South Africa and China. Its shares were unchanged at 426.5p.