Following the discovery of around £3.8 million ($5.99m; €6.06m) in undisclosed promotional expenditure and the firing of its chief executive and financial director [WAMN: 01-Oct-02], Britain's leading cider-maker H P Bulmer has appointed corporate rescue specialist John Darlington, known for his insolvency work with the Millennium Dome.
Bulmer, whose flagship brands are Strongbow and Scrumpy Jack, on Monday issued its fifth profits warning in nine months. This revealed that £14.5m in exceptional charges will hit the balance sheet in the year to April 2003 – plus two writeoffs: £4.7m of capitalised investment in new product development; and £22m in respect of goodwill related to acquisitions in the US.
These exceptional costs, together with debts of some £110m, line-up against a market capitalization of just £67m – a situation that breaches most of Bulmer’s banking covenants and has resulted in urgent meetings with its bankers.
Glossed chairman Will Samuel: “We are taking the opportunity to rebase the business and correct what may have been the over-optimism of the management in the past.”
His seemingly complacent comments did not impress analysts, who opined that the group was more likely to find its way out of the woods under new ownership. This, however, is wishful thinking as around half of the company’s shares are owned or controlled by the Bulmer family.
‘Doc’ Darlington will work closely with Colin Brown, a non-executive director who is acting as chief executive in place of Mike Hughes who quit in September. It is thought that the sale of some of Bulmer’s overseas assets will be high on their agenda.
Data sourced from: Financial Times; additional content by WARC staff