Finance worries could force Bulmer sale
More than £20m has been wiped from the value of troubled cidermaker HP Bulmer after it warned that yet another debt crisis had forced the Hereford firm to consider selling up.
Bulmer said it would launch a rescue rights issue or sell the business by July.
In a grim trading statement, the maker of Strongbow and Scrumpy Jack, gave warning that it faced "further deterioration in trading" in its European and North American businesses.
The company recently appointed former Whitbread beer boss Miles Templeman to try to halt the decline following a calamitous 2002.
Bulmers' "annus horribilus" last year included five profit warnings, the discovery of a black hole in its accounts, and the departure of three board members including chief executive Mike Hughes and finance director Alan Flockhart.
Then earlier this month it announced a first-half loss of £34.4m. This included a £32.6m chunk of exceptional items. Some of this related to write-off costs from operations in overseas - the company exited South Africa and scaled back in the US.
It has already put its Australian and New Zealand businesses up for sale for £22.5m but the proceeds may not be enough to arrest its spiralling debts.
It is also looking for a buyer for its independent UK distribution business The Beer Seller, which it bought for £32m two years ago.
Following the further collapse of the Bulmer share price, the company had a market value of £48m against net debt of almost £110m.
Stuart Price, beverages analyst with WestLB Panmure, said he had never witnessed anything like it in five years of covering pubs and drinks stocks. "The company should have been sold last autumn and it must be sold now," he said.
"It's been one profits warning after another and its communication in terms of guidance to investors has been appalling.
"With this company we are not talking about a bit of strategical re-steering. A fundamental turnaround is needed."
Potential buyers include Irish firm Cantrell & Cochrane. Other international brewers like SABMiller and Interbrew have also been linked with Bulmers in the national press.
As well as Strongbow and Scrumpy Jack, the company produces Woodpecker, White Lightening and a clutch of traditional ciders.
Related articles:
Troubled Bulmers unveils £34m loss (6 January 2003)
Bulmer banks on Miles Templeman (16 December 2002)
Dividend blow at Bulmers (27 November 2002)
Bulmers downgrades profit forecasts (14 October 2002)
Bulmer fires finance chief over £3.8m hidden costs (1 October 2002)
Bulmer boss falls on sword (12 September 2002)
Bulmers uncovers £3.3m black hole in accounts (10 September 2002)
