Outlook: Aikens should pay the price
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Your support makes all the difference.Three strikes and you're out, is the rule in baseball. It should now be applied to Peter Aikens, chief executive of the cider group, Matthew Clark. Mr Aikens was not around to field questions on the company's second profits warning in 18 months yesterday, but his fellow directors were insisting that he still has the full backing of the board. When boardroom colleagues are forced to respond in this way, it generally means the final reckoning is not far off. The latest warning is accompanied by a cut in the dividend, something the company said would not happen at the time of its last trading statement.
Even so, Mr Aikens might have hoped to survive had this been only the second bombshell of his reign. In fact it follows the furore over the pounds 431,000 in expenses the company paid him on top of salary to move from Guildford to Bristol. Executive excess is usually a sure sign of poor performance in the making, and so it has proved at Matthew Clark.
The excuses have been many and varied. First it was the rise of the alcopops which was undermining Clark's traditional cider market. When that proved more an illusory threat than a real one, Clark reverted to blaming a flat cider market. Unfortunately Clark's ciders proved a good deal more flat than anyone else's, so then the excuse became not enough advertising spend.
Upping the promotional budget doesn't seem to have worked either. The extra support has damaged first half profits. Notwithstanding the company's claim that it will "begin to have an impact in the second second half", pre-Christmas trading is said to have been disappointing. Matthew Clark has been a disaster, and as many were saying in the City yesterday, Mr Aikens should be made to pay the price.
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