TROUBLED CIDER group C&C has appointed former Scottish & Newcastle (S&N) chief executive John Dunsmore as its new chief executive, in a move that was hailed by analysts for its potential to revive the company's flagging fortunes.
C&C's share price shot up 19 per cent to €1.37 yesterday, as shareholders drank in the news that Mr Dunsmore and two close members of his team at S&N were putting a sum of €1.5 million into the company and taking control of its future direction.
As chief executive of S&N, Mr Dunsmore led the counterattack on C&C's Magners cider brand after its initial success in 2006 by reinvigorating S&N's Bulmers brand in Britain - a move that alongside poor summer weather contributed to the decline in C&C's fortunes in 2007.
He has now replaced Maurice Pratt, who resigned as C&C chief executive last month, in a bid to revive the company's sales.
Mr Dunsmore and C&C's new chief operating officer, Stephen Glancey, a former S&N operations director, have been appointed to the board. Kenny Neison, a former senior finance executive at S&N, has been appointed as strategy director. All three left S&N in April after it was bought by Heineken and Carlsberg.
C&C chairman Tony O'Brien said the calibre of the appointments was "a major achievement" for the Irish group, which is substantially smaller in size than S&N, and would bring "renewed impetus and momentum".
The remuneration package of the three appointees will include a significant share-based incentive. This will involve the issue of up to 16 million new shares at a price of €1.15, C&C's closing price on Friday. There will be a 10 per cent initial capital contribution from the participants and a market performance vesting condition.
An extraordinary general meeting of C&C shareholders will be held to approve the scheme before Christmas. Mr Dunsmore said the challenge in revitalising Magners was "an exceptional opportunity" for his team.
"The hardest thing to do is if the consumer appeal for a brand is fundamentally undermined, and that's not the case with Magners," he said. But he added that "a good summer would also help" its attempts to recruit more drinkers to the cider-over-ice category.
Although its new strategy has not yet been announced, it is likely to involve a fine-tuning of Magners' premium pricing in a nod to greater price sensitivity among consumers, the launch of new variants of the Magners brand, a renewed push behind Magners draught cider and increased marketing in key European cities.
Davy analyst John O'Reilly noted that while shareholders should not expect an "instant reversal in performance" as a result of the new team, "there can now be reasonable expectation of improved performance".
