Allied Sees Ad Strategy Succeed

Bedminster Down drinks company Allied Domecq concentrated onmarketing as it worked to increase turnover and profits.

The strategy, which included spending a third more on marketing,paid off as the company today announced a 16 per cent rise in full-year turnover and a six per cent rise in pre-tax profits.

Allied's marketing of key spirits and wine brands increased by 34per cent to GBP443 million and the company said seven of its eightcore brands had seen a rise in sales.

Group turnover rose to GBP3.3 billion in the year to August 31,from GBP2.9 billion at the same time last year while pre-tax profitsrose six per cent to GBP480 million from GBP453 million at the sametime last year, meeting analysts' expectations.

The company also runs quick service restaurants including Dunkin'Donuts and Baskin-Robbins where sales increased by six per cent andtwo per cent respectively.

At the half year stage Allied Domecq had warned that some of itsbrands had under performed in the US as a result of lacklustremarketing and poorly thought-out price increases.

Today it said the emphasis was now firmly on marketing andinnovation, with the launch of new brands and acquisition of others.

During the year Allied Domecq bought Malibu, champagne house MummCuvee Napa, Spanish wine business Bodegas y Bebidas and a Germanafter-dinner liqueur business.

And it also launched its own new brands including cream liqueurTia Lusso.

But the increase in turnover was offset by the increased spendingon marketing and advertising, plus overheads including pensionliabilities.

Chief executive Philip Bowman said: "We have maintained our focuson delivering profit growth while adding significantly to our brandportfolio and improving volume performance." And he said there hadbeen big investment in the growth of the business.

Shareholders will receive an increased dividend of 13p from 12.1pat the same time last year.