Merrydown, makers of the grape-based soft drink Shloer, toasted another vintage year with a 26 per cent boost in profits.

The UK's third biggest cider-maker, based in Horam, near Heathfield, recorded profits of £1.76 million.

Sales of Shloer increased for the fifth year running and were up 30 per cent to £13.96 million.

Sales have increased more than three-fold since 1998, Merrydown said.

Group sales climbed 20 per cent to £20.3million while shares rose 0.5 percent to 93.5 pence.

The appeal of Merrydown Vintage cider has also increased since its relaunch in a more contemporary bottle, the group said.

Chief executive Nigel Freer said Shloer had made a good start to the current financial year despite the emergence of a tougher retail environment.

The drink's newly packaged one-litre bottles had been well received by consumers and the introduction of limited edition flavours had also proved popular.

Merrydown cider had seen its best performance in years, bucking the trend in a difficult market, the group added.

Investment in packaging and media promotion, including television campaigns last year on GMTV and some ITV regions, benefited the brand.

Managing director Chris Carr said Merrydown had increased its percentage of shelf space in supermarkets while a surge in demand for bottled recreational drinks like Smirnoff Ice, Bacardi Breezers and WKD had forced some ciders out of stores altogether.

But Merrydown had managed to maintain its strong foothold in the last year and actually increased its sales in supermarkets by about 26 per cent.

Sales generally rose by about ten per cent. Mr Carr said: "We have always been seen as a premium cider brand and I think our refusal to go into plastic bottles has helped.

"Also, our upside-down campaign has been very successful in raising awareness and generally letting people know that Merrydown is back."

The group said it was confident it could build on its brands over the current year, with underlying trends remaining positive for both Shloer and Merrydown.

Shareholders will receive a dividend for the year of 1.35p a share, up on the 1.05p a share offered a year earlier.

The market for Merrydown's white cider, Pulse, was in decline and suffering from unrealistically low pricing, the group said.

Tuesday June 08, 2004