Allied buys drinks group: Seagram agrees sale of Perrier-Jouet

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The Independent Online
Allied-Lyons yesterday capped a complicated set of annual results with the purchase of a French spirits and wine distribution company from Seagram, the Canadian drinks group.

The price for the acquisition of Perrier-Jouet/Barton & Guestier is not being disclosed, but several analysts estimate the cost at about pounds 100m.

The make-up of the international food and drink group's results to 6 March initially caused confusion in the City, with analysts unable to fathom how Allied had managed a record-breaking pounds 620m taxable profit.

Things became clearer once they discovered the results included a pounds 12m lift from disposals, less restructuring costs. However, the headline profit figure lost more gloss as Allied said it would have been pounds 505m under the incoming FRS3 accounting rules.

Under FRS3, property disposal gains of pounds 19m become losses of pounds 2m and a pounds 16m credit from a property reorganisation became a pounds 34m deficit.

Allied said that normal profits under FRS3 would have been pounds 544m.

Allied followed Whitbread's pounds 595m write-down of property values on Monday with a pounds 312m hit, mainly on pubs. Some pounds 41m of that, though, was deemed irrecoverable and charged against profits as was a pounds 17m provision for bad debts on pub loans.

Analysts, meanwhile, moved in three directions, upgrading, downgrading and holding predictions for 1993/4. Average forecast profit remained at pounds 685m, and the shares closed unchanged at 543p. Michael Jackaman, chairman, said: 'Leaving aside the complexities of the accounting changes, our aim is to achieve real growth in earnings per share. And increased dividends as a consequence.'

Earnings per share, only given on an FRS3 normalised basis, rose by 3.5 per cent to 35.2p. The dividend total is 21p, up 5 per cent or 3.1 per cent adjusted for inflation.

On trading in 1992/3, the chairman said: 'The 12 months were no easier for Allied than any other comparable international business.'

Despite the economic constraints, Allied made upbeat statements about prospects. Its businesses include the Hiram Walker drinks company, the joint Carlsberg-Tetley brewing venture, Dunkin Donuts, and food.

Tony Hales, chief executive, said: 'The two main economies which affect our business, the UK and USA, are looking healthier. We view the future with greater confidence than has been possible for some time.'

Allied also said its development plans did not need to be bolstered by a much-rumoured rights issue. 'We will only contemplate it to finance a strategic move,' Mr Jackaman said.

He declined to be drawn, however, on other speculation that a pounds 200m Eurobond was in the offing. Allied has stated its intention to replace borrowings from banks. Net debt on 6 March was pounds 1.81bn, down from pounds 1.93bn a year earlier.