Allied Domecq warns of pounds 181m charges

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The Independent Online
ALLIED DOMECQ, the spirits group which includes Teacher's whisky and Beefeater gin, revealed yesterday that its full year profits will be hit by higher than expected exceptional charges and currency costs totalling pounds 181m.

The company said currency fluctuations will knock pounds 30m off profits in the full year, in line with the pounds 20m effect in the first half. But Allied revealed a host of additional exceptional charges including a pounds 45m deficit arising from a five-yearly valuation of the pub estate; a pounds 30m loss from the revaluation of short leasehold pubs and pounds 40m of other losses including losses of the disposal of Gleneagles Spring water and a pounds 20m goodwill write off on the proposed merger of its Victoria Wine off-licence chain with Whitbread's Threshers' division. In addition to the new charges there will be a pounds 36m deficit arising from a previously announced debenture redemption premium.

News of the costs over-shadowed a trading statement which the company claimed showed it was still on track despite the strong pound, the Asian crises and the effects of the poor British summer.

Trading in the 11 months to 31 July has been "broadly as expected, the company said." The key spirits and wine division is on track for modest growth in the second half except in Asia where the principal impact has been on the duty free business.

Ballantine's whisky has grown volumes in most European markets while Beefeater gin has grown strongly in Spain. US volumes have been recovering after the de-stocking by retailers earlier in the year.

In retailing, UK pub profits have been hit by the poor summer weather. In the Dunkin' Donuts and Baskin-Robbins franchise business, international operations have been hit by the turmoil in Asia though sales are strong in America.

Allied Domecq shares closed 2p lower at 538p.