Bass frenzy wipes pounds 430m off value

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The Independent Online
MORE than pounds 430m was wiped from the stock market value of Bass, as the largest brewer in the UK and the world's biggest hotelier announced half-year profits well short of the most bearish of City forecasts, writes John Shepherd.

The shares tumbled 50p to 483p amid a frenetic round of profit downgradings by analysts. One analyst said it could have been worse had Bass not lifted its interim dividend by 4 per cent to 5.45p.

Bass made pounds 228m before tax in the six months to 10 April, compared with the average expectation in the City of pounds 250m and the pounds 266m made in the comparable period last year. NatWest Securities, the broking house, has cut its forecast for the full year from pounds 572m to pounds 508m.

Failure to meet the forecasts was mainly attributable to three factors - a higher than expected pounds 12m rise in interest charges, unexpectedly low benefits from sterling's devaluation and a drop in profits from Holiday Inns in Europe, the Middle East and Africa.

Ian Prosser, chairman and chief executive, said Bass Brewers had also increased its provisions against bad debts by pounds 9m and incurred further restructuring costs of pounds 4.9m. Those costs and profits reduced operating profits from brewing from pounds 77m to pounds 73m.

Hotel profits fell from pounds 54m to pounds 50m, with a better performance in the US offset by a drop in occupancy and room rates in Europe.

Pubs returned pounds 98m, down from pounds 110m mainly because of a reduction in the number of outlets.

Young's results, page 31

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