Bass shares slump on growth warning
The fall brought to a halt a two-year run in the stock which had seen it rise from less than 500p at the beginning of 1995 to a recent peak of 875p.
Sir Ian Prosser, chairman, told shareholders: "In the first 16 weeks of the year, the business has continued to make progress, although slightly behind our expectations." Analysts responded by knocking up to pounds 20m from full-year profit forecasts to about pounds 730m.
Holiday Inn, the mainly franchised hotel operation, saw the rate of growth in its dollar profits fall below last year's, with trading in Asia especially weak thanks to a softening of the Chinese market.
Bass is also vulnerable to the strength of the pound in that business, which reduces the value on translation into sterling of foreign earnings.
At home, brewing profits bucked the trend in a slowly declining market, with total beer volumes rising by 2.5 per cent compared with an overall fall in the market of 1 per cent. Off-trade volumes increased by 3 per cent in a flat market.
Bass Brewers continues to wait for the Monopolies and Mergers Commission to cast judgement on its proposed takeover of Carlsberg-Tetley and Sir Ian expressed irritation that, with no ruling expected until the end of March, it will be seven months since the deal was first announced before any integration can take place.
It is still not clear what conditions the Monopolies and Mergers Commission will impose on Bass in exchange for giving a green light to the acquisition, but a widely held view is that the company will be forced to dispose of around 1,000 of its tenanted pub estate.
A number of companies, including soon-to-be floated Ushers of Trowbridge, have already expressed an interest in picking up part of that estate.
Managed pubs, including the new All Bar One chain, saw sales increase by 9 per cent, a figure that disappointed analysts, who had hoped for further margin expansion.
Bass's other leisure retailing businesses have increased profits in the first quarter, with all operations except the Gala bingo chain performing well.
Gala admissions, which in keeping with the whole bingo industry have been hit by the introduction of the National Lottery, are 4 per cent lower and spend per head is 1 per cent lower than a year ago.
Coral, the third-largest betting shop chain after Ladbroke and William Hill, has shrugged off the worst effects of the Lottery, benefiting from more racing days and higher spending per head, which lifted turnover per shop by 16 per cent over last year.
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