Ferment in brewing industry prompts heady display

MARKET REPORT

An unlikely combination of regional breweries and computers helped keep the stock market ticking over.

At times interest seemed to evaporate in the August heat, with a little- changed FT-SE 100 index illustrating the lack of ideas and investment activity.

Beers turned on a relatively heady display as the ferment in the industry prompted some discreet buying of the smaller groups thought to be vulnerable to the advances of Bass or spend-happy Whitbread.

With Scottish & Newcastle on the verge of swallowing Courage and becoming the nation's number one brewer it is felt the two majors could descend on the regionals in a bid to increase their market share.

Allied Domecq, the other leading beer group, is seen as a reluctant player and is expected to withdraw from brewing.

Once Britain's biggest brewer Allied is currently suffering a City image problem. Its shares fell 6p to 522p as it suffered a triple whammy - sell recommendations from three investment houses, James Capel, Smith New Court and SBC Warburg.

Morland, the Abingdon-on-Thames brewer that fought off a bid from neighbours Greene King, led the charge, up 16p at 545p. Marston Thompson & Evershed rose 3p to 319p and Vaux, still helped by its hotel involvement, 4p to 281p. Eldridge Pope, once the victim of computer diversification, added 4p to 175p.

MAID inspired the computing fraternity. It more than doubled to 168p as it forged an intriguing alliance with the US software giant, Microsoft. The controversial group, which survived a flotation flop, will provide services for Microsoft's highly publicised Windows 95 product, to be launched later this month.

It was the first time MAID topped its 110p placing price. Its previous high was 104p and in June last year the shares slumped to 43p.

Volatility is a feature of high tech shares. Many have experienced violent swings with, for example, Micro Focus, holding at 725p, once hitting pounds 36. Tadpole Technology, which expects up to a pounds 9.3m loss this year, held at 81p. It has moved between 435p and 38p since 1992's launch.

Among computer shares, higher were Quality Software, 10p to 565p, Blick 15p at 505p and Datrontech, which should benefit from the Windows 95 launch, 21p to 231p.

Securicor, the security group with a direct and indirect 40 per cent stake in Cellnet, came to life as the market was intrigued by a 1m "A" shares agency cross at 1,060p. The shares promptly moved 10p higher to meet the cross price. The voting shares moved ahead 18p to 1,668p.

There is no doubt BT, owning the other 60 per cent of Cellnet, would dearly love to get its hands on the Securicor stake. Earlier this year the Government was not keen to allow such a deal. But recent changes in Whitehall's attitude, the latest example being the likely clearance of the Scottish bid for Courage, could encourage BT to try again.

Builders had another difficult session following the Wilson Bowden profit warning. Barratt Developments fell a further 4p to 188p and WB 2p to 341p. Spring Ram, the bathroom and kitchen group, dipped 2.5p to 34.5p after 2.3 per cent of the capital was agency crossed at 34p.

Hard-pressed Airtours, the packaged holiday group, edged ahead 4p to 364p as Schroders investment arm nudged its stake up to 12.13 per cent. The cut-price battle to entice holiday makers to take up unsold holidays has already led to profit downgradings for Airtours and more are likely.

David Lloyd Leisure was firm at 396p as Whitbread duly confirmed its market buying, through James Capel, declaring a 13.9 per cent stake.

Barclays, still reflecting disappointment over its failure to produce a special dividend, fell 23p to 703p. Barclay de Zoete Wedd and Cazenove started the signalled share buy-back, picking up 25 million at 719p.

Other banks were firm. National Westminster, said to have attracted much of the Barclays cash, rose 19p to 596p and Standard Chartered, on results, gained 27p to 387p.

Rexham, the packaging group formerly known as Bowater, slumped 73p to 422p on a profits warning. David S Smith was unsettled 11p to 633p and Low & Bonar 13p to 532p. Bunzl, figures soon, dipped 5p to 210p.

Southern Water, at one time up 10p, settled for a 1p gain at 686p. But other waters picked up the take over flow, with Severn Trent 9p higher at 626p and Thames, the biggest, 11p better at 552p. Thames has gained 19p in two days.

Filtronic Comtek, a maker of mobile telephone components, jumped 38p to 354p, a peak. The company announced year's profits of pounds 3.3m on Monday, up from pounds 1.1m. The shares were floated at 105p in October.

TAKING STOCK

o.Cedardata, a supplier of accounting software, is attracting attention. The shares rose 5p to138p. They have improved steadily since April when they touched an 85p low. The group, floated at 105p in March last year, produced profits of nearly pounds 3.6m and should hit at least pounds 4.5m this year. With a successful formula and corporate activity never far below the surface in the computer industry Cedardata could attract a predator. But any deal would need the directors' say-so; collectively, they have around half of the capital.

o.Wilshaw, the specialist metals group, held at 72p. Greig Middleton, the stockbroker, rates the shares, which have been as low as 43p in the past year, a buy and forecasts profits will jump from pounds 5.1m to pounds 6.5m this year with pounds 8m in sight for the following year.