Greene King turns in flat results

SIMON REDMAN, chairman of the regional brewer Greene King, said yesterday that he did not expect a restructuring among small brewing companies to follow the unsuccessful outcome of Greene's pounds 100m bid for its Oxfordshire rival Morland.

His comments came as Greene King announced flat annual pre-tax profits of pounds 22m.

His view will focus attention on many of the brewing companies whose share prices are supported by bid speculation.

The brewing industry has had to face sweeping changes in the wake of the Monoplies and Mergers Commission report into the beerage. One presumption was that regional brewers would be forced together to compete with the national companies.

It was partly this logic that led Greene King to launch its bid for Morland. It had 43.5 per cent acceptances from the forced seller, Whitbread Investment Company.

But the outcome leads Mr Redman to conclude that the pressures on institutions, many of which have potentially conflicting holdings in several brewers, will invariably back incumbent managements.

Greene King emerges from its bid with a 29 per cent stake in Morland. Marston, the Burton-on-Trent brewer, fears WIC may spark another bid when it off-loads part or all of its 31 per cent stake. Boddington has not ruled out rebidding for Devenish.

Greene King's pre-tax profits fell marginally to pounds 21.9m from pounds 22.1m but earnings per share before property disposals - unaffected by extraordinary write-offs of last year - improved to 34.8p from 31.2p.

Contrasting with an upbeat statement at yesterday's Whitbread annual shareholder meeting in London, Greene King - also exposed to London and the South-east - said that trading was tough and showed no sign of improvement.

Greene King's dividend was improved 7 per cent to 11.6p. The shares fell 1p to 474p.