Yesterday NatWest Securities cut its Bass profit forecast; said the shares should be sold; and observed that the stock market had failed to appreciate the cost of the new, attacking sales campaign.
The theory is that Bass, with a leading 23 per cent market share, feels the Government's Beer Orders, intended to increase consumer choice, have offered an unrepeatable opportunity to increase its power. It has set its sights on emulating Ansheuser-Busch, the top brewer in the US which has 45 per cent of the market.
Courage, the Australian-owned brewer, with about 18 per cent of the UK's beer sales, is clearly the main Bass target. Already there are indications that Courage, shorn of its pubs, is finding life difficult in the bitterly competitive brewing industry created by the Beer Orders. Carlsberg- Tetley, half owned by Allied-Lyons, is in third position and could also be vulnerable to determined pressure from Bass which is generally regarded as the country's most efficient brewer.
NatWest has cut its Bass forecasts from pounds 589m to pounds 572m and from pounds 595m from pounds 634m. Its downgrading left the shares 13p lower at 562p.
Allied has made cautious noises, prompting analysts to cut their forecasts. On Monday Hoare Govett lowered its estimates and NatWest has also come down to pounds 607m and pounds 714m. Nikko Securities trimmed its Whitbread estimates by pounds 5m to pounds 245m and by pounds 10m to pounds 240m.
The rest of the market had another indifferent session, although a 12.9 points fall in the FT-SE 100 index was cut to 2.8 to 2,861.1 by the close.
Insurance shares provided much of the action. The announcement that United Friendly Insurance was examining the split of the life profits between policyholders and shareholders excited the sector.
Any division of the so-called 'orphan' funds will clearly be beneficial to shareholders and UFI 'B' shares rose 65p to 715p. Britannic, up 172p at 1,475p, and Refuge Group, up 112p to 1,130p, are thought to be the next to adopt the UFI approach. Prudential is also in the 'orphan' school but, helped by results, advanced only 3p to 329p.
Water shares, for so long seemingly oblivious to the tugs of market sentiment as investors have concentrated on their impressive dividend yields, took a bath as James Capel said they were fully valued and profits should be taken. Anglian Water, with the added discomfort of a bomb at its Huntingdon headquarters, fell 7p to 528p.
Food retailers also felt the pinch. Goldman Sachs adopted Barclays de Zoete Wedd's cautious stance. Besides the difficulties the supermarkets are having passing on food inflation there are worries the leaders are being hit by the revival at Asda, the growth of Wm Morrison and the growing strength of the discounters. J Sainsbury fell 8p to 507p and Tesco 3p to 237p. .
Granada's pounds 360m acquisition of the P&O catering division impressed the market. With a placing by Hoare Govett five times oversubscribed the underlying shares gained 20p to 385p.
Land Securities featured in properties, gaining 7p to 524p. The gain reflected the sale of two Victoria office buildings for a reputed pounds 94m. The properties were acquired by the Home Office which already used them as offices.
Banks were lifeless with TSB Group, still the sector's favoured takeover target, at 172p. At the yearly shareholders' meeting Sir Nicholas Goodison, chairman, said the banking industry faced intense competition and still had the problem of bad debt provisions. But he detected 'some slight evidence' of economic recovery.
Brown Shipley, the financial group, slipped 2p to 36p. Guinness Peat Group is expected to confirm its 35p offer today but is thought to be seeking the withdrawal of Kredietbank of Luxembourg, which has offered 30p a share and has a 30 per cent interest.
Manchester United may still be struggling to achieve Premier League ascendancy but it achieved a significant market breakthrough when, on what appeared to be a 6,000 share deal, the price jumped 12p to a 394p peak. It was the first time the shares have topped the 385p at which they were sold to investors in June 1991.
Spring Ram suffered another traumatic session, down 7p at 68p. Expectations that Amec, the building group, will cut its dividend today knocked the shares 5p to 76p.
Suter, the mini-conglomerate, created a stir. Its interest in James Wilkes, where it has more than 10 per cent, lifted the engineer 2p to 72p (after 76p). Excalibur, an engineering and jewellery group, edged ahead 1p to 12p as Suter emerged as a 5.9 per cent shareholder. But Suter, on further consideration of its results, dropped 11p to 133p.
Stonehill Holdings, the former furniture maker now a property business, was unchanged at 14p as the revamping, led by Cathay International Investments, a Chinese company, was completed. CII has 68.9 per cent; another shareholder is the Beijing Municipal Finance Bureau with 4.9 per cent. CII is a property developer in China. Its main asset is uncompleted hotel in Shenzhen, which is just on the Chinese side of the Hong Kong border. It will have 346 bedrooms.
RAGLAN Property Trust, being rescued by Hong Kong interests, rose to 2p and then fell to 0.75p after the company warned its shares 'should be traded at prices substantially' below the 1.5p and 2p they have held since the reconstruction was announced on Friday. Each existing 100 shares will be consolidated into one new 1p share, the price at which the new shares are being sold in the revamp.
HARRY Ramsden's, the Yorkshire fish-and-chip emporium, rose 5p to 148p as Greig Middleton forecast profits will hit pounds 825,000, a pounds 200,000- plus increase, in the year to September. The group is expanding in this country and overseas, largely through franchise and joint ventures. Its Hong Kong restaurant is described as 'promising'. Seven units are now open. The shares were floated in 1989 at 100p.Reuse content