Market Report: Brewers lose ground on fears of poor results

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THE beerage had an exceedingly sober time yesterday as the stock market fretted about the results due to be rolled out next week by three top brewers.

Allied-Lyons fell 13p to 545p; Bass 9p to 525p and Whitbread 'A' 6.5p to 480p. Other drink shares, including Scottish & Newcastle and Guinness, weakened.

Grand Metropolitan's flat trading performance, disclosed on Thursday, created much of the nervousness. Cazenove piled on the agony by adopting a bearish stance on the industry. Allied and Bass closed at their lowest levels this year.

Drink shares have been under pressure as it became apparent that world wine and spirit sales were suffering from the recession, a trend underlined by Grand Met, down 7p at 415p.

And in the domestic market brewers have had to contend with the recession and the fierce price war provoked by the Government's Beer Orders. Bass, the UK's biggest brewer, has led the charge by aggressively seeking to increase market share at the expense of margins.

Profit forecasts have been pulled back but some worry they are still too high and even if the figures are up to expectations the accompanying statements will be cautious.

Whitbread, reporting on Monday, could achieve a small advance with NatWest Securities looking for pounds 223m, up from pounds 221.6m. Allied, according to NatWest, should report pounds 607m against pounds 599m and Bass is thought to be set for a modest interim downturn to pounds 255m.

The rest of the market had a listless session although prices finished above their worst. Unilever's first- quarter results disappointed, leaving the shares down 40p at 1,064p.

Zeneca had another uncomfortable session, losing 12p to 636p with the nil-paid 7.5p lower at 45p.

British Airways, ahead of next week's expected pounds 500m rights issue, rose 4.5p to 303.5p

Reckitt & Colman, down 7p at 556p, failed to respond to a James Capel buy recommendation. But Life Sciences International, on Capel support, rose 8p to 150p.

GKN and Lucas Industries suffered as Hoare Govett made cautious noises; GKN fell 6p to 434p and Lucas 4p to 139p. Laird Group, off 13p at 280p, added to the motor component gloom with profits reported to be running 'a little lower'.

J Bibby, the distribution group, dropped 20p to 89p on a rumoured Cazenove downgrading. But BOC Group, reporting next week, rose 17p to 693p as several investment houses turned bullish.

Tottenham Hotspur, on the latest boardroom hostilities, which led to the ousting of Terry Venables as chief executive, ended unchanged at 89p, recovering a 5p fall.

Millwall was a shade firmer at 2.75p as its rights issue achieved an 85.79 per cent take-up. The rump was placed. An announcement of a new, significant shareholder could occur next week.

Sheffield Insulation Group rose 5p to 176p following its pounds 49.9m cash call at 135p a share.

Smiths Industries, as a large seller was finally accommodated, rose 13p to 356p. The group is a significant beneficiary of the aircraft orders announced by the American group Continental Airlines. Rolls- Royce, strong this week on the orders, shaded 1p to 148p. VSEL made further headway following the order for a helicopter carrier, reaching a peak of 760p, up 22p.

Utilities continued to suffer, with their vaunted dividend yields failing to provide any support. Water companies are due to start reporting later this month.

Profits are expected to improve by about 5 per cent and dividends by up to 8 per cent. But after their strong run such performances are unlikely to bring the sparkle back to the sector.

Electricals, too, gave ground. But BT, reflecting comment on its results, jumped 10.5p to 414.5p.

British Gas, reporting on Thursday, dipped 2p to 295p. Little- changed first-quarter figures of pounds 649m are expected.

Stores attracted attention. Next rose 3p to 167.5p. Boots, up 13p at 448p, reflected talk of a profit upgrading.

Osprey Communications, the advertising group, rose 6.5p to 32.5p as it confirmed reorganisation moves. Scottish TV was one of the media stocks helped higher by an SG Warburg review of the sector.

Downiebrae, the little engineer, continued to attract attention ahead of a suspected revamping exercise, gaining 3p to 74p. Richmond Oil & Gas was the day's best performer, up 37.5 per cent to 5.5p, on talk its tax losses were worth 15p a share.

Pittencrieff fell 12p to 289p as its protracted battle for Aberdeen Petroleum ended with the Aberdeen board suddenly capitulating. Aberdeen was 17.25p.

Bluebird Toys continued to benefit from its cheerful agm statement, up 15p to 234p, a two-day gain of 40.5p. Euromoney Publications rose 35p to 1,023p. Its two-day gain, following results, is 123p.

The FT-SE 100 index ended 2.3 points down at 2,847 and the FT-SE 250 index was off 9.6 at 3,142.3. Turnover was 620 million shares with 28,018 bargains completed. The account ends on 21 May with settlement on 1 June. Government stocks drifted in thin trading.

East West Oil has emerged as the biggest shareholder in Aminex, the little oil group. It has acquired the Aberdeen Petroleum stake, lifting its interest to 22.5 per cent. East West is controlled by Titan Assets, an unquoted, UK-registered company controlled by Russians. At one time it had a big interest in Brabant, now US-owned. Aminex, with its shares up 1.25p at 9.5p, is known to be seeking acquisitions.

Butte Mining, seemingly existing to pursue claims against former directors and shareholders, is one that could benefit from the strength of gold and silver. It has, believes its chairman David Lloyd- Jacob, mining propositions in Montana that now look worth developing. Butte has legal claims, amounting to pounds 637m, that could start being heard next year. Butte, 180p in 1987, is 1.25p.

Morland, the Thames Valley brewer which fought off the attentions of rival Greene King last year, was one beer share to hold firm. The price was unchanged at 480p as Henderson Crosthwaite said buy. Kevin Feeny is looking for profits of pounds 9.24m this year and pounds 10.64m next. Greene King's defeat was astonishing. It started the battle with 44 per cent of Morland. It still has 29.3 per cent.