Taunton shares up as profits double

SHARES in Taunton Cider, the West Country drinks company, touched 200p for the first time yesterday as the company published its first profit figures since floating on the Stock Exchange in July.

Taunton, producer of Dry Blackthorn, Diamond White and Red Rock ciders, more than doubled pre-tax profits to pounds 8m, against pounds 3.7m, for the six months to 31 October.

Much of the difference, however, was due to the repayment of debt with the flotation proceeds. Operating profit figures were 20 per cent ahead.

The shares finished at 198p, up 6p on the day. The latest price is 40 per cent ahead of the 140p flotation price, and is a 20 per cent better performance than the stock market as a whole.

Demand for cider has continued to grow, despite recession and falling demand for beer. Britons drank 81 million gallons of cider in the year to September, 7 per cent more than the year before. It is the only alcoholic beverage that has seen increased volumes. Taunton was also helped by the lower cost of apple concentrate.

The company said it had increased market share to 34 per cent. Taunton doubled spending on advertising to pounds 7m last year.

However, the rate of growth of the total cider market, and of Taunton's share, is slowing.

City analysts believe Taunton will make about pounds 16.5m profit before tax for the year to next April. If it does, the shares are trading on a multiple of 17.

The first interim dividend is 2.4p. The company said it would split the total payout about 40/60 between interim and year-end, indicating a total dividend of 6p.