The serious surgery is yet to come at Grand Met

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Say what you like about Lord Sheppard, life at Grand Met has never been dull with him at the helm. When he became chairman in 1987 he inherited a conglomerate for which the word ragbag could have been invented - 30 businesses in sectors as disparate as engineering and hotels.

But after nine years and a blizzard of deals, he leaves the company next week with just two divisions: branded food and drinks, with household names such as Burger King, Pillsbury, Haagen Dasz and Smirnoff.

The structure is sound, based on leading brands behind which Grand Met can throw its considerable marketing muscle. The company wants 20 world- leading brands and says it has 12 so far.

The trouble is that for all the deals and restructurings, the company has under-performed the FT-SE All Share index by 7 per cent during his tenure.

The shares have enjoyed a fillip recently but even that has been due more to speculation about the possible sell-off of Burger King than any underlying strength. Yesterday's trading update did little to set the pulse racing and the shares slid a further 5p to 436p.

Of the divisions, IDV has been a star performer but has been finding the going heavy more recently. Spirits are hardly the flavour of the month with investors as volumes decline and the big groups struggle to implement price increases. Growing brands in a low-inflation, low-growth envionment is proving hard.

The food business is going well and last year's pounds 1.7bn acquisition of Pet, the US foods group, looks solid.

Burger King is still expanding, although its profits have been hit by the buying-in of franchises. Europe remains weak.

But for all Lord Sheppard's rejigging of the company - what he calls the "brain surgery" - the big operation may be yet to come. For the first time yesterday Lord Sheppard admitted that he had considered de-merger or the spinning off of some of the group's interests, such as IDV or Burger King.

With analysts forecasting profits of up to pounds 9.9bn this year, putting the shares on a forward rating of 13, it will take something as dramatic as that to turn the tide. Unexciting.