INVESTORS backed away from Greenalls yesterday and knocked 12p off the share price because of pounds 3.8m of unexpected exceptional costs in the pub and hotel group's interim results.
The costs, principally for reorganising the drinks and leisure division, pegged the rise in pre-tax profits to 13.4 per cent to pounds 29m.
But drinks analysts said the underlying trading picture matched expectations and they would stick to previous full-year profit forecasts of pounds 85m before exceptional items.
The dividend for the six months to 25 March is being lifted 5 per cent to 5.334p. Analysts expect a similar increase in the final payment, which would take the total to 13p, yielding 3.4 per cent gross on yesterday's closing price of 473p.
Andrew Thomas, chairman and chief executive, said that last summer's pounds 206m purchase of the Devenish pub group had proved worthwhile. 'We are achieving the synergies and savings that we talked about. We are probably doing better than we thought.'
Pubs boosted operating profits 46.8 per cent to pounds 32.7m. The Premier House branded pub restaurants and lodges saw its contribution soar 72.7 per cent to pounds 5.9m.
Mr Thomas said it was impossible to quantify the impact of Devenish on those numbers, but he said the acquisition added 5 per cent to group turnover which rose from pounds 279.5m to pounds 337m.
Greenalls said it had also agreed fresh five-year beer supply contracts with Carlsberg-Tetley, Labatts and Bass. Devenish's previous arrangements with Whitbread remain in place.
The De Vere hotel chain performed better. Occupancy levels were static at 62 per cent, but average room rates improved by pounds 3 to pounds 47 a night, helping to lift profits 15 per cent to pounds 8m. US hotels, which Greenalls wants to sell, cut losses from pounds 600,000 to pounds 400,000.
Profits from the Cellar 5 off-licences dipped from pounds 2.3m to pounds 2m.
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