Bottom Line: Morland adds fizz

MORLAND yesterday injected some fizz into a flat results season for the drinks companies, and was rightly rewarded with a 12p rise in its shares to an all-time high of 500p.

Interim pre-tax profits of pounds 3.6m, up 28.7 per cent from an FRS3-adjusted pounds 2.8m, coupled with a 15 per cent dividend rise, were at the top end of forecasts and completely vindicated last year's rejection of the 450p bid from Greene King.

Morland is one of the few quoted winners to emerge from the dark period of the Beer Orders, which enabled it to accelerate its pub acquisition programme.

The results to 31 March reflect the completed integration of the 100 pubs bought nearly two years ago from Courage. The 72 outlets purchased from Inntrepreneur are covering their acquisition costs.

Morland's Old Speckled Hen is also doing well as a guest ale with Courage and Whitbread, and is now being taken on board by Bass.

A small cash outflow of pounds 1.4m in the first half will be neutralised in the second six months. Borrowings of pounds 26.3m represent a modest 26.3 per cent of shareholders' funds.

Morland will make pounds 9m-plus for 1992/3, putting the shares on a justified premium p/e of 16. The shares are a buy even if Greene, whose shares rose 9p to 554p yesterday, does not re-bid when the Takeover Panel's shackles are removed in July.