Higher tax charge unlikely to dent upturn at Wolves

DRINKS analysts yesterday upgraded profits forecasts for Wolverhampton & Dudley Breweries following a 3.4 per cent rise in interim pre-tax profits to pounds 17.2m. Shares rose 11p to 554p.

David Thompson, managing director, said: 'The outlook for the Midlands economy is not too bad. There is more money around. Income from amusements rose 13 per cent. This is a good barometer of spare cash floating around in the economy.'

However, he said it was too early to tell if the personal tax increases would have an effect because 'we've had some very good weekend weather recently'.

NatWest Markets has lifted its profit prediction for the year from pounds 37m to pounds 38.3m.

Near-exhaustion of tax allowances has seen Wolves' charge rise from 30.2 to 32.5 per cent. 'We see 33 per cent as the norm for the future,' said Alan Flockhart, finance director.

The higher tax rate and subsequent charge depressed half-year earnings per share by 1.1 per cent to 17.5p. The interim dividend, though, is up 8.5 per cent to 5.1p.

Analysts expect the tax effect to be mitigated by rising profits and see full-year earnings rising from 38.6p to 39p.

Despite the better trading climate in the Midlands, Mr Thompson said the Camerons brewery and pub operation in the North-east had yet to see 'an improvement in underlying consumer patterns'.