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Domecq profit rises 16%
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October 31, 2000: 10:26 a.m. ET
British drinks firm boosts earnings, but stays mum on bid for Seagram
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LONDON (CNNfn) - British food and drinks company Allied Domecq PLC said Tuesday full-year profit rose 16 percent, but offered investors no clues about any developments in its bid for the wine and spirits business of Canada's Seagram Co. Ltd.
Allied (ALLD), supplier of Beefeater gin and Kahlua liqueur, said pretax profit for the year ended Aug. 31, excluding its now-sold Panrico Spanish bakery unit, rose to £404 million ($585 million), from £349 million in the previous year.
Analysts polled by Reuters had estimated pretax profit of between £390 and £400 million.
Net profit rose to £317 million from £76 million in 1999. Revenue fell to £2.6 billion, compared with £3.5 billion last year. During the financial year Allied decided to quit the pub sector, selling its 3,500 pubs to Punch Taverns for £2.7 billion. The deal boosted its profits, but lowered revenue. Much of the money from the sale was handed back to shareholders.
"These were good numbers, good for the sector, and there will be some upgrades, but for the long-term share performance we need to see the conclusion of the Seagram auction," said Merrill Lynch drinks industry analyst Philip Hawkins.
 Allied shares were trading up 0.3 percent at 364 pence in early afternoon trade after earlier rising by as much as 2.5 percent.
"We have focused on profitable volume through the management of product mix, pricing and enhanced marketing investment, up 9 percent, principally behind key brands," Chief Executive Phillip Bowman said in a statement.
Allied said on Friday it had secured rights to Seagram's Captain Morgan rum brand with Puerto Rican distiller Destileria Serralles regardless of whether Allied succeeds in its bid for the whole spirits business.
Seagram (VO: Research, Estimates) has said that Destileria Serralles would only be able to strike a deal with Allied if the brand were sold off alone, not as part of Seagram's wine and spirits division.
"We have a contract with Destileria Serralles regarding the change of control of the brand. Further to that, I can not comment further," Bowman said Tuesday.
Allied is competing against a partnership between Britain's Diageo PLC (DGE) and France's Pernod Ricard SA (PRI) for the Seagram unit.
Seagram is shedding the division as part of its plans to merge with French utility and communications company Vivendi SA (PEX) in a $25.8 billion pact. 
--from staff and wire reports
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Allied Domecq
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