Allied Domecq is expecting a barrage of blows to its profit levelsin the first half of its financial year, but says that it will stillcontinue to see earnings grow.
The company yesterday told shareholders at its annual generalmeeting that profits for its Spanish business were set to be dentedto the tune of an estimated GBP25 million as wholesalers in thecountry moved to reduce stock levels.
Another GBP40 million was expected to be written off as a resultof the weakness of the dollar when the company accounted for overseasearnings.
And an extra GBP40 million related to pensions was expected to bemarked down in the light of falling stockmarkets.
As a result, the Bedminster Down company said, it was believedthat these factors would make themselves felt in its results for thefirst half of the year.
But the company added that its United States spirits business wasgrowing and its Latin American and Asia Pacific regions were alsodoing well.
It said its leading whisky brand, Ballantine's, had gained marketshare in the run up to Christmas in Spain, France, Italy, Germany andPortugal.
And the company's quality wine business was now on course to meetgrowth targets, while its Quick Service restaurant business, whichincludes Baskin Robbins, was also making good progress.
Philip Bowman, chief executive of Allied Domecq, said: "Thebusiness is performing well, in spite of challenging conditions, andis meeting our expectations.
"Stronger than anticipated growth in the US, Asia Pacific andLatin America has offset the industry destock in Spain." And MrBowman added: "We are absorbing the impact of significant externalfactors affecting pensions and the translation of overseas earningsand continue to deliver strong underlying growth in earnings."
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