Domecq gets the mix right with wine

MALIBU mixers and better sales of pricier wines gave drinks giant Allied Domecq some punch in its underlying profitability despite a drop in overall sales at the half-year mark.

Sales of Malibu were up 16% boosted by a successful launch of Malibu Chill in Australia, one of a series of strong performances from Allied's core spirits brands including Tequila-based drink Sauza - volumes up 17% - and bourbon Canadian Club, which saw divisional volumes up 6% to 11m cases.

The last two years' move into the premium wine market appears to be paying off with trading profit up 11% despite a 3% drop in volume growth.

This boosted pre-tax underlying profits for the six months to end-February to £266m, up 6% on last year, making up for a dip in overall sales to £1.7bn from £1.74bn.

Weaker-than-expected trading profit in Latin America, down 11% to £46m, did not please the market and the shares fell 15 3/4p to 449p.

Allied, headed by chief executive Philip Bowman said: 'In terms of premium wine we have done exactly what we said we would do and the average selling price per case is up significantly.

'We are on track for our five-year plan to make a return on invested capital of 9%.'

Biggest improvement came from Allied's Quick Service Restaurants division, which were restructured last year.

The dividend is up 10% to 5.83p.