Bulmer has lost some of its fizz

Mitie; Holidaybreak

Not even Johnny Vaughan, the maverick television presenter who advertises Strongbow, could have fizzed up the flat mood at HP Bulmer yesterday.

A one-off production cock-up in the UK compounded setbacks in the US and Australia for the group, which also makes Woodpecker and Scrumpy Jack.

Mike Hughes, the chief executive, said it was "galling" that the company had drastically underestimated demand for its new, smaller glass bottles, costing it £1.5m. This slashed the planned topline double-digit percentage growth in the UK and took the gloss off an otherwise healthy home performance.

Buoyed by the laddish appeal of Johnny Vaughan, Strongbow volumes soared 9 per cent against a flat market. This made the cider the ninth best-seller in the long alcoholic drinks market, known appropriately as LAD. Forays into premium branded beers through San Miguel, Amstel and Red Stripe proved successful, with sales up 50 per cent in a declining beer market.

Elsewhere, the news was grimmer. Bulmer's international operations lost money across the board bar Belgium. This sent operating margins tumbling to 6.2 per cent from 8.1 per cent.

The lightning success of ready-to-drink products such as Diageo's Smirnoff Ice and Bacardi Breezer left Bulmers reeling in the US, where the cider group looks increasingly out of its depth. With US profitability at least two years away, Mr Hughes has yet to prove the value of his investments. Similarly tricky trading conditions in Australia and South Africa added to the palpable air of disappointment that saw Bulmer's shares fall 13 per cent to 367.5p.

Bulmers best hopes for growth may lie in expanding its Beer Seller distribution business, which could pick up extra contracts following the eventual disposal of Carling by Belgium's Interbrew.

Pre-tax profits before exceptionals for the six months to 26 October slumped 18 per cent to £13.5m on sales up 11.3 per cent to £286m. Full-year profits are expected to be in line with last year at £21m. Analysts forecast about 34p of earnings per share, which puts the stock on a forward price/earnings ratio of 11 times. Better value elsewhere.

Mitie

MITIE IS one of those companies with a profile so low it barely registers at all. It operates in support services such as the installation of heating and lighting in buildings as well as maintenance contracts such as cleaning. It may not be exciting but the group has been a solid performer thanks partly to the growing trend for the contracting out of these kind of services. Its success is also partly due to its huge share incentive scheme which encompasses just about all its staff. Indeed the Mitie name stands for Managing Incentives Through Investment Equity.

Yesterday saw another reliable set of figures with half-year profits up a thumping 29.5 per cent to £14.1m. The only hit from the terrorist attacks has been in the sale of scaffolding in it's access systems division.

Growth has been strong elsewhere with a steady stream of orders from the public sector in particular. Mitie has new deals with University College Cardiff, and Somerset College of Art. Other clients in the property sector include the refurbishment of Job Centres.

Margins range from 5 to 6 per cent across the divisions. This is lower than rivals such as Rentokil Initial and Mitie's management sees scope for improvement to 8 to 10 per cent.

Mitie should be a defensive play in a downturn as companies tend to contract out more services in tough times in order to reduce costs. The shares fell 5p to 150p yesterday which leaves them some way of their 190p peak last year. On WestLBPanmure's full-year profit forecasts of £30m the shares trade on a forward p/e of 26. Not cheap but still worth tucking away.

Holidaybreak

IN THE crisis-hit travel sector Holidaybreak looks like an interesting bet. Its two principal businesses are in camping holidays and short hotel breaks, neither of which has seen much, if any impact from 11 September. Virtually all campers travel by road to Holidaybreak's destinations in France and Italy, so fear of flying is not an issue. And the hotel break business is principally a UK operation anyway.

Holidaybreak's main hit has been its adventure holiday business where it made two acquisitions last year. It organises trips to places like Peru and the Galapagos Islands. The firm reckons it lost £300,000 of revenue as a result of the terrorist attacks, with a number of cancellations and virtually no last-minute bookings. This together with reduced load factors hit profits by about £130,000 in the year.

At group level pre-tax profits in the year to 30 September were up 15 per cent to £23.8m. And the current trading update made for encouraging reading. There will be a hit to Adventure Holiday profits in the current year though bookings are starting to come back with people switching to European tours. In the camping division bookings taken in the past eight weeks for next summer are level with the same period last year.

On ING Barings' full-year forecast of £25.7m the shares – up 4p at 437.5p – yesterday trade on a forward p/e of 11. Buy.