Dark days, yes, but perhaps a buying opportunity

Speaking to City analysts last week there is no doubt that the outlook for the licensed sector is a darn gloomy one.

Shares in listed operators have been falling sharply, prompted by sliding beer sales in November - figures for which were leaked recently - and some downbeat trading updates.

When The Restaurant Group, which runs Frankie & Benny's among others, revealed 'so-so' numbers last week its shares slumped 30 per cent, dragging others in its wake.

The Square Mile is, meanwhile, busily re-jigging its profits forecasts in a downwards direction. Is such pessimism justified? The consensus seems to be yes, it is.

Perhaps we are close to the bottom of the shares price slump, but it's not a dead cert. With more results announcements due in the coming weeks the jitters in the market will doubtless continue.

But focusing on share price performance is one thing; the focus on trading and operational performance is also going to be steely-eyed in early 2008.

Still, it's not all gloom and doom, despite the fact that everyone and his dog seems to think it is. Shares might not again reach the dizzy heights we've seen them rise to in the last year or so.

But the canny investor may use this time to pick up stock based on fundamentals at a half decent price, despite the current dour outlook.

Scottish & Newcastle, Carlsberg, Heineken. The band plays on.

January 21. The date by which the consortium of Carlsberg and Heineken must table a formal - and doubtless hefty - offer for Scottish & Newcastle (S&N) or walk is looming and looming fast.

The latest bid from the consortium and the resulting knock-back from St Andrew Square are only the latest chapter in the takeover saga.

The weekend press has been full of talk of interest from Anheuser-Busch and of S&N shareholders disappointed in the brewer's refusal to open up the books to Carlsberg.

S&N is holding out for a minimum of eight quid a share, versus the latest offer of 780p. It's hard to envisage there not being progress on this, despite Carlsberg's assertion that their pockets contain no more money for a takeover.

Meanwhile, however much S&N points to the future value of its beer operations in Russia and Eastern Europe, it will be doing its utmost to assuage the fears of shareholders who think they'll be left out in the cold, come January 21. Keeping these people onside in the coming days will remain a challenge.