SHARES in the Allied Domecq liquor combine fell 12p to 456p after the chairman, Sir Christopher Hogg, disclosed that directors had dropped plans to de-merge the group into two food and drink companies.

The disclosure disappointed the share market where the group's shares had been higher in front of yesterday's financial results on speculation of possible de-merger moves.

Overall, annual profits fell II per cent to £575 million mainly due to a 14 per cent shortfall in trading profits earned spirits and, wine activities, taking in Carolan Irish Cream, mainly due to heavy de-stocking in spirits for sale in, "the US.

Retailing profits increased 4 per cent, led by accelerated growth of pub brands including Scruffy Murphys where the number of outlets increased by 24 to 39.

Total dividend payments were unchanged.