DRINKS group Merrydown made a potential takeover deal look sweeter yesterday by posting its first interim profits in four years.

Merrydown, which is in the early stages of takeover talks with an unnamed party, said operating profits in the six months to September 30 totalled £780,000, compared with losses of £100,000 a year ago.

More drinkers are choosing cider and an increasing number are stocking up on bottles during trips to supermarkets.

Turnover from the Merrydown Vintage brand rose 15 per cent on a year ago and also reflected a turnaround in wholesale demand following the acquisition of rival cidermaker Bulmers by Scottish & Newcastle last year.

Wet weather failed to dampen sales of non-alcoholic fruit drink Shler during the summer, with the brand increasing turnover by 14 per cent to £5.5m.

Chief executive Nigel Freer said: "This is in excess of the growth of about six per cent recorded for the total adult soft drinks market over the same period and considerably ahead of Shler's direct competitors."

A major advertising push for Shler is planned during December and will be supported by posters on billboards near 1,250 supermarkets in London.

This has persuaded Merrydown to delay launching new products until next spring, while the group is also continuing to assess the long-term potential of cordial Posh Squash and herbal drink Sorelle.

''The company's transformation into a focused brand development company nears its completion and we look forward with enthusiasm to tackling the important Christmas period," said Mr Freer.

Growth in sales of Merrydown Vintage continued, building confidence for the business ahead of the festive season, he said.

Although Merrydown is in the black at the operating level, costs of £2.2m from the closure of its Horam factory, in East Sussex, meant bottom-line losses totalled £1.3m.

Thirty-five staff were made redundant when bottling ceased at the factory.

Merrydown, which is based at Reigate, in Surrey, said it expected to sell the property within the next 18 months.