Shares in Wolverhampton & Dudley Breweries fell 11% after the company reported failing margins at its breweries and pubs, and a major shake-up in its senior management team. At least one of its four breweries is now in danger of closure.

Pre-tax profits of £17.3m (up from £12.4m) were well below expectations, on sales up from £166.5m to £277.3m for the six months to April 1. The group blamed increasing competition in town centres, the impact of promotions and difficulty in keeping down costs at former Marston pubs.

Operating margins in the 941-strong managed pub estate dropped from 17.9% to 16.9%.

Brewery margins declined from 15.7% to 12.2%.

The group said a review was underway and one brewery might be closed.

The group also announced that in January 2001, David Thompson, currently managing director, will become chairman. Ralph Findlay, finance director, will be promoted to chief executive. Colin Stump, who joined the board as brewing and free trade director from Mansfield, and marketing director Paul Gilham are both leaving the company.

The falling share price now makes W&D a potential target for venture capitalists. The likes of Alchemy could well consider another foray into the West Midlands, encouraged by the potential of securitising a large chunk of W&D's estate.

Comment in the Financial Times over the weekend said: "Wolves has never been among the cleverest of retailers, and its promotional policy seems to have been at the very least unwise."

W&D is currently selling its Lloyd No1 bars and Via Vita restaurants and has made it known around the industry that it would be open to offers for its Pitcher & Piano chain, although not opening putting it on the market.