Drinks Group Merrydown, the company behind adult soft drink Shloer and a range of vintage cider brands, has posted its first interim profits in four years.

The firm, 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 were choosing cider as the tipple of choice and Merrydown said an increasing number were stocking up on bottles during trips to supermarkets.

It has been a period of dramatic change for the firm, which last week closed its 50-year-old manufacturing plant in Horam, East Sussex, to focus on brand management.

Despite the disruption caused by the factory closure, the results made an imminent takeover deal look more likely than not today.

Poor weather over the summer had little impact as turnover at Shloer increased by 14 per cent to £5.5 million - better, according to Merrydown, than any of the drink's rivals.

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

This has persuaded Merrydown to hold back from 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.

Turnover from its Merrydown Vintage brand rose 15 per cent on a year ago, reflecting increased supermarket sales and a wider turnaround in wholesale demand.

Nigel Freer, chief executive of Merrydown, said: "The first six months of this financial year have been very busy for Merrydown.

"I am delighted with the performance of the company, considering the challenges of the closure of the Horam plant.

"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."

Although Merrydown was now in the black at the operating level, costs of £2.2 million from the closure of its historic Horam factory meant bottom-line losses totalled £1.3 million.

A total of 35 staff were made redundant when bottling ceased at the factory. A small number of office staff will be based at the site until February when Merrydown will sever its connections with East Sussex.

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