News Column

Fuller, Smith & Turner's Profit Driven By Food And Accommodation

June 6, 2014

Rowena Harris-Doughty

LONDON (Alliance News) - London Pride brewer Fuller, Smith & Turner PLC reported Friday higher profits and revenues for its most recent financial year, on the back of strong growth in food and accommodation sales, as its managed pubs and hotels business continued to drive profits in the business.

The independent family brewer, founded in 1845 and based in Chiswick in west London, continues to pump money into the business, with its managed pubs divisions having been the focus of investment in recent years. Chief Executive Simon Emeny says the company has now laid down its foundations for long-term growth.

"We know our strength is in operating at the premium end of the market, and we have a clear vision of where we are going and how we will get there," Emeny said in a statement commenting on the results.

The company proposed a final dividend of 9.30 pence for the year, up 11% from 8.35 pence per share for shareholders a year earlier. That gave a 15.10p total dividend for the year, up 10% on the year before.

For the year ended March 29, Fuller reported a pretax profit of GBP50.5 million, up from a profit of GBP47.7 million a year earlier, boosted by 6% revenue growth to GBP288.0 million from GBP271.5 million.

The company said that growth in the business was driven by like-for-like sales growth of 8.3% in its managed pubs and hotels business. Within that, like-for-like sales rose more than 10% in both food and accommodation.

Its tenanted inns estate saw like-for-like profits increase by 2%.

In the previous year, like-for-like sales in the managed business were up 2.1%, while profit at its tenanted estate was up 1%.

Fuller said total beer and cider volumes were up 1% in the recent year.

"Several new initiatives have come into play during the period including the acquisition of Cornish Orchards, the launch of Frontier, the purchase of the UK distribution rights to Sierra Nevada and the launch of Westside Drinks," said Emeny.

The Fuller's Beer Company launched Frontier, a craft lager, in May last year, and bought traditional cider maker Cornish Orchards in June last year.

The group operates from three different divisions - its managed pubs and hotels; tenanted inns, which comprises pubs operated by third parties under tenancy or lease agreements; and its Fuller's Beer Company, which brews and distributes beer, cider, wines, spirits and soft drinks.

Fuller, Smith & Turner also said it has made a good start to the new financial year, with like-for-like sales at its managed pubs and hotels up 8% in the first nine weeks to May 31, and like-for-like profits in its tenanted estate up 4%. It said volumes in the Beer Company are also up by 10%.

The company said it has opened two new pubs so far this year - a freehold site in Portishead, and a London's Pride pub at the new Heathrow Terminal 2 - and said it has three freehold riverside sites that it will open during the next year across London at Kew, Fulham and Greenwich.

"We are looking forward with anticipation and excitement to the forthcoming year. Investment is taking place in all areas of the company and we continue to be pleased with the impact that it is having on the business," said Emeny in a statement.

The UK government Tuesday said pub tenants will get more rights to challenge rent increases, part of its effort to tackle claims that the tenant publicans are struggling to make a decent living due to high charges imposed by the pub owners.

However, Emeny said the new rules won't affect the business, as it is already within the new rules for tenants.

Fuller, Smith & Turner shares were up 5.8% at 1,002.66 pence in early trading Friday, the top gainer on the FTSE All-Share index.

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Source: Alliance News

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