Celebrate our 150th anniversary with fantastic savings on a joint magazine and IC Advantage subscription.
Fuller Smith & Turner posted a sharp decline in earnings, but the pub operator performed far better than the headline figures suggests. Comparisons were distorted by the disposal of two of its largest hotels, which generated an exceptional profit of £20.1m the previous year. Ignoring this, underlying profits increased by 4 per cent, to £23m.
Advertising
Thanks to its upmarket position, the group, which manages more pubs in the City than any of its competitors, has weathered the challenges of the smoking ban relatively well. Like-for like sales increased by 3.6 per cent at Fuller's Inns thanks to strong food sales and higher revenue per room in its retained business hotel.
And its brewing division performed well, too. Revenue rose by 3 per cent to £60.3m in this division as the owner of London Pride gained market share in new countries such as Russia and Japan.
Nevertheless, for the coming year the group flagged unprecedented inflationary pressures as pubs face higher utility and food bills while the higher cost of barley and glass could hit the beer business. The group intends to mitigate this through a mix of price increases and efficiency gains.
Broker KBC Peel Hunt reduced 2009 full-year EPS forecasts by 6 per cent to 29.1p (28.8p in 2008).
Fuller Smith & Turner (FSTA) |
||||
|---|---|---|---|---|
| 'A' ORD PRICE: | 540p | MARKET VALUE: | £174m | |
| 'A' TOUCH: | 540-537p | 12-MONTH HIGH: | 768p | LOW: 500p |
| DIVIDEND YIELD: | 2% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 354p* | NET DEBT: | 49% | |
| Year to 29 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2004 | 140.0 | 19.2 | 60.60 | 17.31 |
| 2005 | 129.0 | 17.6 | 53.40 | 18.46 |
| 2006 | 145.0 | 15.3 | 46.40 | 19.75 |
| 2007 | 178.2 | 42.2 | 52.14 | **6.50 |
| 2008 | 181.1 | 23.8 | 34.33 | **6.90 |
| % change | +2 | -44 | -34 | +6 |
Ex-div: 25 Jun Payment: 25 Jul *Based on 'A' and 'C' shares **Adjusted for share split |
||||
Click here for a guide to the terms used in IC results tables
These results confirm the resilience of Fuller's business model. Yet its share price has been heavily hit by the sector's de-rating and its cautionary statement will do little to lift investor sentiment in the short term. Fairly priced.
Last IC View: Good value, 585p, 26 Nov 2007
Free access to financial data, charts, portfolio tools and more - registration is quick, secure and free!
Profit from IC share tips; discover the benefits of IC Advantage and sign up for a free trial.
© The Financial Times Limited 2010. All rights reserved. "Investors Chronicle", "FT" and "Financial Times" are trademarks of The Financial Times Limited. No part of these web pages may be reproduced or transmitted to or stored in any other website or other form of electronic retrieval system, without prior permission in writing from the editor.
Warning: Do remember, particularly if you are new to stock market investment that the prices of shares and other investments can fall sharply. You may not get back the money you originally invested. The material here is for general information only and is not intended to be relied upon for individual investment decisions. Take independent advice before making such decisions. This site is aimed at UK residents only. To read more please see our Important Warning
v6.2.11.1 running on ftbwebw-sun-02-z1
