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Fuller's hopping along nicely

The mix of managed and tenanted pubs alongside its beer company continues to work well.
November 20, 2015

There seems to be little standing in the way of Fuller, Smith & Turner (FSTA) if the way in which it beat tough comparables this term is anything to go by. Chief executive Simon Emeny is not so blasé, though, saying a good dose of "healthy paranoia is the thing which keeps us fresh". And it must be working, as like-for-like sales at its core managed pubs and hotels division rose 5.6 per cent against a strong set of numbers from the same period last year.

IC TIP: Buy at 1,140p

The group's tenanted estate - which won't be subject to the 'market rent only' option being introduced through legislation next year, due to its size - saw like-for-like profit rise 3 per cent, thanks in part to £1m-worth of investment. The group's Mike Clist, who has been director of this division for 15 years, is set to retire and pass the reins to Fred Turner, who is already in situ. Meanwhile, the beer group also saw volumes and sales rise.

Fuller's also purchased the freehold of three of its pubs, helping it secure its future in several key locations. Analysts at broker Numis Securities now expect pre-tax profit of £39.5m in the 2016 financial year, leading to EPS of 54.7p, compared with £36.4m and 50.8p in FY2015.

FULLER, SMITH & TURNER (FSTA)
ORD PRICE:1,140pMARKET VALUE:£639m*
TOUCH:1,150-1,190p12-MONTH HIGH:1,250pLOW: 906p
DIVIDEND YIELD:1.5%PE RATIO:20
NET ASSET VALUE:906p*NET DEBT:65%

Half-year to 26 SepTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201416218.325.36.40
201517821.229.86.90
% change+10+16+18+8

Ex-div: 3 Dec

Payment: 4 Jan

*Includes family-held 'B' shares