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TIP UPDATE: Fuller, Smith & Turner's solid half-year results point to further profits for patient investors

The sun shone brightly on Fuller, Smith & Turner (FSTA) as the London-based brewer and pub operator delivered a set of half-year results as smooth as a pint of IPA. Underlying operating profits increased by 6 per cent to £21m, after the company's managed pubs and hotels benefited from their niche London locations to deliver like-for-like sales growth of 7.9 per cent for the half, easily the highest in the industry.

IC TIP: Buy at 991p

The company's 385 pubs are split between 174 managed establishments and 211 public houses run by tenants on Fuller's behalf. In keeping with trends seen at other pub companies, it was the managed division that generated the most significant growth. Sales there increased by 10 per cent to £94.4m, largely as a result of an emphasis on dining. Significant investment in the division helped boost profit margins from 12.7 per cent to 13.3 per cent, with a resulting 16 per cent increase in operating profits to £12.6m.

Chief executive Simon Emeny said expansion was still a priority, despite the rise in asset prices in London and the south east. He added that Fuller's will invest £40m across its entire business, including pubs, hotels and restaurants.

Broker Numis Securities forecasts pre-tax profits of £33m, giving EPS of 44.9p, compared with £31.1m and 42.7p last year.

FULLER'S, SMITH & TURNER (FSTA)

ORD PRICE:991pMARKET VALUE:£556m#
TOUCH:982-1,010p12-MONTH HIGH:995pLOW: 725p
DIVIDEND YIELD:1.4%PE RATIO:19
NET ASSET VALUE:488p*NET DEBT:48%

Half-year to 28 SepTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201213817.327.55.35
201314616.828.75.80
% change+6-3+5+8

Ex-div: 4 Dec

Payment: 2 Jan

*Includes intangible assets of £32.4m, or 58p a share #Includes family-held 'B' shares