Fuller, Smith & Turner (FSTA) chief executive Simon Emeny said that he “cannot remember a time when we have faced such an array of additional cost pressures”. Indeed, the pub company is expecting to pay around £2m more in business rates this financial year, along with higher bills from the apprenticeship levy and the national living wage. This has been so far felt in a 20 basis point contraction in margins to 13.6 per cent at the managed pubs. But Mr Emeny is confident the group’s premium positioning and plans for growth will offset these pressures.
So far this optimism appears justified, with growth across all divisions during the first half. Managed pubs and hotels saw comparable sales increase 3.6 per cent over the period to £140m, which hold up well against industry benchmark Peach Tracker’s 1.3 per cent revenue growth. Like-for-like profit in the tenanted division was up 2 per cent to £6.7m, and with 16 of the 20 pubs it was intending to dispose of having been sold by time of writing.
The company continues to invest in its IT system and estate. The success of its King's Cross location prompted the purchase of pubs in Liverpool Street and Euston railway stations, both due to open in time for Crossrail.
Analysts at Numis expect pre-tax profit of £43.1m in the year to March 2018, giving EPS of 62.1p (from £42.9m and 61.4p in FY2017).
| FULLER SMITH & TURNER (FSTA) | ||||
| ORD PRICE: | 950p | MARKET VALUE: | £531m | |
| TOUCH: | 945-970p | 12-MONTH HIGH: | 1,124p | LOW: 915p |
| DIVIDEND YIELD: | 2% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 588p* | NET DEBT: | 62% | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 198 | 21.4 | 32.1 | 7.25 |
| 2017 | 209 | 23.6 | 35.1 | 7.55 |
| % change | +6 | +10 | +9 | +4 |
| Ex-div: | 7 Dec | |||
| Payment: | 2 Jan | |||
| *Includes family-held 'B' and 'C' shares | ||||
