Larger than usual refurbishment costs knocked around £0.9m off half-year profits for Fuller, Smith & Turner (FSTA), as it built on its reputation as a premium pub business by investing to keep the estate in good shape. Chief executive Simon Emeny said the spend was necessary to bring a number of recently acquired pubs up to Fuller’s standards, but the related closure periods reduced margins in the managed estate by 60 basis points.
However, the focus on premium appears to be worthwhile, as Fuller’s continued to outperform the wider pub sector. Like-for-like sales at its managed pubs increased 4.1 per cent and by 2 per cent at tenanted pubs – well above the 0.2 per cent growth across Britain’s pubs and restaurant groups last month, according to the Coffer Peach Tracker of the industry. This was driven by 5.5 per cent growth in drink sales, compared with a 1.6 per cent increase in food. Mr Emeny said Fuller’s is more focused on sales growth by increasing market share, rather than through price increases. Chancellor Philip Hammond’s announcement in the Budget that beer duty would be frozen has limited the need to do so.
Analysts at Numis expect pre-tax profit of £44.2m during the year to March 2019, giving EPS of 64.3p, compared with £43.2m and 62.2p in FY2018.
| FULLER, SMITH & TURNER (FSTA) | ||||
| ORD PRICE: | 934p | MARKET VALUE: | £520m† | |
| TOUCH: | 912-948p | 12-MONTH HIGH: | 1,010p | LOW: 896p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 632p † | NET DEBT: | 63% | |
| Half-year to 29 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 209 | 23.6 | 35.1 | 7.55 |
| 2018 | 222 | 20.8 | 29.3 | 7.80 |
| % change | +6 | -12 | -17 | +3 |
| Ex-div: | 6 Dec | |||
| Payment: | 2 Jan | |||
| †Includes family-held 'B' and 'C' shares | ||||
