Don’t let a drop in statutory earnings fool you; Fuller Smith & Turner’s (FSTA) full-year results shouldn’t cause concern. The group sold its brewery business to Asahi Europe in April and exceptional items relating to the disposal, along with IT upgrades, lowered profits in the period. Fuller will continue to run parts of the beer business for a year, but management’s focus now is to transition into a purely pub-and-hotel-focused business.
On that front, the numbers look good. The group’s managed pubs and hotels saw like-for-like growth of 4.9 per cent. While this was certainly helped by the football world cup and an unusually warm summer last year, growth has continued into the current period with 1.2 per cent like-for-like growth in the first 16 weeks. Tenanted Inns, a relatively small part of the group, saw sales drop 3 per cent, which management attributed to tough comparators.
The sale of the brewing business will provide a £205m cash infusion to be poured into upgrading and expanding the pub and hotel estate, among other things. Chief executive Simon Emeny said the group would also return cash to shareholders and contribute to the pension scheme.
Broker Peel Hunt is forecasting adjusted earnings per share of 60p for the year to March 2020, down from 62.3p in 2019.
| FULLER SMITH & TURNER (FSTA) | ||||
| ORD PRICE: | 1,100p | MARKET VALUE: | £352m* | |
| TOUCH: | 1,075-1,145p | 12-MONTH HIGH: | 1,210p | LOW: 846p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 1,058p* | NET DEBT: | £245m | |
| Year to 30 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 322 | 36.1 | 51.2 | 16.6 |
| 2016 | 351 | 39.2 | 59.3 | 17.9 |
| 2017 | 392 | 39.9 | 59.2 | 18.8 |
| 2018† | 404 | 43.6 | 64.9 | 19.6 |
| 2019† | 431 | 26.1 | 35.1 | 20.2 |
| % change | +7 | -40 | -46 | +3 |
| Ex-div: | 1 Aug | |||
| Payment: | 6 Sep | |||
| *Does not include family-held 'B' and 'C' shares | ||||
