Leading analyst Douglas Jack, of Numis, has upgraded his forecast for Fuller’s after it revealed it had performed “well ahead of the market” in FY15.

Jack said the forecast for pre-tax profits for 2016 had been upgraded from £38m to £38.5m and the target price from 1200p to 1150p.

Jack said: “Fuller’s outperformed a London managed pub market that generated 3.2% LFL sales over the same period (Peach Tracker). Fuller’s is benefiting from extensions to its premium product range, estate investment, as well as increased food marketing and staff training.

“Eight managed pubs and six The Stable Pizza restaurants were added. This helped managed pub sales to rise by 11%. We estimate managed margins would have been up c.50bps without additional refurbishment downtime/repairs and initial dilution from the Stable Pizza acquisition. Reported margins fell 40bps.”

Jack said like-for-like profits in the tenanted estate were aided by investment as well as improved IT systems, training and support.

He said: “We are upgrading our forecasts by 1-2%, supported by 2015 being ahead and managed pub/hotel LFL sales being up 5.5% and tenanted LFL profits being up 2% during the first nine weeks of 2016E. For 2016E, we assume: 2.5% LFL sales and 15bps margin growth in managed; 2% tenanted LFL profit growth; and 1% brewing volume growth.

“We reiterate our Add recommendation. We believe Fuller’s has plenty of investment and operational initiatives to maintain its momentum. Also, with net debt/EBITDA at 2.7x, there is scope for our 2016E expansion assumptions to be exceeded: we forecast two new managed pubs and six new Stable Pizza restaurants, and all these sites are already found and scheduled to open.”