A leading analyst has said that Fuller’s, the brewer and pub operator, which will reports its first-half results later this week, is well placed to continue its out-performance. Douglas Jack at Numis forecast that the group’s pre-tax profit would rise 3% to £16.2m, supported by positive like-for-like trading. He said: “(We) believe Fullers is well-place to continue its out-performance, leading to further upgrades over the medium-term. Reflecting the potential stemming from the step-up in the managed pub acquisition programme, we are increasing our target price from 725p to 775p. “We believe the risk to forecasts is on the upside in relation to like-for-like trading and faster expansion. Fullers has acquired at least 10 managed pubs since the start of the financial year, a process that should be accretive given a 4.5% cost of debt and scope to increase margins through greater scale. The benefit of recent pub acquisitions should feed through in 2013E, when there should be good upside to forecasts.” The group’s managed pub and hotel like-for-like sales were up 3.2% in the first 16 weeks to 23 July. Jack said: “There was some weakness during June/July due to weather and tough World Cup comparatives, but our sector data suggests that should have been just a blip. “Margins should be up as like-for-like sales are above the 2% required to offset cost inflation in 2012E (utility costs up 10%; food costs up 2%; and the new carbon levy £0.25m). Margins should also benefit, in time, from the recent pick up in expansion which should improve economies of scale.” The company’s tenanted pub like-for-like profits were up 1% for the first 16 weeks led by better beer volumes. Jack said the positive performance reflected “continued strong investment support, training and product range improvements”.