Fuller, Smith & Turner, the brewer and pub operator, has this morning unveiled like-for-like sales growth of 2.8% at its managed pubs for the first half of the year.
Adjusted profit before tax increased by 18% to £14.1m and ebitda was up 9% at £22.7m, up from £20.9m in 2008.
However, chairman Michael Turner describing the results as strong admitted that profits had been boosted by acquisitions, record low interest rates, a pay freeze and better weather.
Turner said: “We remain cautious about the outlook for the UK economy and we expect our second half to be significantly tougher than the first. Starting with VAT rising by 2.5% on 1 January 2010, taxes and interest rates must rise and the economic climate is likely to remain challenging for some considerable time.”
Like-for-like profit at Fuller’s tenanted pubs declined by 3%.
Revenues at the tenanted arm increased 2% to £13.3m but pre-exceptional operating profit slumped by 2% to £5m.
Fuller’s Beer Company continued to outperform the market with a 3% increase in volumes and revenue up by 9% to £49.4m
Net debt increased £12.5m since the year-end to £106.7m despite £31.8m of capital investment in the period, £25.3m of which was for pub acquisitions.
The company said that its net debt to ebitda ratio, which had risen to 2.8 times following its acquisitions, was now at 2.4 times.
It added: “Our main banking facilities are due for repayment in November 2010 and, based on an active dialogue with banks both inside and outside the current banking group, we remain confident of our ability to refinance them in due course.
“The margin we will have to pay to the banks may rise above the 0.5% we are currently paying, as may our blended cost of finance from the rate of 4.1% at the balance sheet date, as interest rates increase in future.”
Fuller’s said that the pubs it had acquired from Punch and M&B had traded well over the summer period. Two have already been converted and it added the remainder would be in the second half of the year.
Like-for-like sales in the group’s managed arm were up by 2.9% for the 33 weeks to 14 November 2009.
