Fuller, Smith & Turner, the London brewer and pub operator, revealed this morning it had grown profits across all parts of its business as it unveiled its results for the 26 weeks to 25 September 2010.
It said it had seen like-for-like sales increase by 3.3% at its managed pubs and hotel arm and also reported what it described as a “robust” 1% growth in the same key metric at its leased and tenanted pub division.
Fuller’s said revenue had improved by 4% to £121.5m and reported an 11% increase in adjusted profit before tax of £15.7m. Profit before tax was up by 11% at £16.8m and ebitda was £24.1m, an increase of 6% year on year.
Beer volumes at the company, which produces London Pride, also increased by 1%
The company said its first half performance had been boosted by low interest rates but it warned that borrowing costs would increase in the second half and this, coupled with government spending cuts and the hike in VAT to 20%, meant the “economic climate is likely to remain challenging for some considerable time”.
Net debt fell by £14.1m at the year-end to £93.6m. It said proceeds of £2.6m from the disposal of non-core properties, including two tenanted pubs, had assisted cash generation and that it has in excess of £33 million undrawn committed banking facilities.
At its managed pub and hotels arm, Fuller’s said that food sales had grown by 4.2% during the half, aided by a 2.3% increase on like for like wet sales. However Fuller’s best performing asset was its hotels – or pubs with rooms – which saw an 11.4% increase in revenue on a like-for-like basis.
Fuller’s has 487 rooms across its estate and said that it had 27 rooms under development at Drayton Court in Ealing but it would “continue to add to this number”.
It added that it aimed to add to its managed estate and would divest in pubs that do match its brand criteria.
In a statement, Fuller’s said: “We have chosen to build our pub estate in London and the South of England. Asset prices tend to be higher in these areas than other regions but we believe that this is the place to be and that further acquisition opportunities will arise in this area.
“London has been shown to be a resilient marketplace and with forthcoming events ranging from the Olympics to the Royal Wedding there will be plenty of attractions bringing customers to the capital.”
Two tenanted inns were sold during the period and the estate stood at 364 properties on 25 September 2010, of which 163 were operated as managed and 201 were tenanted.
At its tenanted arm, Fuller’s reported that revenue increased by 1% to £13.5m and this was assisted by strong foreign beer sales and good early summer weather. Operating profits rose by 2% from £5m to £5.1m whilst ebitda climbed 2% to £5.9m.
At its beer division, the company said that total volumes of Own Beer sold across all trade channels declined by 2% to 107,100
Barrels. It blamed the the challenging climate of the UK free on-
trade market where Fuller’s volumes declined 11%.
It said this decline was offset by good sales in the off-Trade with growth of 8%, and export volumes growth of 25%.
