Fuller Smith & Turner, UK brewer and pub owner, said although revenues increased 1% over its first half, pre-tax profits fell to £12m compared to £12.7m over the same period last year. Although mostly reporting positive gains, the firm’s basic earnings per share slid over the six month period, falling to 13.13p from 20.34p over the same period last year. The company intends to increase its interim dividend by 2% to 2.85p.
Although cash generated from operating activities increased to £20.8m, up from £11.2m in 2007, the company reported operating profits were down in a number of its divisions. Fuller’s Beer Company saw a drop in operating profits of 3% while it decreased by 2% in its Inns business.
The company, which operates more than 350 pubs in the UK half of which are managed with others leased or tenanted, attributed some of the difficulty it saw over the 26 weeks to 27 September to cost inflation, the rise in commodity and energy prices. As energy prices have come down in recent months, Fuller believes its impact will abate, however, the group remains committed to reducing its costs.
Tougher trading conditions over the period also led to a 1% decrease in average revenue per pub, within its tenanted pubs business. Fuller’s said it remains committed to this area of its business and determined to support its tenants through these difficult times but that would not come via rent concessions.
Michael Turner, chairman of Fuller’s, said Fuller’s is in a strong financial position going forwards, owning the freeholds of the majority of its pubs and having prudent gearing with headroom on its committed bank facilities. Fuller’s has reported a fall in its net debt, which has been reduced by £5.4m to £90.1m since March 2008.
Although the outlook for the nation’s economy does not look good, Turner said he believes Fuller’s business can cope well with a downturn and despite the uncertainty it still intends to spend approximately £16m in capital investment projects including committed pub acquisitions during this current year.
