Fullers see good growth in latest results as beer sales outperform market

Local brewer. Fuller Smith & Turner, has reported increased group pre-tax profits of 20% to £7.7m in the half year to the end of September

Fullers Chief Executive, Michael Turner and Finance Director, Paul Clarke

The interim dividend was increased by 6% to 4.75p. Beer sales were strong with growth of over 9% and profits from that division up by 23%. The percentage of sales to non-Fullers pubs continues to increase with 84% of sales outside the group. However the group reported its first ever decline in sales at its managed estate mainly due to a poor performance in City of London pubs as job anxiety seems to have reduced drinking in city bars.

One in 20 pints of cask ale drunk in this country is now London Pride which has established itself as the number two premium cask ale brand. London Pride volumes increased by 11% and at the Queen's Jubilee Concerts 28,000 pints of London Pride and the lighter Organic Honey Dew were quaffed by partygoers.

Following the initial buyback of 100,000 A ordinary shares in December 2001, the Company has repurchased a further 1,312,000 shares at a cost of £6.4 million. The average price paid during the period was £4.85, which is a considerable discount to the estimated net asset value of £6.26. The Chairman, Anthony Fuller, said that buybacks were the preferred strategy as opposed to acquisition adding "We believe that, in general, freehold pub prices have reached unsustainable levels while many leasehold properties are on offer at rents that are too high given current market conditions."

The period was a good one for Fullers in terms of recognition demonstrated by various prizes and awards being won. These include unprecedented gold, silver and bronze medals at the Great British Beer Festival and being voted Brewer of the Year by the Good Pub Guide 2003.

Commenting on the results, Anthony Fuller sounded a cautious note for the future: "We are confident that the results for the full year will show reasonable growth, although it is important to note that the difficult conditions being experienced in certain sections of our market have yet to reverse and may not do so for some time. Trading in the six weeks since the period end has been disappointing.

November 18, 2002

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