Fuller’s profit slides following sale of beer business
Fuller, Smith & Turner reported a fall in profit before tax for the first half, but revenue for the pub group rose slightly amid “good performance” from its managed pubs and hotels.
Statutory pre-tax profit for the six months to 28 September decreased 27 per cent to £11.1m, down from £15.1m the previous year.
Read more: Fuller’s takes a hit on sale of brewery business
Adjusted profit was flat at £17.9m.
Fuller’s said the fall in pre-tax profit was due to the repayment of a large proportion of bank debt following the sale of its Chiswick brewery to Japanese drinks company Asahi for £250m in April.
The pub group – which runs several pubs in the City, including the The Counting House and The Banker – made a £164.5m gain on the sale, which was not included in the pre-tax profit figure.
Fuller’s plans to use the profit from the sale to finance improvements to its pubs and hotels. Asahi will continue to supply the company with beer under a long-term deal.
“The first half of this year has seen the biggest transformation in Fuller’s history,” said chief executive Simon Emeny.
“It has been a time of unprecedented change – and not without its challenges – but we have made good progress and we have a clear view and plan for the next steps.”
Revenue rose six per cent to £174.8m during the first half, compared to £165m the year earlier. Fuller’s proposed an unchanged interim dividend of 7.80p per share.
Fuller’s said it had seen a “good performance” by managed pubs and hotels, with like-for-like sales growth of 2.7 per cent. This is a drop on the 4.1 growth reported for the previous year.
The group’s tenanted properties fared less well, with a three per cent increase in revenue and a three per cent drop in like-for-like profits.
Emeny also called on the next government to “overhaul” the controversial business rates system.
“We hope that the incoming Government helps us to continue to grow our business by overhauling the business rates system,” he said in a statement released with the results.
Read more: Fuller’s prepares to hand £69m to shareholders after brewery sale
The chief executive also called on the next government to ensure “a manageable level of wage inflation,” as well as “creating an immigration system that allows us to recruit and invest in excellent team members from both home and abroad”.
Fuller’s shares were up slightly at 0.21 per cent in early afternoon trading.