23rd Nov 2018 09:19
LONDON (Alliance News) - Pub operator and brewer Fuller, Smith & Turner PLC boosted its interim dividend Friday amid strong sales growth and despite profit being dragged down by investment spending.
For the six months ended September 29, pretax profit narrowed 12% to GBP20.8 million from GBP23.6 million the year prior. This was despite revenue rising 6.1% to GBP222.1 million from GBP209.3 million the year before.
Profit performance was hurt by a number of one-off costs, some GBP2.3 million in the recent half, up from GBP200,000 a year prior. This was primarily due to IT system replacement costs of GBP2.7 million and GBP600,000 in acquisition costs, partly offset by some one-off gains.
Excluding exceptional items, pretax profit declined marginally to GBP23.6 million from GBP23.8 million the year prior.
"While our revenues have continued to grow, we experienced a small drop in group profits - however, this should be taken in context," Fuller's Chief Executive Officer Simon Emeny said. "We made a conscious decision to front-load our investment programme - impacting our profitability by GBP900,000. Although we would have seen profit increase had we not taken this action, we believe this is the right decision and ensures our estate is in the best possible position to benefit from the busy Christmas period and beyond."
Fuller's proposed a 7.80 pence per share interim dividend, up 3.3% from 7.55p the year prior.
Emeny said the company had delivered "another good performance" in which "each division is delivering growth and we continue to benefit from having a well-balanced business".
Fuller's emphasised like-for-like sales for its managed pubs has risen 4.4% in the 33 weeks since the start of its financial year. Meanwhile, at tenanted pubs like-for-like sales were up 2%. Beer and cider volumes at its Fuller's Beer Co also rose 0.5% over the 33-week period into November.
"The second half of the year is also an exciting time for The Fuller's Beer Co," Emeny continued. "We are installing our new canning line at Dark Star, will be brewing our second suite of Fuller's & Friends collaboration beers, and building on the early work of our Fuller's First initiative to grow the share of our own beers in our Managed and Tenanted estates."
"Finally," Emeny said, "it would be impossible to look forward to the second half of the year without reference to Brexit, which is due to happen on the penultimate day of our financial year. Facing uncertainty is never easy, but Fuller's is an exceptionally well-established operation and benefits from a balanced business model which is designed to be flexible enough to adapt to changing trends and markets yet resilient enough to weather any storm."
Shares in Fuller's were 0.3% higher at 936.48 pence on Friday.
Related Shares:
Fuller Smith & TurnerFuller Smth 6%