20th Jul 2015 10:24
LONDON (Alliance News) - Numis says it expects to "at least hold" its current forecasts on Fuller, Smith & Turner after it releases its first-quarter trading statement on Thursday, which Numis believes will demonstrate strong like-for-like sales.
Numis says it thinks that London-based the pub and brewing company saw a 5.5% rise in managed pub/hotel like-for-like sales in the first nine weeks of its financial year, which although was against an 8% comparative, was higher than the the 2% increase in the London managed pub market as a whole.
The broker predicts a 2.5% rise for the full year, which it says is a cautious assumption given that the company is continuing to invest in amenity, product, service and digital marketing ahead of its competitors.
Meanwhile in the tenanted pubs division, Numis says it thinks like-for-like profit grew 2% in the period, versus a 4% comparative, as repairs investment causes short-term fluctuations in profit. It also forecasts 2% like-for-like profit growth for the full year.
Numis adds that beer and cider volumes likely fell 2% in the nine weeks, but are forecast to increase 1% over the full year.
"We expect to at least hold our forecasts. Due to trading and expansion momentum, we believe forecast risk remains on the upside. Also, with net debt/Ebitda at 2.8x, there is scope for our 2016E expansion assumptions to be exceeded," the broker writes in a note.
Numis has a 1,200 pence price target and an Add recommendation on the stock. Shares in Fuller, Smith & Turner are down 4.5% at 1,079.25p Monday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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