UPDATE: Fuller's Cautious On 2011 After Record Full-year

11th Jun 2010 10:41

(Adds chairman comment, detail, background) By Hannah Benjamin Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Pub and brewery group Fuller, Smith & Turner PLC (FSTA.LN) Friday posted a record set of full-year figures in spite of the recession, and said while looming tax hikes could hit spending in its pubs this year it should get a boost from the continued investment in its businesses. The firm has made a strong start to the current fiscal, with comparable sales in its managed pubs and hotels rising 3.5% in the 10 weeks to June 5, beating the 2.7% growth in these pubs and hotels throughout fiscal 2010, which ended March 27. Chairman Michael Turner said the company's resilience compared to peers is most likely due to its focus on the south of England and investments made throughout the downturn, like refurbishments in several pubs. Its pubs are largely based in and around London, which is typically a more affluent area than those in the north of the country. This echoes the fortunes of peer Young & Co's Brewery PLC (YNGA.LN), which last week said it expected its London focus to cushion it from the worst effects of the continuing downturn. The U.K. government's decision to cut interest rates during the recession meant that many consumers had more disposable income each month as mortgage repayments fell. But the new coalition government's budget later this month looks set to hit consumers hard, with tax rises and Value Added Tax increases expected. Fuller's fiscal 2010 pretax profit climbed 86% to GBP26.8 million from GBP14.4 million a year earlier. In fiscal 2009 the company paid out GBP8.4 million of net exceptional costs which mainly related to asset impairment charges. Stripping this out, its pretax profit climbed 17% on the year. Revenue rose 8% to GBP227.7 million from GBP210 million a year earlier, driven by a strong performance in its own-managed pubs. In the pubs it leases to tenants, comparable profits fell 1%. Fuller's, which makes London Pride ale, said sales of its own beer rose 2%. Operating profit at the Fuller's Beer company rose 7% to GBP8.9 million from GBP8.3 million. The company bought eight freeholds during the fiscal year and one tenanted inn. It said opportunities for more pub acquisitions are limited, but it is in the process of getting planning permission for another hotel at one of its London pubs. The company runs a number of hotels on the sites of its pubs in London and inns throughout the South East. It recently sealed a new GBP100 million five-year bank facility which could fund more deals but is also highly cash-generative, evidenced by a 12% rise to its total dividend to 11 pence a share from 9.85 pence a share in fiscal 2009. -By Hannah Benjamin, Dow Jones Newswires; 44-20-7842-9298; [email protected] (END) Dow Jones Newswires June 11, 2010 05:41 ET (09:41 GMT)