Friday, Fuller, Smith & Turner Plc (FSTA.L), an operator of pubs and bars in London, reported a decrease in first-half profit, amid a difficult economic environment, despite a marginal rise in revenue. The company said its excellent cash flow generation and strategy placed it well for the future.
Micheal Turner, chairman of the company, said, "Our performance has been resilient in what has been a challenging period for the industry."
Profit attributable to equity shareholders declined to GBP 7.3 million or 12.9 pence per share from GBP 11.4 million or 20.07 pence per share in the year-ago period.
Profit before tax fell 6% to GBP 12.0 million from GBP 12.7 million in the same period of last year. Adjusted Profit before tax decreased slightly to GBP 12.0 million from GBP 12.1 million last year. However, on a per share basis, adjusted earnings rose to 15.09 pence from 14.98 pence in the previous year.
Total revenue increased 1% to GBP 94.4 million from GBP 94.3 million in the preceding year.
Amid difficult economic conditions, consumer spending was relatively good and the Fuller's Beer segment, which markets English ale, London Pride and Organic Honey Dew among other brands, posted a 2% revenue growth and 3% decline in operating profits, year-over-year.
Fuller's Inns reported good performance with like-for-like sales of 2.3% in the Managed Pubs and Hotels division, which surpassed industry equivalents.
In Fuller's Inns operating profits declined 2% to GBP 13.0 million from GBP 13.3 million last year, while revenues rose to GBP 74.4 million from GBP 73.5 million in the comparable period of last year.
The Fuller's Inns operates in two divisions, managed pubs and hotels, and tenanted inns. As of September 27, 2008, Fuller's had 356 pubs, of which 204 were tenanted or leased pubs and 152 were managed pubs or hotels.
In managed pubs and hotels, revenue increased 1%, while profit declined 4% on increased utility costs. The segment promises to offer quality food and boutique accommodation and recorded food sales growth of 1%, or 27% of revenue in the first half.
During the first half, the company launched a new website to divulge information about its six hotels and boutique rooms at many of its Inns.
In the Tenanted pubs segment, the company witnessed a 1% decrease in average revenue per pub, along with a 1.9% decline in like-for-like sales.
Total own beer volumes declined by 1% to 106 thousand barrels, while UK own beer volumes fell 2%.
In the Wine business, profits grew by 12% year-on-year, driven by growth in the company's agency wine business.
The Board declared an interim dividend of 2.85 pence per share per 40p 'A' and 'C' ordinary share and 0.285 pence per 4p 'B' ordinary share. The dividend will be paid on January 5, 2009 to shareholders of record as of December 12, 2008.
Looking ahead, Micheal Turner, said, "The collapse of confidence in the world's banking system has meant that the outlook for the nation's economy does not look good."
Turner added that the company's financial strength and business model would help it cope well with a downturn.
Among competitors, Young & Co.'s Brewery Plc, yesterday said sales over the last seven weeks were down 3.3%, hurt by unprecedented events in financial markets.
Shares of FSTA.L are currently trading on the London Stock Exchange at 337.00 pence, up 21.25 pence, or 6.73%.
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