Having lots of pubs with beer gardens has proved less of a boon this year than usual for cask ale brewer and pubs group Fuller, Smith and Turner, as England's soggy summer continues.
In the period from April 1st to July 18th, total sales for Fuller's Managed Pubs and Hotels were up 8.0% on the corresponding period of the previous year, but were down 1.1% on a like-for-like (LFL) basis.
The group attributed this to lousy weather affecting sales in pubs that have beer gardens. In contrast, other parts of the business did well out of the Queen's Diamond Jubilee celebrations and the Euro 2012 football championships.
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The Tenanted Inns division saw LFL profits rise 1% year-on-year while beer volumes produced by the London Pride brewer were up 1% on a year earlier.
Cash generation remains strong and net debt at the end of June was down to £134.5m from £138.2m at the end of March.
The 30 pubs acquired last year have bedded down well and are hitting sales targets.
Panmure Gordon said the LFL sales performance of the Managed Pubs and Hotels was worse than it had been expecting; the broker had forecast positive LFL sales growth of 1.0%. The 1.1% decline in LFL sales was at least an improvement on the 2.8% fall the group reported for the first eight weeks of its current financial year and implies, according to the broker's calculations, LFL sales growth of 0.3% over the last seven weeks.
"We reiterate our Hold recommendation and 735p Target Price and continue to prefer Young's (Buy, 804p Target Price) for those seeking exposure to London and the South East," Panmure Gordon said.
Peel Hunt is more bullish on the stock, rating it a "buy".
"As the largest operator of station pubs with established operations at Paddington, Waterloo, and its new Parcel Yard at King's Cross, Fullers is well placed to benefit from high passenger turnover here, as well as from high footfall on London streets," Peel Hunt analyst Paul Hickman said, referring to the influx of people expected in the nation's capital as the Olympics kick off.
JH
