Fuller's ready to start acquiring

Fuller Smith & Turner is set to hit the acquisition trail, following the successful integration of Hampshire brewer Gales, which it bought 18 months ago.

Announcing the London brewer's annual results for the 12 months to March 31 last week, chief executive Michael Turner said he was interested in doing the right deal "if people wanted to sell", but refused to identify a likely target. Some observers have suggested the group might want to go for local rival Young's, although issues such as the high price and a complex beer supply arrangement make a deal unlikely at the moment.

Turner noted that prices for pubs had "gone through the roof" recently and admitted that "we should have bought a few years ago when we were complaining about high prices".On the question of real estate investment trusts, Turner said: "What we know so far is that they are inappropriate, although we are not ruling it out completely at this stage."

He cast doubt on moves by some pubcos to persuade the taxman to include wet rent and AWP income as a basis for conversion. Meanwhile, a full year's contribution from the acquired Gales estate, rising food sales and two hotel disposals boosted the group's annual results.

Fuller's overall turnover grew 23 per cent to £178.2m, with operating profits up 31 per cent to £29.4m. Adjusted pre-tax profits, excluding the sale of two hotels, were up 23 per cent at £22.1m. Adjusted earnings per share were up 26 per cent to 68.94p, while a final dividend of 16.25p, up 15 per cent, would be proposed. The sale of the two hotels during the year for £35.6m, along with other property sales, resulted in exceptional profits of £20.1 million.

Turnover in the group's managed pubs rose 28 per cent, with profits up 41 per cent. Uninvested like-for-like sales in the managed estate rose by 6.7 per cent. Food sales in the managed estate rose 51 per cent in the year, with food now representing more than a quarter of the managed business's total sales, versus a fifth in 2006. Fuller's tenanted pubs saw turnover up 39 per cent, with profits up 40 per cent.

In brewing, the group said sales rose 14.1 per cent, with profits up 12 per cent to £7.9m. The group said it would be proposing a five-for-two share split to "rebase the share price and increase liquidity".