No rent concessions for Fuller's tenants

Fuller, Smith & Turner said licensees across its 204-strong leased and tenanted pub business could expect the brewer's full support in the difficult trading environment, but warned that this would not include rent concessions.

Reporting the group's first half figures today, which saw pre-tax profits dip one per cent to £12m on turnover up one per cent to £94.4m, Fuller's chairman Michael Turner described the trading performance of the group in a challenging market as "resilient".

He said the group "remain committed to our tenants and lessees and [we] are determined to support them through these difficult times.

"However, we do not believe that offering rent concessions is the best way to do this. We prefer to work collaboratively, helping them improve the performance of their business."

Such efforts would include marketing and training initiatives, plus looking at ways of expanding the pubs' food offer.

The tenanted and leased business saw turnover and profits "level" in the six months to September 27, 2008, although average pub turnover dipped one per cent and like-for-like sales fell nearly two per cent.

The group's managed and hotels arm, with 152 sites, saw invested like-for-like turnover up 2.3 per cent. Turnover increased by one per cent, Turner said, "reflecting the fact that we had fewer pubs than in the corresponding period last year, while profits were down four per cent driven by increased utility costs".

Food sales rose one per cent in the managed estate, representing 27 per cent of turnover, level with last year.

Reflecting the downturn in national beer sales, Fuller's Beer Company witnessed overall beer volumes down three per cent, with own brewed volumes off two per cent.

Brewing turnover rose two per cent to £30.9m, although the group said an increase in marketing spending on the previous year meant operating profits fell three per cent to £3.4m.

Describing the first half performance as "resilient in what has been a challenging period for the industry", Turner said current trading remained difficult.

"We have maintained the momentum of the first half and our resilient performance has continued.

"The invested like-for-like sales in our managed pubs and hotels has grown by 2.2 per cent for the 33 weeks to November 15, 2008.

"Consistent with the industry trends, Fuller's Beer Company's own beer volumes declined against the prior period, although we continued to grow our share of this falling beer market."

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Fuller's results at-a-glance

Turnover: £94.4m (up one per cent)

Operating profits: £15.2m (down two per cent)

Pre-exceptional pre-tax profits: £12m (down one per cent)

Pre-tax profit: £12m (down six per cent)

Adjusted eps: 15.29p (up one per cent)

Basic eps: 13.13p (down 35 per cent)

Interim dividend: 2.85p (up two per cent)