Pub trading likely to get tougher, warns Fuller's

Rising taxes and inflation are likely to make life even tougher for the pub sector in the coming months, warned Fuller, Smith & Turner, the London brewer and pub operator.

The "inevitability" of tax hikes after the general election meant the brewer remained cautious for the UK' economic outlook and prospects for its customers.

"We will have to compete even harder for our customers' business", the brewer added in an interim management statement issued today.

However, Fuller's said it had ridden out this recession well, noting it looked set to exceed its previous expectations for its performance for the current financial year.

Fuller's said that in the 11 weeks to January 30, 2010, like-for-like sales in its managed division, which includes its hotel operations, rose by 2.6 per cent, bringing the like for like sales growth for the full 44 weeks to 2.8 per cent.

Like-for-like profits in the group's tenanted pubs division were down two per cent for the 44 week period, while own beer volumes for the Fuller's Beer Company for the 18 weeks to January 30, 2010 grew one per cent, with a two per cent increase for the full 44 weeks.

Fuller's announced second interim dividends for its ordinary 'A' shares of 5.35p and 0.535p for its 'B' shares. The group said it would announce a "small final dividend" in June, representing a year-on-year increase to the total dividend for 2009/10.

Fuller's said it had recently commenced the formal process of renegotiating its £85m bank facility which is up for renewal in November this year. It was "pleased with the level of interest" it had received to date and remained confident of its ability to refinance on "competitive terms".