Fuller's backs calls for a minimum price for alcohol

Fuller, Smith & Turner, the London-based brewer and pub operator, has called on the coalition government to consider imposing a minimum price for alcohol.

The group, which announced its annual results today, said while the government was right to look at supermarkets' strategy of using alcohol as a traffic builder, it "urged" ministers to look at the minimum price at which it should be available.

"Anything else is unlikely to make a significant difference to the harm done by irresponsibly priced alcohol," it said.

With an eye on the looming emergency Budget the brewer added it also looked forward to Prime Minister David Cameron and his Liberal Democrat colleagues putting in place "meaningful legislation and a duty regime that is fair and fit for purpose".

Fuller's meanwhile announced turnover for the year to March 27, 2010, up eight per cent at £227.7m. Pre-exceptional pre-tax profits rose 17 per cent to £26.6m

The group revealed the earnings figures for its tenanted and lease pubs for the first time. While turnover rose marginally from £26m to £26.1m, operating profits across the estate fell three per cent to £9.9m, while like-for-like profits were one per cent down.

Fuller's said that it was "fundamental that our tenants share our corporate values of quality, service and pride and we work closely with them to promote these values.

The group added that it understood that "on occasion" rents need to be reviewed.

"We are aware of this because we ourselves are obligated under a small number of leases where, as tenants, we are obliged to pay rents which are not sustainable. These are property issues though, not issues confined to the pubs sector and the Beer Tie.

"We seek to ensure that each pub has the right level of rent and we will adjust the rent when we believe it does not. Where a business is failing, we believe that the underlying problems need to be addressed.

"Key issues such as beer duty and supermarket pricing are outside of our control and affect the whole industry. These issues cannot be resolved by rent concessions."

Fuller's said its managed pub and hotels business saw like-for-like sales up nearly three per cent in the year, while in the first 10 weeks of the current financial year the operation's revenues were 3.5 per cent up.

Its own beer volumes rose two per cent in 2009, with operating profits up seven per cent to £8.9m. Current volumes were "level" with the same period last year.

The group said its recently-arranged new £100m banking facility would help fund further acquisitions - Fuller's acquired a number of pubs last year, notably from Punch Taverns - and repay existing bank borrowings.

While Fuller's said it was "well placed to compete" in the current market, it said it was "very cautious" about the outlook for the UK economy.

"We may technically have emerged from recession and the economy may no longer be contracting, however, with the prospect of personal taxation in our target market rising further and disposable incomes reducing there may be less leisure spend available in real terms."

Results at a glance

Turnover: £227.7m (up eight per cent)

Adjusted pre-tax profits: £26.6m (up 17 per cent)

EBITDA: £43.6m (up eight per cent)

Adjusted earnings per share: 34.19p (up 17 per cent)

Total dividend for the year: 11p (up 12 per cent)