Fuller's prepares for 'challenging' times

February 1, 2008: Trading for the rest of its financial is likely to prove “challenging”, according to Fuller’s, which issued a trading statement today relating to the 43 weeks up to January 26.

Following a record first half, trading conditions are now less favourable, it said. Growth in Fuller's Inns, the managed and tenanted pubs and hotel business, has slowed, with invested like for like sales for the managed pubs for the 43 weeks to 26 January up 4%. Tenanted revenues are up 4.4% over the same period and the hotel division continues to perform strongly. The Fuller's Beer Company continues to show strong performance with total beer volumes up 2% in the 43 weeks to 26 January.

However, the statement adds: “The trading environment for the remainder of the financial year is likely to continue to be challenging. Cost pressures on raw materials in the Beer Company and food and utilities in our managed estate are the highest they have been for some time.

"However, the overall strength of the company's business gives the board cause to remain confident that profit before tax for the year will be within the range of market expectations.”

Chairman Michael Turner commented: “Since the half-year, the slowdown in consumer spending and input price inflation, on top of the smoking ban, have made operating conditions more challenging. I am therefore very pleased with the way the Company has performed in such a climate.

"Continued good growth in beer sales volumes, particularly Fuller's own brands, illustrates the strength of and customer demand for our products. Our managed estate is proving resilient due to its high quality and historic investment levels. Our collaborative approach with our tenants is now being shown to its full advantage and our hotels continue to perform strongly.

”These, together with our strong balance sheet, modest levels of debt, predominantly freehold asset base and high cash generation, make me believe we are well positioned in what is, at least for the moment, a challenging market.”