Companies: FSTA   

Brewer, pub and hotel operator Fuller saw pre-exceptional pre-tax profits fall 11% to £6.4m during the six months to 29 September, following a profit warning in which the company highlighted the late openings of two new hotels and the underperformance of its late night bars, plus difficult market conditions. It has now arranged to sell all six of those venues but has accounted for a £3.8m loss on their disposal, making for total exceptional costs of £5.2m at the interim stage. Fuller owns a total of 241 pubs (including those in six of its hotels), 119 of which are tenanted, with the rest managed. The failure of the late night venues meant that the Inns division saw profits decline 11% to £7.2m, on £47.3m turnover (72% of the group's £65.3m). However, both managed and especially tenanted estates performed well. This, together with the 21% increase to £2.3m of profits from the brewing division gives cause for optimism. Its beers - with London Pride at the forefront - have shown growth in a declining real ale market, and there is plenty of potential for more. However, Inns and Hotels have significant exposure to the City of London, where job losses and terrorism fears have hit trading and continue to do so. Peel Hunt analyst Paul Hickman thinks that Fuller will report earnings of 38.9p for the full year and says that the shares are fully valued at present.

Fuller Smith and Turner	LSE	£119.98m	360.00p	10.00p
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