Fuller Smith & Turner Share News (FSTA)

London Pride brewer Fuller, Smith and Turner had a northern-style big head on its interim profits, as its Tenanted Inns division recorded its best ever half-year.Revenues in the 25 weeks ended October 1st rose 6% to £128.2m from £121.5m a year earlier. Adjusted profit before tax, which excludes exceptional items, rose by 5% to £16.5m from £15.7m at the interim stage of 2010. This time round the company took an exceptional charge of £0.5m, having enjoyed an exceptional credit of £1.1m last year, which means the reported profit before tax dipped to £16.0m this year from £16.8m last year. The Tenanted Inns division saw a 1% year-on-year increase in like-for-like (LFL) profits, while operating profit was up 2% on a year ago. LFL sales in the Managed Pubs and Hotels grew by 3.9%, with first-time contributions from acquired pubs increasing total revenues by 5% from £74.8m last year to £78.6m. Operating profits before exceptional items grew by 1% to £10.4m from £10.3m last year. Operating margins declined from 13.8% to 13.2%, however, as the group struggled to pass on the full 7% increase in excise duty on booze to customers."Unless the duty escalator is abolished, we expect this margin dilution to continue," the company warned.On the brewing side, overseas customers seem to be developing the palate for ales, stouts and porters, with export sales growing 21% from a year ago. The Fuller's Beer Company own beer volumes increased 2% from a year earlier, while there was also a strong performance from wine sales, together generating an increase in revenue of 7% to £54.9m from £51.3m a year earlier. Operating profit was 12% higher at £4.6m from £4.1m last year. The board has approved an increase of 6% in the interim dividend for the 'A' and 'C' shares. Holders of the 'B' shares will receive an interim dividend of 5.05p, up from 4.75p last year. "We continue to make good progress and in the 33 weeks to 19 November 2011 like-for-like sales in our Managed Pubs and Hotels grew by 3.8% and our Own Beer volumes increased by 1%," said Michael Turner, chairman of the company. "Our balance sheet remains very strong and having increased our bank facilities to £120m during the period we have additional funds available to invest in new opportunities as they arise. Our strategy is to be highly selective and we have the patience to wait for the right assets to become available at the right price," Turner added.The share price was unchanged on the figures. --jh