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Brewer Fuller Sees Through Haze Of Smoking Ban

Pulished by Reuters on the 23rd of November 2007:

By Alastair Sharp

LONDON, Nov 23 (Reuters) – Fuller, Smith & Turner <FSTA.L>, one of London’s last remaining brewers, said a wet summer and the introduction of a smoking ban had not dented profits, as drinkers stuck with ales and smokers huddled in outside alcoves.

“Pubs without smoking are much nicer places to be,” Chairman Michael Turner told a press conference. “Long term it is going to be very positive for our trade.”

The London Pride brewer posted pretax profit of 12.7 million pounds ($26.3 million) in the 26 weeks to Sept. 29, up 16 percent, on revenue up 3 percent to 93.3 million pounds.

Shares in Fuller rose more than 8 percent to 600 pence by 1400 GMT, valuing the company at 194 million pounds.

Fuller said its own-brand sales rose 4 percent, while foreign beer sales declined 2 percent, as many drinkers turned away from lager in the wet summer.

The company estimated it spent 3 million pounds preparing its pubs for the smoking ban by upgrading outside seating and heating, and introducing promotions.


Fuller exports 10 percent of its beer by volume, primarily to North America and Europe, and has seen strong growth in new markets, particularly Russia, China and Japan.

“There is a large demand for good, premium Western brands, and prices aren’t that much of an issue,” said John Roberts, managing director of the beer division, adding the company was also looking to invest in India.

Panmure Gordon analyst Douglas Jack said the results were broadly in line with his expectations, and kept a “buy” rating on the stock and a target price of 840 pence.

“With the strongest balance sheet within its peer group, the company is well positioned to make further acquisitions or buy back equity,” Jack said in a note.

Fuller did not deny such speculation on Friday, with Emeny saying the firm will maintain an acquisition programme that is “dependent on quality pubs being available at suitable prices.”

(Additional reporting by Marc Jones, Editing by Erica Billingham)

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