The Pride of Fuller's

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While Fuller's pubs continued to be hurt by tough trading in London, the West London brewer was buoyed by a strong performance in its beer and hotels...

While Fuller's pubs continued to be hurt by tough trading in London, the West London brewer was buoyed by a strong performance in its beer and hotels divisions last year.

The company shrugged off the tough times in the City unveiling a 10 per cent rise in underlying profits.

The company said Fuller's beers are now found in 10,000 pubs across the UK. That equates to one in six pubs, a fact that underpinned strong full-year numbers last week.

"We have undertaken a programme of continuous improvement in the quality of our beer," said Fuller's Beer Company managing director John Roberts. "Customers are clearly noticing the difference and giving us increasing support."

Total UK volumes of flagship ale London Pride were up nine per cent last year and sales exceeded the 190,000-barrel mark for the first time. London Pride recently emerged as the UK's most desired cask ale in The Publican's "Desert Island Brands" survey.

The company won gold, silver and bronze medals at the Great British Beer Festival for its range of beers. Mr Roberts said Organic Honey Dew was the top-selling organic beer and 1845 was the top-selling bottle-conditioned beer in the UK. Beer profits rose 18 per cent to £6.8m.

Contrary to other hotel operators hit by the Iraq war and the threat of the SARS virus, Fuller's hotels saw a four per cent rise in like-for-like profits and a three per cent rise in comparable sales. The company has 492 rooms across eight sites and will shortly unveil its latest edition, the Red Lion Hotel at Hillingdon, West London.

The company reiterated the desire to double its pub numbers to 500 in the medium term but said this would be tempered by an emphasis on quality. "We could double the estate tomorrow but we do not want to buy 250 leaseholds," said retail director Simon Emeny.

The performance of the group has been held back by tough trading conditions in its managed pubs, the majority of which are located in and around London. "For Fuller's, the past year reflects one of consolidation," said Mr Emeny. "Job losses have influenced people's desire to go out and celebrate, and trading in London remains difficult."

Like-for-like sales in managed pubs were down 1.7 per cent. Pubs used for this comparison had been trading for the whole of the current and previous year, with less than £50,000 invested in either period.

Food sales rose four per cent after the company introduced "All Day Food" across the managed estate.

The company bought two pubs during the year - the Bishop on the Bridge in Winchester, a former Old Monk site, and the Grove Lock on the Grand Union Canal in Leighton Buzzard. It has bought two more since the year-end, including the eight-acre Mill at Elstead, Surrey.

In Fuller's Tenanted Inns, the company grew operating profits by nine per cent. Average turnover per house rose four per cent.

It has converted 31 per cent of its tenants to a new long-term lease.

"Our win-win approach in our tenanted inns means that recruitment of licensees is not an issue," said Mr Emeny.

In the 12 months, it sold three pubs and transferred one managed house to tenancy.

Fuller's results at a glance