Fuller's unveils leap in profits

London brewer Fuller's has unveiled a leap in profits in the wake of the acquisition of Hampshire brewer and retailer Gales. Chief executive Michael Turner described the Gales deal as a "fantastic opportunity" in a marketplace where the "number of opportunities is reducing."

The company acquired 111 pubs and a brewery for £92m in the Gales deal. In its current financial year, Fuller's sold two hotels for £35.6m, producing an exceptional property profit of £20.1m.

"That's a rate of return firmly in our favour," said Turner. He reported that about 50% of the Gales pubs had been converted to Fuller's branding, with the remainder moving across in the coming year.

The Horndean brewery site would also now be sold off for re-development. The acquisition of Gales had produced improved distribution along the south coast for Fuller's beers. Sales of Fuller's beer brands rose 6% to 208,000 barrels in a market where ale sales were down by 6%.

Fuller's bought eight new pubs during the year - in sharp contrast to a few years ago when it argued London pubs were over-priced.

Turner said: "Prices have gone through the roof. [But] we should have purchased more [pubs] when we were complaining about prices [a few years ago]."

He said that Fuller's had accepted that it was not possible to obtain the same return on freehold pub investments as was achievable 15 years ago. In its managed division, like-for-like sales were up 6.7% year-on-year. The hotel division saw like-for-like profits up 22%, thanks to higher occupancy rates.

Revenue for the 52 weeks to 31 March was up 23% to £178.2m, with adjusted profits up 23% to £22.1m.