Brewer Fuller's toasts profits hike

The firm, which is based in Chiswick, west London, said like-for-like sales in its key managed pubs and hotels arm lifted 3.3 per cent during the six months to September 26.

Underlying group profits rose to 15.7m in the first half and Fuller said it hoped the firm's heartland in the south of England would help shield it from much of the impact of Government spending cuts.

Fuller also saw like-for-like profits growth of one per cent across its 201 tenanted pubs, marking a turnaround after a tough recent period for the division.

And earnings in its brewing operation, which boasts its flagship ale London Pride, lifted five per cent as beer sales volumes rose one per cent.

But it was Fuller's 163-strong managed pubs and hotels arm - the largest part of the group - that drove half-year results.

Fuller has focused on higher-margin food and accommodation business to offset a declining drinks market.

Its hotels were the star performers, with sales from accommodation up 11.4 per cent on a like-for-like basis - now accounting for seven per cent of total revenue.

Nearly a third of the division's revenues come from food sales, up 4.2 per cent in the half-year, while drinks sales were also resilient with a 2.3 per cent increase.

Fuller said the managed pubs performance had improved further since September, with like-for-like sales growth edging up to 3.5 per cent in the 33 weeks of the year so far.

Michael Turner, chairman of Fuller, said he was mindful of pressure on customers from Government austerity measures as well as the impending increase in VAT to 20 per cent.

But he said: "We expect the spending cuts to impact the south of England less than other parts of the UK."

He added London and the South was "the place to be", with forthcoming highlights including Prince William and Kate Middleton's wedding.

"London has been shown to be a resilient marketplace and with forthcoming events ranging from the Olympics to the Royal Wedding there will be plenty of attractions bringing customers to the capital."

Half-year profits were also partly boosted by low interest rates on Fuller's debt, although it said borrowing costs would increase in the second half.

However, Seymour Pierce analyst Hugh-Guy Lorriman raised his full-year profits forecast to 28.4m from 27.6m after today's figures.

He said Fuller had a "growing industry star status" and was also well positioned to snap up distressed rivals.