Fuller result down despite higher sales

FULLER Smith & Turner, the brewer of London Pride and ESB bitter beers, suffered a 13 per cent fall in pre-tax profits despite expanding sales by 9 per cent.

Fuller has been particularly successful in selling its beers to free houses, a sector of the pub market that has widened in the wake of the Monopolies and Mergers Commission report into the brewing industry.

But the profit margins on free- trade business are not as high as for sales to Fuller's tied estate. Profits from tied pubs fell, despite the full-year contribution from the 44 pubs bought from Allied-Lyons in September 1990.

Taxable profit for the year to 28 March was pounds 7.8m, down from pounds 9m last time.

The strong demand for Fuller ales in the free-trade market has led the company to abandon the brewing of lager and use the capacity for its bitters.

Pre-tax profits were also hit by an interest bill of pounds 722,000, compared with a surplus of pounds 108,000 last time, a result of the acquisition from Allied.

Bad debts among new free- trade customers affected profits, though the company said the amount involved was a fraction of the relatively small total loan book of pounds 600,000.

Earnings per share, however, rose as figures below the pre-tax line benefited from a one-off tax credit.

Earnings were 25.2p, up from 24.4p last time.

The dividend was increased by 10 per cent to 6.7p. The shares were unchanged at 418p.