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Fuller’s Half Year Results

Fuller’s have today published their half year results for the 26 weeks ended 30 September 2017.

Financial Highlights

• Adjusted profit before tax1¹ up 4% to £23.8 million (2016/17: £22.8 million)

• Adjusted earnings per share² up 5% to 34.22p (2016/17: 32.44p)

• Revenue up 6% to £209.3 million (2016/17: £197.6 million)

• EBITDA³ up 4% to £37.6 million (2016/17: £36.3 million)

• Interim dividend up 4% to 7.55p (2016/17: 7.25p)

• Pro-forma net debt to EBITDA at 2.8 times (2016/17: 3.0 times)

Operational Indicators

• Managed Pubs and Hotels outperformed the market, with like for like sales growing by 3.6% and a rise in like for like accommodation sales of 8.2%

• Tenanted Inns like for like profit increased 3%, with 11 pubs sold and average EBITDA per pub rising 7%

• Total beer and cider volumes for The Fuller’s Beer Company rose 1% against a flat UK market

1. Adjusted profit before tax is the profit before tax excluding separately disclosed items. Statutory profit before tax was £23.6 million (2016/17: £21.4 million) 2. Calculated using adjusted profit after tax and the same weighted average number of shares as for the basic earnings per share and using a 40p ordinary share. Basic earnings per share were 35.12p (2016/17: 32.08p) 3. Pre-separately disclosed earnings before interest, tax, depreciation, loss on disposal of plant and equipment, and amortisation 4. Pro-forma net debt to EBITDA is calculated on a 12-month basis adjusting as appropriate for acquisitions and disposals

Strategy Update

• Continued programme of investing in our estate to maintain our premium position and offer a first-class customer experience

• Addition of a further four bedrooms to the estate during the first half, with 14 more since the period end

• Pipeline of four managed sites

• Progression of strategic plan for our Tenanted Inns to grow this part of the business and benefit both Fuller’s and our Tenants

• Rebranded and increased marketing investment in London Pride to reinforce the quality and authenticity of our core brand

• Investment in our central IT and back office systems, and improvements to our digital footprint, starting to deliver benefits across the business

Current Trading and Outlook

• Managed Pubs and Hotels like for like sales up by 3.7% for 33 weeks

• Tenanted Inns like for like profit rose 2% for 33 weeks

• Total beer and cider volumes increased 1% for 33 weeks

• Acquired The Manor near Christchurch, a freehold pub with 10 bedrooms

• Two new sites in key transport locations – Euston (The Signal Box) and Liverpool Street (The Parcel Office) – due to open in 2018

• Continued focus on investing in our people, our brands and our estate to deliver our strategic vision

• Well-invested, balanced business well-placed to mitigate continued headwinds.

Commenting on the results, Chief Executive Simon Emeny said: “I am delighted to be reporting good financial figures with all the Group’s key measures moving in a positive direction. This growth has been driven by our Managed Pubs and Hotels, which generate the largest share of our turnover and profit and have once again outperformed the market.

“The last six months have seen some unprecedented influences on the business, not only in our particular industry, but in the context of the wider UK economy and global political scene. I cannot remember a time when we have faced such an array of additional cost pressures, particularly in our Managed Pubs, starting with the 26% rise in business rates. The pub sector is now responsible for 2.8% of the total business rates bill, despite only generating 0.5% of total turnover. Over and above this increase, we have met with rises in the Apprenticeship Levy and National Living Wage rates, but in spite of this, we have continued to grow, delivering consistently strong returns for our shareholders. This is due to a clear, shared vision and a commitment to delivering an outstanding customer experience across the business.

“In the 33 weeks since 1 April 2017, like for like sales in our Managed Pubs have risen 3.7%, while like for like profit in our Tenanted Inns is up 2% and total beer and cider volumes in The Fuller’s Beer Company are up 1%. “Although we have already faced and absorbed a number of prevailing headwinds, future economic and political uncertainty may still cause further challenges, however we are well-placed to face these. I am confident that our long-term vision, clear strategy and commitment to ongoing investment, delivering an outstanding customer experience throughout the business and creating an atmosphere in our pubs that cannot be rivalled at home, will ensure our further growth.”