A trading update from brewery and pubs group Fuller, Smith & Turner PLC (LON:FTSA) on Friday is likely to show steady like-for-like sales but a strain on margins continuing.
Back in January, the FTSE Small Cap firm posted a solid set of figures for the 42 weeks to January 20, despite what the firm described as a "challenging" trading environment.
Fuller’s said like-for-like sales in its Managed Pubs & Hotels division rose 3.0% for the period, while like-for-like profit in Tenanted Inns rose 2.0%, with beer and cider volumes flat.
Liberum Capital reckons Fuller’s solid trading is testament to the well-invested estate and its premium offering, but it noted the firm is stepping up investment in systems and IT capex which will weigh on margins.
The City broker is forecasting Fuller’s posting managed like-for-like sales growth of 3.4% this year with EBIT margin of 12.3%, down 35 basis points.
They concluded: “Assets are recorded at cost and hence NAV of 593p per share doesn’t reflect the true value of bricks and mortar nor the value of the Chiswick site, however we prefer the growth potential of City Pubs and Young's”.
Friday June 8:
Trading update: Fuller Smith & Turner PLC (LON:FSTA)
Finals: First Property Group PLC (LON:FPO), Volex PLC (LON:VLX)
Economic data: US wholesale trade