Fuller Smith & Turner – now 630p, are the shares a Buy ahead of this week’s Finals, brokers consensus TP is 820p

09.06.2025

It has been some years since I went around the Fuller’s Brewery in Chiswick, West London, but it has not stopped me from enjoying the company’s products, even though I am mainly a wine drinker.

Similarly, it has not reduced my interest in just how the Fuller Smith & Turner (LON:FSTA) business has been progressing, even though it has changed significantly since my brewery visit.

The Business

Having sold its brewing division in January 2019, Fuller, Smith & Turner is now a premium pubs and hotels business.

With an outstanding estate of iconic pubs and hotels across the Southern half of England, the group’s purpose is to create experiences that ‘nourish the soul’.

At its heart is the warm and inviting welcome of a fantastic pub or hotel, delivered by an exceptional team of over 5,000 talented individuals.

The company has been delighting its customers – with delicious, fresh, seasonal food, an exciting drinks range, and beautiful bedrooms – for 180 years.

It total, Fuller’s has 185 Managed Pubs and Hotels, with 1,025 bedrooms and 153 Tenanted Inns, all aiming to ensure that everyone leaves that little bit happier than when they arrived.

It March this year it added to its chain when it acquired the freehold of The White Swan in Twickenham, an iconic pub with a brilliant riverside location further complementing the group’s presence in South West London.

Management Comment

In mid-March this year, when announcing its Business Update prior to its year end on 29th March, CEO Simon Emeny stated that:

“With just two weeks to go, we have had a very strong year – and to cap it off with such an excellent new acquisition is the icing on the cake.

The White Swan is a riverside gem in Twickenham, and we look forward to welcoming the team there into the Fuller’s family.

We are confident of meeting market expectations for the full year and are taking appropriate actions to manage the impact of forthcoming market challenges.

We remain confident and optimistic about the future for our business and will continue to allocate capital to drive long-term growth and returns for shareholders.

We will next update the market on 11 June 2025, when we announce the Company’s full year results for the 52 weeks to 29 March 2025.”

The Management declared that they believe that the current share price significantly undervalues the business and does not reflect the intrinsic net asset value of its high-quality, primarily freehold estate.

Furthermore, it stated that trading momentum continues to be strong, and it is confident that market expectations will be delivered.

New Banking Facility

The group announced that it had agreed a new £185m bank facility with a consortium of existing relationship banks.

The unsecured facility is available until 31st August 2028, at an interest margin 75bps lower than existing terms, reflecting the strong financial position of the company.

This new facility provides the company with significant headroom to pursue further growth through appropriate acquisitions and to enhance returns for shareholders.

The Equity

There are some 13.33m ‘A’ shares in issue.

The larger holders include Lansdown Partners (11.54%), FIL Investment Advisors (6.904%), Threadneedle Asset Management (5.39%), Michael Taylor (5.13%), BlackRock Investment Management (4.69%), Aberdeen Investments (4.17%), Artemis Investment Management (3.21%), Dunarden (2.92%), Highclere International Investors (2.27%) and Hargreaves Lansdown Asset Management (2.01%).

Broker’s Views

Some five broking analysts follow the company, with the consensus average Target Price being 811p a share.

The Lowest Price Target is 640p, while the Highest is 1,250p.

Cautiously Panmure Liberum call the shares a Buy, with a 715p Target Price.

Three of the analysts call the shares out as a Buy, one looks for them to Outperform, while the fifth suggests that they are a Hold.

My View

This coming Wednesday, 11th June, the group will be announcing its Annual Results for the year to 29th March 2025.

I believe that they will be very positive, despite the general gloom perceived within the country’s licensed trade.

This group’s shares are trading well below their asset value, but it will need good figures and prospects to help them move a lot higher than their current 630p.

That could well become evident this week, giving the shares time and ability to progress prior to the group’s AGM on Tuesday 22nd July.

After my initial feature on this group in August 2020, its shares rose from 600p to over 950p within the next nine months, before slumping to 440p more than a year later.

The recent share price ascent from 518p at the end of March, is down to growing confidence in the group’s prospects.

Wednesday’s Statement will, hopefully, give further evidence of that strength.

(Profile 17.08.20 @ 600p set a Target Price of 700p*)

Asterisk * denotes that the Target Price has been achieved since Profile publication.