Fuller Smith & Turner – pub and hotels group looks strong enough to follow as it goes forward, shares now 614p, brokers consensus 811p TP

12.06.2025

Yesterday’s Final Results announced by Fuller Smith & Turner (LON:FSTA) saw its shares rise to 669.24p at one stage, before closing at 614p, down 30p on the day.

The current level could well prove to be an excellent buying opportunity for medium-term investors.

Fuller's operates 185 Managed Pubs and Hotels, with 1,028 bedrooms and 153 Tenanted Inns.

The 180-year old group is a premium pubs and hotels business, with an estate of iconic pubs and hotels across the Southern half of England, offering delicious, fresh, seasonal food, an exciting drinks range, and beautiful bedrooms.

The Results

For the 52 weeks to 29th March 2025 the group reported revenues up 4.8% to £376.3m (£359.1m), while like-for-like sales rose 5.2%.

It was a strong year, with adjusted profit before tax rising 32% to £27m, beating expectations, earnings increased from 24.48p to 34.22p, its dividend was increased from 17.75p to 19.76p per share.

But it does appear that, despite favourable spring weather, there has been something of a slowdown in 2025 so far, even so like-for-like sales for the first ten weeks have risen by 4.2%.

Management Comment

CEO Simon Emeny stated that:

"It has been an excellent year for Fuller's.

We have continued to build on our existing momentum and have delivered strong like-for-like sales growth in our Managed Pubs and Hotels of 5.2%.

We have converted this strong revenue growth into improved profitability with adjusted profit before tax rising by 32% and even more pleasing is that these results, combined with our effective allocation of capital, have delivered impressive adjusted earnings per share growth of 40%.

We have started the new financial year well with like for like sales in the first 10 weeks of the year rising by 4.2%.

We have completed our investment at The Chamberlain in the City of London, one of our largest hotel sites, which reopened in May and we have a number of clear priorities for the year focused on our properties, our people and our customer proposition.

Our estate is well invested, predominately freehold, and full of iconic gems in great locations.

Our people are dedicated and engaged, and our customers are more resilient to economic turbulence than most.

Our financial position is robust and we make sensible decisions for the long-term.

I have no doubt that interesting times are ahead and I'm looking forward with confidence and excitement."

Current Trading and Outlook

The group reported that its trading and profit growth momentum was continuing into the new financial year, with like-for-like sales for the first 10 weeks rising by 4.2%.

It stated that the company was well-positioned to continue to deliver excellent returns to shareholders through future growth and prudent Balance Sheet management.

The Equity

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

The larger holders include Lansdown Partners (11.54%), FIL Investment Advisors (6.94%), Threadneedle Asset Management (5.40%), Michael Taylor (5.13%), BlackRock Investment Management (4.68%), 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 View

In response to yesterday’s results, Peel Hunt analyst Douglas Jack downgraded his rating from ‘Add’ to ‘Hold’, while leaving his Target Price unchanged at 700p.

The analyst believes price rises and efficiency gains can offset labour cost increases in the current year.

However, he noted the valuation at 8.2 times enterprise value/EBITDA is the highest in the hospitality sector.

The analyst stated the group will need to continue to trade strongly in the face of rising costs:

“We believe maintaining managed like-for-like sales growth to offset ongoing cost inflation will likely be the main catalyst for the shares in 2026.”

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.

My View

The group’s shares have risen strongly from 506p in mid-April before hitting 669.24p yesterday.

The news-responsive share price fall to 614p could well provide an excellent medium-term buying opportunity for investors.

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

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