Fuller’s takes a hit on sale of brewery business
UK pub chain Fuller, Smith & Turner warned this morning that the costs associated with the sale of its brewery business to Japanese beer giant Asahi have been higher than expected.
Shares in the company fell 5.69 per cent to 990.24p after it said profit for the full year ended 28 March is expected to be in line with the previous year at £31m.
Read more: Fuller’s prepares to hand £69m to shareholders after brewery sale
Fuller’s, the producer of London Pride, sold its beer, cider, soft drinks and distribution business to Asahi for £250m in January, ending its 174-year role as a brewer, as it shifted its focus to operating its pub and hotel portfolio.
In a trading update today the pub operator said costs associated with the separation of the brewing business were significantly higher than anticipated, and overheads will remain high until May next year.
“Whilst it was not underestimated that this would be a period of significant transition for the business, the costs associated with carrying the central overhead previously allocated to the beer company have transpired to be materially higher than expected, with additional resource required to assist the business through this complex separation period,” the company said in a statement.
Total sales in Fuller’s managed pubs were up 5.2 per cent and like-for-like sales growth was 2.3 per cent in the 32 weeks to 9 November.
Read more: Fuller’s calls time on brewing business
Fuller’s chief executive Simon Emeny said: “This is a transitional year for the company following the sale of the brewing business and subsequent separation of a highly integrated business.
“There have been many moving parts to navigate and we have incurred some greater than anticipated costs as a result which have had a short term impact on our financial performance.”
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