E-Malt.com News article: UK: British brewer Fuller is optimistic about its new Discovery ale

British beer maker, Fuller, Smith and Turner, announced on June 10 it was optimistic about its new Discovery ale as it reported a 6 % rise in profit. But the brewer and pub owner's shares fell 5.6 % in the first hour of trading after a strong run up in recent days, Reuters commented.

Its Griffin brewery increased volumes by 2 %, with profit up 5 % to 8.2 million pounds ($14.9 million), said Fuller's, which has been targeting traditional lager drinkers since April with its cold, blonde Discovery beer.

Chief Executive Michael Turner told Reuters Discovery sales were exceeding targets, but he declined to give exact volumes. "What I can say is that although the pubs were very good at ordering much more than they would have anticipated selling, we've still had a lot of panicked phone-calls mid-week for more Discovery."

"And the brewers brewed twice as much as they thought they could possibly need, and they've been running round having to brew more Discovery at short notice," he added. Profit before tax and exceptional items was 17.8 million pounds in the 53 weeks to April 2, compared to analysts' consensus of 19 million pounds. Its shares, which have gained 8 percent in the last two weeks, were down 5.6 percent to 894 pence by 0800 GMT.

"Basically, the numbers were fine, about 3 percent below expectations, but they'd ramped up so high ahead of the results and the decrease now is entirely sensible," said analyst Greg Feehely at Altium Securities.

The 160-year-old group's eight hotels increased sales by 10 percent and profit by 17 percent, but Turner said high property prices meant expanding the portfolio of hotels was not currently a priority. Fuller's 116 managed pubs increased like-for-like sales by 0.4 percent, while its 118 tenanted pubs increased sales by an average of 3 percent per pub.

Fuller's said it had increased its share of the cask ale market to around 7 percent, while London Pride had retained its position as Britain's best selling premium cask ale. "We have seen excellent growth in a number of key brands, such as the award winning "Champion Ale" ESB, with volumes up 6 percent, and Organic Honey Dew, with volumes up 26 percent," it added. The final dividend was increased 7 percent to 13.1 pence per share.


11 June, 2005