Half Yearly Report

RNS Number : 4681W

Fuller,Smith&Turner PLC

19 November 2010

 



 

STRICTLY EMBARGOED

UNTIL 7AM FRIDAY 19 NOVEMBER 2010

FULLER, SMITH & TURNER P.L.C.

Financial results for the 26 weeks ended 25 September 2010

Financial Performance

·    Revenue up 4% to £121.5 million (2009: £116.9 million¹)

·    Adjusted¹ profit before tax up 11% to £15.7 million (2009: £14.1 million)

·    Profit before tax up 11% to £16.8 million (2009: £15.1 million)

·    EBITDA² up 6% to £24.1 million (2009: £22.7 million)

·    Adjusted earnings per share³ up 11% to 19.96p (2009: 17.95p)

·    Basic earnings per share⁴ up 23% to 23.70p (2009: 19.21p)

·    Interim dividend⁴ up 6% to 4.75p (2009: 4.50p)

Corporate Progress

·    Managed Pubs and Hotels LFL sales up 3.3%

·    Managed Pubs and Hotels profits up 8%

·    Tenanted Inns LFL profits up 1%

·    Total Beer volumes up 1%

·    Net debt⁵ / EBITDA reduced to 2.1 times⁶

1      Adjusted profit measures exclude exceptional items

2      Pre-exceptional earnings before interest, tax, depreciation, loss on disposal of plant and equipment and amortisation

3      Calculated using adjusted profits after tax and the same weighted average number of shares as for the basic earnings per share and using a 40p ordinary share

4      Calculated on a 40p ordinary share

5      Net debt comprises cash and short term deposits, bank overdraft, bank loans, loan notes, debenture stock and preference shares

6      Calculated using EBITDA for the 52 week period to 25 September 2010

Commenting on the results, Michael Turner, Chairman of Fuller's, said:

"I am pleased to announce an excellent set of results for the first half of our financial year in what has been another challenging period for the industry.  Profits have grown in all parts of the business, with particularly strong performances in our Managed Pubs and Hotels led by growth in accommodation and food sales.  Adjusted profits before tax (excluding exceptional items) increased by 11% to £15.7 million (2009: £14.1 million), with adjusted earnings per share up 11% to 19.96p (2009: 17.95p).

Our Managed Pubs and Hotels, the largest part of our business, achieved a 3.3% increase in like for like sales, whilst our Tenanted Inns again put in a robust performance, out-performing the industry, as like for like profits increased by 1%.  The Fuller's Beer Company's total beer volumes grew by 1%.

We continue to make good progress and like for like sales in our Managed Pubs and Hotels grew by 3.5% for the 33 weeks to 13 November 2010.

Our first half performance has again been boosted by low interest rates and our borrowing costs will rise in the second half.  In January VAT will increase to 20% and we expect that, with the announced Government spending cuts, the economic climate is likely to remain challenging for some considerable time. 

Nevertheless, we expect the spending cuts to impact the South of England less than other parts of the UK and we are confident that with our strong brands and high quality, well invested estate, we are well placed for further growth." 

- Ends -

For further information, please contact:

Fuller, Smith & Turner P.L.C.

Press Office                                                      020 8996 2198 / 2048 / 2175

                                                                         07889 396197

                                                                         E-mail: [e-mail]

Michael Turner, Chairman: Press                       020 8996 2048

James Douglas, Finance Director: Analysts        020 8996 2048

Merlin                                                             020 7726 8400

Paul Downes                                                    07900 244888

Toby Bates                                                       07876 161314

Notes to Editors

Copies of this statement, the Half Year Report and results presentation will be available on the Company's website, www.fullers.co.uk.

Attached:         

Chairman's Statement

            Unaudited Condensed Group Income Statement

            Unaudited Condensed Group Statement of Comprehensive Income

Unaudited Condensed Group Balance Sheet

Unaudited Condensed Group Statement of Changes in Equity

            Unaudited Condensed Group Cash Flow Statement

            Notes to the Financial Statements

FULLER, SMITH & TURNER P.L.C.

HALF YEAR RESULTS FOR THE 26 WEEKS ENDED

25 SEPTEMBER 2010

CHAIRMAN'S STATEMENT

Whatever You Do, Take Pride

INTRODUCTION

I am pleased to announce an excellent set of results for the first half of our financial year in what has been another challenging period for the industry.  Profits have grown in all parts of the business, with particularly strong performances in our Managed Pubs and Hotels led by growth in accommodation and food sales.  Adjusted profits before tax (excluding exceptional items) increased by 11% to £15.7 million (2009: £14.1 million), with adjusted earnings per share up 11% to 19.96p (2009: 17.95p).

Our aim is to be the benchmark in retailing and brewing, delivering Quality, Service and Pride in everything we do.  Our strategy for achieving this remains fundamentally unaltered, with a long term focus, and a culture of style not fashion. We have an unrivalled portfolio of beer brands which enjoy a premium position, our borrowings are modest and we have an excellent, largely freehold estate of pubs in the South of England.

Revenue rose by 4% to £121.5 million (2009: £116.9 million), and EBITDA increased by 6% to £24.1 million (2009: £22.7 million). We remain strongly cash generative and reduced our net debt from £107.7 million at the start of the financial year to £93.6 million by the end of September.  Finance costs fell 17% to £2.4 million (2009: £2.9 million), making a significant contribution to our earnings growth.

Our Managed Pubs and Hotels, the largest part of our business, achieved a 3.3% increase in like for like sales. Revenue increased by 4% to £74.8 million (2009: £71.6 million). Pre-exceptional operating profits increased by 8% to £10.3 million (2009: £9.5 million).

Our Tenanted Inns again put in a robust performance, out-performing the industry, as like for like profits increased by 1%. Revenue increased by 2% to £13.5 million (2009: £13.3 million) and our pre-exceptional operating profits also increased by 2% to £5.1 million (2009: £5.0 million).

The Fuller's Beer Company's total beer volumes grew by 1%, in a challenging and changing market. The overall volume growth comprised a decline of 2% in Own Beer volumes offset by a 6% increase in Foreign Beer volumes (principally lager). Revenue grew by 4% to £51.3 million (2009: £49.4 million) and operating profits grew by 5% to £4.1 million (2009: £3.9 million).  We continue to invest in promoting London Pride, our flagship brand.  It is the UK's leading premium ale, and a new, heavyweight television, poster and digital campaign was launched during October.  This features Top Gear's James May and is in line with our objective to target new sales channels and recruit new customers to the brand.

FINANCIAL PERFORMANCE

Our balance sheet remains in very good health and I am pleased to report that the Group's net debt has fallen by £14.1 million since the year end to £93.6 million notwithstanding £6.1 million of capital investment in the period.  Proceeds of £2.6 million from the disposal of non-core properties, including two tenanted pubs, have further assisted cash generation.  We had in excess of £33 million undrawn committed banking facilities at the end of the period.

Whilst we arranged a new five year bank facility in May 2010, we benefited from being able to draw on the old facilities until they matured in early November.  The new borrowings carry a higher margin than the old facilities but we have mitigated the forthcoming increased cost by taking advantage of lower market interest rates;  since May we have entered into contracts to hedge the interest rate risk on £60 million of our new bank borrowings for the next five years.  As of 25 September, 93% of the Group's borrowings were at fixed or capped rates.  We expect the blended cost of finance on our debt to be 4.5% for the full year.

The extent of the strong cash generation in the period is demonstrated by our net debt already being lower than it was at the end of March 2009, before we acquired nine iconic London freehold pubs for £30.2 million.  On an annualised basis the ratio of net debt to EBITDA, which reached 2.8 times in April 2009, has now fallen back to 2.1 times.  Net finance costs decreased by 17% to £2.4 million (2009: £2.9 million), mainly due to a £0.4 million decrease in net pension finance costs.  However total pension costs remain broadly level with the first half of last year as there was a corresponding increase of £0.3 million in the current service pension costs included within operating profit.

The deficit on the defined benefit pension scheme rose from £12.7 million to £16.4 million during the period, despite employer contributions of £1.0 million.  The increase in the deficit is due to the accounting value of the liabilities increasing in line with the reduction in corporate bond rates since March.  The triennial valuation of the scheme as at 30 July 2010 is underway and will be completed by the time of the annual report. 

Exceptional items in the income statement were a net gain of £1.1 million and comprised profits on the disposal of non-core properties of £1.6 million, insurance claim proceeds (net of costs) of £0.4 million, offset by £0.9 million of property impairments. Exceptional items in the same period last year comprised profits on the disposal of non-core properties of £1.0 million.

Tax has been provided for at an effective rate of 28.7% (2009: 29.1%) on adjusted profits. The overall effective tax rate for the period is 20.8% (2009: 29.1%) and benefits from an exceptional deferred tax credit of £1.3 million, relating to the reduction in corporation tax rate to 27% from 1^st April 2011.

In addition to the 11% increase in adjusted profit before tax, the combined effects of the exceptional items caused basic earnings per share to increase by 23% to 23.70p (2009: 19.21p).

During the period, 180,000 'A' ordinary shares and 13,000 'B' ordinary shares were purchased for £1.1 million by the Trustees of the Share Incentive Plan and LTIP Trustees to cover future issuance (2009: 169,000 'A' ordinary shares for £0.8 million).

DIVIDEND

The Board has approved an increase of 6% in the interim dividend to 4.75p (2009: 4.50p) per 40p 'A' and 'C' ordinary share and 0.475p (2009: 0.450p) per 4p 'B' ordinary share.  This will be paid on 4 January 2011 to shareholders on the share register as at 17 December 2010.

FULLER'S INNS

Fuller's Inns operates Managed Pubs, Hotels and Tenanted Inns.  Our key operational measure for Managed Pubs and Hotels is like for like sales growth and for the 26 week period this increased by 3.3%.  Our key operational measure for Tenanted Inns is like for like profit growth.  For the 26 week period, this improved by 1% which we believe is an industry leading result. 

Our strategy is for all of our pubs to hold a premium position in the marketplace, with an offer built around outstanding cask ale, delicious food, great wines and exemplary customer service.  We seek to exploit accommodation opportunities and we invest appropriately in our properties to ensure that they are a great place to socialise. We aim to acquire more Managed Pubs and Hotels and we will divest of pubs which cannot match our brand criteria.

We have chosen to build our pub estate in London and the South of England.  Asset prices tend to be higher in these areas than other regions but we believe that this is the place to be and that further acquisition opportunities will arise in this area.  London has been shown to be a resilient marketplace and with forthcoming events ranging from the Olympics to the Royal Wedding there will be plenty of attractions bringing customers to the capital.

Two Tenanted Inns were sold during the period and the estate stood at 364 properties on 25 September 2010 of which 163 were operated as Managed Pubs and Hotels and 201 were operated as Tenanted Inns.

Managed Pubs and Hotels

Revenue increased by 4% to £74.8 million (2009: £71.6 million). Pre-exceptional operating profits increased by 8% to £10.3 million (2009: £9.5 million) and EBITDA increased by 7% to £14.4 million (2009: £13.4 million).

The strongest growing segment in our Managed Pubs and Hotels was the accommodation business which has rebounded strongly from a tough prior year. Investments made in pubs such as the Hampshire Hog, Clanfield and The Pilgrim Inn, Marchwood have borne fruit and contributed to this. Also last year we strove to maintain the average room rate charged and this was key to our performance as occupancy improved.  Accommodation revenue grew by 11.4% on a like for like basis and now accounts for 7% of total revenue (2009: 6%).  We now have 487 bedrooms across the Managed estate and we will continue to add to this number, with a 27 bedroom scheme currently under development at the Drayton Court in Ealing.

Food sales grew 4.2% on a like for like basis and represent 29% of revenue (2009: 28%), excluding the 12 pubs where food is provided by Thai franchisees.  Our focus on freshly-cooked food made from locally-sourced produce where possible differentiates us from our competitors and we believe is a key driver of this growth.

Wet sales grew by 2.3% on a like for like basis, with cask ale again outperforming lager, reflecting our commitment to outstanding cask ales.  As we anticipated, the football World Cup had a minimal overall effect on the business; the good weather for the first half of the summer was far more significant.

The 11 Central London pubs acquired during 2009 are fully integrated into our business. They have all traded well over the period and benefited from a programme of investment to ensure they meet the high standards of the Fuller's estate.

We increased our capital spending across the Managed Estate compared to the same period last year and also spent more on repairs and maintenance.  A major refurbishment at the historic Wykeham Arms, Winchester during September has been well-received and a number of smaller projects across the estate have also been completed to maintain the quality that our customers have come to expect from Fuller's pubs. 

 

Tenanted Inns

Revenue increased by 1% to £13.5 million (2009: £13.3 million), assisted by strong Foreign Beer sales and good early summer weather. 

Operating profits rose by 2% from £5.0 million to £5.1 million, whilst EBITDA climbed 2% to £5.9m. Like for like profits were up 1%.

We continue to work closely with our Tenants, developing strong business plans to manage the impact of the economic downturn together. As part of these plans, we have chosen to cap increases to indexed rents at 3% regardless of RPI until the end of the current financial year. Our programme of investment in the tenanted arm of the business remains strong with small, targeted investments made in partnership with our Tenants, focusing on customer-facing areas.

During the period two pubs were sold, the Seven Stars, Kensington, and the White Horse, South Bersted with a further two sold since the period end, the Fur and Feathers, Basingstoke and the White Bear, Hounslow.

Fuller's Master Cellarman initiative remains the ultimate mark of quality within our pubs. Only Tenants with the highest standards of serve and cellar management achieve this award, and 87 of our Tenants now hold this gold standard.  

 

THE FULLER'S BEER COMPANY

The Fuller's Beer Company operates a single brewery in Chiswick.  We have diversified routes to market via Fuller's Inns, other On-Trade outlets, the Off-Trade and Export markets.  We have an unrivalled portfolio of premium beer brands which have a broad customer appeal.  It is this broad-based strategy that has enabled us, in tough market conditions, to record a good performance with revenue up 4% to £51.3 million (2009: £49.4 million).  Operating profits increased by 5% to £4.1 million (2009: £3.9 million) and EBITDA increased by 6% to £5.2 million (2009: £4.9 million),

driven by total beer volume growth of 1%.

Total volumes of Own Beer sold across all trade channels declined by 2% to 107,100 barrels (2009: 109,500 barrels) as a result of the challenging climate of the UK Free On-Trade market where Fuller's volumes declined 11%.  This decline was offset by good sales in the Off-Trade with growth of 8%, and Export volumes which grew 25%.  Our major markets of North America and Northern Europe generated the majority of the overseas growth, and we have seen substantial increases in our newer markets such as Russia and Japan. Exports now account for 14% (2009: 11%) of our total brewed volume and profitability is at record levels, aided by the weaker pound. Our Foreign Beer volumes rose by 6% to 59,000 barrels.

These figures highlight how our diversified sales channel strategy is working for us, driving volume growth in the strong segments whilst limiting our overall exposure to any one route to market.

London Pride remains our leading brand and reinforced its position as the UK's number one premium ale by growing its share of the UK ale market, which was down 8%.  This year, London Pride again topped the Publican magazine Licensee's Choice as the cask ale that landlords would most like to have on their bar, while the Morning Advertiser awarded us the title of Regional Cask Ale Supplier for the South East.

We have created a new poster, television and online advertising campaign for London Pride featuring BBC Top Gear's James May, which we launched in October 2010.  The campaign is designed to broaden the brand's appeal and to reach new drinkers. We have also continued to support the brand with our key long term sponsorships of the English Golf Union and the London Marathon. These partnerships have raised the brand's profile among key target audiences and are extremely valuable in growing awareness of London Pride.  Marketing costs were level with the first half of last year, but with the launch of the new James May campaign, we expect these to rise by £0.3 million in the second half of the year.

Our portfolio of high quality beers performed well over the period with Organic Honey Dew and ESB standing out.  Our seasonal ale programme remains very successful, particularly in recruiting new drinkers and in launching new brands, the most recent of which are Seafarers and Bengal Lancer.

Our wine business continued to grow its volumes, with a particularly strong performance coming from sales through our direct delivered Free Trade.  Our one-stop-shop, offering premium products and a premium service is increasingly attractive to independent free traders looking to stand out in a tough market.

PEOPLE

The business is now even stronger than before the recession and it is the continued hard work of our staff which has enabled Fuller's to deliver another set of record results. I would like to thank all of our employees for their contribution. I was delighted that Simon Emeny was appointed Group Managing Director with effect from 1st November 2010 and I look forward to continuing to work with him in his new role, maintaining Fuller's successful track record.

 

 

CURRENT TRADING AND PROSPECTS

We continue to make good progress and like for like sales in our Managed Pubs and Hotels grew by 3.5% for the 33 weeks to 13 November 2010.

During the first half of the year we continued to invest in the fabric of our estate.  In the full year, we expect to spend a total of £12 million on capital projects excluding pub acquisitions.

We have new bank facilities in place and the ability to capitalise on acquisition opportunities as they arise.  However, we remain highly selective and are prepared to wait for the right assets to become available.

Our first half performance has again been boosted by low interest rates and our borrowing costs will rise in the second half.  In January VAT will increase to 20% and we expect that, with the announced Government spending cuts, the economic climate is likely to remain challenging for some considerable time. 

Nevertheless, we expect the spending cuts to impact the South of England less than other parts of the UK and we are confident that with our strong brands and high quality, well invested estate, we are well placed for further growth.

The current financial year will be a 53 week period ending on 2 April 2011.  The next Interim Management Statement will be issued on 28 January 2011.

Michael Turner

Chairman

19 November 2010

FULLER, SMITH & TURNER P.L.C.

FINANCIAL HIGHLIGHTS

FOR THE 26 WEEKS ENDED 25 SEPTEMBER 2010

	Unaudited	Unaudited		Audited
	26 weeks ended	26 weeks ended		52 weeks ended
	25 September	26 September	Change	27 March
	2010	2009	2010/2009	2010
	£m	£m		£m
Revenue	121.5	116.9	4%	227.7
Adjusted profit 1	15.7	14.1	11%	26.6
Profit before tax	16.8	15.1	11%	26.8
EBITDA 2	24.1	22.7	6%	43.6
Adjusted earnings per share 3	19.96p	17.95p	11%	34.19p
Basic earnings per share 4	23.70p	19.21p	23%	34.37p
Dividend per share 4	4.75p	4.50p	6%	11.00p
Net debt 5	93.6	106.7		107.7
Pro forma net debt / EBITDA 6	2.1 times	2.4 times		2.5 times

1. Adjusted profit is the profit before tax excluding exceptional items.
2. Pre-exceptional earnings before interest, tax, depreciation, loss on disposal of plant and equipment and amortisation.
3. Calculated using adjusted profits after tax and the same weighted average number of shares as for the basic earnings per share and using a 40p ordinary share.
4. Calculated on a 40p ordinary share.
5. Net debt comprises cash and short term deposits, bank loans, loan notes, debenture stock and preference shares.
6. Pro forma net debt / EBITDA is calculated using EBITDA for a 52 week period, adjusted as appropriate for pubs acquired in the period.

FULLER, SMITH & TURNER P.L.C.
CONDENSED GROUP INCOME STATEMENT
FOR THE 26 WEEKS ENDED 25 SEPTEMBER 2010
		Before exceptional	Exceptional
Unaudited - 26 weeks ended		items	items		Total
25 September 2010	Note	£m	£m		£m
Revenue	2	121.5	-		121.5
Operating costs	3	(103.4)	(0.5)		(103.9)
		___________	___________		___________
Operating profit		18.1	(0.5)		17.6
Profit on disposal of properties	3	-	1.6		1.6
Finance costs	4	(2.4)	-		(2.4)
		___________	___________		___________
Profit before tax		15.7	1.1		16.8
Taxation	3,5	(4.5)	1.0		(3.5)
		___________	___________		___________
Profit for the period attributable to equity shareholders of the Parent Company		11.2	2.1		13.3
		___________	___________		___________
		Before exceptional	Exceptional
Unaudited - 26 weeks ended		items	items		Total
26 September 2009	Note	£m	£m		£m
Revenue	2	116.9	-		116.9
Operating costs		(99.9)	-		(99.9)
		___________	___________		___________
Operating profit		17.0	-		17.0
Profit on disposal of properties	3	-	1.0		1.0
Finance costs	4	(2.9)	-		(2.9)
		___________	___________		___________
Profit before tax		14.1	1.0		15.1
Taxation	3,5	(4.1)	(0.3)		(4.4)
		___________	___________		___________
Profit for the period attributable to equity shareholders of the Parent Company		10.0	0.7		10.7
		___________	___________		___________

 

FULLER, SMITH & TURNER P.L.C.
CONDENSED GROUP INCOME STATEMENT (continued)
		Before exceptional	Exceptional
Audited - 52 weeks ended		items	items	Total
27 March 2010	Note	£m	£m	£m
Revenue	2	227.7	-	227.7
Operating costs	3	(195.7)	(0.9)	(196.6)
		___________	___________		___________
Operating profit		32.0	(0.9)	31.1
Profit on disposal of properties	3	-	1.1	1.1
Finance costs	4	(5.4)	-	(5.4)
		___________	___________		___________
Profit before tax		26.6	0.2	26.8
Taxation	3,5	(7.5)	(0.1)	(7.6)
		___________	___________		___________
Profit for the year attributable to equity shareholders of the Parent Company		19.1	0.1	19.2
		___________	___________		___________
EARNINGS PER SHARE		Unaudited	Unaudited	Audited
		26 weeks ended	26 weeks ended	52 weeks ended
		25 September	26 September	27 March
		2010	2009	2010
		Pence	Pence	Pence
Per 40p 'A' and 'C' ordinary share
Basic	6	23.70	19.21	34.37
Diluted	6	23.38	18.90	33.82
Adjusted	6	19.96	17.95	34.19
Diluted adjusted	6	19.69	17.67	33.64
Per 4p 'B' ordinary share
Basic	6	2.37	1.92	3.44
Diluted	6	2.34	1.89	3.38
Adjusted	6	2.00	1.79	3.42
Diluted adjusted	6	1.97	1.77	3.36

The results and earnings per share measures above are all in respect of continuing operations of the Group.

FULLER, SMITH & TURNER P.L.C.

CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME

FOR THE 26 WEEKS ENDED 25 SEPTEMBER 2010

		Unaudited	Unaudited	Audited
		26 weeks ended	26 weeks ended	52 weeks ended
		25 September	26 September	27 March
		2010	2009	2010
	Note	£m	£m	£m
Profit for the period		13.3	10.7	19.2
		___________	___________	___________
Net gains on valuation of financial assets and liabilities		0.3	0.4	0.9
Net actuarial losses on pension schemes	10	(3.8)	(6.9)	(4.5)
Tax on components of other comprehensive income	5	0.7	1.8	1.1
		___________	___________	___________
Other comprehensive loss for the period, net of tax		(2.8)	(4.7)	(2.5)
		___________	___________	___________
Total comprehensive income for the period, net of tax, attributable to equity shareholders of the Parent Company		10.5	6.0	16.7
		___________	___________	___________

FULLER, SMITH & TURNER P.L.C.

CONDENSED GROUP BALANCE SHEET

25 SEPTEMBER 2010

		Unaudited	Unaudited	Audited
		At 25 September	At 26 September	At 27 March
		2010	2009	2010
	Note	£m	£m	£m
Non-current assets
Goodwill		23.9	24.1	23.9
Property, plant and equipment	8	345.6	344.0	348.2
Investment properties		9.2	8.3	9.3
Derivative financial assets		0.6	-	-
Other non-current assets		0.4	0.5	0.4
Deferred tax assets		7.0	7.5	6.1
		___________	___________	___________
Total non-current assets		386.7	384.4	387.9
		___________	___________	___________
Current assets
Inventories		6.6	6.6	7.6
Trade and other receivables		17.0	15.5	15.6
Cash and short term deposits	9	0.8	2.1	1.1
		___________	___________	___________
Total current assets		24.4	24.2	24.3
		___________	___________	___________
Assets classified as held for sale		0.5	-	0.6
		___________	___________	___________
Current liabilities
Borrowings	9	67.0	8.7	81.4
Derivative financial liabilities		0.2	-	0.6
Trade and other payables		39.0	36.8	39.7
Current tax payable		5.6	5.8	3.8
Provisions		0.4	0.4	0.4
		___________	___________	___________
Total current liabilities		112.2	51.7	125.9
		___________	___________	___________
Non-current liabilities
Borrowings	9	27.4	100.1	27.4
Derivative financial liabilities		0.3	1.1	-
Retirement benefit obligations	10	16.4	15.2	12.7
Deferred tax liabilities		35.4	37.9	37.5
Provisions		2.1	2.3	2.1
		___________	___________	___________
Total non-current liabilities		81.6	156.6	79.7
		___________	___________	___________
Net assets		217.8	200.3	207.2
		___________	___________	___________

FULLER, SMITH & TURNER P.L.C.

CONDENSED GROUP BALANCE SHEET (continued)

		Unaudited	Unaudited	Audited
		At 25 September	At 26 September	At 27 March
		2010	2009	2010
	Note	£m	£m	£m
Capital and reserves
Share capital		22.8	22.8	22.8
Share premium account		4.8	4.8	4.8
Capital redemption reserve		3.1	3.1	3.1
Own shares		(3.7)	(5.0)	(4.0)
Hedging reserve		(0.2)	(0.8)	(0.4)
Retained earnings		191.0	175.4	180.9
		___________	___________	___________
Total shareholders' equity		217.8	200.3	207.2
		___________	___________	___________

FULLER, SMITH & TURNER P.L.C.

CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY

FOR THE 26 WEEKS ENDED 25 SEPTEMBER 2010

			Share	Capital
		Share	premium	redemption	Own	Hedging	Retained	Total
		capital	account	reserve	shares	reserve	earnings	equity
Unaudited - 26 weeks		£m	£m	£m	£m	£m	£m	£m
	ended 25 September 2010
	At 27 March 2010	22.8	4.8	3.1	(4.0)	(0.4)	180.9	207.2
	Profit for the period	-	-	-	-	-	13.3	13.3
	Other comprehensive loss for the period	-	-	-	-	0.2	(3.0)	(2.8)
		________	________	________	________	________	________	________
	Total comprehensive income for the period	-	-	-	-	0.2	10.3	10.5
	Shares purchased to be held in ESOT or as treasury	-	-	-	(1.1)	-	-	(1.1)
	Shares released from ESOT and treasury	-	-	-	1.4	-	(1.1)	0.3
	Dividends (note 7)	-	-	-	-	-	(0.6)	(0.6)
	Share-based payment charges	-	-	-	-	-	1.1	1.1
	Tax credited directly to equity (note 5)	-	-	-	-	-	0.4	0.4
		________	________	________	________	________	________	________
	At 25 September 2010	22.8	4.8	3.1	(3.7)	(0.2)	191.0	217.8
		________	________	________	________	________	________	________
	Unaudited - 26 weeks ended 26 September 2009
	At 28 March 2009	22.8	4.8	3.1	(5.9)	(1.1)	173.3	197.0
	Profit for the period	-	-	-	-	-	10.7	10.7
	Other comprehensive loss for the period	-	-	-	-	0.3	(5.0)	(4.7)
		________	________	________	________	________	________	________
	Total comprehensive income for the period	-	-	-	-	0.3	5.7	6.0
	Shares purchased to be held in ESOT or as treasury	-	-	-	(0.8)	-	-	(0.8)
	Shares released from ESOT and treasury	-	-	-	1.7	-	(1.2)	0.5
	Dividends (note 7)	-	-	-	-	-	(3.9)	(3.9)
	Share-based payment charges	-	-	-	-	-	1.3	1.3
	Tax credited directly to equity (note 5)	-	-	-	-	-	0.2	0.2
		________	________	________	________	________	________	________
	At 26 September 2009	22.8	4.8	3.1	(5.0)	(0.8)	175.4	200.3
		________	________	________	________	________	________	________

FULLER, SMITH & TURNER P.L.C.

CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY (continued)

		Share	Capital
	Share	premium	redemption	Own	Hedging	Retained	Total
	capital	account	reserve	shares	reserve	earnings	equity
	£m	£m	£m	£m	£m	£m	£m
Audited - 52 weeks ended 27 March 2010
At 28 March 2009	22.8	4.8	3.1	(5.9)	(1.1)	173.3	197.0
Profit for the period	-	-	-	-	-	19.2	19.2
Other comprehensive loss for the period	-	-	-	-	0.7	(3.2)	(2.5)
	________	________	________	________	________	________	________
Total comprehensive income for the period	-	-	-	-	0.7	16.0	16.7
Shares purchased to be held in ESOT or as treasury	-	-	-	(0.8)	-	-	(0.8)
Shares released from ESOT and treasury	-	-	-	2.7	-	(1.9)	0.8
Dividends (note 7)	-	-	-	-	-	(9.4)	(9.4)
Share-based payment charges	-	-	-	-	-	2.1	2.1
Tax credited directly to equity (note 5)	-	-	-	-	-	0.8	0.8
	________	________	________	________	________	________	________
At 27 March 2010	22.8	4.8	3.1	(4.0)	(0.4)	180.9	207.2
	________	________	________	________	________	________	________

FULLER, SMITH & TURNER P.L.C.

CONDENSED GROUP CASH FLOW STATEMENT

FOR THE 26 WEEKS ENDED 25 SEPTEMBER 2010

		Unaudited	Unaudited	Audited
		26 weeks ended	26 weeks ended	52 weeks ended
		25 September	26 September	27 March
		2010	2009	2010
	Note	£m	£m	£m
Group profit before tax		16.8	15.1	26.8
Net finance costs	4	2.4	2.9	5.4
Exceptional items	3	(1.1)	(1.0)	(0.2)
Depreciation		6.0	5.7	11.5
Loss on disposal of property, plant and equipment		-	-	0.1
		___________	___________	___________
		24.1	22.7	43.6
Difference between pension charge and cash paid		(0.2)	(0.6)	(1.1)
Share-based payment charges		1.1	1.3	2.1
Change in trade and other receivables		(1.4)	0.6	0.6
Change in inventories		1.0	(0.5)	(1.5)
Change in trade and other payables		0.1	3.0	5.0
Cash impact of exceptional items	3	0.4	-	0.4
		___________	___________	___________
Cash generated from operations		25.1	26.5	49.1
Tax paid		(3.6)	(2.7)	(7.0)
		___________	___________	___________
Cash generated from operating activities		21.5	23.8	42.1
		___________	___________	___________
Cash flow from investing activities
Purchase of property, plant and equipment		(6.1)	(31.8)	(44.1)
Sale of property, plant and equipment		2.6	2.1	2.4
		___________	___________	___________
Net cash outflow from investing activities		(3.5)	(29.7)	(41.7)
		___________	___________	___________
Cash flow from financing activities
Purchase of own shares		(1.1)	(0.8)	(0.8)
Receipts on release of own shares to option schemes		0.3	0.5	0.8
Interest paid		(1.9)	(2.3)	(4.4)
Preference dividends paid	7	(0.1)	(0.1)	(0.1)
Equity dividends paid	7	(0.6)	(3.9)	(9.4)
Drawdown of bank loans		-	17.5	22.5
Repayment of bank loans		(13.7)	(3.7)	(7.5)
Repayment of loan notes		-	(0.1)	(1.3)
Cost of refinancing and associated hedging		(1.2)	-	-
		___________	___________	___________
Net cash (outflow)/inflow from financing activities		(18.3)	7.1	(0.2)
		___________	___________	___________
Net movement in cash and cash equivalents	9	(0.3)	1.2	0.2
Cash and cash equivalents at the start of the period		1.1	0.9	0.9
		___________	___________	___________
Cash and cash equivalents at the end of the period		0.8	2.1	1.1
		___________	___________	___________

There were no significant non-cash transactions during any period.

FULLER, SMITH & TURNER P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

1.   HALF YEAR REPORT

Basis of preparation

These half year financial statements for the 26 weeks ended 25 September 2010, which are abridged and unaudited, have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and International Accounting Standard (IAS) 34, Interim Financial Reporting.

The half year financial statements were approved by the Directors on 19 November 2010. 

This half year statement does not constitute full accounts as defined by Section 435 of the Companies Act 2006.  The figures for the 52 weeks ended 27 March 2010 are derived from the published statutory accounts.  Full accounts for the 52 weeks ended 27 March 2010, including an unqualified auditors' report which did not make any statement under Section 498 of the Companies Act 2006, have been delivered to the Registrar of Companies.

On the basis of the strong cash flows generated by the business and the significant headroom available on the new bank facilities the Directors are confident that the Group has adequate resources to continue in operational existence for the foreseeable future and, accordingly, consider that it is appropriate to continue to adopt the going concern basis of accounting in preparing the financial statements.

Significant accounting policies

The accounting policies adopted are consistent with those applied in the 52 weeks ended 27 March 2010, which are published as part of the accounts for that year and which are available from the Group's website, www.fullers.co.uk.

2.   SEGMENTAL ANALYSIS

Unaudited - 26 weeks ended 25 September 2010	Managed Pubs and	Tenanted	Fuller's Beer
	Hotels	Inns	Company	Unallocated1	Total
Revenue	£m	£m	£m	£m	£m
Segment revenue	74.8	13.5	51.3	-	139.6
Inter-segment sales	-	-	(18.1)	-	(18.1)
	___________	___________	___________	___________	___________
Revenue from third parties	74.8	13.5	33.2	-	121.5
	___________	___________	___________	___________	___________
Segment result	10.3	5.1	4.1	(1.4)	18.1
	___________	___________	___________	___________	___________
Operating exceptional items					(0.5)
					___________
Operating profit					17.6
Profit on disposal of properties					1.6
Net finance costs					(2.4)
					___________
Profit before tax					16.8
					___________

Unaudited - 26 weeks ended 26 September 2009	Managed Pubs and	Tenanted	Fuller's Beer
	Hotels	Inns	Company	Unallocated1	Total
Revenue	£m	£m	£m	£m	£m
Segment revenue	71.6	13.3	49.4	-	134.3
Inter-segment sales	-	-	(17.4)	-	(17.4)
	___________	___________	___________	___________	___________
Revenue from third parties	71.6	13.3	32.0	-	116.9
	___________	___________	___________	___________	___________
Segment result and operating profit	9.5	5.0	3.9	(1.4)	17.0
	___________	___________	___________	___________	___________
Profit on disposal of properties					1.0
Net finance costs					(2.9)
					___________
Profit before tax					15.1
					___________

¹Unallocated expenses represent primarily the salary and costs of central management.

2.   SEGMENTAL ANALYSIS (continued)

Audited - 52 weeks ended 27 March 2010	Managed Pubs and	Tenanted	Fuller's Beer
	Hotels	Inns	Company	Unallocated1	Total
Revenue	£m	£m	£m	£m	£m
Segment revenue	137.9	26.1	97.9	-	261.9
Inter-segment sales	-	-	(34.2)	-	(34.2)
	___________	___________	___________	___________	___________
Revenue from third parties	137.9	26.1	63.7	-	227.7
	___________	___________	___________	___________	___________
Segment result	15.8	9.9	8.9	(2.6)	32.0
	___________	___________	___________	___________	___________
Operating exceptional items					(0.9)
					___________
Operating profit					31.1
Profit on disposal of properties					1.1
Net finance costs					(5.4)
					___________
Profit before tax					26.8
					___________

¹Unallocated expenses represent primarily the salary and costs of central management.

3.   EXCEPTIONAL ITEMS

	Unaudited	Unaudited	Audited
	26 weeks ended	26 weeks ended	52 weeks ended
	25 September	26 September	27 March
	2010	2009	2010
	£m	£m	£m
Amounts included in operating profit:
Insurance claim	0.4	-	-
Impairment of properties	(0.9)	-	(2.0)
Reversal of impairment	-	-	1.0
Impairment of goodwill	-	-	(0.2)
VAT repayment	-	-	0.3
	___________	___________	___________
	(0.5)	-	(0.9)
Profit on disposal of properties	1.6	1.0	1.1
	___________	___________	___________
Total exceptional items before tax	1.1	1.0	0.2
	___________	___________	___________
Exceptional tax:
Change in corporation tax rate (note 5)	1.3	-	-
Profit on disposal of properties	(0.4)	(0.3)	(0.3)
Operating expenses	0.1	-	0.2
	___________	___________	___________
Total exceptional tax	1.0	(0.3)	(0.1)
	___________	___________	___________
Total exceptional items	2.1	0.7	0.1
	___________	___________	___________

The insurance claim income of £0.4 million during the 26 weeks ended 25 September 2010 relates to the gain made on the disposal of a property destroyed by fire in the previous year, that was covered by an insurance claim, the proceeds of which were received during the period.

The property impairment charge of £0.9 million during the 26 weeks ended 25 September 2010 (52 weeks ended 27 March 2010: £2.0 million) relates to the write down of licensed properties to their recoverable value.  The reversal of impairment credit of £1.0 million during the 52 weeks ended 27 March 2010 relates to the write back of previously impaired licensed properties to their recoverable value. 

The goodwill impairment charge of £0.2 million during the 52 weeks ended 27 March 2010 relates to the write down of goodwill in relation to the Jacomb Guinness cash-generating unit where the total asset values exceeded their value in use. 

The VAT repayment income of £0.3 million during the 52 weeks ended 27 March 2010 relates to the reclaim of VAT overpaid in previous years. 

The profit on disposal of properties of £1.6 million during the 26 weeks ended 25 September 2010 (26 weeks ended 26 September 2009: £1.0 million, 52 weeks ended 27 March 2010: £1.1 million) relates to the disposal of four licensed and unlicensed properties (26 weeks ended 26 September 2009: three, 27 March 2010: five). 

The cash impact of operating exceptional items before tax for the 26 weeks ended 25 September 2010 was £0.4 million cash inflow (26 weeks ended 26 September 2009: £nil cash flow, 52 weeks ended 27 March 2010: £0.4 million cash inflow).

4.   FINANCE COSTS

	Unaudited	Unaudited	Audited
	26 weeks ended	26 weeks ended	52 weeks ended
	25 September	26 September	27 March
	2010	2009	2010
	£m	£m	£m
Interest expense arising on:
Financial liabilities at amortised cost - loans and debentures	2.1	2.2	4.3
Financial liabilities at amortised cost - preference shares	0.1	0.1	0.1
	___________	___________	___________
Total interest expense for financial liabilities	2.2	2.3	4.4
Finance charge on net pension liabilities	0.1	0.5	0.9
Unwinding of discounts on provisions	0.1	0.1	0.1
	___________	___________	___________
Finance costs	2.4	2.9	5.4
	___________	___________	___________

5.   TAXATION

	Unaudited	Unaudited	Audited
	26 weeks ended	26 weeks ended	52 weeks ended
	25 September	26 September	27 March
	2010	2009	2010
	£m	£m	£m
Tax on profit on ordinary activities
Current income tax:
Corporation tax	5.4	4.7	8.1
Amounts overprovided in previous periods	-	-	(1.0)
	___________	___________	___________
Total current income tax	5.4	4.7	7.1
	___________	___________	___________
Deferred tax:
Origination and reversal of temporary differences	(0.6)	(0.3)	(0.4)
Change in corporation tax rate (note 3)	(1.3)	-	-
Amounts underprovided in previous periods	-	-	0.9
	___________	___________	___________
Total deferred tax	(1.9)	(0.3)	0.5
	___________	___________	___________
Total tax charged in the Income Statement	3.5	4.4	7.6
	___________	___________	___________

5.   TAXATION (continued)

	Unaudited	Unaudited	Audited
	26 weeks ended	26 weeks ended	52 weeks ended
	25 September	26 September	27 March
	2010	2009	2010
	£m	£m	£m
Tax relating to items charged/credited to Statement of Comprehensive Income
Deferred tax:
Change in corporation tax rate	0.2	-	-
Net gains on valuation of financial assets and liabilities	0.1	0.1	0.2
Net actuarial losses on pension schemes	(1.0)	(1.9)	(1.3)
	___________	___________	___________
Tax credit included in the Statement of Comprehensive Income	(0.7)	(1.8)	(1.1)
	___________	___________	___________

Tax relating to items charged/credited directly to equity
Deferred tax:
Reduction in deferred tax liability due to indexation	(0.2)	-	(0.5)
Share-based payments	(0.2)	(0.1)	(0.1)
Current tax:
Share-based payments	-	(0.1)	(0.2)
	___________	___________	___________
Tax credit included in the Statement of Changes in Equity	(0.4)	(0.2)	(0.8)
	___________	___________	___________

The taxation charge is calculated by applying the Directors' best estimate of the annual effective tax rate to the profit for the period.

During the period the Finance Act (No 2) 2010 has been "substantively enacted".  The main impact is that the rate of UK corporation tax will reduce from 28% to 27% from 1 April 2011.  To the extent that this rate change will affect the amount of future cash tax payments to be made by the Group, this will reduce the size of both the Group's balance sheet deferred tax liability and deferred tax asset.  The impact in the 26 weeks to 25 September 2010 is an exceptional credit to the income statement of £1.3 million, and a charge to the Statement of Comprehensive Income of £0.2 million.

Further reductions have been proposed, to reduce the rate to 26%, 25% and 24% on 1 April 2012, 2013 and 2014 respectively, however these changes have not yet been substantively enacted and the financial effects will only be recorded in future periods as legislation is introduced.

6.   EARNINGS PER SHARE

	Unaudited	Unaudited	Audited
	26 weeks ended	26 weeks ended	52 weeks ended
	25 September	26 September	27 March
	2010	2009	2010
	£m	£m	£m
Profit attributable to equity shareholders	13.3	10.7	19.2
Exceptional items net of tax	(2.1)	(0.7)	(0.1)
	___________	___________	___________
Adjusted earnings attributable to equity shareholders	11.2	10.0	19.1
	___________	___________	___________
	Number	Number	Number
Weighted average share capital	56,125,000	55,714,000	55,858,000
Dilutive outstanding options	759,000	891,000	914,000
	___________	___________	__________
Diluted weighted average share capital	56,884,000	56,605,000	56,772,000
	___________	___________	___________
40p 'A' and 'C' ordinary share	Pence	Pence	Pence
Basic earnings per share	23.70	19.21	34.37
Diluted earnings per share	23.38	18.90	33.82
Adjusted earnings per share	19.96	17.95	34.19
Diluted adjusted earnings per share	19.69	17.67	33.64
4p 'B' ordinary share
Basic earnings per share	2.37	1.92	3.44
Diluted earnings per share	2.34	1.89	3.38
Adjusted earnings per share	2.00	1.79	3.42
Diluted adjusted earnings per share	1.97	1.77	3.36

For the purposes of calculating the number of shares to be used above, 'B' shares have been treated as one tenth of an 'A' or 'C' share.  The earnings per share calculation is based on earnings from continuing operations and on the weighted average ordinary share capital which excludes shares held by trusts relating to employee share options and shares held in treasury of 859,252 (26 September 2009: 1,270,416 and 27 March 2010: 1,125,936).

Diluted earnings per share are calculated using the same earnings figure as for basic earnings per share, divided by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

Adjusted earnings per share are calculated on profit before tax excluding exceptional items and on the same weighted average ordinary share capital as for the basic and diluted earnings per share.

7.   DIVIDENDS

	Unaudited	Unaudited	Audited
	26 weeks ended	26 weeks ended	52 weeks ended
	25 September	26 September	27 March
	2010	2009	2010
	£m	£m	£m
Declared and paid during the period
Final dividend paid in the period	0.6	3.9	3.9
First interim dividend paid in the period	-	-	2.5
Second interim dividend paid in the period	-	-	3.0
	___________	___________	___________
Equity dividends paid on ordinary shares	0.6	3.9	9.4
	___________	___________	___________
Dividends on cumulative preference shares (note 4)	0.1	0.1	0.1
	___________	___________	___________

Dividends per 40p 'A' and 'C' ordinary share declared in respect of the period	Pence	Pence	Pence
First interim	4.75	4.50	4.50
Second interim*	-	-	5.35*
Final	-	-	1.15
	___________	___________	___________
	4.75	4.50	11.00
	___________	___________	___________

* The second interim dividend for 2010 was paid on 5 March 2010.  The Directors do not intend to pay a second interim dividend in the current financial year.  The final dividend for 2010 took into account the level of interim dividends already paid during the year.

The pence figures are for the 40p 'A' and 'C' ordinary shares.  The 4p 'B' ordinary shares carry dividend rights of one tenth of those applicable to the 40p 'A' ordinary shares.  Own shares held in the employee share trusts do not qualify for dividends as the trustees have waived their rights.  Dividends are also not paid on own shares held as treasury shares. 

The directors have declared an interim dividend of 4.75p (2009: 4.50p) for the 40p 'A' ordinary shares and 40p 'C' ordinary shares, and 0.475p (2009: 0.450p) for the 4p 'B' ordinary shares, with a total estimated cost to the Company of £2.7 million (2009: £2.5 million).

8.   PROPERTY, PLANT AND EQUIPMENT

	Unaudited	Unaudited	Audited
	26 weeks ended	26 weeks ended	52 weeks ended
	25 September	26 September	27 March
	2010	2009	2010
	£m	£m	£m
Net book value at start of period	348.2	318.7	318.7
Additions	5.6	31.8	44.9
Disposals	(0.9)	(0.8)	(1.3)
Transfer to investment properties	-	-	(1.2)
Transfer to assets held for sale	(0.5)	-	(0.4)
Impairment loss net of reversals	(0.9)	-	(1.0)
Depreciation provided during the period	(5.9)	(5.7)	(11.5)
	___________	___________	___________
Net book value at end of period	345.6	344.0	348.2
	___________	___________	___________

During the 26 weeks ended 25 September 2010, the Group recognised an impairment loss of £0.9 million in respect of the write down of licensed properties purchased in recent years where their asset values exceeded either fair value less costs to sell or their value in use (52 weeks ended 27 March 2010: £2.0 million).  The impairment losses relate principally to a small number of Tenanted Inns where profitability has declined and which are being marketed for sale.  Impairment losses in the 52 weeks ended 27 March 2010 were driven principally by high individual asset prices in the market at the point of acquisition based on anticipated higher growth rates than are now expected and changes in the local competitive environment in which the pubs are situated.

Following an improvement in trading performance and an increase in the amounts of estimated future cash flows of certain previously impaired sites, reversals of £1.0 million were recognised during the 52 weeks ended 27 March 2010.

9.   ANALYSIS OF NET DEBT

Unaudited - 26 weeks ended	At 27 March			At 26 September
25 September 2010	2010	Cash flow	Non cash1	2010
	£m	£m	£m	£m
Cash and cash equivalents:
Cash and short term deposits	1.1	(0.3)	-	0.8
	__________	__________	__________	__________
Debt due within one year:
Bank loans 2	(80.2)	14.5	(0.1)	(65.8)
Loan notes	(1.2)	-	-	(1.2)
	__________	__________	__________	__________
	(81.4)	14.5	(0.1)	(67.0)
	__________	__________	__________	__________
Debt due after one year:
Debenture stock	(25.8)	-	-	(25.8)
Preference shares	(1.6)	-	-	(1.6)
	__________	__________	__________	__________
	(27.4)	-	-	(27.4)
	__________	__________	__________	__________
Net debt	(107.7)	14.2	(0.1)	(93.6)
	__________	__________	__________	__________

¹ Non cash movements relate to the amortisation of arrangement fees.

² In May 2010 Fuller, Smith & Turner P.L.C. entered into a new unsecured £100 million bank facility to replace its existing facilities which matured in November 2010.  The new facility has a five year term expiring in May 2015, has no amortisation requirements and provides £33 million of additional funding above the amount available under the previous facility at 25 September 2010.  Bank loans are stated net of unamortised arrangement fees.

Unaudited - 26 weeks ended	At 28 March			At 26 September
26 September 2009	2009	Cash flow	Non cash	2009
	£m	£m	£m	£m
Cash and cash equivalents:
Cash and short term deposits	0.9	1.2	-	2.1
	__________	__________	__________	__________
Debt due within one year:
Bank loans	(7.5)	3.7	(3.7)	(7.5)
Loan notes	(1.3)	0.1	-	(1.2)
	__________	__________	__________	__________
	(8.8)	3.8	(3.7)	(8.7)
	__________	__________	__________	__________

Debt due after one year:
Bank loans	(57.7)	(17.5)	3.7	(71.5)
Debenture stock	(27.0)	-	-	(27.0)
Preference shares	(1.6)	-	-	(1.6)
	__________	__________	__________	__________
	(86.3)	(17.5)	3.7	(100.1)
	__________	__________	__________	__________
Net debt	(94.2)	(12.5)	-	(106.7)
	__________	__________	__________	__________

Audited - 52 weeks ended	At 28 March			At 27 March
27 March 2010	2009	Cash flow	Non cash	2010
	£m	£m	£m	£m
Cash and cash equivalents:
Cash and short term deposits	0.9	0.2	-	1.1
	__________	__________	__________	__________
Debt due within one year:
Bank loans	(7.5)	7.5	(80.2)	(80.2)
Debenture stock	-	-	(1.2)	(1.2)
Loan notes	(1.3)	1.3	-	-
	__________	__________	__________	__________
	(8.8)	8.8	(81.4)	(81.4)
	__________	__________	__________	__________
Debt due after one year:
Bank loans	(57.7)	(22.5)	80.2	-
Debenture stock	(27.0)	-	1.2	(25.8)
Preference shares	(1.6)	-	-	(1.6)
	__________	__________	__________	__________
	(86.3)	(22.5)	81.4	(27.4)
	__________	__________	__________	__________
Net debt	(94.2)	(13.5)	-	(107.7)
	__________	__________	__________	__________

10.   RETIREMENT BENEFIT OBLIGATIONS

	Unaudited	Unaudited	Audited
	At 25 September	At 26 September	At 27 March
	2010	2009	2010
The amount included in the Balance Sheet arising	£m	£m	£m
from the Group's obligations in respect of its defined benefit retirement plan
Fair value of plan assets	72.7	65.5	71.1
Present value of scheme liabilities	(89.1)	(80.7)	(83.8)
	__________	__________	__________
Deficit in scheme	(16.4)	(15.2)	(12.7)
	__________	__________	__________
Key financial assumptions used in the valuation of the scheme
Rate of increase in salaries	3.60%	3.70%	4.00%
Rate of increase in pensions in payment	3.10%	3.20%	3.50%
Discount rate	5.10%	5.60%	5.60%
Inflation assumption	3.10%	3.20%	3.50%

Mortality assumptions

The mortality assumptions used in the valuation of the Plan as at 25 September 2010 are as set out in the financial statements for the 52 weeks ended 27 March 2010.

	Unaudited	Unaudited	Audited
	At 25 September	At 26 September	At 27 March
	2010	2009	2010
	£m	£m	£m
Value of assets in the scheme
Bonds - Government	2.5	15.7	-
Bonds - Corporate	18.6	4.5	18.9
Equities	46.8	42.7	47.3
Property	1.2	0.5	1.0
Cash	2.6	1.1	2.9
Annuities	1.0	1.0	1.0
	__________	__________	__________
Total market value of assets	72.7	65.5	71.1
	__________	__________	__________

10.   RETIREMENT BENEFIT OBLIGATIONS (continued)

	Unaudited	Unaudited	Audited
	26 weeks ended	26 weeks ended	52 weeks ended
	25 September	26 September	27 March
	2010	2009	2010
	£m	£m	£m
Movement in deficit during period
Deficit in scheme at beginning of the period	(12.7)	(8.4)	(8.4)
Movement in period:
Current service cost	(0.8)	(0.5)	(1.0)
Contributions	1.0	1.1	2.1
Finance charge on net pension liabilities	(0.1)	(0.5)	(0.9)
Net actuarial losses	(3.8)	(6.9)	(4.5)
	__________	__________	__________
Deficit in scheme at end of the period	(16.4)	(15.2)	(12.7)
	__________	__________	__________

11.   POST BALANCE SHEET EVENT

On 5 November 2010 the Group drew down on the new £100 million bank facilities that had been entered into in May 2010 (see note 9), and used these funds to repay all bank borrowings under the former 2005 bank facilities.

12   PRINCIPAL RISKS AND UNCERTAINTIES

There has been no change since 27 March 2010 to the risks and uncertainties which may affect the Company's performance in the next six months, details of which are set out in the financial statements for the 52 weeks ended 27 March 2010, and are available on the Fuller's website, www.fullers.co.uk.  In summary three different generic types of risk and uncertainty have been identified by the Directors.

-     Regulatory risks encompass the risks to the business of increased regulation of the sale of alcohol, health and safety in the workplace and pensions.

-     Economic and market conditions include the risk to the business due to the strength or otherwise of the economy, cost pressures, in particular from utilities, the risk of assigned leases reverting to the Group and changes in consumer trends.

-     Operational risks such as damage to the Group's property, brands or reputation and reliance on information systems to operate efficiently on a daily basis. 

Principal among these risks and uncertainties is the ongoing strength of the UK economy as it recovers from recession; with the planned public spending cuts and taxation rises already announced, consumer spending in the UK will come under renewed pressure, with the leisure industry particularly vulnerable.  Other key risks include the impact of new Government regulation, particularly with regard to future policy on alcohol duties and Off-trade retail pricing, which may impact demand for our products, and our ongoing exposure to incidents which may damage the reputation of the Company or its brands, or our ability to supply our customers.

13   SHAREHOLDERS' INFORMATION

Shareholders holding 40p 'C' ordinary shares are reminded that they have 30 days from 19 November 2010 should they wish to convert those 'C' shares to 'A' shares.  The next available opportunity after that will be June 2011.  For further details please contact the Company's registrars, Computershare on 0870 702 0101.

14   HALF YEAR REPORT

Copies of the half year report are being sent to shareholders and will be available from the Company's registered office: Griffin Brewery, Chiswick, London W4 2QB and the Company's website www.fullers.co.uk.

15   STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors confirm, to the best of their knowledge, that this condensed set of financial statements has been prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by the European Union, and that the interim management report herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

-     an indication of important events that have occurred during the first six months and their impact on the financial statements and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

-     disclosure of material related party transactions in the first six months and any material changes to related party transactions.

By order of the Board

Michael Turner Chairman

James Douglas Finance Director

19 November 2010

 

END

 

 

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