Shares of Fuller, Smith and Turner (LON: FSTA) have crashed across Friday trading after the firm issued a profit caution to shareholders.
Shares of the Chiswick based pub company crashed 2.86% to 1,020p. 15/11/19 12:56BST.
The statement provided updated shareholders saying that annual profit was set to be unchanged.The firm alluded to costs with the separation of its brewing business came in significantly higher than expected.
In January, pub operator Fuller’s agreed to sell its historic brewing operations to Japanese brewer Asahi Group Holdings Ltd (TYO: 2502) for £250 million.
The results will come as a disappointment to shareholders, as competitors seem to be gaining ground in the market.
J D Wetherspoon plc (LON: JDW) reported a bullish update earlier this week, whilst Greene King (LON: GNK) have been taken over by a Hong Kong billionaire, diversifying their markets.
Fuller’s expects the higher overhead levels to remain in place until the services agreement ends in May. Following this, the now pure-play pubs and hotels operator will be able to transition its costs structure to this new focused business.
“This is a transitional year for the company following the sale of the brewing business and subsequent separation of a highly integrated business,” Chief Executive Officer Simon Emeny said. “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. Whilst we are taking the action to address these, the impact of this will not be felt in the current financial year.
“Trading is good in light of exceptionally strong comparatives last year and the continued challenge of cost inflation facing our sector,” Emeny added. “Our strategy remains on track and we will continue to execute our growth ambitions and maximise the opportunities open to us as a focused pubs and hotel business.”
