Market's view on Fuller Smith & Turner
Published on April 2024
- Share buybacks have been authorised at the company’s last five or more AGMs, with a plan to cancel the purchased shares.
- Share buyback activities are also positively viewed as they potentially offer financial sense, especially when shares are trading below net asset value.
- The company’s entry into the German market with Premier Inn is uncertain and considered a significant unknown.
- Concerns about customer service quality in the company’s pubs have been raised, citing poor experiences.
- Financial performance shows double-digit percentage increases in revenue from food, drink, and accommodation, and a significant increase in interim dividends and cash flow.
- There is a focus on the value of the company’s property portfolio, with assets significantly undervalued on books compared to potential market prices.
- The sale of a central London property significantly above book value is highlighted as an example of the undervalued assets.
- The company is perceived to have a strong balance sheet which offers a degree of protection against economic uncertainties like inflation and interest rate rises.
- Dividends and share buybacks are seen as rewarding for patient investors.
- Criticism was noted on the company’s strategy of not expanding the brewing business and relying heavily on London asset price inflation, which has stagnated.
- Personal anecdotes shared about poor treatment of loyal customers at flagship locations, affecting the company’s image.