Fuller’s Buys 10 London and Bath Pubs From Stonegate

Fuller, Smith & Turner (LON: FSTA), the London-focused managed pubs and hotels group, said earlier today it has exchanged contracts to buy 10 pubs from Stonegate Group and an institutional property investor for £35.25m in aggregate consideration. The shares rose around 1%, trading at 727.6p, up from Monday’s close of 720p.

Nine of the 10 pubs sit in prime London postcodes, with the tenth in central Bath. The deal covers four freehold pubs, where Fuller’s owns the site outright and completion is expected this month, and six leasehold pubs, where Fuller’s holds a lease and completion happens site by site subject to landlords’ consent. Named assets include The Shipwrights Arms in London Bridge, The Duchess next to Selfridges, and The Blue Anchor in Hammersmith.

Executive Chairman Simon Emeny said: “I am delighted to be announcing this transaction today. We have always maintained a disciplined policy of only acquiring the right assets at the right price – and they must always be estate enhancing.”

Emeny said the pubs sit in areas where Fuller’s already has “a strong presence and knowledge of the customer” and called them “a perfect complement to our existing estate,” adding they will give “additional momentum” to earnings growth in the core business. Management has not put a figure on the earnings impact, saying it will update the market at its interim results presentation later in the year.

The £35.25m outlay is modest against Fuller’s roughly £376m market capitalisation, and the muted scale of today’s share move reflects that: a bolt-on deal that fits an estate the company already knows well, rather than a shift in strategy.

Investors will get the first quantified detail on how the acquisition affects earnings when Fuller’s reports its interim results later this year.