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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
Fuller’s tripped up by mechanics of separating beer business

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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
Fuller Smith & Turner (FSTA) £10.20
Loss to date: 4.7%
Original entry point: Buy at £10.70, 14 February 2019
Pub and hotels group Fuller Smith & Turner (FSTA) admits that it has underestimated costs of ‘transitioning’ the beer business to Japanese brewer Asahi, which struck a deal in January to acquire the assets.
This mistake will result in full-year pre-tax profit to 28 March 2020 being flat on a comparable basis to last year at £31m.
What appears to have happened is that the migration to a new enterprise resource planning system (ERP) has taken longer to deliver benefits than anticipated, resulting in higher running costs.
The ERP issue further complicated the separation of the 174-year-old beer business, resulting in £3.4m of extra costs and the transition period extending to the end of May next year.
The impact appeared larger because analysts’ profit forecasts of £42m had gotten out of line with management expectations, which were closer to £37m.
Broker Liberum sees this event as a post-disposal ‘reset of the numbers’ rather than a profit warning.
SHARES SAYS: Don’t be put off by the setback. We believe the disposal makes strategic sense and once the current transition is complete, the group is well positioned for further growth.
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