2 growth heroes you need to check out

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While Fuller, Smith & Turner’s (LSE: FSTA) share price has ducked in Friday trade despite the release of bubbly trading numbers, this is not surprising given the leisure leviathan’s strong run of recent months.

Fuller, Smith & Turner announced that revenues swept 12% higher in the 12 months to March 2017, to £392m, a result that powered adjusted pre-tax profit 5% higher to £42.9m.

Toasting the results, chief executive Simon Emeny announced that “food and accommodation have driven like-for-like sales growth in our Managed Pubs and Hotels and the targeted investments we have made in both new sites and redeveloping our existing estate have generated excellent returns.”

On the march

And Fuller, Smith & Turner has seen performance improve across the board since the end of the fiscal period.

The pub operator saw like-for-like sales across its Managed Pubs and Hotels division rise 3.7% in the year to March. And it has seen takings improve since, with underlying revenues here up 6.6% in the first nine weeks of the present year.

Meanwhile, at the pub operator’s Tenanted Inns division, like-for-like profits have risen 5% in the initial nine-week period. These fell 2% in the whole of fiscal 2017.

And at its brewing operations, it has seen beer and cider volumes up 7% in just over two months. By comparison sales at The Fuller’s Beer Company fell 2% in the year to March.

Further growth in store

Now Fuller, Smith & Turner faces no inconsiderable hurdles looking ahead, from the cost pressures created by increased business rates and the introduction of the National Living Wage, through to the uncertainties created by the Brexit negotiations and now the political malaise following this week’s general election.

Still, with Britons’ spending on leisure proving relatively robust, and Fuller, Smith & Turner chucking shedloads of cash at its estate (the firm bought five new pubs and refurbished 25 in the last year alone), I reckon the company can expect earnings to keep on rising.

City analysts expect earnings to rise 2% and 6% in the years to March 2018 and 2019 respectively.

And while the booze behemoth may change hands on a forward P/E ratio of 16.9 times — peeking above the broadly-regarded value benchmark of 15 times or below — I reckon the company’s exciting growth strategy merits this premium, and expect earnings to keep chugging higher long into the future.

Brand beauty

I am convinced the evergreen popularity of hit labels like Nurofen painkillers and Durex condoms makes Reckitt Benckiser (LSE: RB) one of the FTSE 100’s most dependable earnings stocks.

While the business is currently enduring some difficulties in its so-called developed markets, the resilience of Reckitt Benckiser’s consumer healthcare stable — allied with the currency benefits created by its huge international presence — is helping to keep sales moving skywards. Indeed, revenues rose 15% in January-March, to £2.6bn despite these pressures.

And I reckon spiralling wealth levels in emerging regions should deliver splendid returns in the longer term. Reckitt Benckiser generates around a third sales from these territories right now.

The number crunchers expect earnings at the business to rise 10% in 2017 and 5% in 2018. And I reckon a prospective P/E rating of 23.7 times is more than fair given Reckitt Benckiser’s strong defensive qualities.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Reckitt Benckiser. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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