Fuller’s ‘pleased’ with start to year despite brewing arm sale impact
Pub giant Fuller, Smith & Turner hailed a solid start to the new financial year, despite the impact of selling its brewing business earlier this year.
Shares lifted in early trading as the hospitality group said sales from its managed pubs and hotels surged over the year to March, and have continued to deliver growth.
The company added it was in a sustainable financial position after selling its brewing arm to Japan’s Asahi for £250 million in January.
Simon Emeny, chief executive of the London-based business, said the deal has put Fuller’s in a “strong position to deal with potential turbulent times” as the UK navigates its exit from the EU.
Fuller’s saw statutory pre-tax profits slide 40% to £26.1 million in the year to March 31 after the company was weighed down by £17 million in one-off costs.
However, it reported adjusted profits, the firm’s preferred measure, which were flat against the previous year at £43.2 million.
Mr Emeny told PA he was “very pleased” with the company’s profitability given the level of upheaval at the company amid the sale.
He said: “We think flat profit for the year was a great performance given that this was against the backdrop of a major disposal, as well as rising costs and consumer weakness.
“Our profits would have been even higher if it wasn’t for business rate increases, and I would tell the new Prime Minister to address this because the retail and leisure sectors have been crippled by rate rises over the past two years.
“I am hopeful that he will work to help business – he had a good track record as London mayor – and this is certainly a key issue to be addressed.”
Despite the brewery sale, total revenues rose by 7% to £431.1 million during the year, due to a “strong performance” in its managed pubs and hotels business.
Like-for-like sales in managed pubs and hotels rose by 4.9%, accelerating from 2.9% growth in 2018.
The company also hailed a “good” performance among its tenanted pub and hotel portfolio, although sales slowed to 1% from 3% in the previous full year.
Beer and cider sales volumes remained flat, stemming a decline in volumes from the previous year.
Fuller’s was boosted by the acquisition of 11 new sites, including six Bel & The Dragon country inns in the home counties.
Total sales have continued to rise into the new financial year, with overall revenues rising 2.3% in the past 16 weeks.
The company added that managed pub and hotel sales rose 1.2% on the same period last year, although sales from tenanted sites are 3% down for the year so far.
Mr Emeny added: “We’ve been pleased with the year so far as we managed 1.2% growth for managed pubs despite very tough comparisons against a hotter summer and England’s men reaching the World Cup semi-final.
“Customers are perhaps drinking less than they used to, but are happy to pay more for better quality.
“We feel this works well for a business like ourselves, as we work to deliver high-quality gin and tonics, good food they can trust and meet trends such as the growth in vegan and vegetarian food.”
Shares in the company opened higher on Thursday morning, rising by 3.3% to 1,100p in early trading.