Fuller’s profits up 10% despite cost pressures
FULLER, Smith & Turner has reported a 10 per cent jump in half-year profits despite facing “unprecedented” cost and economic pressures, but warned political uncertainties in the UK could still hit the business.
The pubs group said pre-tax profit rose to £23.6million in the 26 weeks to September 30 from £21.4million a year earlier, while revenues rose 6 per cent to £209.3million.
It was helped by a strong performance from its managed pubs and hotels, which outperformed the market with a 3.6 per cent rise in like-for-like sales, while like-forlike accommodation sales jumped 8.2 per cent.
But total beer and cider volumes at The Fuller’s Beer Company rose just 1 per cent against a “flat UK market”. Chief executive Simon Emeny said the company experienced “some unprecedented influences on the business, not only in our particular industry, but in the context of the wider UK economy and global political scene.
“I cannot remember a time when we have faced such an array of additional cost pressures,” he said, citing a 26 per cent rise in business rates for its managed pubs, as well as hikes to the apprenticeship levy and national living wage rates. Like a number of industry peers, Fuller, Smith & Turner is keeping a close eye on the effects of Brexit-related uncertainties. “Although we have already faced and absorbed a number of prevailing headwinds, future economic and political uncertainty may still cause further challenges,” he said. “However, we are wellplaced to face these,” he added, saying the company was committed to ongoing investments in the business. Those investments have been aimed at its estate, central IT and back office operations, as well as rebranding and marketing of its London Pride brew. As part of a strategic review of its tenanted inns, the company has sold a further 12 pubs, and put the remaining four of the 20 earmarked for disposal on the market. Underlying earnings per remaining tenanted pub is up 7 per cent and total profit for tenanted inns has risen 2 per cent to £6.7million “despite having a smaller estate”, the group highlighted.