Bottoms up

Fuller’s shrugs off the pub trade gloom to post improved profits

FULLER, Smith & Turner has managed to navigate the pub industry’s mounting cost pressures but called for the “antiquated” business rates system to be overhauled.

Simon Emeny, its chief executive, said even though he “cannot remember a time when we have faced such an array of additional cost pressures” his business grew half-year sales and profits ahead of the wider industry.

He said in spite of the company suffering an extra £2m in business rates this financial year, the London Pride brewer had managed to grow adjusted pre-tax profits in the six months to Sept 30 by 4pc to £23.8m, a figure which excluded proceeds from pub sales.

With these included, statutory pretax profits rose by 10pc, helped by an exceptional gain of £4.8m from the disposal of 11 pubs.

The earnings performance came on the back of sales of £209m, up 6pc.

Mr Emeny welcomed the decision in Chancellor Philip Hammond’s Budget to link business rates to the lower level of inflation – the consumer prices index – from next year.

He said, however, it still did not address the fundamental issue. “There was a small concession but the system is antiquated,” he said.

“It was designed when we didn’t have such a big online market and you cannot substitute the pub experience for an online one.”

Mr Emeny said the pub sector was now responsible for 2.8pc of the total business rates bill, despite only generating 0.5pc of total turnover, suggesting this showed it was unfairly burdened. Mr Hammond did try to address the issue of online businesses being able to pay less tax because of how they are set up.

He introduced a crackdown aimed at raising £200m a year to combat a tax avoidance measure in which companies pay substantial royalties to subsidiaries in low-tax jurisdictions.

Elsewhere, Mr Emeny said Fuller’s had continued to grow its presence in railway stations by securing sites within London’s Euston and Liverpool Street.

The company said that it would also add 100 rooms to its accommodation business in the next two years, a division which boomed during this period with its like-for-like sales up more than 8pc.

The company’s shares closed down 1.5pc at 951p.