Confident Outlook Following Fuller’s Solid Start to Year

Shares of Fuller, Smith & Turner rose in early Wednesday trading after the long-established pub operator reported annual results that exceeded market expectations and highlighted positive momentum at the start of its new financial year.

The company, which operates a network of pubs and hotels throughout southern England, generated revenue of £397.8 million in the 52 weeks ending 28 March, representing a 5.7% increase from the previous year. Comparable sales across its managed pubs and hotels also grew, rising 4.9%.

Fuller’s noted that these results were achieved despite a more difficult economic and political environment, including higher tax costs. The company also reported a strong opening to the new financial year, with like-for-like sales increasing 4.4% during the 10 weeks to 6 June.

Executive Chairman, Simon Emeny said:

“I am delighted, as I complete my first year as Executive Chairman, to report that it has been another successful year for Fuller’s. Like for like sales in our Managed estate are up 4.9%, revenue for the Company is up by 5.7% to £397.8 million and both our Managed Pubs and Hotels and Tenanted Inns divisions have grown – resulting in adjusted profit before tax rising 28% to £34.6 million. Combined with our capital allocation framework and continued share buyback programme, we have also seen adjusted earnings per share rise 38% – achieving market-leading growth in this key metric.

“The new financial year has begun well. Like for like sales for the first 10 weeks have risen by 4.4%, building on a strong comparative period last year and our underlying profitability continues to improve, maintaining the momentum we have built in recent years.

“As we move into our summer season, preparations have gone well. Our garden investment programme has seen fresh space created for peak trading, advance bookings for the World Cup have been strong, and we are seeing increased demand for staycations benefiting our excellent rooms business.

“We have exciting opportunities for the coming year with plans to invest over £30 million across the estate. In addition, we will begin the transformation of The Barrowboy and Banker, an existing freehold site by London Bridge, where we will create a 26-bedroom hotel to mirror the successful investment made previously at The Counting House, Cornhill.

“We have also today announced plans to extend our share buyback programme with the buyback of one million “A” shares, and we will continue to actively pursue new site acquisition opportunities where we believe the addition will complement the quality of the existing estate and deliver strong returns.

“The results we have delivered this year are driven by our strong operational performance, a proven successful strategy, an outstanding team of people, and a robust capital allocation framework – which combined, reflect the success of our long-term business model. While we are monitoring the ongoing geopolitical and economic situations, we remain optimistic and confident that we will continue to deliver further progress for our people, our customers and our shareholders.”

Greg Johnson, Equity Analyst at Shore Capital, said: “Fullers, arguably one of the highest-quality pub estates across the UK, has issued annual results for the year to end March. The key outturn being robust profit growth (above our estimates), strong cash generation and further shareholder returns, with EPS ahead by an exceptional 38%. Trading at the start of the new financial year remains resilient and the Group has announced a further 1m share buyback.”