Fuller, Smith & Turner has reported an ‘excellent’ year increasing earnings against a backdrop of elevated cost pressures.
The pub & hospitality group, which operates pubs and hotels across London and the South, reported that pre-tax profits jumped 40 per cent to £14.4million in the year ending 30 March.
Although the business experienced higher food and labour costs, the latter due to the National Living Wage increase, its operating margins still improved by 2.2 percentage points to 9.6 per cent. Its results further revealed that revenue rose by 7.1 per cent to £359.9million, thanks partly to a solid like-for-like performance at the firm’s city sites.
Chief Executive Simon Emeny said:
“It has been a strong year for Fuller’s and I am pleased and proud of the progress we have made. All parts of the Company have performed well – with like for like sales in our Managed Pubs and Hotels increasing by 11%, Tenanted Inns operating profit rising 4% and adjusted profit before tax rising 61% to £20.5 million.
“Fuller’s has delivered these excellent results in the last financial year, despite the high inflationary environment. As of today, those inflationary pressures – especially in regard to food and energy – have reduced, which gives us additional confidence in the coming year.
“We have continued to build on this strong momentum with like for like sales in the first 10 weeks of the year rising by 4.4%. We have commenced a wide-ranging investment programme, with seven schemes already on site or completed since the start of the new financial year. Complementing this investment in our properties is continued investment in our people. We will be rolling out our leadership development programme to our support centre managers and Head Chefs and continuing to provide development opportunities to team members at all levels across the business.
“As a Company, we are primed for further success and growth. We will continue with our share buyback programme, and we will benefit from the sale of The Mad Hatter in July 2024 for a total consideration of £20 million, and £18.3 million from the sale of 37 non-core pubs to Admiral Taverns.
“With the solid financial foundation of a strong Balance Sheet and a first-class, predominately freehold estate of iconic pubs and hotels, combined with a team that has the ability and capacity to drive the business forward, we are confident and excited by the opportunities the future will bring.
Julie Palmer, partner at Begbies Traynor, said:
“Fuller’s have served up an impressive set of full-year results, with the pub operator looking relatively unscathed after the challenges of recent years, enforced closures during the pandemic and navigating sky high food and energy prices. What’s particularly impressive is the 11% uptick in like-for-like sales which points to how the hospitality giant has made a strong recovery over the last year.
“Pleasingly, like-for-like sales have also held up well in the first few weeks of the year, rising 4.4% in the first 10 weeks as pubgoers still sought out an enjoyable experience despite the squeeze on their wallets.
“There’s no hiding from the fact that the damp spring wasn’t ideal for consumers, so Fullers will be hoping for warm summer evenings, beautiful hot weekends and a stellar performance from England at the Euros.
“If it can get all three of those things this summer, the iconic pubs group will have every reason to be cheerful, especially given the prospect of extended licences if the Three Lions do particularly well.
“Fuller’s is well-positioned for future growth and there’s a clear strategy for investment and a commitment to developing its workforce. Reinforcing this is a solid financial foundation and predominantly freehold estate that provides it with a stable platform for expansion and innovation.”
