Pub group Fuller Smith and Turner recorded an “excellent year of progress” over the 52 weeks to 30 March as the group continued to recover from the pandemic and cost of living crisis.
Today, the company, which operates a range of pubs and hotels across London and the South of England, reported a seven per cent increase in revenue to £359.1m. However, this was against a 53-week year prior period.
According to the CGA RSM Hospitality Business Tracker, like-for-like sales rose 11 per cent overall, which significantly outperformed the industry average.
The performance of Fuller’s pubs in “urban” locations, mainly central London was particularly strong. The group said like-for-like sales at this part of the business jumped 15.6 per cent, following growth of 32.8 per cent last year.
This strong recovery helped Fuller’s report profit before tax of £20.5m, up 61 per cent compared to the prior period.
Analysts at Deutsche Numis noted the company’s margins have “almost recovered to the pre-Covid level and should be helped by an additional £2m correction in utilities this year.”
The company also hiked its dividend by 21 per cent for the year to 17.75p. The group said this growth continued its return to a “progressive dividend policy.”
Fuller’s has also laid out plans to buy back the 6.5m ‘A’ shares it issued during the depths of the pandemic to bolster its balance sheet. Since September 2022, the group has repurchased 3m shares at a “30 per cent discount to the 830p price of the share issue.”
The company’s results follow what has been a trying few years for the hospitality industry. The cost of living crisis has hit consumer spending, while wages have jumped, pushing costs higher for pub and restaurant operators.
However, Fuller’s said today it believes these pressures have finally started to recede. “As of today, those inflationary pressures – especially in regard to food and energy – have reduced, which gives us additional confidence in the coming year,” chief executive Simon Emeny said.
“We have continued to build on the strong momentum of the last year with like-for-like sales in the first 10 weeks of the year rising by 4.4 per cent,” the boss added.
The group recently announced the sale of 37 non-core pubs to Admiral Taverns for £18.3m and the sale of The Mad Hatter pub, which is expected to be completed in July 2024 for a total of £20m.
These sales, the company added, would allow it to continue to reinvest in its estate. It spent a total of £27.2m last year with a number of major schemes completed, including The Counting House in the City of London.
There would also be room for “appropriate acquisition opportunities,” the CEO said.
“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,” Emeny concluded.