Fuller's down despite full-year growth

Shares in Fuller, Smith & Turner were down 3.26% in morning trading on Friday, after it reported positive growth for the last financial year but challenging conditions going into the current year.

Adjusted profit before tax at the London-listed pubco rose 12% in the year to 26 March to £40.9m, against £36.4m, with adjusted earnings per share rising 13% to 58.35p.

Revenue grew 9% to £350.5m, and EBITDA was up 11% to £65m. Statutory profit after tax was up 17% to £33m, from £28.3m.

“It has been another outstanding year for the company and I am delighted to be reporting an excellent set of results, particularly in the largest part of our business - our managed pubs and hotels,” said chief executive Simon Emeny.

“We are seeing the rewards of our continued investment programme and the emphasis we have placed on recruiting, developing, rewarding and promoting the best people.”

Emeny said the company’s long-term approach is underpinned by a consistent strategy, though the board was continuing to seek new, exciting opportunities to build the business further.

He said Fuller's has purchased pubs in geographical areas where it has previously lacked a presence, introduced new premium brands and continued to develop pub designs and the quality and creativity of the menus.

“Our business is in excellent shape and it has been a solid start to the year. Like for like sales in our managed pubs and hotels for the first 10 weeks of the new financial year are up by 2.7% against strong comparatives from last year,” Emeny explained.

“Over the same period, like for like profits in our tenanted inns are down by 2% and beer and cider volumes have decreased by 5%.”

Fullers’ board said the economy remained difficult to read with the European Union referendum imminent, and while it was important to be aware of the external environment, the company will continue with plans already in place with a long-term perspective giving it the flexibility to react accordingly.

“We will further invest in training our people and we will also be investing a record amount in refurbishing our existing estate, putting more focus on our delicious fresh food and continuing to attract new customers to our pubs,” Enemy explained.

“We have already completed seven major schemes in this current financial year including The Harpenden Arms in Harpenden, The Drayton Court in Ealing and The Ox Row in Salisbury, and four more are underway as of today with many others soon to follow.

“In addition, since the year end, we have purchased an additional 25% of The Stable, taking our stake to 76%,” he added.

Fuller’s board announced a final dividend of 11p per ‘A’ and ‘C’ ordinary share and 1.1p per ‘B’ ordinary share, to be paid on 25 July.

The payment makes for a final dividend of 17.9p per ‘A’ and ‘C’ share and 1.79p per ‘B’ share, representing an 8% increase, and will be covered more than 3.2x by adjusted earnings per share.