Shares fall flat as Fuller, Smith & Turner warns on profits

Shares in Fuller, Smith & Turner fell on Monday after the pubs and hotels business warned on profits.

The group said sales in the 43 weeks to 21 January 2023 had risen 20% year-on-year, or by 97% when compared to the same period in the 2020 full-year, prior to the pandemic.

But rail strikes during December had kept drinkers at home, Fullers added, causing it to lose around £4m in sales over the key festive period.

In the four weeks including Christmas and New Year, sales were ahead 38% against the previous year, when pandemic restrictions were still in place, but down 5% against the same period in 2019.

The firm now expects to report full-year earnings below market expectations as a result. Inflation is also continuing to affect both operating costs and margins, it noted.

As at 0945 GMT, shares in the London-listed group were down 5% at 470p.

Simon Emeny, chief executive, said: “While it is frustrating that the train strikes have set back our reported sales and earnings, it is reassuring that we are achieving our anticipated sales trajectory in periods unaffected by strikes.

“While ongoing strike action will dampen sales, demand from customers remains good.”

He concluded: “Although strike action and the cost-of-living crisis create short-term hurdles to our post-pandemic recovery, we remain confident in the resilience of the pub and the future opportunity for Fullers.”

Victoria Scholar, head of investment at Interactive Investor, said: “While the pub group is hoping that more office workers and tourists return to the capital this year, pressure on customers from cost-of-living crisis as well as cost pressures from inflation, which are squeezing margins, continue to act as key headwinds in 2023.”

Fullers, which has 208 managed businesses and 175 tenanted inns, most of which are in the south of England, is due to publish full-year results on 1 April.