Fuller's reports strong results
London brewer and operator Fuller's has reported a strong set of results with adjusted profit before tax up 4% to £23m on last year despite challenging conditions.
Revenue across the company was also up 2% to £181.1m with beer volumes up 4%, beer company profits up 1% and invested managed pub sales up 3.2% and 3.6% at hotels.
"Our consistent focus on quality, and commitment to outstanding cask conditioned ales, delicious food, great wines and exemplary service, continues to provide the best foundations for a stable business," said chairman Michael Turner (pictured, left, with finance director James Douglas).
"We operate in the premium end of the market and believe this is the only place to be.
"We have a long-term strategy, strong balance sheet, excellent cash flow generation and an experienced management team and are well placed to meet the challenges ahead."
Managed pubs
Revenues across its managed and hotel division remained flat despite the sale of its two largest hotels for £20.1m last year.
Invested like-for-like sales at hotels rose 7.5% and invested like-for-like sales at managed pubs rose 3.2%.
The company has decided to merge the managed and hotel division as it had has only six hotels left and a number of pubs offering accomodation.
Combined like-for-like sales at invested sites rose 3.6%.
Food and accommodation were the key drivers with food sales up 8% and now representing 27% of revenue - up 2% on last year.
Accommodation now accounts for 7% of total revenue - down from 8% in 2007 following the sale of the Brigstow and Master Brewer hotels.
Fuller's now has 494 rooms across its managed estate of 157 outlets.
Tenanted pubs
The 203-strong tenanted business had a "good year" with revenues up 5% and average revenue per pub rising by 2.4%.
Like-for-like sales rose 0.3% and profits were up 4%.
There was significant investment in to help tenants cope with the smoking ban with refurbishment costs up 6% on last year.
Beer
Fuller's Beer Company reported a 1% increase in pre-exceptional operating profits to £8m with revenue up 3% to £63m.
Its own beer volumes increased by 4% - fuelled by a 7% growth in the of-trade and 21% in exports, where it continues to break in to new markets such as Russia, Japan and China.
However, its foreign beer volumes fell 4% as a result of the weather and smoking ban but this is against an on-trade lager market down 7%.
Finally, the Fuller's wine division saw profits rise 9%.
It is currently marketing the sale of the former Gales Brewery site in Horndean - the proceeeds of which will more than cover the building of a bespoke warehouse ad distribution centre nearby.
Challenges ahead
Despite the strong results, Turner warned there were challenges ahead.
"The current inflationary pressures in the UK, particularly on grain, food and energy, are both pushing up our costs and squeezing our customers' disposable incomes," he said.
"Despite these inflationary pressures, we intend to hold our gross margins across both our retail and brewing operations.
"In 2007/8 our gas and electricity costs alone increased by £0.6m.
"We have fixed prices for around half of our energy consumption but, at current market prices, we would see this cost to the business rise again by at least a further £1.2 m in the coming 12 months."
