Fuller's reports healthy earnings rise

By John Harrington

- Last updated on GMT

Related tags Pubs Exceptional items Public house London

Fuller's has posted strong half-year results
Fuller's has posted strong half-year results
Fuller’s, the London-based brewer and pub operator, has reported a 4% rise in EBITDA to £28.1m in the six months to 28 September as like-for-likes in its managed estate grew 7.9%.

It also announced plans to dispose of 10 tenanted pubs and revealed that it has bought a west London venue, the Distillers in Hammersmith, for its managed estate for £3.4m.

Overall revenue increased 6% to £146.3m and adjusted pre-tax profit rose 8% to £18.1m. Adjusted earnings per share grew 9% to 24.79p and the company announced an interim dividend of 5.8%, a rise of 8%.

Managed estate

In its managed estate, profits increased 16% and the rise in like for likes was led by strong growth in freshly prepared food, Fuller’s said. Revenues in the division grew 10% to £94.4m and operating profits before exceptional items increased 16% to £12.6m, with EBITDA up 11% to £17.4m.

Fuller’s said food, drinks and accommodation all performed well with like-for-like sales growth of 11.8%, 6.9% and 7.8% respectively.

“Our focus on fresh food over recent years is being realised and the average food spend per cover increased 5% to £10.84, accompanied by a total increase of 7% in the number of main course covers during the period.”

The group reported a 7.8% increase in like for like sales in its Accommodation division following strong growth in occupancy, despite having benefitted last year from the London 2012 Olympic Games. It currently operates 610 bedrooms across 12 hotels and 16 pubs with rooms. It will add a further 13 bedrooms across two further projects this autumn.

Tenanted pubs

Revenue across its Tenanted Inns increased 2% to £16m (2012: £15.7m) in a trading period characterised by “great weather but fewer one-off events”. Like for like profits were 1% higher than last year after increased investment in repairs during the period. Operating profit before exceptional items remains level at £6.2m (2012: £6.2m) and average EBITDA per pub was also level.

During the period the company acquired one pub, The White Hart, Southwark and disposed of one non-core pub. In addition, four pubs were transferred from its Managed division and two pubs were transferred from Tenanted to Managed. It also said it had taken the decision to sell 10 Tenanted pubs which no longer meet its criteria. Since the half year end, the group has entered into agreement to sell two of these pubs for a total exceptional profit of £1.4m.

The average length of tenure of its current Tenants is 6.3 years. It refurbished 19 pubs in the period.

The company said that its Tenanted service agreement, which was launched last year, has now been taken up by 70% of its estate.

Beer volumes

Total beer and cider volumes were down 1% although the company said it made good progress on its long term strategic initiatives, with Cornish Orchards “successfully integrated and trading strongly”; a successful launch of its new-wave craft lager Frontier; and its new “Made of London” advertising campaign being “well received”.

Chief executive Simon Emeny said: “Good underlying momentum in the first half has continued over the last seven weeks, with growth in Managed Pubs and Hotels like-for-like sales of 7.8% over the 33 weeks to 16 November 2013, as we continue to invest in all aspects of our customer proposition to ensure the very best customer experience. Over the same period our Tenanted Inns like for like profits were up 2% and total beer and cider volumes have grown 1%.

“Whilst current trading remains strong, we are mindful that there has been a benefit from exceptionally good weather over recent months. Nevertheless, our London and South East based portfolio of well invested quality pubs, a strong balance sheet and consistent long term strategy leave us well placed for the future and we remain confident of achieving our full year targets.”

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