Fuller's investment into estate eats into half-year profits

By Emily Hawkins contact

- Last updated on GMT

Half-year results: Fuller's said investment in its estate was the right decision to ready its pubs for the busy winter (image: Mark Hillary, Flickr)
Half-year results: Fuller's said investment in its estate was the right decision to ready its pubs for the busy winter (image: Mark Hillary, Flickr)

Related tags: Fullers

Fuller’s said an investment in its estate will ensure it is best placed for the Christmas period despite its half-year profits dipping as a result.

The pubco saw its sales rise 6% in the first half of its financial year thanks to a warm summer and World Cup fever.

Revenues rose to £222.1m, compared to £209.3m in the same period last year.

Like-for-like profit at its managed pubs increased 4.4% and at tenanted inns increased 2%. Its total beer and cider volume sales also increased by 0.5%.

However, adjusted profit before tax fell 1% to £23.6m, from £23.8m in 2017. Costs of £900,000 from investments in the pubco’s estate were put down as the cause of this drop.

Right decision

Chief executive Simon Emeny​ said: “Each division is delivering growth and we continue to benefit from having a well-balanced business.”

“While our revenues have continued to grow, we experienced a small drop in group profits – however, this should be taken in context.

“We made a conscious decision to front-load our investment programme – impacting our profitability by £0.9m.

“Although we would have seen profit increase had we not taken this action, we believe this is the right decision and ensures our estate is in the best possible position to benefit from the busy Christmas period and beyond.”

New sites

It opened a new pub in Surrey,​ added bedrooms to one of its Ealing pubs, and is set to open a site at Euston Station next month.

Emeny said he was pleased with the results: “Each division is delivering growth and we continue to benefit from having a well-balanced business.

“Our excellent management team has further strengthened the business through a clear vision, a strong set of values and a commitment to growth through offering an outstanding customer experience and recruiting, developing and retaining the best people.”

Emeny described the pubco as well-placed to handle Brexit​, which is set to occur on the penultimate day of its financial year (30 March 2019).

“With a first-class team of people, a well-invested pub estate and a portfolio of outstanding brands, we are ready and able to face the future,” he said.

What's next?

“The second half of the year is also an exciting time for Fuller’s.

We are installing our new canning line at Dark Star,​ will be brewing our second suite of Fuller’s & Friends collaboration beers and building on the early work of our Fuller’s First initiative to grow the share of our own beers in our managed and tenanted estates.

“We will also be optimising and driving business benefits from the new ERP system and launching an online B2B sales platform,” Fuller’s chief executive Simon Emeny said.

Related topics: Other operators

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