Fuller’s pumped £26m into estate during last financial year

The group released its financial results for the 52 weeks to 26 March 2022 and reported revenues had recovered to £253.8m – up from £73.2m for the same period in 2021 – despite being impacted during the year by coronavirus-related closures, restrictions and work from home guidance.

Adjusted profit before tax returned to growth at £7.2m against a loss of £48.7m in 2021 and net debt excluding leases reduced to £131.9m, while headroom for future growth is in place with new four year £200m bank facilities.

Chief executive Simon Emeny said: “During the year, we have returned to profitable growth with revenues of £253.8m and adjusted profit before tax of £7.2m.

“It is testament to the dedication and resilience of our team, across the business, that we have managed to trade profitability under such difficult circumstances.

“As a company, we have used the past two years wisely. While steering the business through challenging trading conditions, we have also completed a number of strategic projects that will deliver benefits over the coming years.”

He stated the business had successfully honed its offer, completed a digital transformation project, rolled out a new central finance system, delivered an employer brand and new recruitment platform as well as having refined its branding alongside reviewing and evolving its long-term strategy.

The company also reported its new directors’ valuation of its total property portfolio at £995.6m – about £400m above its current book value, implying an adjusted net asset value per share of £13.80.

New strategic framework

Emeny said: “The new strategic framework, driven by our purpose to create experiences that nourish the soul and the pillars that underpin it, will give everyone in the company clear direction and ensure we work as a team, from our kitchens to our boardroom, to deliver excellent results for all our stakeholders.

“In addition, we have worked hard to strengthen our balance sheet and highlight how we will continue to deliver long-term value through the application of our capital allocation framework. The completion of the bank refinancing provides us with the headroom to grow and the directors’ valuation of the estate demonstrates that the implicit net asset value per share of our business is £13.80.

“Through the successful delivery of our strategic objectives, we plan to grow this value over the long term. “

With many sites in London, Government advice for people to work from home over last winter has meant the business took a hit during this time.

“While the last financial year has adversely affected Fuller’s – with some of our key sites being the most impacted by the pandemic, we have built a balanced business which positions us well to navigate the continued evolution in consumer trends and behaviour,” he chief executive added.

“The current year has started well. We welcome the gradual return of workers to the city and tourists to central London, which is now underway, and we are seeing steady growth in our total weekly sales, which will have a positive impact in FY2023.”

He expanded on how trade in the capital is gradually returning and the impact this has had on the company’s sales.

Trade report

Emeny said: “Momentum in the city and central London continues to build, and we are confident that we will see the benefits of our estate’s composition come into play.

“In the first 10 weeks of the new financial year total sales are up 4% on pre pandemic levels and are up 130% on the same period last year.

“On a like-for-like basis, excluding closed periods, sales in the first 10 weeks of the year are up 21.4% on last year. Furthermore, the investments we have made in the last two years are not yet comparable and the return on our capex projects will benefit the current year’s results.”

While market conditions remain challenging with fragile consumer confidence, alongside well-documented high inflationary pressures, Emeny stated the pub company’s offer is slightly protected.

“Our premium offering provides some protection from inflation, however we are certainly not immune from its effects. In common with our peers, we have seen significant increases in food and utility costs and are proactively working with our suppliers, and actively managing our offering, to mitigate the effects of inflation without impairing the customer experience,” he said.

“We remain confident that, despite the current market challenges, we will maintain our growth trajectory for revenues and profits and as such we are pleased to announce a final dividend of 7.41p, which means a total dividend to shareholders of £7m for the year.”

Furthermore, the Fuller’s boss highlighted how the year of highs and lows has been volatile, the new financial year began on a high.

He said: “We may be facing some bracing headwinds, especially around energy and inflation, but we are well placed to tackle the issues with clear measures and solutions in place.

“The great British pub has always been, and will always be, an affordable treat and has proved its resilience over time with its position at the very heart of the communities we serve. With an amazing team of people, great pubs and a clear strategy, we look forward to the future with confidence and excitement.”