Fuller’s – the virus has cost in excess of £10m in trading, comfortable with current levels of trade: Fuller’s has estimated the cost of coronavirus on trading at in excess of £10m. The company reported over 75% of its managed pubs and hotels and almost all tenanted inns have already reopened. It said it was ‘too early to draw meaningful conclusions for the longer term, but (it was) comfortable with current levels of trade’. Chief executive Simon Emeny said: “When we released our interim statement in December 2019, we were on track to finish the financial year in a good position having received the proceeds from the sale of the Fuller’s Beer Business and with a clear future path laid out before us. It had been a transformational year for Fuller’s – but we would never have anticipated that we would end it in March with the whole hospitality industry in a state of closure and with no income stream. Against this backdrop, it is easy to forget that the financial year started in April 2019 with the sale of the Fuller’s Beer Business to Asahi Europe Ltd for an enterprise value of £250 million, followed in October 2019 by the acquisition of Cotswold Inns & Hotels – seven stunning hotels in the heart of the Cotswolds – from existing bank facilities. The decision to sell the Fuller’s Beer Business at that time has proved fortuitous and ensured we were in a strong position, with substantial liquidity headroom, when the coronavirus pandemic struck. While it is still early days, it is pleasing to see our teams welcoming guests back and we have taken a range of actions and measures to ensure our pubs are safe and inviting. The first stage of our three stage plan saw 27 pubs open on 4 July 2020 and another 136 since – meaning over 75% of our managed pubs and hotels are now open. Almost all our tenanted inns have also reopened. While it is too early to draw any meaningful conclusions, we are comfortable with the level of trade and we continue to monitor footfall in those areas where our pubs are not yet open. While we are prepared for business, particularly in London, to take some time to return to normal, we are well placed to satisfy the uptick in demand for staycations as many customers holiday closer to home – an opportunity we are supporting with marketing activity for our Beautiful Bedrooms. We continue to focus on minimising cash burn and returning to profitability. During August, we will gradually reintroduce rent for Tenants – but on a tapered basis to help with their own return to sustainable trading levels. In these uncertain times, it is challenging to accurately predict the future. But having begun reopening our pubs nearly four weeks ago, it is encouraging to see customers returning to our pubs and this steady growth in consumer confidence will be the key to success – not just of our company or our industry but the economy as a whole. We have a well-balanced estate geographically and that, combined with a freehold asset base and the calibre of our people, puts us in a stronger position than many to build towards sustained profitability in this full year and a strong start to the FY2022 financial year. A freehold approach is a fundamental foundation of our long-term business. It is not always fashionable, but yet again it underpins our ability to survive the toughest of times. We are proud to be 175 years old this year and with our balanced and well-invested estate, prudent approach to finance and amazing team of dedicated people, we will still be here for generations to come.” The company reported profit before tax of £174.5m in the 52 weeks ended 28 March having sold its beer division to Asahi for an enterprise value of £250m in April 2019. The company has also sold the freehold of The Castle, Acton for £10.3m. 

 

Compass Group reports revenue down 44% in Third Quarter: Contract caterer Compass Group has reported it is working to re-open sites after a Third Quarter that saw organic global revenue down 44% – and 55% down in Europe. Dominic Blakemore, group chief executive, said: “Throughout the covid-19 pandemic our priority has remained the health and safety of our employees and consumers. Trading has been challenging, but we continue to manage the business to protect the interests of all our stakeholders, including our people and the communities in which we operate. We are working with our clients to help them reopen and bring their teams back safely. We are also seeing encouraging signs of an acceleration in first-time outsourcing opportunities. Our focus on operational execution, our scale, and our strengthened balance sheet will enable us to succeed in this new environment and further consolidate our position as the industry leader in food services. In a quarter when lockdown measures were at their most severe in our major markets, the steps taken to contain the spread of the virus impacted our sectors in different ways. Performance in healthcare and defence, offshore and remote was good. Our education and business and industry sectors were mostly closed in April and May, and started to cautiously reopen in June, while sports and leisure remained fully shut. By the end of June, about 60% of our business was open, compared to 55% by the end of May. Retention was robust at 95% and we have started to see attractive new first-time outsourcing opportunities. Group organic revenue declined by 44% in the third quarter and by 14% for the nine months to 30 June 2020. Our sites are re-opening with best in class Health and Safety protocols, and we are actively entering into contract re-negotiations with our clients to recover the costs of operating safely and with lower attendance levels. We began to adjust our business to the new trading environment and in the third quarter spent £42 million in resizing costs in North and South America. Encouragingly, the group’s operating margin improved within the quarter, and the drop through improved further to 20% in June. As a result, the group’s operating margin was (6.3)% in the third quarter and 3.9%5 for the nine months to 30 June 2020.”

AB InBev reports impact of coronavirus: AB InBev has reported its performance in the second quarter was materially impacted by the covid-19 pandemic, as expected. It stated: “As the quarter progressed, however, we saw considerable improvement. April volumes declined by 32.4%, May volumes declined by 21.4% and June volumes grew by 0.7%, demonstrating the resilience of the global beer category.” Paula Lindenberg, president, Budweiser Brewing Group UK&I, said: “During this period, which saw the UK began to ease some lockdown restrictions and adapt to a new normal, Budweiser Brewing Group continued to support our employees, customers and communities, whilst working with our partners and the industry to support a safe re-opening of the hospitality sector. In Q2, our UK business grew in market share to become the largest brewer by volume YTD, showcasing the strength of our brand portfolio. Our brands, including Budweiser, Stella Artois, Corona and Bud Light performed strongly this quarter, seeing significant growth in the Off-Trade. In Q2, Stella Artois and Budweiser were the #1 and #2 most valuable beer brands in the Off-Trade, and Corona was the #1 most valuable World Beer brand in UK Grocers. We also continued to meet the demand for no and low-alcohol options, which grew in value and volume as many Brits continued to moderate drinking during this period. We expanded our portfolio with the launch of two new alcohol-free beers: Budweiser Zero and the award-winning Stella Artois Alcohol-Free. In addition to favourites like Beck’s Blue and Bud Light, we offer people choice in how they can moderate alcohol intake without having to sacrifice on the taste of their favorite beers. Our growth reflects the strength of our portfolio of brands. People are choosing the brands they know and love, and we’re proud that the quality of our beer portfolio and our iconic brands meet the demands of Britain’s beer drinkers today. In response to the wide-reaching impact of covid-19 on the hospitality sector, we launched Save Pub Life in March to provide urgent financial support to the trade during the closure period. The initiative enabled pubgoers to buy a gift card to spend at their local pub once it reopens, and Budweiser Brewing Group matched the value of the gift cards to pubs. The programme sold 20,000 gift cards, funneling over £1 million directly into the pub sector throughout the UK. Now, during the re-opening phase, we have evolved the Save Pub Life platform to provide a robust package of support for our pub and bar partners. To help them re-open safely and effectively, we are offering a wide range of support, including access to discounted PPE, exclusive partnerships with BT Sport and Opus Energy, and an app to enable mobile ordering, amongst more. Alongside renowned agency Studio Number One, Stella Artois launched ‘Together Apart Street Art,’ creating striking street art which helps customers adhere to social distancing outside of pubs and bars in a beautiful way, without using barriers. It launched at London’s iconic Truman Brewery and will be expanded to 1,000 pubs across the country. We’re proud of our teams across our business and in our breweries who have adapted and evolved with the circumstances and changes that covid-19 has brought. Looking forward, we will be harnessing the strength of our brand portfolio and the dedication of our teams to play a leading role in the recovery of the hospitality sector and the wider industry.”