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Fri 18th Nov 2016 - Fuller’s boss – ‘there are changing times head’
Fuller’s boss – ‘there are changing times head’: Fuller’s chief executive Simon Emeny has warned of “changing times” ahead with the impact of the National Living Wage, business rate revaluation and Brexit. His comment came as the company reported sales up 11% to £197.6 million (2015/16: £177.7 million) in the 26 weeks ended 24 September. Ebitda was up 9% to £36.3 million (2015/16: £33.3 million). Managed pubs and hotels grew like-for-like sales by 3.4%, supported by further growth in food, with a rise in operating profit before exceptional items of 6%. Tenanted Inns operating profit before exceptional items was marginally down 1% and like-for-like profit down 2%. Craft beer brands showed strong growth for The Fuller’s Beer Company and operating profit before exceptional items rose by 8%, although total beer and cider volumes decreased by 4%. Statutory profit before tax was £21.4 million (2015/16: £21.2 million). The company acquired two new managed pubs, The Gun on the River Thames in Docklands overlooking The O2 arena, and The Half Moon, Herne Hill. It added 16 boutique hotel rooms to our estate, which is well-positioned to attract expected additional inbound tourists and staycationers. Of current trading and outlook, the company reported managed pubs and hotels like-for-like sales are up by 2.6% for 33 weeks. Tenanted Inns like-for-like profit is down by 2% for 33 weeks. Total beer and cider volumes are down by 5% for 33 weeks. It has acquired The Albert Arms in Esher – a freehold site and its first pub in the area. Fuller’s has started development schemes in six pubs since the half year, with 15 more planned before the year end – and opened The Stable, Exeter in October 2016. Emeny said: “We have had a good start to the year and our managed pubs and hotels, which represent the largest share of our profits, have yet again led the way with a rise in like for like sales that has outperformed the market. Trading since the period end has been good and as expected, with comparisons to last year being heavily influenced by the 2015 Rugby World Cup. For the first 33 weeks, like-for-like sales in our managed pubs and hotels grew 2.6%, Tenanted Inns like-for like profits declined 2% and Fuller’s Beer Company volumes fell 5%. There is no doubt that the UK economy is facing some significant challenges. The impact of increases in business rates and the National Living Wage, combined with uncertainty around the UK’s departure from the EU, make for changing times ahead. However, Fuller’s has a long-term, strategic vision, a solid balance sheet and a predominantly freehold estate, which is well-invested and supported by excellent, engaged team members and dedicated, skilled management. These are the qualities needed to continue to delight and excite our customers, provide a good return for our shareholders and attract the best new recruits to our business. Fuller’s has a long history in both retailing and brewing and we have progressed through changing times over nearly two centuries. The current political environment makes for uncertain times once again and there are cost pressures on the horizon in the form of a steep rise in business rates, combined with an increase in the National Living Wage. However our clear, differentiated strategy, executed with outstanding standards and supported by a solid balance sheet, provides the stability and long-term vision needed to steer a course through any future choppy waters. There have been a number of highlights over the last six months and I am particularly delighted with the progress we have made in improving awareness of our fantastic fresh food, the wide range of Fuller’s craft beer and our continued focus on our people. We have seen further internal promotions and a reduction in labour turnover.” Chairman Michael Turner added: “These good results have been driven by further growth in our managed pubs and hotels division, which has seen like for like sales rise by 3.4% (2015/16: 5.6%), once again outperforming the market. Our Managed Pubs continue to deliver a very clear customer offer based around delicious, home-cooked, seasonal food, a great range of premium drinks, well-invested pubs and excellent customer service. Our continuous programme of refurbishing and investing in our existing estate, together with targeted acquisitions, ensures we look after our existing customers while attracting new guests in new locations. Times have been tougher for our Tenanted Inns and The Fuller’s Beer Company, but as a long-term business, we look with optimism to the future. We have a plan in progress to create a Tenanted division that better reflects the Fuller’s vision and values and a similar forward looking approach for The Fuller’s Beer Company. Our commitment to developing balanced beers that pack great flavours, while remaining moreish, has resulted in good sales for our craft keg range and at Cornish Orchards, a similar ethos to making cider has resulted in sales growth in this important market sector too.”


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