Fuller’s serves up soaring profits despite cost-of-living crisis

13 June 2024, 09:14

A Fuller's pub in central London.
Coronavirus – Thu Nov 26, 2020. Picture: PA

Pub group defies struggling economy to post rise in sales, driven by strong business in central London.

Pub group Fuller, Smith and Turner’s sales rose by a tenth last year, as the company defied high inflation to post a nearly 60% rise in profit.

The London-listed company said like-for-like sales rose 11% for the year ending March 30, while revenue rose 7% to £359.1 million.

Fuller’s said its central London locations brought in particularly strong trading, with pubs in “urban” locations enjoying a yearly rise in like-for-like sales of 16%.

It comes after a tricky period for pub operators, who emerged from pandemic-related closures to be met with sky-high inflation and energy costs through 2022 and 2023.

The cost-of-living crisis has also combined with rising labour costs, creating a deadly cocktail for some groups.

More than 500 pubs closed their doors for good last year, data from the British Beer & Pub Association said in January.

However, Fuller’s said today it believes these pressures have started to recede.

Simon Emeny, Fuller’s chief executive, said: “As of today, those inflationary pressures – especially in regard to food and energy – have reduced, which gives us additional confidence in the coming year.

“We have continued to build on the strong momentum of the last year with like-for-like sales in the first 10 weeks of the year rising by 4.4%.”

Fuller’s recently sold 37 pubs to Admiral Taverns for £18.3 million, and sold off its south London pub The Mad Hatter for £20 million, in a deal expected to complete next month.

At the same time, it has reinvested in a swathe of new locations, spending £27.2 million last year on new parts of its estate.

Mark Crouch, analyst at investment platform eToro, said: “Inflationary pressure is still causing a headache in this industry, leading to unavoidable price hikes to defend already watered down profit margins.

“The good news however is that some of those pressures, specifically in food and energy, have begun to relent.”

“London is a key market for Fuller’s and according to current data, tourist numbers are on the rise and set to reach pre-pandemic levels within the next couple of years.

“Couple this with a steady pick-up in more of us returning to the office and the signs are positive for Fuller’s.”

By Press Association