Fuller's reports 'strong' results and says it is 'optimistic' despite budget challenges

Fuller’s has reported increases in both profit and revenue over the last six months and said it is optimistic about the future” despite the “fresh challenges presented by the Chancellor’s recent budget”.

 

In the 26 weeks to 28 September 2024 the pub and hotel company recorded revenues of £194.1m, up from £188.8 during the same period in 2023.

 

Adjusted profit before tax stood at £17.6 across the period, up from £14.5m in 2023.

 

The business said like-for-like sales across its managed pubs and hotels were up 5.2%, with food sales seeing a 5.5% uptick, drink sales a 4.9% increase and accommodation sales a 4.9% boost.

 

During the six-month period Fullers invested £10m across its estate, with plans to invest a further £20m in H2.

 

It sold 37 tenanted pubs to Admiral Taverns for £18.3m and the Mad Hatter hotel for £20m. The business also acquired seven Lovely Pubs sites in Warwickshire for £22.5m.

 

Chief executive Simon Emeny said: “Following our strong first half results, we have continued to build on our momentum with like for like sales for the 32 week period rising by 5.4%. This sustained underlying performance, combined with the added benefit from our Lovely Pubs acquisition and encouraging Christmas bookings up 15%, provides us with confidence that we are on track to meet current market expectations for the financial year.

 

“In summary, everything that is in our control is going well. We have an outstanding, predominately freehold, well-invested estate, a driven and motivated team – who are supported by continuous development – and a clear, consistent strategy.

 

"We are in excellent shape, and despite the fresh challenges presented by the chancellor’s recent budget, we remain positive and optimistic about the future.”

 

Fuller’s was one of the 209 hospitality businesses to sign a letter to chancellor Rachel Reeves detailing the consequences of the increase in employer taxation, announced in last month’s budget.

 

The government is to increase the rate of employer Class 1 National Insurance contribution rates (NICs) from 13.8% to 15%.

 

It is also reducing the per-employee threshold at which employers become liable to pay National Insurance from £9,100 to £5,000 a year, from 6 April 2025.

 

Analysis by UKHospitality revealed the increases to employers’ NICs and wages will hit hospitality harder than other industries, with a 10% rise in the cost of employing a worker, amounting to at least £2,500 per employee.

 

In a letter to the chancellor, the bosses of Fuller’s, Stonegate Group and Whitbread, among others, said: “There is no capacity to pass the costs onto customers. Businesses would be reluctantly forced to raise prices by 6-8%, fueling inflation, yet could not realistically do so as our customers are at the end of their ability to pay more.

 

“We understand that these proposals come at an immediate financial cost, but we are absolutely firm in our belief that the lost growth potential which would result from inaction would be substantially more expensive, for the economy, for society and for the public finances.”