Fuller's reports "very positive" full-year results with pre-tax profit up 3% to £30.3m

Every business division was in growth, with like-for-likes in the managed estate up 4.2%, the tenanted arm up 4%, and the Beer Company up 2%. EBITDA increased 3% to £47.8m, adjusted earnings per share rose 7% to 39.82p and final dividend increased 8% to 7.6p.

However, the company said it experienced “the most volatile and weather-dependent start to a year that we can remember”, with like-for-like sales in the managed arm down 2.3% in the eight weeks to 26 May, despite 7.2% sales growth overall in the division.

Revenues in its managed arm grew 6% to £155.7m. The 13 pubs and hotels acquired in the year added 4% and the one week shorter reporting period reducing the figure by 2%. Operating profits before exceptionals increased at a lower rate of 1% to £18.3m, resulting from a reduced operating margin. EBITDA grew 1% to £26.9m.

The like-for-like sales growth in the year was predominantly due to increasing the number of covers rather than price, Fuller’s said. Margins improved through holding supplier increases below general food inflation and “enhancing kitchen efficiency”.

Fuller’s attributed the fall in operating margin in the division to three main factors: first, lower margins on drinks as it could not pass on the full 7% duty increase in March 2011 by raising prices further; second, one-off head office investments made to enhance food development teams, scheduling systems and digital presence; and the short-term impact of acquisitions that required closures for refurbishment and, in the case of the development sites, were loss-making prior to their transformations.

Significant investments were made in 18 sites in the year, totalling £4.2m. They are “already showing good returns”, Fuller’s said.

Fuller’s said cask ale growth outperformed growth in lager in the managed arm this year, “indicating both a shift in consumers’ tastes, with craft beer the order of the day, and interesting developments in our range”.

Revenue in the tenanted arm grew 2% to £27.5m, driven partly by acquisitions, with 17 added to the division in then year (there were four disposals).

Fuller’s said it trained “more tenants than ever” in the year and continued to invest in the estate, investing £0.6m last year across 26 pubs. Nearly 50% of its pubs have been upgraded in the past two years.

Revenues in Fuller’s Beer Company increased 5% to £109.1m, with operating profit up 2% to £9m as operating costs increased 5%.

On a comparable 52 week basis, total beer volumes increased by 2% and own beer volumes were 1% higher than last year, driven by volumes of own beer sold in Fuller’s pubs growing 3% and export volumes up 22% in the year.

Michael Turner, chairman of Fuller’s, said: “I am pleased to announce a very positive performance in a year where we have laid strong foundations for future growth following capital investment of £75m across the business, which included the acquisition of 30 carefully selected pubs.

“As the summer sun chases away the economic gloom, we now look ahead to what promises to be a historic time for the country. This coming weekend we have the Queen’s Diamond Jubilee, followed by the European Football Championships and then the Olympic games. With our pub estate based in London and the south east and London Pride as our flagship beer, we aim to give our customers a wonderful summer to remember.”