Fuller's reports tough times for tenanted division

Emeny was speaking to MCA​ following publication of the group’s results for the 26 weeks to 24 September.

Managed sites grew like-for-like sales by 3.4%, supported by further growth in food, with rise in operating profit before exceptional items of 6%.

The company admitted “times have been tougher” in the tenanted division, where like-for-like profit fell 2% with profit before exceptional items down 1%.

The company said there was a plan in progress to “create a tenanted division that better reflects the Fuller’s vision and values”. As part of this plan, 18 sites – about 9% of the tenanted estate – have been earmarked for disposal.

Emeny told MCA​ that the decline in the tenanted estate had to be seen in the context of years of outperforming the market. He said the company would be working with tenants to strengthen their offer, with a particular focus on food.

Total beer and cider volumes fell 4% in the half-year but operating profit before exceptional items rose by 8% and craft beer brands showed “strong growth”.

The Stable continued to show strong growth in a period in which Fuller’s increased its share in the company to 76%. The brand’s first operations director was appointed via the internal promotion of David Gough.

Emeny told MCA​ that the focus for The Stable in the second half of the year was on consolidation before further growth in 2017.

Over the 33-week period, managed like-for-like sales were up 2.6% with tenanted inns like-for-like profit down by 2% for same period. Total beer and cider volumes were down by 5% for 33 weeks.

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. 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.”