Fuller's strong performance boosted by hotels and managed pubs

Revenue in the group as a whole rose by 6 per cent to £241.9m for the 53 weeks ended 2 April 2011, while adjusted profit before tax rose by 10 per cent to £29.3m.

The strong results were held up by growth in Fuller’s managed pubs and hotel business, as well as strong food sales throughout its operations.

However, the group did not emerge unscathed from the challenges facing the beer and pub trade. The damaging effects of duty rises can be seen in the performance of both Fuller’s Tenanted Inns business, where profits fell 1 per cent, and Fuller’s Beer Company, where operating profits also fell 1 per cent.

Although overall beer volumes rose by 2 per cent, boosted by export markets, own beer volumes were 2 per cent lower than last year, while own beer sold in the UK fell 4 per cent. In contrast, export volumes rose 16 per cent, meaning that one in seven barrels of beer produced by Fuller is now exported.

Managed pubs and hotels​

Fuller currently operates 162 managed pubs and 486 bedrooms across 22 properties. It has agreed to purchase a further three properties under its Managed Pub and Hotels division since April this year.

Revenue in the division increased by 7 per cent over the year to reach £147.2m, while operating profit grew by 15 per cent to £18.1m.

Accommodation, food and drink sales all showed strong like for like sales growth of 11.6, 5.1 and 3.2 per cent respectively.

Moving forward, Fuller’s said it plans to further expand both the food and accommodation side of it business, although “not at the expense of our drinks sales”.

Food, it says, is “an important growth lever”, and the group plans to maximise the potential of the food opportunity in each site as it refurbishes its estate. It also plans to “expand further” its hotel business, starting with the addition of the recently acquired 42 bedroom White Swan Hotel in Stratford-upon-Avon.

Tenanted Inns and beer​

Fuller’s also operates tenanted inns around the country, where the group owns the pub but it is run by a self-employed entrepreneur who sells Fuller’s beers and operates under its brand.

The company currently operates 196 tenanted inns, which are eight fewer than last year, and has already agreed to acquire an additional site since April this year.

Revenue in its Tenanted Inns business grew by 3 per cent to £26.9m, but high operating costs pushed down like for like profits by 1 per cent.

Fuller’s Beer Company saw revenue increase by 6 per cent to £104.1m, driven by an overall increase in beer volumes combined with higher duty rates.

However, high costs resulting from an increased proportion of packaged beer going to the export and off trade markets pushed operating profits down by 1 per cent compared to last year.

“With wages in the UK running behind inflation, our customers’ incomes are being squeezed and we will have to work hard in the current year and beyond to earn their custom,” said Fuller’s chairman Michael Turner.

He added, however, that the group is well placed to make investments going forward, and that he expects it will benefit from the ‘London factor’ in 2012.