Fuller Smith & Turner PLC (AIM:FSTA) has warned that its earnings for the current financial year to 1 April 2023 will miss market expectations with the wave of train strikes impacting its sales.
In a trading update, the pubs and hotels operator estimated that industrial action has reduced its sales by £4mln since the start of October, adding that “the consequent impact on profitability means that we now expect to report earnings below market expectations for the full year”.
Compared with pre-pandemic 2019, sales over the four-week Christmas and New Year period declined by 5% due to the train strikes, it said.
On a more positive note, Fuller’s said the underlying positive sales momentum of the business has continued with like-for-like sales for the 43 weeks to 21 January 2023 up 20% on the prior year, despite the challenging consumer backdrop.
Like-for-like sales for the 43 weeks were 97% higher than in full-year 2020, before Covid struck. Sales for the four-week festive period increased by 38% on last year, when Covid restrictions and work-from-home guidance impacted trading.
“We are encouraged by our underlying sales performance,” commented Simon Emeny, chief executive of Fuller’s in the trading statement. “While it is frustrating that the train strikes have set back our reported sales and earnings, it is reassuring that we are achieving our anticipated sales trajectory in periods unaffected by strikes.
“While ongoing strike action will dampen sales, demand from customers remains good and we are optimistic that 2023 will deliver further sales growth through a busy calendar of events, and as office workers and tourists continue to return to the capital.”
Noting that high inflation is impacting the company’s operating costs and margins, Emeny said the company is focused on measures to mitigate these costs.