Fuller Smith & Turner PLC (AIM:FSTA), the hospitality group, offered signs of recovery to London’s hospitality sector after it reported better-than-expected full-year results.
The pub and hotel operator saw a 33% spike in revenues compared to its 2022 financial year, with sales coming in at £336.6mln.
Strong momentum continued past the 2023 financial year with like-for-like sales up almost 14% in the first ten weeks of 2024.
London was a key driver for this success after sales in the capital jumped by around 40% year-on-year.
Impressively, the performance in the City was against the backdrop of strikes, downtrading and an increasing number of businesses working from home.
The London-based firm estimates the industrial action impacted sales by as around £5mln over the financial year.
Growth in other areas also helped lift revenues, such as the opening of a new site at Heathrow Airport, said Neil Shah at research house Edison.
Shah added: “The company plans to continue these streams of growth, noting new establishments to open in the City and Ealing as more city workers and tourist return to London.”
Net debt at the group rose to £133mln in 2023, most of which is on variable rates.
Despite planning disposals – such as The Mad Hatter hotel for £20mln – if interest rates continue to rise it could dent financials, Peel Hunt warned.
Increasing wages, inflation and weaker pricing power could also hurt operations going forward, the investment bank added.
Fuller shares rose almost 3% on Thursday to 565p, around 6% below Peel Hunt’s 600p target price.