Strong growth in food and accommodation at Fuller Smith & Turner PLC (LON:FSTA) more than offset falling beer and cider sales as the brewery notched up another good year.
For the 53 weeks to 1 April, Fuller’s posted an adjusted pre-tax profit of £42.9mln, 5% higher than the £40.9mln posted in 2016.
That was on revenues of £392mln – a 12% year-on-year jump (2016: £350.5mln).
As a result, the total annual dividend was boosted by 5% to 18.8p, in comparison to the 17.9p Fuller’s paid out last year.
The managed pubs and hotels division was the star performer with like-for-like sales growth of almost 4% – driven largely by improved food and accommodation sales.
That more than offset a surprising fall in beer and cider volumes, which slipped 2% over the year.
Industry headwinds
Despite the decent headline figures from last year, Fuller’s was more cautious in its outlook for the coming 12 months.
It highlighted several “impending cost pressures” that it expects to impact not just itself, but the industry as a whole over the next year or two.
Fuller’s pointed to higher business rates, the new apprenticeship levy, rises in the National Living Wage and recruitment pressures as a result of Brexit.
Despite the various issues, the company told investors it is “well-positioned to face the future”.
‘Another good year,’ says CEO
“It has been another good year for Fuller's with a strong set of results for the company,” said chief executive Simon Emeny.
“Food and accommodation have driven like for like sales growth in our managed pubs and hotels and the targeted investments we have made in both new sites and redeveloping our existing estate have generated excellent returns.
"There are a number of headwinds that will have a significant financial impact on both Fuller's and the industry as a whole, but we face the future in a strong position.”
Beer and cider sales back on the up
Despite Emeny’s “realistic and cautious” attitude, the company has carried the momentum it built up in 2016 into the new year.
The managed pubs and hotels division has seen like-for-like rise by 6.6% in the first nine weeks of this 2018 financial year, while punters have also rediscovered their love for a pint, with total beer and cider sales up 7% so far.
Like-for-like profits at Fuller’s Tenanted Inns division are also up by 5%, possibly a reflection of the £22mln invested into that business last year.
Shares lost 0.4% to trade at £10.71.