Fuller, Smith & Turner hiked its annual dividend by 30% on Thursday 15 June as strong sales of cocktails and rosé wine helped the British pubs group continue its recovery from the pandemic, despite a hit from transport strikes and high inflation.
Details
"I am more optimistic about the future than I have been since before the pandemic. While the well-documented inflationary environment has been a challenge, there are positive signs on the horizon," CEO Simon Emeny said in a statement.
Resilient customer spending has helped the UK hospitality industry pass on rising costs, but business was disrupted by widespread strikes at the end of 2022 and early this year.
Train and tube strikes hit particularly hard in central London, where many of Fullers pubs are located. It estimated the disruption lopped more than £5 million off sales in the financial year ended April 1.
Fullers reported a 76% rise in adjusted profit before tax to £12.7 million, but that was still below 2019 levels.
Shares in the company, which have gained almost 15% so far this year, were up 1% in morning trade on Thursday 15 June.
"We believe Fuller's underperformance in profit recovery can be addressed as pandemic recovery trends and cost headwinds normalise," Stifel analysts said in a note.
Emeny said profit margins, which have been hit by higher energy, food and wages costs, were expected to improve, though the company does not anticipate a full recovery this year.
Fullers has this year increased drinks prices by 6.8% and food prices by 8%.
Additional Information
Like-for-like sales were up almost 14% in the first 10 weeks of its new financial year, including a 26% jump in rosé wine and strong demand for cocktails.
Read More: British Pub Group Fuller Warns On Profit As Train Strikes Hurt Sales
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