Fuller’s sees lfl sales up 13% in recent trading, helped by a strong performance in central London: Fuller’s has reported a 13% increase in like-for-like sales for the seven weeks to 12 November 2022 versus the prior year, helped by like-for-like sales growth of 20% across central London, as it said it was well-placed to deliver long-term growth, despite the challenging environment. The Simon Emeny-led company said revenues grew to £168.9m in the 26 weeks to 24 September 2022 (H1 2022: £116.3m), with like-for-like sales up 20% compared to the prior year, with central London growing by 67%. The business said that adjusted pre-tax profit for the half year increased to £9.8m (H1 2022: £4.6m) as the benefit of the sales recovery exceeded inflationary increases in the cost base. In the group’s Managed Pubs and Hotels business, like-for-like sales grew by 20% compared with the prior year, with total sales increasing by 47%. Compared to pre-pandemic levels (PY-2), like-for-like sales were at 96%, as momentum in the City grew over the period. For the seven weeks post period end they are at 101%. The company said: “While overall Ebitda was £28.9 million, it is worth noting that Ebitda for the Managed Pubs and Hotels business was £30m, which represents an increase of 18% from prior year (H1 2022: £25.4m). However, Ebitda margin fell from 24.3% to 19.5%. This is predominately for three reasons. The VAT rate on food and accommodation has increased from 5% in the prior period to 20% in the current period, utilities has increased by £3.1m from the prior year, equating to a 2% decline in margin, and thirdly, in the prior year we received a number of grants from the government as well as a business rates holiday for part of the period. On a like for like basis, Ebitda margin would have been 24.8% compared with the prior year of 24.3% however, given the nature of the adjustments, the current reported margin is more reflective of future expectations for margins.” The company’s Tenanted Inns revenue grew from £11.9m to £15.1m in the current period representing a 27% increase in sales. Ebitda margin also improved from 47.1% to 51.7%. It said: “The low-cost base of the Tenanted Division means that it is a highly profitable part of the group and continues to trade strongly despite the economic backdrop.” The company reported central costs were £9.2m in the period which was an increase of £700,000 on the prior period, mainly due to increased payroll costs as recruitment was paused during lockdowns. While the quantum of central costs was up, the percentage to overall revenue was down from the prior period at 5.4% (H1 2022: 7.3%). During the period, the group refinanced all its banking facilities and agreed a new unsecured banking facility of £200m, split between a revolving credit facility of £110m and a term loan of £90m. These facilities have been agreed for a tenure of four years through to May 2026. It also reported continued strong performance in its hotels with revenue per available room (RevPAR) increasing by 17% against H1 2020 to £94.65. Its net debt is £129.2m (H1 2022: £131.5m) with the cash generated by the business funding investment in the estate and returns to shareholders. The company said that Christmas bookings are strong and that it expected an additional uplift from the World Cup. It said that its digital transformation work had been completed with new look websites and enhanced consumer marketing capability. The business said it was implementing a wide range of energy reduction initiatives as part of its “Life is too good to waste programme”, and that it had maintained investment in its estate, with £12m invested in the period to enhance capital values and drive further growth. Across the estate, it plans to invest £500,000 over the next 12 months delivering a wide range of energy saving measures which it expects to reduce consumption by 5% per annum and save over £600,000 in the first year alone. Emeny said: “Following on from a good first half performance, we have maintained our forward momentum in the seven weeks post the period end, with like for like sales up by 13% against the same period last year. As commuters return to their offices and international tourists once again visit the capital, our central London and City sites have seen like for like sales for the first seven weeks of the second half rise by 20% against the prior year, despite the impact of tube and train strikes. While we look forward to our first Christmas free of restrictions for three years, and the added bonus of a FIFA World Cup, we are trading in an increasingly challenging environment. Cost pressures from energy bills, wage and food inflation, and increasing interest rates continue to impact us and all businesses in the hospitality sector. Our teams are working hard to manage these pressures, while ensuring we continue to deliver an outstanding experience for our customers. We are a long-term business, with excellent foundations both in terms of the strength of our balance sheet and our predominately freehold estate, and we have the talent, desire and drive to deliver future growth and success.”