Fuller’s reports like-for-like sales up 13.9% in last ten weeks, full-year revenue increases 33% to £336.6m, energy costs almost double: Fuller’s has reported “strong sales momentum” with like-for-like sales for the ten weeks to 10 June 2023 up 13.9%. The company said it was “delivering on our long-term strategy, purpose and vision to grow our business in a sustainable manner”. The company stated: “We are delighted that our sales momentum has continued into the new financial year. Our recent investments at The Willow, The Sanctuary House and The Admiralty are outperforming our expectations, and we have exciting projects planned for this financial year at The Counting House in the City, The Forester in Ealing, and The Rising Sun near Bashley. While the well-documented inflationary environment has been a challenge, there are positive signs on the horizon. In addition, we are ever hopeful of a resolution to the ongoing train strikes to allow us to further benefit from the increasing numbers of office workers and international tourists returning to the capital.” It comes as the business reported revenue increased 33% to £336.6m for the 53 weeks to 1 April 2023 (2022: £253.8m). Like-for-like sales in the year grew 17.5% compared with the prior year, with central London growing 40.1%. Ebitda was up to £51.8m (2022: £44.3m). Adjusted profit before tax was up 76% to £12.7m (2022: £7.2m). The business saw net debt increase slightly to £132.8m (2022: £131.9m) with cash generated by the business funding investment in the estate and returns to shareholders. Three new pubs opened during the year – The Rising Sun in the New Forest, The Willow in Bourton-on-the-Water, and The Queen’s Arms at Heathrow Terminal 2. Four pubs were transferred from managed to tenanted, with a further 23 identified, of which four transfers have already completed. A “small” number of pubs are earmarked for disposal. A sale has been agreed on The Mad Hatter in Southwark, “which will realise £20m in value and a profit on disposal of £17m”. Fuller’s maintained investment in its existing estate, with £25m invested in the period “to enhance capital values and drive further growth”. On costs, the company said: “The trading environment during the year was very challenging. The war in Ukraine caused our energy costs to increase substantially. Even with hedging arrangements in place, and reduced usage, our total energy costs increased to £14.2m, compared with £7.6m in the prior year. We have had to manage significant food and drink inflation and growing wage costs, as a result of labour shortages at the start of the year, as well as the increase in National Living Wage. This national inflationary environment has also led to the Bank of England raising interest rates, with our finance costs rising by nearly 10% from the prior year.” As part of its ongoing succession planning, Dawn Browne will join the board with effect from 3 July 2023. Browne joined Fuller’s in 2011 and, following roles in the learning and development team and as head of operations for the City, has been people and talent director since 2019. Chief executive Simon Emeny said: “We have made good progress in the last year, with continued investment in our people and properties, providing the perfect post-covid springboard for the future. Looking forwards, that future looks very positive. We continue to build on our five strategic pillars, investing in the areas that have the greatest impact on our business and growing our profitability. We live by our values and our culture, and despite having had a lot to contend with over the last year – with interruptions from tube and train strikes and high-cost inflation in energy, food and wages – our teams across the estate are successfully delivering experiences that nourish the soul. 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. In addition, we are ever hopeful of a resolution to the ongoing train strikes to allow us to further benefit from the increasing numbers of office workers and international tourists returning to the capital. We have a clear pathway to further growth based on enhancing profitability from our underlying business, proactively managing our property portfolio to ensure we are getting the best returns and continuing to seek out appropriate acquisitions. I am excited by the opportunities ahead, optimistic about the future, and confident in our ability to deliver excellent service to our customers, careers for our people and returns for our shareholders.”
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Wadworth – 2023 will be a ‘transformational year for the business’, reports full-year Ebitda increases to £3.6m: Brewer and retailer Wadworth has said 2023 will be a “transformational year for the business” as it reported a full-year boost in Ebitda. Wadworth saw turnover increase to £36,319,000 for the year ending 31 December 2022 compared with £25,134,000 the previous year. The company, which operates 19 managed houses and 132 tenanted pubs, saw Ebitda rise to £3,644,000 from £1,645,000 the year before. Pre-tax losses were up to £5,380,000 from £4,039,000 the year before. In his report accompanying the accounts, chairman Charles Bartholomew said: “We started 2022 with the business plan projection of a more normal year following the challenges of covid. Sadly, this has not been the case with economic and political uncertainty at every corner. The effects on the hospitality and brewing world of a high inflationary environment have been significant. Our results were behind our expectations for the year as we could not have predicted the Russia/Ukraine conflict and the impact on costs that this would have across every cost line, with the most extreme being our utility costs which have increased by £725,000 versus the prior year. We started the build of the new brewery in May 2022 and have made excellent progress towards creating a facility that will give us considerable cost savings and flexibility on product range, including a canning and bottling facility. We are into the final stages of the project and have managed to ensure it is still on time and on budget, even with the current cost pressures on building works. As the new brewery is expected to be up and running more quickly than initially anticipated, we have accelerated the depreciation on the old brewery, which in turn sees additional depreciation of £1.3m recognised in this year’s accounts. We exchanged contracts on part of our current brewery site with a local property developer in November 2022 who will be looking to build a predominantly residential led scheme. The contract is subject to planning and we would hope to complete at the beginning of 2024. Our tenanted division performed well throughout the year. We had only one pub to let at the beginning of the year, but during the second half of the year there were a number of business partners deciding to move on due to the financial pressures and staffing issues facing the industry. We have supported our business partners as much as possible and many are still doing exceptionally well in such a tough trading environment. As we headed into 2023 with a number of pubs to let, we continue to attract quality business partners to work with Wadworth. In managed houses it has been a very challenging year with conversion to profit impacted by increases across every cost line. Utility bills have been the biggest issue. The teams were all tasked with reducing utility consumption where possible, but we still ended the year with a cost increase of more than £500,000 versus the period ended 1 January 2022. Labour shortages, which have been seen across every industry, were particularly apparent in the kitchen and this resulted in a number of pubs having to shut for two days a week and agency chefs used at inflated costs. From a management perspective it has been a year of change with eight of our 19 pubs having new managers and this meant the businesses have needed some time to turn around their performance. The effort to drive the top line was beginning to come through in the last few months of 2022 with December sales up 29% on the prior year. We are in a good position heading into 2023 and are still improving with a much more settled team in place and an opportunity to convert the sales into profit. At the end of 2022, it was necessary to undertake a revaluation of our estate by an external party. The increasing economic and operational headwinds, plus political instability in the second half of 2022 subdued the market as buyers and sellers became more cautious. Any valuation is by definition a snapshot in time and in these circumstances has been reflected in a revaluation downwards of the estate of 12.8%. Interest rate payments have risen alongside the Bank of England interest rate rises, however we are protected on two thirds of our debt through a fixed loan and interest rate swap arrangement. Our current positions come to an end in September 2024 and consequently we have already started looking at our refinancing options. We are looking ahead with positivity and the right team in place to keep evolving the business. 2023 is a transitional year for us, with the move to a new state-of-the-art brewing facility and new offices. The new brewery efficiencies will release further funds to reinvest in the pub estate towards the end of 2023. Our firm intention is to accelerate our Ebitda growth, which will enable us to pay down a proportion of our debt and be in a position to fund dividends.” No dividend was paid (2021: nil).
