Fuller’s profits fall in Christmas preparations

Preparations for the Christmas period meant that profits at pub and beer giant Fuller’s fell this year, despite a revenue boost from the World Cup.

Share price for the company fell more than 1% as markets opened on Friday morning when Fuller’s posted its half-year financial results, and still have yet to return to their value pre-publication.

Sales in the six months to September 2018 rose 6% to £222.1 million, up from £209.3 million year-on-year.

Earnings before tax had also risen by 2% compared to the same period last year, from £37.6 million in 2017 to £38.2 million now, but the adjusted profit fell 1% to £23.6 million thanks to a series of investments the company made in preparation for the festive season.

The pub group, which runs 182 tenanted pubs and 203 pubs and hotels, said the overall dip in profits happened because it was operating on a front-loaded investment strategy, accounting for around £900,000 of the company’s costs.

“Although we would have seen profit increase had we not taken this action, we believe this is the right decision and ensures our estate is in the best possible position to benefit from the busy Christmas period and beyond,” Simon Emeny, Fuller’s chief executive, said.

Fuller’s acquired 10 new sites in 2018, including six Bel & The Dragon country inns in the Home Counties in June, and four central London bars that “fill geographical gaps in our estate,” the report said.

On the brewing side of the business, revenues rose by 7%, giving operating profits a 9% boost. The company also acquired a 100% stake in craft brewery Dark Star earlier this year. Emeny said the beer giant plan to invest in a new canning line for Dark Star in a bid to expand its production.

In addition to brewing its own beers, Fuller’s also owns cider maker Cornish orchards, wholesale drinks business Nectar Imports and George Gale & Co, which it bought in 2005 having subsequently moved brewing operations to its London site. The company’s report said that there will be more beer collaborations in the pipeline next year.

“The second half of the year is also an exciting time for The Fuller’s Beer Company. We are installing our new canning line at Dark Star, will be brewing our second suite of Fuller’s & Friends collaboration beers and building on the early work of our Fuller’s First initiative to grow the share of our own beers in our Managed and Tenanted estates.”