The strengthening economy in London and the south of England has helped ferment rising sales and profits at brewer and pub operator Fuller, Smith & Turner.
The maker of London Pride bitter reported revenue up 10% to £162m in the six months to 27 September and underlying pre-tax profit up 8% to £19.6m. Sales at pubs and hotels open a year or more rose 6.5% and total beer and cider volumes increased 6%.
Fuller’s, based in Chiswick, west London, has most of its pubs in London and surrounding counties, though its network stretches to Birmingham and to Portishead in Somerset. London’s economy, driven by financial services and construction, is expected to outstrip all other parts of the UK this year.
Simon Emeny, Fuller’s chief executive, said: “There is no doubt in our trading area that our customers have benefited from reduced unemployment, rising house prices and low interest rates. But it’s still very competitive running pubs in the south-east so we can’t rely on the economy being strong.”
Fuller’s has been refurbishing pubs to cater for customers wanting better food and a more upmarket feel. Food sales rose by 14% in the first half and there were 80 weeks’ worth of pub closures, up from 29 weeks a year earlier. Fuller’s said the lost revenues were more than recouped after the pubs reopened.
Emeny said his company would not be affected by MPs’ vote to end the beer tie between tenants and big pub companies because Fuller’s 382 pubs fell below the threshold. But he said the change would be bad for pub tenants and consumers and would probably lead to more pub closures.
“The tie is designed to give the landlord an incentive to invest in the tenant so the tenant can be successful. I suspect many pub companies will withdraw support in terms of investment.”
