The pubs group Fuller, Smith & Turner has hailed a rebound in activity at City bars, saying workers in the Square Mile are making the most of afterwork drinks during the warm weather and “enjoying being back” in the office.
The fillip in trade came after tube and train strikes cost Fuller’s more than £5m of sales, the company said as it released full-year results.
Strike action in recent months and the Christmas period prompted a profits warning in January. On Thursday, Fuller’s said the hit had been worse than expected and further strikes looked probable.
“This has been a very challenging period for the industry,” said its chief executive, Simon Emeny. However, he added that he was upbeat about the coming months.
“I am more optimistic about the future than I have been since before the pandemic. There’s no doubt in London that people are enjoying being back in offices.
“It’s not just that employers are keen to get them back, they [people] are actually enjoying being back, working together, and not working from their bedrooms. You can see the happiness around the place, people mixing outside pubs, companies booking spaces in our pubs so they can hold events again to have the camaraderie back in the office.”
Emeny said tourists from North America had started coming back last year, as had domestic travellers. Tourists from east Asia were also returning, since China dropped its strict zero-Covid policy, he added.
Fuller’s total revenues grew 33% to £337m in the year to 1 April. Like-for-like sales rose 17.5%, with its central London business reporting a 40% jump as it recovered from the impact of Covid restrictions on trade. Like-for-like sales have been up 13.9% in the 10 weeks since.
Emeny said said the group’s energy costs doubled last year after Russia’s invasion of Ukraine, but were down 20% this year. He added that Fuller’s had reduced its energy consumption by 12%, by investing in new kitchen kit and technology, and educating staff on how to use energy more carefully.
Food price inflation remained “stubbornly high”, Emeny continued, and said he hoped they would come down this year.
Fuller’s opened three new pubs during the year including the Queen’s Arms at Heathrow Terminal 2, its second airport pub. It also has pubs in railway stations, such as King’s Cross in London. It is investing in other pubs, including the Counting House in the City, where it will add six bedrooms to the 15 above the bar. Fuller’s has more than 1,000 boutique bedrooms across its pubs.
The company made a pretax profit of £12.7m, up 76% on £7.2m the year before, excluding one-off items. Statutory pretax profit, including the strike impact, fell to £10.3m from £11.5m.
The group, which sold its brewery business including its London Pride ale to the Japanese firm Asahi for £250m in 2019, said staff vacancies were at a low level, and that it had plugged recruitment gaps by hiring more workers over 50, as well as 16- to 18-year-olds with no previous pub experience. A fifth of its workforce is now made up by people under 18.
Emeny said: “We no longer have the recruitment challenges that we had a year ago.”
Last summer, the company had to limit trading hours because of labour shortages caused by the Brexit and the Covid-19 pandemic. “Brexit was always going to be an enormous challenge for the sector and that hasn’t gone away,” Emeny said.
