Covid has hit the historic west London based pub chain hard. The company has 209 directly managed pubs, 175 tenanted inns and just over 1,000 “boutique” hotel rooms all predominantly based in the capital and across the south east.
On Thursday Fuller’s reported swinging to a £59.2 million pre-tax loss for the year to March 27, from a £166.2 million pre-tax profit a year earlier. The company said its estate - which also comprises the Cotswold Inns & Hotels chain - was shut for an average of 71% of the financial year, resulting in a 77% plunge in revenues to £73.4 million.
Back in March Fuller’s had said it was burning through cash at a rate of some £5 million a month, and group net debt stood at £218 million by period end.
But Emeny said his company’s balance sheet is now in a “very strong” position following the completion of a £52 million share placing in April, and that he is eyeing conservative expansion.
In the three months to July 3 the group was cash generative, with sales “better than expected internally” at 76% of 2019 levels, and England’s Euros success has provided a boost to revenues - even if one curtailed by capacity limits.
The pub group has hired 1300 people since reopening in April despite the hospitality staffing crisis, and is looking to recruit another 200 roles.
Emeny said: “We look forward to the 19th July and restrictions being lifted. We are expecting to progress from then onwards.
“Everything is heading in the right direction, really. Our customers will be able to order at the bar, they will be able to stand up, we won’t have capacity restrictions. We are clearly going to have a benefit from staycations this summer, especially outside of London, and I think as the world gets fully vaccinated we will see tourism pick up towards the end of 2021.”
The chief executive said Fuller’s, which has a £500 million market cap, has already spent £20 million investing in its estate over the last year. Investments include the opening of the group’s new The White Horse pub in Wembley, which was “packed” with as many fans as legally allowed for the Euros semi-final last night.
“As of last week, our net debt position is actually better than it was when we entered the pandemic, so that leaves us in a very strong position to build for our future now, to continue to invest in our pubs, and hopefully take advantage of opportunities in our market that come up going forward,” he said. “We will make carefully selected acquisitions as we always have done in both rural, suburban and urban pubs.”
The pub boss is confident London - which is currently seeing footfall hit by home working and other “new normal” lifestyle changes - will bounce back fast.
“There’s nothing that we’ve seen since opening for indoor trading six weeks ago that doesn’t make me believe that London will bounce back strongly in 2022,” he said. ”It is the most unbelievable capital city. We have to remind ourselves how attractive it is as a tourist destination, as a centre for business, and I have no doubt it will bounce back as a strong force.”
Despite Emeny’s relief at being able to resume normal service this month, he said some Covid-era habits are here to stay - including more table service in pubs.
“We’ve been through the most seismic change in the last 16 months, and some customers have actually enjoyed some of the changes that we’ve had,” he said. “I think we will see more table service in our business than we would have had if it wasn’t for the pandemic - and I think that is part of the successful evolution of pubs.”
Shares in Fullers lifted on Thursday on the company’s update, up 6.5% at 884p after early trading.