Fuller, Smith & Turner sales gain on summer demand, extends buyback
A strong start to the new financial year is supporting Fuller, Smith & Turner as higher drinks sales, staycation demand and World Cup bookings lift trading. The UK pub and hotel operator is also stepping up shareholder returns and estate investment after reporting stronger annual profit and margins.
Highlights
- Fuller, Smith & Turner reports like-for-like sales up 4.4% in the 10 weeks to June 6 and shares surge as much as 9.8% on summer demand.
- The company plans to invest over £30 million in pubs and hotels and extends its share buyback programme by 1 million class A shares.
- Adjusted pretax profit for the year ended March 28 increases 28% to £34.6 million, with operating margin improving to 11.5% from 10.7%.
Trading momentum and investment plans
As reported by Reuters, like-for-like sales in the 10 weeks to June 6 rise 4.4%, following a 4.9% increase in the 12 months ended March 28. Shares rise as much as 9.8% in early trading after the company says recent weeks benefit from summer demand, advance World Cup bookings and stronger staycation interest.Executive Chairman Simon Emeny says the new financial year has begun well and preparations for the summer season have gone smoothly. Fuller, Smith & Turner says it plans to invest more than 30 million pounds across its pub and hotel estate to improve its offer, and it announces an extension of its share buyback programme by 1 million class A shares.
Sector backdrop and annual performance
Fuller, Smith & Turner's upbeat update stands in contrast with comments from rivals Mitchells & Butlers and Marston's, which flag softer demand as consumers remain cautious and limit spending amid macroeconomic uncertainty. The wider pub sector is also under pressure from higher costs and weaker consumer sentiment linked to the Iran war.For the year ended March 28, the company says adjusted pretax profit grows 28% to 34.6 million pounds. Adjusted operating margin rises to 11.5% from 10.7% a year earlier.
Our earlier coverage of Shell plc’s share buyback focused on the company’s repurchase and cancellation of 1.2 million shares as part of its capital return strategy. We also noted that, despite the supportive impact on per-share metrics, technical indicators at the time still pointed to cautious, range-bound trading with downside risk unless resistance levels were cleared.
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