Fuller, Smith & Turner pub group warns on profits after UK rail strikes hit sales

UK pub chain Fuller, Smith & Turner has warned on profits, blaming “frustrating” train strikes for reducing festive sales in its city-centre venues.

The pub group, which has an estate mainly concentrated in London and the south-east, said on Monday that industrial action since October had reduced sales by £4mn. Fuller’s said it now forecast full-year earnings to fall below market expectations of £17.3mn.

Sales for the four-week Christmas and new year period were up 38 per cent on the previous year when the hospitality industry was hobbled by the spread of the Omicron coronavirus variant.

But the company added that the biggest wave of industrial action across the UK’s rail network in decades meant sales over the four weeks were 5 per cent lower than the same period in 2019.

“While it is frustrating that the train strikes have set back our reported sales and earnings, it is reassuring that we are achieving our anticipated sales trajectory in periods unaffected by strikes,” said Simon Emeny, Fuller’s chief executive.

Fuller’s share price was down nearly 5 per cent to £4.70 in early morning trading in London. Last week, Revolution Bars Group had 20 per cent wiped from its stock market value after it also warned on profits, saying rail strikes had dented Christmas sales at its 90 venues.

Emeny said the “high-inflation environment”, driven by a sharp rise in energy, labour and food and drink costs, was continuing to affect Fuller’s operating costs and profit margins.

Although strike action and the cost of living crisis created “short-term hurdles” to the company’s post-pandemic recovery, Emeny added that he was “confident in the resilience of the pub”. Like-for-like sales at Fuller’s in the 43 weeks to January 21 were just 3 per cent down on the 2019-20 financial year.

Mark Brumby, an analyst at Langton Capital, said the train strikes had “taken the shine off” of Fuller’s trading performance but longer-term prospects looked more positive.

“The company had been able to say that it had ‘the best momentum in the sector’ and, whilst the strikes have intervened negatively, there will be hopes that Fuller’s can return to that trajectory in due course,” said Brumby.