Pub and hotels group Fuller Smith & Turner (FSTA) released first-half performance in-line with its unscheduled update on 21 November, when it flagged some transition problems resulting in flat operating profits of £17.9m.
There was some relief that the company had drawn a line under the problems, nudging the shares up 0.4% to 934p.
The new enterprise resource planning system (ERP) which cost £11.5m has been replaced with a simpler and cheaper accounting system. Central costs previously allocated to the exited brewing business had a £3.3m impact (8%) while operating margins came under pressure from business rates and wage inflation.
The company confirmed that it had made a book profit of £164.5m on the sale of its brewery to Asahi and received net proceeds of £230.9m.
As we highlighted in July, this year the business has been through more operational changes than in its whole 174-year history, including the sale of its brewing business, a new ERP system and a change of headquarters (spring 2020).
It is therefore, perhaps unsurprising that the road has been bumpier than management imagined at the start of 2019. As for the rest of the year to 30 March 2020 the business is focused investing in its estate and on using some of its financial heft to make bolt-on acquisitions such as the recent addition of Cotswold Inns and Hotels.
Current trading for the 36 weeks to 7 December has seen like-for-like sales up 2.1% and total sales up 5.1% in the pubs and hotels division while tenanted inns have experienced a 2% like-for-like fall in profits. Management highlighted poor weather and macro uncertainty as factors holding back growth.
