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With the rail strikes that have crippled the country still in sight, Fuller, Smith & Turner boss Simon Emeny is a man on edge.
The pub chain was on its way to a full recovery from the Covid pandemic, perky telling investors in June it was delighted to see the return of workers and tourists to central London.
But just six months later, the company is back in the doldrums, with another profit warning.
Profit warning: pub chain Fuller’s was on track to fully recover from the pandemic, but just six months later the company is back in the doldrums
‘Frustrating’, is how the tired CEO described the situation. ‘Since the beginning of October we estimate that union action has reduced our turnover by approximately £4 million and the impact on profitability means we now expect full year revenues to be below market expectations.’
Prior to the warning, sales were expected to grow 29 per cent to £327m, not far from the £333m turnover figure reported in 2019-2020 before Covid hit.
The results are a blow and show the dire state of the hospitality industry, with experts warning that the militant rail action cost bars, pubs and restaurants at least £1.5bn in December.
Fuller’s is particularly vulnerable because 40 percent of its 400 pubs are in London.
The business relies on the after-work trade – those who have a pint around 6pm before catching the train home – as well as West End shoppers and theatre-goers.
Shares of the 178-year-old company fell 3.9 percent, or 19 pence, to 475 pence.
And worse could come, with new strikes planned for February 1 and February 3 by members of Asle, the machinists’ union.
Russ Mould, an analyst at AJ Bell, said: “With more train strikes looming, Fuller’s can do little but hope. There is a chance to make up some of the lost revenue later this year.
The coronation of the king in May adds another holiday to the calendar and gives the public a reason to get out of the house and celebrate with friends and family.”
Rivals Young’s lost 1.4 percent, or 16p, to 1100p, Revolution Bars fell 1.7 percent, or 0.1p, to 5.9p and Mitchells & Butlers fell 1.6 percent, or 2.7p, to 168.6p .
Among the blue chips, Scottish Mortgage Investment Trust was up ahead of a big week for US tech earnings, with both Tesla and Microsoft reporting in the coming days.
Scottish Mortgage backs Tesla and hopes fourth quarter results hold.
The electric car maker has had a rough year, between production delays in China, a backlash over CEO Elon Musk’s takeover of Twitter, and its unloading of tens of billions of dollars into its own Tesla stock.
Confidence rose 1.7 percent, or 12.6 pence, to 746.6 pence, helping the FTSE 100 gain 0.2 percent, or 14.08 points, to 7784.67 points. The FTSE 250, meanwhile, rose 0.5 percent, or 99.06 points, to 19801.69.
Coral owner Entain was also a mover, adding 1.2 percent or 18.5 pence to 1526.5 pence, after the Mail on Sunday reported that US media giant MGM was considering a new bid for the gambling company.
But St James’s Place was sliding as the lackluster start to the year continued for shares in actively managed City funds.
The drop for one of the UK’s largest asset managers came after analysts at HSBC lowered their buy rating for the stock.
At the same time, Barclays lowered its price target on St James’s Place from 1509 pence to 1507 pence. Shares lost 2.2 percent, or 27p, to 1208p.
Outside the top flight, National Express was in control after the company revealed its German rail transport arm had won an £800 million contract to operate two lines of Germany’s Rhein-Ruhr-Express until 2033.
Shares added 1 percent or 1.3 pence to 138.8 pence.
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