Fuller's reports £10m energy price hike

Pub group Fuller's has said it expects its total gas and electricity costs this year to be around £18m, compared to £8m last year.

In a trading update for the 25 weeks to 17 September, the group said the global energy crisis was causing "significant increases" in expected costs for gas and electricity

Earlier in the year, the business said it forward purchased contracts to cover 50% of its forecast annual gas and electricity requirements. But following the "unprecedented" increases in energy costs, growing uncertainty, and the risk of even higher market costs into the winter months, Fuller's confirmed it has purchased additional forward contracts to cover what it anticipates will be its annual requirement.

"We have made good progress implementing a number of initiatives, with more to follow, which reduce our energy usage and help mitigate these cost increases over the medium term," the group said.

During the first half of the year, total sales were up 3% against pre-pandemic levels and 50% on the same period last year. On a like for like basis, sales were 21% up on last year.

The company opened the Queen's Arms, a landside pub at Heathrow Terminal Two, and was close to completion on two further sites.

In the year to date it has sold four unlicensed premises, generating proceeds of £6.9m, which it planned to put towards the repurchase of up to one million ‘A' shares in the company.

Chief executive Simon Emeny said: "While sales continue to recover from the effects of the pandemic, we are conscious that consumers face increasingly challenging times ahead.

"Businesses across the hospitality sector are experiencing unsustainable increases in energy costs. Despite having proactively purchased forward contracts to limit the impact on Fuller's, we will see significant increases this year and do urge the Government to provide much needed clarity on its proposed support package so that we can plan accordingly.

"We are looking forward to the forthcoming World Cup and our first restriction-free Christmas for three years. The future may present more obstacles to navigate, but Fuller's is a long-term company with a clear vision and the people, properties, and financial fire power to deliver consistent returns in the long term."

A fiscal statement is expected to be announced by the chancellor this week.

Businesses are expected to receive "support", but only for six months, followed by targeted measures for industries such as hospitality, but no further details have been confirmed.

Hospitality and tourism trade bodies previously warned the sectors had no time for 'drip-fed' support measures with many businesses already closing or reducing trading hours due to spiralling costs.

Image: Solar Studio/Shutterstock