At its full-year results in July – and amidst the sale of its beer business to Asahi – Simon Emeny lauded the “transformational period” under way at Fuller, Smith & Turner (FSTA).
Four months on, the chief executive tells us the pub group is now in a “transitional year”, and used an unscheduled trading update to warn investors that full-year profits will be badly hit by materially higher costs associated with the transaction. Adjusted pre-tax profits for the 12 months to 28 March 2020 are now expected to come in at £31m, some 26 per cent below consensus forecasts.
At issue is the delivery of the so-called transitional services agreement (TSA) tied to the sale, which requires Fullers to absorb all costs until full control of the business is handed to Asahi in May 2020. The migration to a new resource-planning software system has failed to deliver the expected benefits, resulting in additional costs.
Separately, Fullers described 2.3 per cent like-for-like sales growth in the 32 weeks to 9 November as solid, but flagged that cost pressures had led to some margin erosion.
