MCA talks to Fuller’s chief executive Simon Emeny about the group’s continued drive to promote from within; the overhaul of its tenanted estate – including new agreements; the strategy in terms of acquisitions and disposals and the roadmap for taking full control of the Stable next June.

Emeny was speaking to MCA following publication of the group’s financial results for the year to 1 April.

During that period the group reached its long-term aim of filling 66% of vacancies with internal promotions.

Emeny told MCA: “This was something we set out to achieve four years ago. We wanted a structure around development that meant people who join us could see a route to progressing their careers with us for the long-term. We have worked hard on the initiatives available to encourage that and now have something like 12 different development programmes in place.

“We are now in a position in all areas of the business, where 2 in 3 appointments we have made have been internal. It’s very healthy for the business that we are recruiting high quality staff and showing them how their careers can develop with us. That’s from the pub floor to director level.”

Recent trading

In the first nine weeks of the new financial year, the company grew like-for-like sales by 6.6% in its managed arm, while the full-year decline in tenanted like-for-like profits (-1%) and beer and cider volumes (-2%), was reversed with an increase of 5% and 7% respectively.

Emeny stressed that the figures should be seen in the context of soft comparatives and Easter falling in April this year but said it was still an encouraging start.

He said: “The numbers for the tenanted arm and beer company please me enormously because we spent a lot of time last year re-evaluating both of those businesses. We have new leadership in both and a big push both in terms of investment and innovation. With the tenanted pubs we have been implementing key learnings from our managed estate. In the beer company we have seen the successful launch of London Pride Unfiltered, continued growth of Frontier and Cornish Orchard.

“We’ve got some big cost headwinds coming down the track but it’s the start to the year we would have liked.”

Food /drink/ accommodation

Food and accommodation were the strongest drivers of growth during the year – with like-for-like increases of 4.5% and 6.4% respectively.

The group has introduced a new food recipe, margin and stock system aimed at improving food margin and consistency of freshly cooked dishes. It is also expanding healthier options and Emeny said that in the last 12 months the number of vegetarian and vegan dishes on the menu have increased significantly.

Like-for-like drink sales in the managed estate were up 3.1% and during the year Fuller’s relaunched and refreshed the wine offer. The wine lists have been redesigned around styles and the move has resulted in customers trading up to more premium wines. Emeny said craft beers had also continued to perform well across the managed estate, with sales increasing of both Fuller’s own range and those from other brewers.

Emeny said: “We think we have a unique position in the market place around fresh food, exciting craft products and around the quality of service and atmosphere. As long as we keep developing and evolving around those lines, we can continue to grow market share. We are giving an experience in our pubs that is unrivalled either in restaurants or at home and we are confident that we can continue to grow that.”

New agreement

As part of the strategic review of the tenanted business, Fuller’s has for the first time introduced a turnover-related agreement. Emeny told MCA there are currently six pubs operating under this model. Among the first signatories were a former Fuller’s manager and chef – which Emeny said completed the career path from front line team member to business owner.

Emeny said: “This isn’t going to be something we would look at for the entire estate but we’ve looked at the market place and the success we’ve had with our managed pubs and clearly we need to recruit and invest with entrepreneurial tenants that share our vision. We see a turnover-based agreement as being something that will enable us to attract the right sort of tenants, and will enable us and our tenants to invest in the properties quite significantly. Then we can start sharing in the successes of those developments, particularly around food, going forwards.”

Emeny said he was also pleased that the tenanted estate was now made up of 92% substantive agreements, up from 85% a year ago.


During the year Fuller’s identified 20 pubs from the tenanted estate for disposal, of which four have competed and the remaining 16 are either under negotiation or exchanged.

Emeny said: “We would expect that by the end of the year that portfolio will have gone. They’re all being sold individually because that’s the best way we can maximise shareholder value.

“That leaves us with an exceptionally strong core, which was the intention.”


On the approach the acquisitions, Emeny said: “I would never put a number on it. We acquired five fantastic pubs last year – four of which have bedrooms and I couldn’t be more pleased with what we have achieved with them.”

Emeny refused to be drawn on whether he would consider a group deal in the short-term, but said: “The company has an outstandingly strong balance sheet and even though we have acquired and invested significantly in our estate over the last year our net debt to EBITDA has actually gone down to 9X, so we do have significant head room.”

The Stable

On future development plans for craft cider and pizza business, The Stable, which Fuller’s acquired a majority stake in three years ago, Emeny said: “It’s been a very hectic few years for The Stable. We have taken it from five restaurants to 17. There was a period where we had an opening every other month. With a relatively small team, that rate of expansion needed to slow down.

“We have appointed David Gough as our operations director, which is part of our longer-term succession and we have brought a number of the services into the group, which is certainly going to lead to more efficiency in the Stable.

“That pause in openings has been really helpful for the team because it has given them time to really perfect the existing operation.

“It has coincided with some over-supply in the restaurant market which has meant a number of sites coming to the market.

“We are now actively looking for fresh sites but being very selective about that.

“It is absolutely our intention to exercise our option to acquire the last 24% of the business in June 2018 and take full ownership.”


Emeny said evolving the company’s digital offer would continue to be a key focus in the coming year.

He added: “Digital has to be at the heart of every decision we make in the business. Whether that’s communicating with our staff and linking into their development programme or building on what is becoming a very high quality database of engaged customers on our email database.”

During the year, 100 of the company’s pub websites have been upgraded with fully responsive, mobile optimised sites where photography is at the heart. A new online feedback system was launched, which has so far generated over 40,000 individual responses. The group also reached the milestone of 60% of its managed pubs and hotels now having a superfast WiFi connection.