Fuller’s chief executive Simon Emeny has told MCA that the group is focussed on continuing to drive growth in its managed arm as well as boosting profit in its tenanted division through a mixture of disposals and a greater focus on food.

Emeny was speaking to MCA following publication of the group’s results for the 26 weeks to 24 September.

The managed division grew like-for-like sales by 3.4%, supported by further growth in food, with operating profit before exceptional items growing 6%.

The company admitted “times have been tougher” in the tenanted division, where like-for-like profit fell 2% with profit before exceptional items down 1%.

The company said there was a plan in progress to “create a tenanted division that better reflects the Fuller’s vision and values”. As part of this 18 sites - c9% of the tenanted estate - have been earmarked for disposal.

Emeny told MCA that the decline in the tenanted estate had to be seen in the context of years of outperforming the market. He said the company would be working with tenants to strengthen their offer, with a particular focus on food.

Total beer and cider volumes fell 4% in the half-year but operating profit before exceptional items rose by 8% and craft beer brands showed “strong growth”.

The Stable continued to show strong growth in a period in which Fuller’s increased its share in the company to 76%. The brand’s first operations director was appointed with the internal promotion of David Gough.

Emeny told MCA that the focus for the Stable in the second half of the year was on consolidation before further growth in 2017.

Over the 33-week period managed like-for-like sales were up 2.6% with tenanted Inns like-for-like profit down by 2% for same period. Total beer and cider volumes were down by 5% for 33 weeks

Total revenue for the half-year was up 11% to £197.6m with EBITDA up 9% to £36.3m.

During the half-year two new managed pubs were acquired - The Gun in Docklands and The Half Moon, Herne Hill, while 16 boutique hotel rooms added to estate.

During the period, the company spent £19.1m on its continued investment in the Fuller’s Inns estate and equipment at the Chiswick Brewery.

A total of £9.5m was spent on acquisitions including The Gun in Canary Wharf and the purchase of an additional 25% share in The Stable for £2.7m.

Since the year end, the group has acquired the Albert Arms, Esher, which will reopen in the new year. It has started six new development schemes since period end, with 15 more planned before year end.

Emeny said: ““We have had a good start to the year and our Managed Pubs and Hotels, which represent the largest share of our profits, have yet again led the way with a rise in like for like sales that has outperformed the market.

“Trading since the period end has been good and as expected, with comparisons to last year being heavily influenced by the 2015 Rugby World Cup. For the first 33 weeks, like for like sales in our Managed Pubs and Hotels grew 2.6%, Tenanted Inns like for like profits declined 2% and Fuller’s Beer Company volumes fell 5%.

“There is no doubt that the UK economy is facing some significant challenges. The impact of increases in business rates and the National Living Wage, combined with uncertainty around the UK’s departure from the EU, make for changing times ahead. However, Fuller’s has a long-term, strategic vision, a solid balance sheet and a predominantly freehold estate, which is well-invested and supported by excellent, engaged team members and dedicated, skilled management. These are the qualities needed to continue to delight and excite our customers, provide a good return for our shareholders and attract the best new recruits to our business.”