Pub operator Fuller, Smith & Turner’s says its current sales are holding firm, but costs are soaring faster than inflation.

The company has disclosed strong current trading and hiked the full-year dividend by 30 per cent, but margins are being squeezed and hit hard by inflation.

Revenues rose sharply against the pandemic-battered prior year, despite a hit of more than £5m to sales from strike action. Like-for-like sales were also up by 13.9 per cent in the first 10 weeks of the current financial year.

Fuller’s chief executive Simon Emeny said the Great British pub has always been, and will always be, an affordable treat and has proved its resilience over time with its position at the very heart of the communities we serve.

Emeny said: “During the year we have returned to profitable growth with revenues of £253.8m and adjusted profit before tax of £7.2m. It is testament to the dedication and resilience of our team, across the business, that we have managed to trade profitability under such difficult circumstances.

“As a company, we have used the last two years wisely. While steering the business through challenging trading conditions, we have also completed a number of strategic projects that will deliver benefits over the coming years.

“We have successfully honed our offer, completed a digital transformation project, rolled out a new central finance system, delivered an employer brand and new recruitment platform. We have also refined our branding and reviewed and evolved our long-term strategy.

“The new strategic framework, driven by our purpose to create experiences that nourish the soul, and the pillars that underpin it, will give everyone in the company clear direction and ensure we work as a team, from our kitchens to our boardroom, to deliver excellent results for all our stakeholders.

“In addition, we have worked hard to strengthen our Balance Sheet and highlight how we will continue to deliver long-term value through the application of our capital allocation framework.

“The completion of the bank refinancing provides us with the headroom to grow and the Directors’ valuation of the estate demonstrates that the implicit net asset value per share of our business is £13.80. Through the successful delivery of our strategic objectives, we plan to grow this value over the long term.

“While the last financial year has adversely affected Fuller’s – with some of our key sites being the most impacted by the pandemic, we have built a balanced business which positions us well to navigate the continued evolution in consumer trends and behaviour. The current year has started well.

"We welcome the gradual return of workers to the City and tourists to Central London, which is now underway, and we are seeing steady growth in our total weekly sales, which will have a positive impact in FY2023. Momentum in the City and Central London continues to build, and we are confident that we will see the benefits of our estate’s composition come into play.

“In the first 10 weeks of the new financial year total sales are up four per cent on pre pandemic levels and are up 130 per cent on the same period last year. On a like-for-like basis, excluding closed periods, sales in the first 10 weeks of the year are up 21.4 per cent on last year. Furthermore, the investments we have made in the last two years are not yet comparable and the return on our capex projects will benefit the current year’s results.”