Fuller’s H1 2026: profit up 28%, dividend up 6%, and momentum intact
Fuller, Smith & Turner has served up a tasty first half to 27 September 2025. Revenue rose 7% to £207.5 million and adjusted profit before tax jumped 28% to £22.5 million. Like for like sales in Managed Pubs & Hotels were up 4.6%, with drink leading the charge. The interim dividend is increased by 6% to 7.85p and the buyback continues.
If you’re new to the terms: “like for like” compares sales only from sites that traded in both periods, and “adjusted” figures exclude one-off items to show underlying performance.
Key numbers at a glance
| Metric | H1 2026 | H1 2025 |
|---|---|---|
| Revenue | £207.5m | £194.1m |
| Adjusted EBITDA | £42.4m | £37.6m |
| Adjusted profit before tax | £22.5m | £17.6m |
| Statutory profit before tax | £21.1m | £29.0m |
| Adjusted EPS | 30.03p | 21.81p |
| Basic EPS | 27.84p | 37.44p |
| Interim dividend | 7.85p | 7.41p |
| Net debt (ex leases) | £138.3m | £128.2m |
| Managed LFL sales | +4.6% | – |
Why adjusted profits rose but statutory fell
The underlying business is clearly performing better: adjusted PBT up 28% and adjusted EPS up 38% to 30.03p. The statutory PBT is lower year on year because the prior period benefited from a £17.2 million book profit on the disposal of The Mad Hatter hotel. Strip that one-off out, and the trajectory is up and to the right.
Sales mix: premium drinks led, food and rooms holding their own
- Drink like for like sales up 6.5%.
- Food like for like sales up 2.0%.
- Accommodation like for like sales up 3.3%.
Fuller’s premium positioning and affluent customer base are doing the heavy lifting. Pre-booked sales have grown 4.8% and now account for 33% of Managed revenue, equating to £60.9 million. That includes weddings – 510 couples said “I do” at Fuller’s venues in the half.
Rooms remain a strength. Occupancy was 81% (slightly down from 82%), the average room rate increased 3.8% to £143.10, and RevPAR rose £3.63 to £115.76, which Fuller’s says is the highest in the pub sector. The Cotswolds portfolio averaged £165.96 per room, up 3.1%.
Margin momentum: procurement wins and cost control
Managed Pubs & Hotels operating margin improved from 15.7% to 17.1%, with adjusted operating profit up £4.8 million to £32.5 million. Several self-help levers stood out:
- Upgraded ranges – transition to Coca-Cola, a new premium spirits line-up, and illy coffee.
- Better procurement – helping offset inflation and Extended Producer Responsibility costs.
- Utilities – effective forward purchasing and reduced consumption are cutting the annualised bill by £0.5 million versus last year.
Headwinds remain. Labour costs are challenging, with an extra £8 million annualised from April 2025 due to National Living Wage and National Insurance changes. Fuller’s is countering this through labour efficiency and selective price increases. Management does not expect further utility cost relief from here, as commodity price gains are likely to be offset by higher non-commodity charges.
Investment and estate quality: freeholds, capex and returns
One of Fuller’s structural advantages is its predominantly freehold estate (87% of pubs and hotels are freehold). The Group invested £13.5 million in H1 on upgrades including:
- £4.0 million transformation of The Chamberlain Hotel, Minories.
- £1.8 million uplift at The Hampshire Hog, Clanfield.
- £1.0 million refurbishment of Bel & The Dragon, Odiham.
- Refit at The Parcel Yard in King’s Cross.
Another £15 million is earmarked for H2 across 14 “transformational” schemes, with a targeted 20% return on trade-enhancing investments. That is punchy, and if delivered, value accretive.
Cash returns and balance sheet headroom
Fuller’s continues to share the spoils. Cash returns in the half were £13.8 million – £6.7 million in dividends and £7.1 million on share buybacks. In total, 1.2 million ‘A’ shares were repurchased in the period; since September 2022 the Group has bought back 7.8 million at an average £6.05.
Net debt excluding leases is £138.3 million, down £3.9 million since year end. Leverage sits at 2.18x net debt to EBITDA (improved from 2.29x). Facilities are unsecured and total £185 million to August 2028, with £63.2 million undrawn and £4.3 million of cash on hand. Finance costs fell to £5.8 million (from £6.6 million) thanks to the March 2025 refinancing, an interest rate swap on £60 million at 3.65%, and a lower Bank Rate (5% to 4%).
Tenanted Inns: a steady cash generator
Revenue dipped to £16.9 million (from £17.5 million) due to last year’s disposal of 37 smaller, non-core sites, but on a like for like basis revenue rose 2%. EBITDA margin improved by 1.3 percentage points to 53.3% and average EBITDA per pub increased 7.1% to £127,000. The division remains capital-light and supports Group cash flow.
Current trading and near-term catalysts
- Like for like sales for the 32 weeks to 8 November 2025 are up 4.6%.
- Christmas bookings are 16% ahead of the same time last year.
- £15 million capex planned in H2 to drive FY2027 momentum.
- Balance sheet headroom positions Fuller’s for “appropriate acquisition opportunities”.
Diary notes: interim dividend payment on 2 January 2026, a trading update on 15 January 2026, and full-year results on 10 June 2026.
Risks to keep in view
- People costs – continued wage and NI inflation following the April 2025 increases.
- Macroeconomic/policy – sector awaits clarity from the 26 November 2025 Budget.
- Operational disruption – rail and tube strikes could impact key trading periods.
- Pensions – the defined benefit scheme shows a £0.5 million deficit after a 2024 buy-in, modest but worth tracking.
- Property impairments – £1.9 million write-down across five properties in the half.
My take: premium positioning is paying off
This is a strong set of numbers. Fuller’s is growing revenue, expanding margins, and converting it into higher adjusted earnings and cash for shareholders. The premium and events-heavy mix (one third of Managed revenue pre-booked) is cushioning the cycle, and the freehold-heavy estate gives resilience and optionality.
On the watchlist, labour inflation will keep management busy, utilities tailwinds look largely spent, and transport disruption remains a nuisance variable. Statutory profit looks softer year on year only because last year had a chunky disposal gain – underlying performance has clearly improved.
Overall, the business looks in good shape: like for like sales up 4.6% year to date, Christmas booked 16% ahead, £15 million of targeted H2 capex, and ample debt headroom. For income investors, a 6% uplift in the interim dividend and an ongoing buyback are welcome signs of confidence. If execution on the 20% return capex and selective acquisitions follows, the momentum should carry into FY2027.
