As businesses anxiously await details of the government’s promised financial aid to help cover surging energy bills, a pub operator has revealed it is facing an £18m hit without help.
In a trading update to the market on Tuesday, Fuller, Smith & Turner (F,S&T), which has almost 180 tenanted pubs and several hotels, said the expected bill for gas and electricity in its current financial year followed a total of £8m for 2021/22.
It appealed for clarity on the assistance that firms could expect, due later this week, while revealing that sales continued to recover during the first 25 weeks of its trading year to 17 September.
It said total sales were up 3% against pre-pandemic levels and 50% higher on the same period last year, which was marred by continued COVID restrictions.
On a like for like basis, sales were 21% up.
But the company said it was mindful of the squeeze on disposable consumer income due to the cost of living crisis, despite the incoming energy price guarantee to limit household gas and electricity costs for the next two years from October.
The government also announced this month that businesses would benefit too, but just for a period of six months, with only more targeted support to follow.
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More details, expected to include some retrospective aid, could be released ahead of the mini-budget due on Friday.
F,S&T said of its situation: “Earlier in the year, we had forward purchase contracts in place to cover 50% of our forecast annual gas and electricity requirements.
“More recently, the energy markets have seen costs increase even further to unprecedented levels.
“With growing uncertainty, and the risk of even higher market costs for energy as we head into the winter months, we have purchased additional forward contracts to cover what we anticipate will be our annual requirement, providing surety for the months ahead.”
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The company said it had made “good progress” implementing a number of initiatives, with more to follow, which reduce its energy usage and “help mitigate these cost increases”.
Chief executive Simon Emeny said: “While sales continue to recover from the effects of the pandemic, we are conscious that consumers face increasingly challenging times ahead.
“Businesses across the hospitality sector are experiencing unsustainable increases in energy costs.
“Despite having proactively purchased forward contracts to limit the impact on Fuller’s, we will see significant increases this year and do urge the government to provide much needed clarity on its proposed support package so that we can plan accordingly.”
Shares were down by more than 1% in early deals.
