London brewer and pub owner Fuller, Smith and Turner's premium pubs business grew in the second quarter in a "challenging" trading environment, but the company was hit by a drop in beer and cider demand.
Like-for-like sales in the company's managed pubs and hotels division rose 2.1 per cent in a trading update for the 16 weeks to 16 July.
Sales growth in the tenanted pub division were down two per cent, while total beer and cider volumes in the brewing arm Fuller's Beer Company were down a more pronounced five per cent over the period.
Fuller's makes London Pride, Quintessential British Pale Ale and Oliver's Island Golden Ale, as well as Cornish Orchards cider.
The company's share price was down 1.6 per cent to 975p in early afternoon trading.
Why it's interesting
The company's like-for-like sales in its managed pub and hotel division have taken a hit in the last six weeks.
When Fuller's announced its full-year results in June, it said that in the first 10 weeks of trading of the current financial year, its managed arm was reporting 2.7 per cent growth, which has now slid to 2.1 per cent.
The drop in beer and cider volumes and tenanted pubs have remained flat. Last year, the company's total revenue was up nine per cent year-on-year to £40.9m.
In the current financial year Fuller's has already bought another London pub, Canary Wharf-based The Gun, and has opened the first London site for its brand The Stable in Whitechapel. A second, on Kew Bridge, is due to open at the end of July.
It has also ploughed funds into refurbishing three other venues and acquired a virtual freehold property in London's Smithfield. Fuller's operates almost 400 pubs in the UK.
Fuller's took a very different stance to fellow pub group JD Wetherspoon in the run-up to the EU referendum, saying a Brexit vote would be a "significant risk to the viability of the business".
What Fuller's said
Chief executive Simon Emeny:
We have seen solid growth in our managed pubs business during the first part of the new financial year against tough comparatives from last year and despite some unseasonably poor summer weather and an uncertain economic and political environment.
Fuller's has always focused on building a business with genuine longevity and this ability to take a long-term view during short-term external pressures stands us in good stead. We have exciting plans in place and will continue to invest in our people, our premium brands and our pub estate.
Fuller's has avoided a hangover this time around but will be looking to up its beer and tenanted like-for-like sales in the rest of the second half.