As businesses anxiously await details of the government’s promised financial support to help cover rising energy bills, a pub owner has revealed it faces an unaided £18m charge.
In a trading update to the market on Tuesday, Fuller, Smith & Turner (F,S&T), which has nearly 180 rented pubs and several hotels, said the expected gas and electricity bill in the current financial year totaled £8 million. for 2021/22.
Follow the latest updates on the cost of living crisis
It appealed for clarity about the relief businesses could expect later this week, while revealing that sales continued to recover during the first 25 weeks of the trading year through September 17.
It said total sales were up 3% from pre-pandemic levels and 50% higher than the same period last year, which was marred by ongoing COVID restrictions.
On a comparable basis, sales increased by 21%.
But the company said it was aware of the pressures on disposable consumer incomes from the cost of living crisisdespite the incoming energy price guarantee to limit gas and electricity costs for households for the next two years from October.
Costs have reached ‘unprecedented levels’
The government also announced this month that businesses will also benefit, but only for a period of six months, after which only more targeted support will follow.
More details, which are expected to include some retroactive support, could be released ahead of the mini budget due on Friday.
It is described by the government as a “fiscal event” because, unlike the budget or the spring statement, there will be no independent analysis of the government’s plans for loans and spending from the Bureau of Fiscal Responsibility.
The Treasury Committee of MPs made it clear on Tuesday that it was “vital” that a forecast from the OBR be requested if the chancellor, as expected, unveiled major tax changes.
Businesses are also being tipped to take advantage of Kwasi Kwarteng’s announcements as it faces higher energy, shipping, labor and other costs.
F,S&T said of his situation: “Earlier in the year we had forward purchase contracts to cover 50% of our projected annual gas and electricity needs.
“More recently, energy markets have seen costs rise even further to unprecedented levels.
“With increasing uncertainty and the risk of even higher energy market costs as we move into the winter months, we have purchased additional forward contracts to cover what is expected to be our annual requirement, providing security for the coming months.”
Which items have gone up and down in price?
Are prices rising faster in the UK than in other countries?
Energy price rises ‘unsustainable’
The company said it had made “good progress” in implementing a number of initiatives, with more to follow, that reduce energy consumption and “help mitigate these cost increases.”
Chief executive Simon Emeny said: “As sales continue to recover from the effects of the pandemic, we are aware that consumers are facing increasingly challenging times.
“Businesses in the hospitality industry are dealing with unsustainable increases in energy costs.
“Despite proactively buying forwards to mitigate the impact on Fuller’s, we will see significant gains this year and are urging the government to provide much-needed clarity on its proposed support package so we can plan accordingly.”
Shares fell more than 1% in early deals.