• 2023 dividend up 30%
  • Sales in 10 weeks of financial 2024 up almost 14%
  • Shares up 1%

June 15 (Reuters) - Fuller Smith & Turner (FSTA.L) hiked its annual dividend by 30% on Thursday as strong sales of cocktails and rosé wine helped the British pubs group continue its recovery from the pandemic, despite a hit from transport strikes and high inflation.

"I am more optimistic about the future than I have been since before the pandemic. While the well-documented inflationary environment has been a challenge, there are positive signs on the horizon," CEO Simon Emeny said in a statement.

Resilient customer spending has helped the UK hospitality industry pass on rising costs, but business was disrupted by widespread strikes at the end of 2022 and early this year.

Train and tube strikes hit particularly hard in central London, where many of Fullers pubs are located. It estimated the disruption lopped more than 5 million pounds ($6.3 million) off sales in the financial year ended April 1.

Fullers reported a 76% rise in adjusted profit before tax to 12.7 million pounds, but that was still below 2019 levels.

Shares in the company, which have gained almost 15% so far this year, were up 1% in morning trade.

"We believe Fuller's underperformance in profit recovery can be addressed as pandemic recovery trends and cost headwinds normalise," Stifel analysts said in a note.

Emeny said profit margins, which have been hit by higher energy, food and wages costs, were expected to improve, though the company does not anticipate a full recovery this year.

Fullers has this year increased drinks prices by 6.8% and food prices by 8%.

Like-for-like sales were up almost 14% in the first 10 weeks of its new financial year, including a 26% jump in rosé wine and strong demand for cocktails.

($1 = 0.7905 pounds)

Reporting by Radhika Anilkumar in Bengaluru; Editing by Rashmi Aich and Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

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