TIDMFSTA
RNS Number : 7647C
Fuller,Smith&Turner PLC
15 June 2023
15 JUNE 2023
FULLER, SMITH & TURNER P.L.C.
("Fuller's", the "Company", or the "Group")
Financial results for the 53 weeks to 1 April 2023
Return to strong like for like growth
Financial and Operational Highlights
53 weeks 52 weeks
ended ended
1 April 26 March
2023 2022
GBPm GBPm
---------------------------- --------------------------- ---------
Revenue and other income 336.6 253.8
EBITDA(1) 51.8 44.3
Adjusted profit before
tax(2) 12.7 7.2
Statutory profit before
tax 10.3 11.5
Basic earnings per share(3) 12.98p 11.59p
Adjusted earnings per
share(3) 16.10p 9.79p
Dividend per share 14.68p 11.31p
Net debt excluding lease
liabilities(4) 132.8 131.9
---------------------------- --------------------------- ---------
All figures above are from continuing operations.
1 Earnings before interest, tax, depreciation, amortisation,
profit on disposal of property, plant and equipment, and separately
disclosed items.
2 Adjusted profit before tax is the profit before tax excluding separately disclosed items.
3 Per 40p 'A' or 'C' ordinary share. Adjusted EPS is calculated
using earnings attributable to equity shareholders after tax
excluding separately disclosed items. Basic EPS includes separately
disclosed items.
4 Net debt excluding lease liabilities comprises cash and
short-term deposits, bank overdraft, bank loans, debenture stock
and preference shares.
-- Revenues grew 33% to GBP336.6 million (FY2022: GBP253.8
million) as the business recovered from the impact of covid-related
restrictions on trade
-- Like for like sales in the year grew by 17.5% compared to
prior year, with Central London growing by 40.1%
-- Adjusted profit before tax increased by 76% to GBP12.7 million (FY2022: GBP7.2 million)
-- Net debt at GBP132.8 million (FY2022: GBP131.9 million) with
cash generated by the business funding investment in the estate and
returns to shareholders
-- Directors' valuation of the total property portfolio in May
2022 at GBP995.6 million, approximately GBP400 million above our
current book value - giving implied adjusted net asset value per
share of GBP14.07
-- Total dividend of 14.68p declared, representing a 30% increase on last year
-- Board to keep further share buybacks under review in line
with its capital allocation framework.
Strategic Highlights
-- Clear long-term strategy, with all elements contributing to
growing sales momentum and profitability
-- Maintained investment in the existing estate, with GBP25
million invested in the period to enhance capital values and drive
further growth
-- Maximising our pubs' potential through proactive portfolio
management to ensure all pubs are operated to deliver a great
customer experience, while optimising our returns
o Three new pubs opened during the year - The Rising Sun in the
New Forest, The Willow in Bourton-on-the-Water, and The Queen's
Arms at Heathrow Terminal 2
o Four pubs transferred from Managed operations to Tenanted Inns
in the year, with a further 23 identified, of which four transfers
have already completed
o Small number of pubs earmarked for disposal
o Sale agreed on The Mad Hatter, Southwark, which will realise
GBP20 million in value and a profit on disposal of GBP17
million
-- Continued investment in our people to develop the leaders of
the future and deliver best in class service for our customers
-- Dawn Browne, People & Talent Director, promoted to Main Board from 3 July 2023
-- Implementing a wide range of energy reduction initiatives as
part of our Life is too good to waste programme.
Current Trading
-- Strong sales momentum with like for like sales for the 10 weeks to 10 June 2023 up 13.9%
-- Reopened The Admiralty, our iconic pub on Trafalgar Square,
following a major fire last July and completed GBP2.5 million
refurbishment at The Sanctuary House, near Westminster Abbey
-- Low level of vacancies across the estate and strong pipeline of home-grown General Managers
-- Delivering on our long-term strategy, purpose and vision to
grow our business in a sustainable manner.
Chief Executive Simon Emeny said:
" We have made good progress in the last year, with continued
investment in our people and properties, providing the perfect
post-covid springboard for the future. Looking forwards, that
future looks very positive. We continue to build on our five
strategic pillars, investing in the areas that have the greatest
impact on our business and growing our profitability. We live by
our values and our culture, and despite having had a lot to contend
with over the last year - with interruptions from tube and train
strikes and high-cost inflation in energy, food and wages - our
teams across the estate are successfully delivering experiences
that nourish the soul.
"We are delighted that our sales momentum has continued into the
new financial year and like for like sales for the first 10 weeks
are up 13.9%. Our recent investments at The Willow in
Bourton-on-the-Water, The Sanctuary House by Westminster Abbey, and
The Admiralty in Trafalgar Square are outperforming our
expectations, and we have exciting projects planned for this
financial year at The Counting House in the City, The Forester in
Ealing, and The Rising Sun near Bashley in the New Forest.
"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. In addition, we are ever hopeful of a resolution to the
ongoing train strikes to allow us to further benefit from the
increasing numbers of office workers and international tourists
returning to the Capital.
"We have a clear pathway to further growth based on enhancing
profitability from our underlying business, proactively managing
our property portfolio to ensure we are getting the best returns
and continuing to seek out appropriate acquisitions.
"I am excited by the opportunities ahead, optimistic about the
future, and confident in our ability to deliver excellent service
to our customers, careers for our people and returns for our
shareholders."
-Ends-
For further information, please contact:
Fuller, Smith & Turner P.L.C.
Simon Emeny, Chief Executive
020 8996 2000
Neil Smith, Finance Director
020 8996 2000
Georgina Wald, Corporate Comms Manager 020 8996 2198
Instinctif Partners
Justine Warren
020 7457 2010
Notes to Editors:
Fuller, Smith & Turner PLC is the premium pubs and hotels
business that is famous for beautiful and inviting pubs with
delicious fresh food, a vibrant and interesting range of drinks,
and engaging service from passionate people. Our purpose in life is
to create experiences that nourish the soul. Fuller's has 200
managed businesses, with 1,024 boutique bedrooms, and 177 Tenanted
Inns. The estate is predominately located in the South of England
(44% of sites are within the M25) and stretches from our London
heartland to the Jurassic Coast via the New Forest. Our Managed
Pubs and Hotels include Cotswold Inns & Hotels - seven stunning
hotels in the Cotswolds, and Bel & The Dragon - seven exquisite
modern English inns located in the Home Counties. In summary,
Fuller's is the home of great pubs, outstanding hospitality and
passionate people, where everyone is welcome and leaves that little
bit happier than they arrived.
Photography is available from the Fuller's Press Office on 020
8996 2000 or by email at pr@fullers.co.uk .
This statement will be available on the Company's website,
www.fullers.co.uk . An accompanying presentation will be available
from 12 noon on 15 June 2023.
FULLER, SMITH & TURNER P.L.C.
FINANCIAL RESULTS FOR THE 53 WEEKSED 1 APRIL 2023
CHAIRMAN'S STATEMENT
The 2020s is fast becoming the decade that has seen an
unprecedented use of the word unprecedented. A year ago, I
reflected on the impact of the Omicron variant on our business.
Since then, the war in Ukraine has continued, food and energy
inflation, together with the cost of living in general, has
spiralled, we have seen strikes across a wide range of industries
and we have had three Prime Ministers, four Chancellors of the
Exchequer and fiscal statements that have taken the economy in all
manner of directions.
Against this backdrop, your Company has delivered a good
performance, and in times of short-term upheaval, long-term
businesses come into their own. The Executive Team, under the
leadership and guidance of Simon Emeny, is implementing our
strategic plan to return to pre-pandemic levels of profitability
and deliver long-term growth for the Company, our shareholders and
our team members.
With our clear purpose to create experiences that nourish the
soul, and five defined strategic pillars, our teams throughout the
business understand the role they play in our success and have the
skill, motivation and dedication to deliver it. Despite the twists
and turns, the stops and starts, they have continuously bounced
back to delight their customers and deliver an outstanding level of
service. They are the heart and soul of Fuller's, and I would like
to thank each and every one of them for their loyalty and
commitment.
Underpinning our success is, and has always been, the strength
of our excellent, predominately freehold estate. We have always
maintained that operating both managed and tenanted models offers a
wide range of benefits, particularly around portfolio management.
And while I am always proud of all parts of the Fuller's business,
I was particularly delighted to see the Tenanted Inns team pick up
the award for Best Tenanted Pub Company at this year's Publican
Awards.
We are seeing rising numbers of international tourists and ever
more workers returning to the City and this, combined with the
actions we are taking as part of the strategy to continue to
improve profitability, gives me confidence and optimism in the
future.
As part of our ongoing succession planning, I am delighted to
announce that Dawn Browne has accepted our invitation to join the
Board with effect from 3 July 2023. Dawn joined Fuller's in 2011
and, following roles in the Learning & Development Team and a
successful term as Head of Operations for the City, has been our
People & Talent Director since 2019. As a people-centric
business, and given her unique skillset, she has an important role
to play on the Board. Her in-depth knowledge of our team members,
alongside her operational experience, will provide invaluable
insight. We also look forward to her support to help us to drive
and prioritise diversity and inclusion and to provide visibility on
matters around culture and organisational change. I know her
appointment will be received extremely well by the business.
DIVID
The Board is pleased to announce a final dividend of 10.0p
(FY2022: 7.41p) per 40p 'A' and 'C' ordinary share and 1.0p
(FY2022: 0.741p) per 4p 'B' ordinary share, representing a
year-on-year increase of 35%. This will be paid on 27 July 2023 to
shareholders on the share register as at 23 June 2023. The total
dividend of 14.68p (FY2022: 11.31p) per 40p 'A' and 'C' ordinary
share and 1.468p (FY2022: 1.131p) per 4p 'B' ordinary share
represents a 30% year-on-year increase and continues our return to
a progressive dividend policy.
Michael Turner
Chairman
14 June 2023
CHIEF EXECUTIVE'S REVIEW
OVERVIEW
We have made good progress in the last year, with continued
investment in our people and properties providing the perfect
post-covid springboard for the future. Looking forwards, that
future looks very positive. We continue to build on our five
strategic pillars, investing in the areas that have the greatest
impact on our business and growing our profitability. We live by
our values and our culture, and despite having had a lot to contend
with over the last year - with interruptions from tube and train
strikes and high cost inflation in energy, food and wages - our
teams across the estate are successfully delivering experiences
that nourish the soul.
There is clearly more to come too, as international tourism
numbers continue to rise, the rhythm of life grows louder across
offices in our towns and cities, and cost pressures stabilise.
Ongoing rail strikes are unhelpful - particularly in the Capital -
but commuters are a resilient bunch and the impacts, while
detrimental financially, are thankfully short-lived. Most
importantly to Fuller's is that we have a long-term vision,
continuing to stick to the things we do best, and this is validated
by our customers' continued loyalty.
STRATEGIC REVIEW
We have forward momentum, a great team of people, we are already
building on the 33% rise in total sales last year and have started
the new financial year with excellent like for like growth. We will
continue to achieve this through our long-term strategy -
delighting our customers, inspiring our people, enhancing our
estate, evolving our business and owning our impact. These
strategic pillars have not changed, and they provide a framework
that allows us to grow our business in a sustainable manner.
We are a proactive asset manager and have taken some significant
portfolio management decisions to evolve our estate, ensuring it
remains fit for the future. In order to improve and sustain returns
in the long term, post year end we identified 23 of our Managed
Pubs to transfer across into our Tenanted Inns division - four of
which have moved across already. We have also taken the opportunity
to crystallise the value of The Mad Hatter in Southwark, which we
have contracted to sell as part of a larger property redevelopment,
in a sale that will deliver Fuller's GBP20 million in value on
completion next year. These funds, combined with our ambition to
continue to build our business, will allow us to grow both
organically and through acquisition.
Like all businesses, margins have been increasingly squeezed due
to cost inflation, but we are addressing this through a programme
of action focused on delivering sales-led growth while keeping a
tight rein on costs.
Delight our customers
We are confident that a trip to the great British pub will
always be an affordable luxury and part of our national psyche. But
customers have a choice, and they will choose to go to the pubs and
hotels that deliver an outstanding customer experience at a price
the consumer sees as good value.
In recent years, we have put a lot of effort and emphasis on the
entire customer journey - starting with the digital touchpoints
that attract the customer, through the in-pub experience around
choice, service delivery and reasons to visit, and finishing with
the correct level of follow up and future contact.
We are reaping the rewards of the digital transformation project
that completed in the previous financial year, and which allows for
easy, low cost per customer communications to promote the great
activities that take place in our pubs. One of the activities that
we will be looking at for the coming year is to build our presence
around a premium sport experience - which will increase frequency
of visit, spend per head and help acquire new customers.
We know that there is a demand for premium sports occasions -
both in terms of near-stadium packages such as at The Cabbage Patch
and The Turk's Head, both at Twickenham, and when watching live
sport on the television. The pub is always seen as the next best
place to being in the stadium for major sporting events and we will
be giving our customers amazing hospitality, bookable spaces, great
menus and atmosphere to build on these lucrative occasions, in
collaboration with our drinks partners - particularly Asahi, who
are one of the main sponsors of this year's Rugby World Cup.
To stay ahead of the competition, we are also in the process of
a farm to fork project to ensure we keep our food offer fresh,
interesting and relevant. This process has included some extensive
customer segmentation work, which will further help us to ensure
that we target the right offer, in the right style of venue, to the
right customer - driving sales and reducing the acquisition and
retention costs of new and existing customers.
Inspire our people
Hospitality is a people business and it is our amazing team
members at the front line that can make the biggest impact on our
customers. They will only deliver great service and an experience
that nourishes the soul if they are well-trained, highly motivated,
happy and engaged.
During the last year, we have worked hard to ensure we are
listening to our teams across the business - so we were delighted
that response rates and levels of happiness and engagement rose
when we conducted our second Happiness Index survey. In addition,
we received a plethora of individual comments and suggestions - all
of which have been read, recorded and collated into common themes
and, in turn, shared and discussed by the Executive Team so future
actions can be taken. This is only one strand of our listening
strategy and is supported by new forums for our General Managers,
our Head Chefs and our support centre team and regular catch-up
sessions with Helen Jones, our designated Non-Executive Director
responsible for employee engagement.
During the year, we also had our largest graduation event for
all those undertaking development programmes, and our
apprenticeship programmes - both front of house and through our
Chefs' Guild - continue to deliver excellent results with 200
apprentices trained last year across six different programmes,
making full use of our Apprenticeship Levy. There is more to come,
with an anticipated 220 apprenticeships in the coming year, and I
am delighted to see more of our General Managers choosing to take
on the LEAP programme degree level apprenticeship. This investment
in development, and in particular leadership, will secure our
future success.
Enhance our estate
Operating both Managed and Tenanted pubs has always been a key
tenet of our strategy. It allows us to holistically curate our pub
estate, so we can operate individual sites under the business model
that works best for the pub and its customers, best for the
Company, and delivers the best return for our shareholders.
Over the years, we have always moved sites between the two
businesses, but moves normally happen on an individual basis.
Following 12 months of trading free of restrictions, and in light
of the changing economics of running a pub, we undertook a detailed
review of the estate post year end - particularly around
profitability within our managed framework - and, as a result,
decided to move 23 pubs into our Tenanted Inns division. Four of
these transfers have already happened, with the remainder due to
take place in the coming weeks.
In line with our values, we put our people first, and the
majority of team members in the impacted pubs could either remain
in situ with the new Tenant, apply to take on the Tenancy for
themselves, or move to another Fuller's managed site.
During the year we decided to exit a small number of leasehold
sites, including The Ship at Borough and The Inn of Court at
Holborn, and earmarked for disposal a handful of pubs which no
longer satisfy our internal returns criteria. We have also decided
to accept an offer of GBP20 million in value for The Mad Hatter in
Southwark, representing a significant premium above its net book
value of GBP2.7 million. This transaction is due to complete in
summer 2024.
Supporting all of this activity is our continued commitment to
maintaining high standards in our existing estate and developing
sites for the future. This is reflected with three new openings
during the year - The Rising Sun in the New Forest, The Willow in
the idyllic Cotswolds village of Bourton-on-the-Water, and The
Queen's Arms at Heathrow Terminal 2.
In addition, we continue to invest to enhance the core pub
estate. We were delighted to reopen The Admiralty - the iconic and
only pub on Trafalgar Square - following a GBP3.3 million rebuild
after a major fire last summer - and we recently completed a GBP2.5
million investment at The Sanctuary House, near Westminster Abbey,
reopening in time to welcome customers for King Charles III's
coronation.
Evolve our business
While we have a long-term strategy - we never stop monitoring
trends, societal changes, and the behaviour of existing and
potential customers. Reacting to those changes is imperative in
delivering continued growth and this has been reflected in the
investments we made through our digital transformation project and
that we will make as we continually review and hone our food
offering.
In November, I was delighted to welcome Sam Bourke to the
Executive Team as Marketing Director. Sam has a long history in the
hospitality sector having previously worked for ETM, The Restaurant
Group and Wasabi. Sam is already adding value across the business
with her drive, enthusiasm, and clear focus on the key trading
opportunities that will deliver strong sales for our pubs and
hotels.
As well as building on the opportunities provided through
enhancing our premium sports packages, the marketing team is also
reviewing our kids' menus and ensuring our family proposition is
best in class. In addition, we are looking to capitalise on trading
opportunities during all parts of the day, for example with an
elevated and indulgent brunch offer.
The new Business Central finance system which was implemented in
2021 is delivering high quality information that aids the
decision-making process and with finance, marketing and operations
working in perfect harmony, we can make successful decisions based
on our knowledge of consumer trends, supported by hard data,
excellent supplier relationships, and outstanding operational
capability.
Own our impact - because Life is too good to waste
Sustainability and decisions around our people, the planet and
our communities, are at the heart of everything we do - and while
doing things the right way has always been a Fuller's value, it is
now absolutely part of business as usual.
We have a long-standing declared commitment to reach Net Zero by
2030 for our operational emissions and by 2040 for our supply
chain. We have made good progress on our target to increase
recycling and reuse, while driving down single use items, and we
continue to send zero waste to landfill. In addition, we are
currently rolling out a programme of sustainability champions to
help us embed best practice across the estate.
There are, of course, added benefits to our sustainability
programme with reductions in energy usage of 14% for gas and 13%
for electricity. New equipment in our pubs continually moves us
away from gas and both The Queen's Arms at Heathrow and The
Admiralty are fully electric. Combined with the fact that all our
electricity is from renewable sources, that means these two pubs
are exclusively powered by zero carbon energy.
As well as our commitment to the environment, we continue to
invest in our diversity and inclusion programme, with all senior
leaders undertaking diversity and inclusion training. In a great
example of creating a virtuous circle, we are recruiting more team
members with intellectual disabilities through a programme
supported by our corporate charity partner, Special Olympics Great
Britain. It is joined up thinking that helps a company of our size
punch far above its weight in this area.
TENANTED INNS
One of the highlights of the year was seeing our excellent
Tenanted Team, under the leadership of Iain Rippon, pick up the
award for Best Tenanted and Leased Pub Company (up to 500 sites) at
this year's Publican Awards. It was great recognition for the
excellent work Iain and the team have done supporting our Tenants,
especially in the current inflationary cost environment.
We have always seen the benefit of operating both managed and
tenanted models. The latter allows pubs to remain within the
Fuller's estate but with lower capex, lower costs and shared risk
and reward, enabling the innovative, entrepreneurial Tenants, which
our pubs attract, to benefit from Fuller's operational expertise
and vice versa. The flexibility it facilitates to move pubs between
the models constantly proves useful to all parties and as well as
the obvious benefits of the 23 houses that are moving into the
Tenanted division, we see the benefits of moving in the other
direction through sites such as The George & Dragon in
Westerham and The Plough at East Sheen.
It has been particularly rewarding to see the success of those
pubs on turnover linked agreements, where we have added additional
marketing resource to help our Tenants build their business and
access the benefits that come from also having a Managed estate.
From Shakespeare and opera to panto, we can give our Tenanted pubs
access to revenue building reasons to visit.
Finally, it is training that is the key to running successful
tenancies. At no cost to our Tenants, this currently includes a
Fuller's induction day, covering the basics and introductions to
key support team members, social media and marketing courses
delivered locally, bespoke training for turnover agreement pubs,
personal licence courses, a business development day held by a
third-party trainer, and full access to the suite of FLOW online
training. We also run an excellent cellar course at the Fuller's
Brewery through our long-term supply agreement with Asahi.
FINANCIAL REVIEW
Income statement
Group revenue increased by 33% to GBP336.6 million (FY2022:
GBP253.8 million). Both financial years had periods when trade was
disrupted, with train and tube strikes in the current financial
year and covid restrictions in the prior year. The train and tube
strikes were particularly detrimental in Central London, where a
significant proportion of our estate is situated, with commuters
choosing to work from home. We estimate that the strike action has
impacted sales by in excess of GBP5 million in the financial
year.
The trading environment during the year was very challenging.
The war in Ukraine caused our energy costs to increase
substantially. Even with hedging arrangements in place, and reduced
usage, our total energy costs increased to GBP14.2 million,
compared to GBP7.6 million in the prior year. We have had to manage
significant food and drink inflation and growing wage costs, as a
result of labour shortages at the start of the year, as well as the
increase in National Living Wage. This national inflationary
environment has also led to the Bank of England raising interest
rates, with our finance costs rising by nearly 10% from the prior
year.
Despite the challenging backdrop, the Group has delivered an
adjusted profit of GBP12.7 million, up 76% on the prior year
(FY2022: GBP7.2 million). The financial year to 1 April 2023
comprised 53 weeks of trading, whereas the prior year represented
52 weeks. The additional week of trade contributed GBP5.7 million
to the Group revenues and GBP0.3 million to Group adjusted
profit.
In our Managed Pubs and Hotels business, like for like sales
have grown by 17.5% compared to the prior year, with total sales
increasing by 34%. Like for like sales in our Central London sites
have risen by 40.1%, demonstrating both workers and tourists are
returning to London and continue to do so.
Adjusted EBITDA for the Managed Pubs and Hotels business was
GBP53.4 million, which represents an increase of 11% on the prior
year (FY2022: GBP48.0 million). However, adjusted EBITDA margin
declined from 21.0% to 17.4%, reflecting the impact of increased
energy and labour costs. Additionally, in the prior year the UK
Government was providing some support due to the pandemic. VAT
rates for food and accommodation were at 5%, and then 12.5%, but
increased back to 20% in the current year. We also received some
support grants in the prior year, which were not repeated in the
current year.
Tenanted Inns revenue grew by 19% from GBP25.0 million to
GBP29.8 million. Adjusted EBITDA margin improved from 51.6% to
52.0%. The low cost base of the Tenanted business means it is a
highly profitable part of the Group and continues to trade strongly
despite the economic backdrop.
Total net finance costs (before separately disclosed items) have
increased by GBP1.1 million to GBP12.4 million. The increase is due
to the rising Bank of England base rate partially offset by the
improved margins secured on the new bank facilities as part of the
refinancing in May 2022. This means that the average cost of
borrowing was 7.0% in the current financial year compared to 4.2%
in the prior year.
The net position on separately disclosed items of GBP2.4 million
expense (FY2022: GBP4.3 million credit) includes GBP11.8 million of
profits on the disposal of nine predominately unlicensed
properties, impairments of GBP14.3 million on 22 properties, costs
of GBP0.5 million incurred as a result of corporate reorganisation
and refinancing, offset by a GBP0.8 million credit in respect of a
historical VAT provision.
The underlying effective tax rate was 22.8% (FY2022: 16.7%) as
some movements are at the current corporation tax rate of 19% and
others are at the future tax rate of 25%. Separately disclosed
items have an effective tax rate of 20.8% (FY2022: 74.4%),
resulting in an overall tax rate of 23.3% (FY2022: 38.3%).
Balance Sheet
During the year, the Group refinanced its banking facilities
with new unsecured facilities of GBP200 million, comprising a
revolving credit facility of GBP110 million and a term loan of
GBP90 million. These facilities have been agreed for a tenure of
four years through to May 2026. The new facilities bear interest at
a margin dependent on the leverage covenant plus a base rate of
SONIA. In the year, interest rates have increased sharply with
SONIA increasing from 60bps to just under 420bps.
In order to mitigate the risk of high SONIA rates, on 2
September 2022, the Group entered into a zero-premium cap and
collar over GBP60 million of the term facility. This instrument is
in place for a three-year period to hedge some of the variability
in interest rates. The Group sold a floor of 310bps and bought a
cap of 500bps, which gives some protection should SONIA exceed
500bps.
Net debt (excluding leases) was at GBP132.8 million (FY2022:
GBP131.9 million). This is only a marginal increase from last year
as the Group has delivered on its capital allocation framework
through investment in the estate and returns to shareholders. A
total of GBP30.7 million was invested in the estate in the year,
including three new acquisitions - The Rising Sun near Bashley in
the heart of the New Forest, The Willow in Bourton-on-the-Water in
the Cotswolds and The Queen's Arms at Heathrow Terminal 2. The
improvement in EBITDA has meant that net debt/EBITDA is now at 3x,
which is in line with our capital allocation framework.
The net defined benefit pension scheme accounting surplus has
increased by GBP0.3 million to GBP14.6 million (FY2022: GBP14.3
million surplus) as a result of both a decrease in the present
value of pension obligations as the discount rate increased from
3.0% to 4.75%, and a similar quantum of decline in the fair value
of scheme assets. In April 2023, the 2022 triennial valuation was
concluded, and the Company has agreed to continue to pay
contributions into the plan in line with the existing recovery
plan. Under this plan, deficit reduction contributions started at
GBP2.2 million per annum in July 2022. As of January 2023, the
deficit reduction contributions have increased to GBP2.4
million.
Shareholder returns
Total dividends paid to shareholders were GBP7.4 million
(FY2022: GBP2.4 million) and the Board has announced a final
dividend of 10.0p (FY2022: 7.41p), which will be paid in July. In
addition, and in line with our capital allocation framework, we
have purchased 1 million 'A' shares at a total cost of GBP4.8
million. Share buybacks are an important element of capital
allocation and will be evaluated on an ongoing basis.
CURRENT TRADING AND OUTLOOK
We are delighted that our sales momentum has continued into the
new financial year and like for like sales for the first 10 weeks
are up 13.9%. Our recent investments at The Willow, The Sanctuary
House and The Admiralty are outperforming our expectations, and we
have exciting projects planned for this financial year at The
Counting House in the City, The Forester in Ealing, and The Rising
Sun near Bashley.
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. In addition, we are ever hopeful of a resolution to the
ongoing train strikes to allow us to further benefit from the
increasing numbers of office workers and international tourists
returning to the Capital.
Fuller's is, and has always been, about the long term. We have
an excellent vision and strategy that signposts the direction in
which the Company is heading and what we will do to get there. We
have a clear pathway to further growth based on enhancing
profitability from our underlying business, proactively managing
our property portfolio to ensure we are getting the best returns
and continuing to seek out appropriate acquisitions. We have a
strong set of values that guide us in how to get there, and we have
an amazing team of people who will deliver all of the above.
Finally, we have a predominately freehold estate, epitomised by
iconic sites in outstanding locations.
I am excited by the opportunities ahead, optimistic about the
future, and confident in our ability to deliver excellent service
to our customers, careers for our people and returns for our
shareholders.
Simon Emeny
Chief Executive
14 June 2023
Fuller, Smith & Turner P.L.C.
Condensed Group Income Statement
For the 53 weeks ended 1 April 2023
53 weeks ended 1 April 52 weeks ended 26 March
2023 2022
-------------------------------- -----------------------------------
Before Before
separately Separately separately Separately
disclosed disclosed disclosed disclosed
items items Total items items Total
Note GBPm GBPm GBPm GBPm GBPm GBPm
-------------------- ---- ----------- ---------- ------- ----------- ---------- ----------
Revenue 2 336.6 - 336.6 253.8 - 253.8
Operating costs (311.5) (14.2) (325.7) (235.3) (2.0) (237.3)
-------------------- ---- ----------- ---------- ------- ----------- ---------- ----------
Operating profit 25.1 (14.2) 10.9 18.5 (2.0) 16.5
Finance costs 3,4 (12.4) - (12.4) (11.3) - (11.3)
Profit on disposal
of properties 3 - 11.8 11.8 - 6.3 6.3
-------------------- ---- ----------- ---------- ------- ----------- ---------- ----------
Profit before tax 12.7 (2.4) 10.3 7.2 4.3 11.5
Tax 5 (2.9) 0.5 (2.4) (1.2) (3.2) (4.4)
-------------------- ---- ----------- ---------- ------- ----------- ---------- ----------
Profit for the year 9.8 (1.9) 7.9 6.0 1.1 7.1
-------------------- ---- ----------- ---------- ------- ----------- ---------- ----------
53 weeks
ended
1 April 52 weeks ended
2023 26 March 2022
Group Note Pence Pence
--------------------------------------- ---- -------- --------------
Earnings per share per 40p 'A' and
'C' ordinary share
--------------------------------------- ---- -------- --------------
Basic 6 12.98 11.59
Diluted 6 12.96 11.51
Adjusted 6 16.10 9.79
Diluted adjusted 6 16.07 9.73
Earnings per share per 4p 'B' ordinary
share
--------------------------------------- ---- -------- --------------
Basic 6 1.30 1.16
Diluted 6 1.30 1.15
Adjusted 6 1.61 0.98
Diluted Adjusted 6 1.61 0.97
Fuller, Smith & Turner P.L.C.
Condensed Group Statement of Comprehensive Income
For the 53 weeks ended 1 April 2023
53 weeks 52 weeks
ended ended
1 April 2023 26 March 2022
Note GBPm GBPm
--------------------------------------------------------------------------------- ---- ------------- --------------
Profit for the year 7.9 7.1
--------------------------------------------------------------------------------- ---- ------------- --------------
Items that may be reclassified to profit or loss in subsequent years (net of tax)
Net gains on valuation of financial assets and liabilities 0.1 0.5
Tax related to items that may be reclassified to profit or loss 5 - (0.1)
--------------------------------------------------------------------------------- ---- ------------- --------------
Items that will not be reclassified to profit or loss in subsequent years (net of
tax)
Net actuarial (losses)/gains on pension schemes 12 (2.5) 15.5
Tax related to items that will not be reclassified to profit or loss 5 0.6 (3.8)
Other comprehensive (losses)/gains for the year, net of tax (1.8) 12.1
--------------------------------------------------------------------------------- ---- ------------- --------------
Total comprehensive income for the year, net of tax 6.1 19.2
--------------------------------------------------------------------------------- ---- ------------- --------------
Fuller, Smith & Turner P.L.C.
Condensed Group Balance Sheet
1 April 2023
At 1 April 2023 At 26 March 2022
Note GBPm GBPm
------------------------------- ---- --------------- ----------------
Non-current assets
Intangible assets 29.0 29.5
Property, plant and equipment 8 583.3 592.7
Investment properties 1.5 1.6
Retirement benefit obligations 12 16.1 16.2
Right-of-use assets 10 66.4 73.8
Other financial assets 0.1 -
------------------------------- ---- --------------- ----------------
Total non-current assets 696.4 713.8
------------------------------- ---- --------------- ----------------
Current assets
Inventories 4.2 3.6
Trade and other receivables 10.2 10.7
Current tax receivable 0.7 0.6
Cash and short-term deposits 11 14.1 15.6
Total current assets 29.2 30.5
------------------------------- ---- --------------- ----------------
Assets classified as held for
sale 7.0 5.4
------------------------------- ---- --------------- ----------------
Total assets 732.6 749.7
------------------------------- ---- --------------- ----------------
Current liabilities
Trade and other payables (54.6) (57.1)
Provisions (0.5) (0.5)
Borrowings 11 (6.0) (120.0)
Lease liabilities 10 (4.8) (6.8)
Other financial liabilities - (0.1)
Total current liabilities (65.9) (184.5)
------------------------------- ---- --------------- ----------------
Non-current liabilities
Borrowings 11 (140.9) (27.5)
Lease liabilities 10 (67.0) (73.9)
Retirement benefit obligations 12 (1.5) (1.9)
Deferred tax liabilities (14.7) (12.7)
Total non-current liabilities (224.1) (116.0)
------------------------------- ---- --------------- ----------------
Net assets 442.6 449.2
------------------------------- ---- --------------- ----------------
At 1 April 2023 At 26 March 2022
GBPm GBPm
--------------------------- --------------- ----------------
Capital and reserves
Share capital 25.4 25.4
Share premium account 53.2 53.2
Capital redemption reserve 3.7 3.7
Own shares (21.3) (16.6)
Hedging reserve - (0.1)
Retained earnings 381.6 383.6
---------------------------- --------------- ----------------
Total equity 442.6 449.2
---------------------------- --------------- ----------------
Fuller, Smith & Turner P.L.C.
Condensed Group Statement of Changes in Equity
For the 53 weeks ended 1 April 2023
Share Capital
Share premium redemption Own Hedging Retained
capital account reserve shares reserve earnings Total
Group GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------------------- -------- -------- ---------- ----------- --------- ------------- ---------
At 27 March 2021 22.8 4.2 3.7 (17.0) (0.5) 366.3 379.5
----------------------------------------- -------- -------- ---------- ----------- --------- ------------- ---------
Profit for the year - - - - - 7.1 7.1
Other comprehensive income for the year - - - - 0.4 11.7 12.1
----------------------------------------- -------- -------- ---------- ----------- --------- ------------- ---------
Total comprehensive income for the year - - - - 0.4 18.8 19.2
Issue of Share capital 2.6 49.0 - 0.2 - - 51.8
Shares released from ESOT and treasury - - - 0.2 - - 0.2
Dividends (note 7) - - - - - (2.4) (2.4)
Share-based payment charges - - - - - 0.8 0.8
Tax credited directly to equity - - - - - 0.1 0.1
At 26 March 2022 25.4 53.2 3.7 (16.6) (0.1) 383.6 449.2
----------------------------------------- -------- -------- ---------- ----------- --------- ------------- ---------
Profit for the year - - - - - 7.9 7.9
Other comprehensive income for the year - - - - 0.1 (1.9) (1.8)
----------------------------------------- -------- -------- ---------- ----------- --------- ------------- ---------
Total comprehensive income for the year - - - - 0.1 6.0 6.1
Shares purchased to be held in ESOT or as
treasury - - - (4.8) - - (4.8)
Shares released from ESOT and treasury - - - 0.1 - - 0.1
Dividends (note 7) - - - - - (7.4) (7.4)
Share-based payment credits - - - - - (0.4) (0.4)
Tax credited directly to equity - - - - - (0.2) (0.2)
At 1 April 2023 25.4 53.2 3.7 (21.3) - 381.6 442.6
----------------------------------------- -------- -------- ---------- ----------- --------- ------------- ---------
Fuller, Smith & Turner P.L.C.
Condensed Group Cash Flow Statement
For the 53 weeks ended 1 April 2023
53 weeks ended 52 weeks ended
1 April 26 March
2023 2022
Note GBPm GBPm
------------------------------------------------------------------------------ ---- -------------- ----------------
Profit before tax for continuing operations 10.3 11.5
Net finance costs before separately disclosed items 4 12.4 11.3
Separately disclosed items 3 2.4 (4.3)
Depreciation and amortisation 26.7 25.8
------------------------------------------------------------------------------ ---- -------------- ----------------
51.8 44.3
Difference between pension charge and cash paid (2.3) (2.3)
Share-based payment (credit)/charges (0.4) 0.8
Change in trade and other receivables 2.5 0.5
Change in inventories (0.6) (1.5)
Change in trade and other payables (3.0) 28.8
Cash impact of operating separately disclosed items 3 (0.5) (1.9)
------------------------------------------------------------------------------ ---- -------------- ----------------
Cash generated from operations 47.5 68.7
Tax received - 2.5
------------------------------------------------------------------------------ ---- -------------- ----------------
Net Cash generated from operating activities 47.5 71.2
------------------------------------------------------------------------------ ---- -------------- ----------------
Cash flow from investing activities
Purchase of property, plant and equipment and intangibles (30.7) (25.8)
Sale of property, plant and equipment, right-of-use assets and assets held for
sale 16.0 10.0
Net Cash (outflow) from Investing activities (14.7) (15.8)
------------------------------------------------------------------------------ ---- -------------- ----------------
Cash flow from financing activities
Purchase of own shares (4.8) -
Receipts on release of own shares to option schemes 0.1 0.1
Interest paid (8.7) (7.2)
Preference dividends paid 7 (0.1) (0.1)
Equity dividends paid 7 (7.4) (2.4)
Net proceeds from equity placing - 51.8
Repayment of CCFF 11 - (100.0)
Drawdown of bank loans 11 - 12.6
Surrender of leases (2.1) (1.9)
Principal and interest elements of lease payments 11 (9.8) (8.6)
Payment of loan arrangement fees 11 (1.5) (1.2)
------------------------------------------------------------------------------ ---- -------------- ----------------
Net cash (outflow) from financing activities (34.3) (56.9)
------------------------------------------------------------------------------ ---- -------------- ----------------
Net movement in cash and cash equivalents (1.5) (1.5)
------------------------------------------------------------------------------ ---- -------------- ----------------
Cash and cash equivalents at the start of the year 11 15.6 17.1
------------------------------------------------------------------------------ ---- -------------- ----------------
Total cash and cash equivalents at the end of the year 11 14.1 15.6
------------------------------------------------------------------------------ ---- -------------- ----------------
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 53 weeks ended 1 April 2023
1. Preliminary statement
The consolidated financial statements of Fuller, Smith &
Turner P.L.C. for the 53 weeks ended 1 April 2023 were authorised
for issue by the Board of Directors on 14 June 2023.
The financial information presented does not constitute the
Group's annual report and accounts for either the 53 weeks ended 1
April 2023 or the 52 weeks ended 26 March 2022 within the meaning
of Section 435 of the Companies Act 2006, but is derived from those
accounts. The Group's statutory accounts for 2022 have been
delivered to the Registrar of Companies and those for 2023 will be
delivered following the Company's annual general meeting. The
independent auditor's reports on both the 2023 and 2022 accounts
were not qualified or modified. The independent auditor's reports
for both 2023 and 2022 did not contain any statements under Section
498 of the Companies Act 2006.
The Group financial statements are presented in Sterling and all
values are shown in millions of pounds (GBPm) rounded to the
nearest hundred thousand pounds, except when otherwise indicated.
The accounting policies used have been applied consistently, except
where set out below, and are described in full in the statutory
financial statements for the 53 weeks ended 1 April 2023, which
will be mailed to shareholders on or before 27 June 2023 and
delivered to the Registrar of Companies. The financial statements
will also be available from the Company's registered office: Pier
House, 86-93 Strand-on-the-Green, London, England, W4 3NN, and on
its website, from that date.
Going concern
At 1 April 2023, the Group's Balance Sheet comprises of 92% of
the estate being freehold properties and available headroom on
facilities of GBP79.5 million and GBP14.1 million of cash and
resulting net debt of GBP132.8 million.
During the year, the Group secured a new facility of GBP200
million, split between a RCF of GBP110 million and a term loan of
GBP90 million, for a tenure of four years to May 2026. Under the
new agreement, the minimum liquidity covenant of GBP10 million
tested monthly remained until November 2022. From December 2022
(and tested quarterly thereafter) the covenant suite consists of
net debt to EBITDA (leverage) and EBITDA to net finance
charges.
The Group has modelled financial projections for the going
concern period, which is the period to 29 June 2024, based upon two
scenarios, the base case and the downside case. The base case is
the Board approved FY2024 budget as well as the Q1 FY2025 plan,
which forms part of the Board approved three year plan. The base
case assumes that sales will continue to recover, in particular in
Central London. However, the budget remains cautious about the
inflationary environment and also the impact on the consumer and
therefore only assumes moderate levels of volume growth as well as
continued pressure on margins. The base case scenario indicates
that the Group will have sufficient resources to continue to settle
its debts as they fall due and operate well within its covenants
for the going concern assessment period.
The Group has also modelled a downside case which assumes that
sales volume reduces by 10% from the base case, and costs across
food, staff and interest continue to rise. This model also assumes
that train strikes are more frequent than experienced in FY2023. In
this downside case, management would implement mitigating actions
such as overhead reduction and reduction of capital expenditure and
other property spend to essential maintenance. Under this scenario,
the Group would still have sufficient resources to settle
liabilities as they fall due and headroom on its covenants through
the duration of the period.
The Group has also performed a reverse stress case which shows
that the Group could withstand a 24% reduction in volumes
throughout the going concern period, as well as costs assumed to
increase at a similar or higher rate than the downside scenario,
before the covenant levels would be exceeded on 31 March 2024. The
Directors consider this scenario to be remote as other than when
the business was closed because of the pandemic have never seen
volumes decline at anywhere close to that rate.
Under both the base and downside scenarios modelled, the Group
would have sufficient headroom on its facilities throughout the
going concern assessment period. Additionally, under the downside
scenario, there are further mitigating actions which the Group has
in its control to either improve EBITDA or reduce net debt, such as
further reduction in capex spend to only essential maintenance and
the decision
not to pay dividends and bonuses. Further mitigating actions
would include disposals of licensed and unlicensed properties.
The Directors have also determined that, over the period of the
going concern assessment, there is not expected to be a significant
impact because of climate change.
After due consideration of the matters set out above, the
Directors are satisfied that there is a reasonable expectation that
the Group has adequate resources to continue in operational
existence for the going concern assessment period, being the period
to 29 June 2024, and have therefore adopted the going concern basis
in the preparation of these financial statements.
2. Segmental Analysis
Operating Segments
For management purposes, the Group's operating segments are:
- Managed Pubs and Hotels, which comprises managed pubs, managed
hotels, Bel & The Dragon and Cotswold Inns & Hotels.
- Tenanted Inns, which comprises pubs operated by third parties
under tenancy or lease agreements.
The most important measure used to evaluate the performance of
the business is adjusted profit, which is the profit before tax,
adjusted for separately disclosed items. The operating segments are
organised and managed separately according to the nature of the
products and services provided, with each segment representing a
strategic operating unit. The Managed Pubs and Hotels operating
segments have been aggregated to one reportable segment on the
basis they have similar economic characteristics. Economic
indicators assessed in determining that the aggregated operating
segments share similar characteristics include expected future
financial performance, operating and competitive risks, and return
on capital. As such the operating segments meet the aggregation
criteria in paragraph 12 IFRS 8 Operating Segments (amended).
As segment assets and liabilities are not regularly provided to
the Chief Operating Decision Maker ("CODM"), the Group has elected,
as provided under IFRS 8 Operating Segments (amended), not to
disclose a measure of segment assets and liabilities.
Managed Total
Pubs and Tenanted continuing
Hotels Inns Unallocated(1) operations
53 weeks ended 1 April 2023 GBPm GBPm GBPm GBPm
------------------------------------- --------- -------- -------------- -----------
Revenue
Sale of goods and services 271.6 21.2 - 292.8
Accommodation income 33.7 - - 33.7
------------------------------------- --------- -------- -------------- -----------
Total revenue from contracts with
customers 305.3 21.2 - 326.5
Rental income 1.5 8.6 - 10.1
------------------------------------- --------- -------- -------------- -----------
Revenue 306.8 29.8 - 336.6
Segment result 30.0 13.2 (18.1) 25.1
Operating separately disclosed
items (14.2)
------------------------------------- --------- -------- -------------- -----------
Operating profit 10.9
Profit on disposal of properties 11.8
Net finance costs (12.4)
------------------------------------- --------- -------- -------------- -----------
Profit before tax 10.3
------------------------------------- --------- -------- -------------- -----------
Other segment information
Additions to property, plant &
equipment and intangible assets 25.2 4.7 0.1 30.0
Depreciation and amortisation 23.4 2.3 1.0 26.7
Impairment of property, right-of-use
assets and assets classified as
held for sale 12.5 1.8 - 14.3
------------------------------------- --------- -------- -------------- -----------
Managed Total
Pubs and Tenanted continuing
Hotels Inns Unallocated(1) operations
52 weeks ended 26 March 2022 GBPm GBPm GBPm GBPm
---------------------------------- ---------- -------- -------------- -----------
Revenue
Sale of goods and services 205.1 17.9 - 223.0
Accommodation income 21.9 - - 21.9
---------------------------------- ---------- -------- -------------- -----------
Total revenue from contracts with
customers 227.0 17.9 - 244.9
Rental income 1.8 7.1 - 8.9
---------------------------------- ---------- -------- -------------- -----------
Revenue 228.8 25.0 - 253.8
Segment Result 24.7 11.1 (17.3) 18.5
Operating separately disclosed
items (2.0)
---------------------------------- ---------- -------- -------------- -----------
Operating Profit 16.5
Profit on disposal of properties 6.3
Net finance costs (11.3)
---------------------------------- ---------- -------- -------------- -----------
Profit before tax 11.5
---------------------------------- ---------- -------- -------------- -----------
Other segment information
Additions to property, plant &
equipment and intangible assets 20.2 2.3 2.6 25.1
Depreciation and amortisation 23.3 1.8 0.7 25.8
Impairment of property 3.0 0.3 - 3.3
---------------------------------- ---------- -------- -------------- -----------
1 Unallocated expenses represent primarily the salaries and
costs of central management. Unallocated capital expenditure
relates to additions to the head office and in the prior year
additions to IT development costs.
3. Separately Disclosed Items
The Group presents separately disclosed items on the face of the
Income Statement for those material items of income and expense
which, because of the nature or expected infrequency of the events
giving rise to them, merit separate presentation to allow
shareholders to understand better the elements of financial
performance in the year.
53 weeks ended 52 weeks ended
1 April 2023 26 March 2022
Continuing operations GBPm GBPm
-------------------------------------------------------------------------------------- -------------- --------------
Amounts included in operating profit:
Reorganisation costs (0.5) (0.8)
Impairment of properties, right-of-use assets and assets classified as held for sale
(note
9) (14.3) (3.3)
Insurance claim (0.2) -
Adjustment related to settlement of the beer business - 2.1
VAT provision release 0.8 -
-------------------------------------------------------------------------------------- -------------- --------------
Total separately disclosed items included in operating profit (14.2) (2.0)
Profit on disposal of properties 11.8 6.3
Separately disclosed finance credits:
Finance credit on net pension liabilities 0.5 -
Finance charge on the write down of arrangement fees (0.5) -
Total separately disclosed finance credits - -
-------------------------------------------------------------------------------------- -------------- --------------
Total separately disclosed items before tax (2.4) 4.3
-------------------------------------------------------------------------------------- -------------- --------------
Exceptional tax:
Profit on disposal of properties (1.0) (1.3)
Change in tax rate 0.5 (3.3)
Other items 1.0 1.4
-------------------------------------------------------------------------------------- -------------- --------------
Total separately disclosed tax 0.5 (3.2)
-------------------------------------------------------------------------------------- -------------- --------------
Total separately disclosed items (1.9) 1.1
-------------------------------------------------------------------------------------- -------------- --------------
The reorganisation costs compromise GBP0.5 million in relation
to the corporate restructure during the 53 weeks ended 1 April 2023
(26 March 2022: GBP0.8 million).
The impairment charge of GBP14.3 million (26 March 2022: GBP3.3
million) relates to the write down of 22 properties to their
recoverable value (26 March 2022: six properties).
The insurance claim of GBP0.2 million is the write off of
property, plant and equipment and the cost of the rectification
work (GBP2.7 million) net of insurance monies claimed (GBP2.5
million).
The VAT provision release relates to a VAT adjustment of GBP0.8
million. In the prior year, GBP2.1 million credit is the release of
the provision, net of the final settlement amount on the sale of
the Fuller's Beer Business.
The profit on disposal of properties of GBP11.8 million during
the 53 weeks ended 1 April 2023 (26 March 2022: GBP6.3 million)
relates to the disposal of nine licensed and unlicensed properties
(26 March 2022: 12 properties).
The cash impact of operating separately disclosed items before
tax for the 53 weeks ended 1 April 2023 was GBP0.5 million cash
outflow (26 March 2022: GBP1.9 million cash outflow).
4. Finance Costs
53 weeks ended 52 weeks ended
1 April 2023 26 March 2022
GBPm GBPm
--------------------------------------------------------------- ---------------- ----------------
Finance Income
Interest income from financial assets 0.2 -
Finance Costs
Interest expense arising on:
Financial liabilities at amortised cost - loans and debentures (9.6) (8.1)
Financial liabilities at amortised cost - preference shares (0.1) (0.1)
Financial liabilities at amortised cost - lease liabilities (2.9) (3.1)
--------------------------------------------------------------- ---------------- ----------------
Net Finance costs before separately disclosed items (12.4) (11.3)
--------------------------------------------------------------- ---------------- ----------------
Finance credit on net pension liabilities (note 3) 0.5 -
Finance charge on the write down of arrangement fees (note 3) (0.5) -
Net finance costs after separately disclosed items (12.4) (11.3)
--------------------------------------------------------------- ---------------- ----------------
5. Taxation
53 weeks ended 52 weeks ended
1 April 2023 26 March 2022
Group GBPm GBPm
-------------------------------------------------- ---------------- ----------------
Tax charged in the Income Statement
Current income tax:
Current tax on profit for the year - 0.2
Adjustments for current tax on prior periods - 0.6
-------------------------------------------------- ---------------- ----------------
Total current income tax expense - 0.8
-------------------------------------------------- ---------------- ----------------
Deferred income tax:
Origination and reversal of temporary differences 3.6 2.2
Change in corporation tax rate - 3.3
Adjustments for deferred tax on prior periods (1.2) (1.9)
Total deferred tax expense 2.4 3.6
-------------------------------------------------- ---------------- ----------------
Total tax charged in the Income Statement 2.4 4.4
-------------------------------------------------- ---------------- ----------------
Analysed as:
Before separately disclosed items 2.9 1.2
Separately disclosed items (0.5) 3.2
-------------------------------------------------- ---------------- ----------------
2.4 4.4
-------------------------------------------------- ---------------- ----------------
Reconciliation of the Total Tax Charge
The tax expense in the Income Statement for the year is higher
(2022: higher) than the standard rate of corporation tax in the UK
of 19% (2022: 19%). The differences are reconciled below:
53 weeks ended 52 weeks ended
1 April 2023 26 March 2022
GBPm GBPm
------------------------------------- ------------------------------------- ----------------
Profit before income tax expense 10.3 11.5
Accounting profit multiplied by
the UK standard rate of corporation
tax of 19% (2022: 19%) 2.0 2.2
Items not deductible/(taxable)
for tax purposes 0.2 (0.3)
Current and deferred tax (over)
provided in previous years (1.2) (1.3)
Net movements in respect of property 1.4 0.5
Change in corporation tax rate - 3.3
Total tax charged in the Income
Statement 2.4 4.4
------------------------------------- ------------------------------------- ----------------
53 weeks ended 52 weeks ended
Deferred tax relating to items charged 1 April 2023 26 March 2022
to the Income Statement GBPm GBPm
--------------------------------------- -------------- --------------
Deferred tax depreciation 1.5 (0.8)
Unrealised capital gains (on PP&E) 1.7 5.2
Retirement benefit obligations 1.8 1.6
Tax losses 0.7 (2.8)
Other (3.4) (0.7)
Corporate interest restriction 0.1 1.1
--------------------------------------- -------------- --------------
Deferred tax in the Income Statement 2.4 3.6
--------------------------------------- -------------- --------------
Tax relating to Items (credited)/charged to the Statement
of Comprehensive Income
Deferred tax:
Valuation gains on financial liabilities - 0.1
Net actuarial (losses)/gains on pension
scheme (0.6) 3.8
----------------------------------------- ----- ---
Total tax (credited)/charged in the
Statement of Comprehensive Income (0.6) 3.9
----------------------------------------- ----- ---
Tax relating to Items charged/(credited) directly to equity
Deferred tax:
Share based payments 0.2 (0.1)
Total tax charged/(credited) to equity 0.2 (0.1)
--------------------------------------- --- -----
6. Earnings Per Share
53 weeks ended 52 weeks ended
1 April 2023 26 March 2022
Group GBPm GBPm
------------------------------------------------------ ---------------- ----------------
Profit attributable to equity shareholders 7.9 7.1
Separately disclosed items net of tax 1.9 (1.1)
------------------------------------------------------ ---------------- ----------------
Adjusted earnings attributable to equity shareholders 9.8 6.0
------------------------------------------------------ ---------------- ----------------
Number Number
--------------------------------- ---------- ----------
Weighted average share capital 60,875,000 61,264,000
Dilutive outstanding options and
share awards 90,000 413,000
--------------------------------- ---------- ----------
Diluted weighted average share
capital 60,965,000 61,677,000
--------------------------------- ---------- ----------
40p 'A' and 'C' ordinary share Pence Pence
------------------------------- ----- -----
Basic earnings per share 12.98 11.59
Diluted earnings per share 12.96 11.51
Adjusted earnings per share 16.10 9.79
Diluted adjusted earnings per
share 16.07 9.73
------------------------------- ----- -----
4p 'B' ordinary share Pence Pence
------------------------------ ----- -----
Basic earnings per share 1.30 1.16
Diluted earnings per share 1.30 1.15
Adjusted earnings per share 1.61 0.98
Diluted adjusted earnings per
share 1.61 0.97
------------------------------ ----- -----
For the purposes of calculating the number of shares to be used
above, 'B'shares have been treated as one-tenth of an 'A' or 'C'
share. The earnings per share calculation is based on earnings from
continuing operations and on the weighted average ordinary share
capital which excludes shares held by trusts relating to employee
share options and shares held in treasury of 2,134,152 (2022:
1,744,564).
Diluted earnings per share amounts are calculated using the same
earnings figure as for basic earnings per share, divided by the
weighted average number of ordinary shares outstanding during the
year plus the weighted average number of ordinary shares that would
be issued on the conversion of all the dilutive potential options
into ordinary shares.
Adjusted earnings per share are calculated on profit after tax
excluding separately disclosed items and on the same weighted
average ordinary share capital as for the basic and diluted
earnings per share. Adjusted earnings per share measures have been
included as the Directors consider that these measures better
reflect the underlying earnings of the Group.
7. Dividends
53 weeks ended 52 weeks ended
1 April 2023 26 March 2022
GBPm GBPm
-------------------------------------- ------------------ --------------
Declared and paid during the year
Equity dividends on ordinary shares:
Final dividend for 2022: 7.41p (2021:
0p) 4.6 -
Interim dividend for 2023: 4.68p
(2022: 3.90p) 2.8 2.4
Equity dividends paid 7.4 2.4
-------------------------------------- ------------------ --------------
Dividends on cumulative preference
shares (note 4) 0.1 0.1
-------------------------------------- ------------------ --------------
Proposed for approval at the Annual
General Meeting
-------------------------------------- ------------------ --------------
Final dividend for 2023: 10.0p (2022:
7.41p) 6.1 4.6
-------------------------------------- ------------------ --------------
The pence figures above are for the 40p 'A' ordinary shares and
40p 'C' ordinary shares. The 4p 'B' ordinary shares carry dividend
rights of one-tenth of those applicable to the 40p 'A' ordinary
shares. Own shares held in the employee share trusts do not qualify
for dividends as the Trustees have waived their rights. Dividends
are also not paid on own shares held as treasury shares.
8. Property, Plant and Equipment
Land & buildings Land & buildings Plant
- owned - owned machinery Fixtures
& used & lessor & vehicles & fittings Total
Group GBPm GBPm GBPm GBPm GBPm
--------------------------------- ---------------- ------------------ ------------ ------------ -----
Cost
--------------------------------- ---------------- ------------------ ------------ ------------ -----
At 27 March 2021 482.7 107.8 6.3 171.6 768.4
--------------------------------- ---------------- ------------------ ------------ ------------ -----
Additions 11.3 1.8 - 9.6 22.7
Disposals (1.3) - - (1.9) (3.2)
Transfer to assets held for sale (1.5) - - (0.4) (1.9)
Transfer from assets held for
sale 2.4 - - 0.6 3.0
--------------------------------- ---------------- ------------------ ------------ ------------ -----
At 26 March 2022 493.6 109.6 6.3 179.5 789.0
--------------------------------- ---------------- ------------------ ------------ ------------ -----
Additions 12.0 2.3 - 15.7 30.0
Disposals (1.4) (0.3) - (6.6) (8.3)
Transfer to asset held for sale (7.8) - - (1.4) (9.2)
At 1 April 2023 496.4 111.6 6.3 187.2 801.5
--------------------------------- ---------------- ------------------ ------------ ------------ -----
Depreciation and impairment
--------------------------------- ---------------- ------------------ ------------ ------------ -----
At 27 March 2021 48.8 9.7 1.7 118.0 178.2
--------------------------------- ---------------- ------------------ ------------ ------------ -----
Provided during the year 4.2 0.6 - 13.1 17.9
Disposals (1.3) - - (1.9) (3.2)
Impairment loss (note 9) 3.3 - - - 3.3
Transfer to assets held for sale (0.1) - - (0.3) (0.4)
Transfer from assets held for
sale - - - 0.5 0.5
--------------------------------- ---------------- ------------------ ------------ ------------ -----
At 26 March 2022 54.9 10.3 1.7 129.4 196.3
--------------------------------- ---------------- ------------------ ------------ ------------ -----
Provided during the year 4.8 1.0 - 13.3 19.1
Disposals (0.8) - - (6.3) (7.1)
Impairment loss (note 9) 13.4 - - - 13.4
Transfer to assets held for sale (2.3) - - (1.2) (3.5)
At 1 April 2023 70.0 11.3 1.7 135.2 218.2
--------------------------------- ---------------- ------------------ ------------ ------------ -----
Net book value at 1 April 2023 426.4 100.3 4.6 52.0 583.3
--------------------------------- ---------------- ------------------ ------------ ------------ -----
Net book value at 26 March 2022 438.7 99.3 4.6 50.1 592.7
--------------------------------- ---------------- ------------------ ------------ ------------ -----
Net book value at 27 March 2021 433.9 98.1 4.6 53.6 590.2
--------------------------------- ---------------- ------------------ ------------ ------------ -----
9. Impairment
2023 2022
Group GBPm GBPm
------------------------------ ----- -----
Impairment losses
Property, plant and equipment 13.4 3.3
Right-of-use assets 0.5 -
Assets held for sale 0.4 -
Total net impairment charge 14.3 3.3
------------------------------ ----- -----
During the 53 weeks ended 1 April 2023, the Group recognised an
impairment loss of GBP13.4 million (2022: GBP3.3 million) on
property, plant and equipment, GBP0.5 million of impairment on
right-of-use assets (2022: GBPnil) and GBP0.4m on assets held for
sale (2022: GBPnil) in respect of the write down of a number of
licensed properties where their asset values exceeded the higher of
fair value less costs to sell or their value in use. The impairment
losses were driven principally by changes in the local competitive
environment in which the pubs are situated.
10. Leases
Amounts recognised in the Balance Sheet
2023 2022
Group GBPm GBPm
-------------------- ----- -----
Right-of-use assets
Properties 66.2 73.1
Equipment 0.2 0.6
Vehicles - 0.1
-------------------- ----- -----
66.4 73.8
-------------------- ----- -----
Lease liabilities
Current 4.8 6.8
Non-current 67.0 73.9
-------------------- ----- -----
71.8 80.7
-------------------- ----- -----
Set out below are the carrying amounts of right-of-use assets
recognised and the movements during the period:
Property Equipment Vehicles Total
Group GBPm GBPm GBPm GBPm
--------------------------------------- -------- --------- -------- -----------
Net carrying value as at 26 March 2022 73.1 0.6 0.1 73.8
--------------------------------------- -------- --------- -------- -----------
Disposals (1.0) - - (1.0)
Lease amendments (1) 1.3 - (0.1) 1.2
Depreciation (6.7) (0.4) - (7.1)
Impairment (0.5) - - (0.5)
--------------------------------------- -------- --------- -------- -----------
Net carrying value as at 1 April 2023 66.2 0.2 - 66.4
--------------------------------------- -------- --------- -------- -----------
(1) Lease amendments include lease terminations, modifications,
reassessments and extensions to existing lease agreements.
11. Analysis of Net Debt
At 26 March Cash Non At 1 April
53 weeks ended 1 April 2022 flows cash(1) 2023
2023 GBPm GBPm GBPm GBPm
--------------------------- ----------- ------ -------- ----------
Cash and cash equivalents:
Cash and short-term
deposits 15.6 (1.5) - 14.1
--------------------------- ----------- ------ -------- ----------
15.6 (1.5) - 14.1
--------------------------- ----------- ------ -------- ----------
Financial liabilities:
Lease liabilities (80.7) 11.9 (3.0) (71.8)
--------------------------- ----------- ------ -------- ----------
(80.7) 11.9 (3.0) (71.8)
--------------------------- ----------- ------ -------- ----------
Debt:
Bank loans(2) (120.0) 1.5 (0.9) (119.4)
Debenture stock (25.9) - - (25.9)
Preference shares (1.6) - - (1.6)
--------------------------- ----------- ------ -------- ----------
Total borrowings (147.5) 1.5 (0.9) (146.9)
--------------------------- ----------- ------ -------- ----------
Net debt (212.6) 11.9 (3.9) (204.6)
--------------------------- ----------- ------ -------- ----------
Cash Non
At 27 March 2021 flows cash(1) At 26 March 2022
52 weeks ended 26 March 2022 GBPm GBPm GBPm GBPm
----------------------------- ---------------- ------ -------- ----------------
Cash and cash equivalents:
Cash and short-term deposits 17.1 (1.5) - 15.6
----------------------------- ---------------- ------ -------- ----------------
17.1 (1.5) - 15.6
----------------------------- ---------------- ------ -------- ----------------
Financial liabilities
Lease liabilities (89.9) 10.5 (1.3) (80.7)
-----------------------------
(89.9) 10.5 (1.3) (80.7)
-----------------------------
Debt:
Bank loans(2) (107.9) (11.4) (0.7) (120.0)
CCFF (99.8) 100.0 (0.2) -
Debenture stock (25.9) - - (25.9)
Preference shares (1.6) - - (1.6)
----------------------------- ---------------- ------ -------- ----------------
Total borrowings (235.2) 88.6 (0.9) (147.5)
----------------------------- ---------------- ------ -------- ----------------
Net debt (308.0) 97.6 (2.2) (212.6)
----------------------------- ---------------- ------ -------- ----------------
(1) Non-cash movements relate to the amortisation of arrangement
fees, arrangement fees accrued, and movements in lease
liabilities.
(2) Bank loans are net of arrangement fees and cash flows
include the payment of arrangement fees.
12. Pensions
The amount included in the Balance Sheet arising from the
Group's obligations in respect of its defined benefit retirement
plan are:
2023 2022
GBPm GBPm
------------------------------------ ----------------------------------------- ------------
Fair value of Scheme assets 113.4 143.9
Present value of Scheme liabilities (98.8) (129.6)
------------------------------------ ----------------------------------------- ------------
Surplus in the Scheme 14.6 14.3
------------------------------------ ----------------------------------------- ------------
Defined benefit Fair value Net defined
obligation of Scheme assets surplus
----------------- ------------------- ----------------
2023 2022 2023 2022 2023 2022
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------------- -------- ------- ---------- ------- ------- -------
Balance at beginning of the year (129.6) (147.3) 143.9 143.8 14.3 (3.5)
Included in profit and loss
Net interest credit (3.9) (2.8) 4.4 2.8 0.5 -
(3.9) (2.8) 4.4 2.8 0.5 -
Included in Other Comprehensive
Income
Actuarial (losses)/gain relating
to:
Actual return less expected return
on Scheme's assets - - (32.0) 0.6 (32.0) 0.6
Experience gains arising on Scheme
liabilities 29.5 14.9 - - 29.5 14.9
---------------------------------------- -------- ------- ---------- ------- ------- -------
29.5 14.9 (32.0) 0.6 (2.5) 15.5
Other
Employer contributions - - 2.3 2.3 2.3 2.3
Benefits paid 5.2 5.6 (5.2) (5.6) - -
---------------------------------------- -------- ------- ---------- ------- ------- -------
5.2 5.6 (2.9) (3.3) 2.3 2.3
---------------------------------------- -------- ------- ---------- ------- ------- -------
Balance at end of the year (98.8) (129.6) 113.4 143.9 14.6 14.3
---------------------------------------- -------- ------- ---------- ------- ------- -------
Key assumptions
The key assumptions used in the valuation of the Scheme are set
out below:
2023 2022
Mortality assumptions Years Years
------------------------------------ ------- -------
Current pensioners (at 65) -
males 22.0 22.2
Current pensioners (at 65) -
females 24.2 24.5
Future pensioners (at 65) - males 23.3 23.6
Future pensioners (at 65) - females 25.7 25.9
------------------------------------ ------- -------
The scheme is now closed to future accrual. The average age of
the members who were active at closure is 58 for males and 55 for
females. The average age of all non-pensioners is 57.
Key financial assumptions used
in the valuation
of the Scheme 2023 2022
-------------------------------- --------- ---------
Rate of increase in pensions
in payment 3.20% 3.75%
Discount rate 4.75% 3.00%
Inflation assumption - RPI 3.20% 3.80%
Inflation assumption - CPI (pre 2.3%/3.2% 2.9%/3.8%
2030/post 2030)
-------------------------------- --------- ---------
2023 2022
Assets in the Scheme GBPm GBPm
------------------------------ ----- -----
Corporate bonds 56.4 25.0
Index linked debt instruments 28.7 26.0
Overseas equities 6.6 31.5
Alternatives (1) 19.0 56.5
Cash 0.3 1.6
Annuities 2.4 3.3
------------------------------ ----- -----
Total market value of assets 113.4 143.9
------------------------------ ----- -----
(1) Alternatives is composed of holdings in diversified growth
investment funds.
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