TIDMFSTA
RNS Number : 6356G
Fuller,Smith&Turner PLC
25 July 2019
STRICTLY EMBARGOED
UNTIL 7AM THURSDAY 25 JULY 2019
FULLER, SMITH & TURNER P.L.C.
("Fuller's", "the Group" or "the Company")
Financial results for the 52 weeks ended 30 March 2019
A business positioned for long-term success
Financial Highlights*
-- Revenue up 7% to GBP431.1 million (2018: GBP403.6 million)
-- EBITDA(1) up 3% to GBP73.2 million (2018: GBP70.9 million)
-- Adjusted profit(2) level at GBP43.2 million (2018: GBP43.2 million)
-- Adjusted earnings per share(3) level at 62.78p (2018: 62.90p)
-- Total annual dividend up 3% per 'A' and 'C' 40p ordinary share to 20.15p
(2018: 19.55p)
-- Statutory profit before tax of GBP26.1 million (2018: GBP43.6
million), after separately disclosed items of GBP17.1 million
-- Basic earnings per share of 35.12p (2018: 64.89p)
*Figures are for total Group (continuing and discontinued
operations)
Operational Indicators
-- Strong performance from Managed Pubs and Hotels with like for
like sales(4) growth of 4.9% (2018: +2.9%)
-- Good performance from Tenanted Inns - like for like profits(5) rose 1% (2018: +3%)
-- Total beer and cider volumes remained level (2018: -1%)
Strategy Update
-- Sale of the Fuller's Beer Business to Asahi Europe Ltd agreed
during the financial year for GBP250 million, with completion post
year end.
-- Acquired 11 new sites including six Bel & The Dragon
country inns across the Home Counties and a package of four bars in
the City
-- The Signal Box opened at Euston Station adding to our growing
portfolio of pubs in transport hubs
-- Added a further 93 bedrooms to our estate including 15 at The Counting House on Cornhill
-- Significant period of investment with 94 closure weeks (2018: 59)
-- Further progress with our Tenanted Inns turnover agreement -
30 pubs operating under this model at the year end
-- Completed the roll out of the new ERP (Enterprise Resource
Planning) system across the business
(1) Earnings before separately disclosed items, interest, tax,
depreciation and amortisation for total Group operations
(2) Adjusted profit is the profit before tax excluding
separately disclosed items for total Group operations
(3) Calculated on total Group operations, using adjusted profit
after tax and the same weighted average number of shares as for the
basic earnings per share (EPS) and using a 40p ordinary share.
(4) Managed Pubs and Hotels like for like sales excludes The
Stable
(5) Operating profit before separately disclosed items and head
office costs
Current Trading and Outlook
-- Managed Pubs and Hotels like for like sales rose 1.2% and
total sales increased 2.3% in the first 16 weeks
-- Tenanted Inns like for like profits down -3% for first 16 weeks
-- Sale of the Fuller's Beer Business completed on 27 April 2019 for GBP250 million
-- Business in a strong financial position to overcome external
economic pressures and ready to capitalise on attractive and
profitable growth opportunities.
Commenting on the results, Chief Executive Simon Emeny said: "It
would be impossible to review the last financial year without
mentioning the sale, post year end, of the Fuller's Beer Business -
a transformational move that has changed the face of our Company.
Fuller's has always taken decisions for the very long term and this
sale was no exception.
"It gives us an even clearer focus on sustainable growth from
the higher margin part of our business and has the added advantage
of putting us in a strong position to deal with potentially
turbulent times ahead as the UK navigates the implications of
exiting the European Union.
"Underpinning this position is a premium pubs and hotels
business in robust health. We have had another year of like for
like growth that has outperformed the industry, while our
successful Tenanted business has continued to build on the new
turnover agreement that creates genuine, sustainable partnerships
between our Tenants and ourselves.
"Against some incredibly tough comparatives from the hot weather
and football fervour of summer 2018, I am pleased to report steady
trading for the first 16 weeks of the new financial year with like
for like sales in our Managed Pubs and Hotels rising by 1.2% and
total revenue rising by 2.3%. Like for like profits in our Tenanted
Inns were down -3% against very tough comparatives.
"This is a transformational period for Fuller, Smith &
Turner, which coincides with a great deal of political and economic
uncertainty. However, we can see a clear way ahead for the Company.
With an exceptionally strong balance sheet, a predominantly
freehold estate and a proven long-term business model, there will
be undoubted opportunities and we are perfectly poised to leverage
those over time as we embark on the next phase in our history."
Pursuant to Listing Rule 9.6.11, as indicated at last year's
Annual General Meeting, John Dunsmore had agreed to stay on for an
additional year beyond his nine-year term to provide continuity and
stability as new Board Members settled into their roles. Following
the approval of the Annual Reports and Accounts for the financial
period ended 30 March 2019, John Dunsmore resigned as a Director
with effect from 25 July 2019. The Board thank John Dunsmore for
his enormous contribution to the business over these 10 years.
-Ends-
For further information, please contact:
Fuller, Smith & Turner P.LC.
Simon Emeny, Chief Executive 020 8996 2000
Georgina Wald, Corporate Comms Manager 020 8996 2198 / 07831 299801
Instinctif Partners
Justine Warren 020 7457 2020
Notes to Editors:
Fuller, Smith and Turner P.L.C. is a premium pub and hotel
business. The Company runs 180 Tenanted pubs and 204 Managed Pubs
and Hotels, with a focus on delicious, fresh, home-cooked food,
outstanding cask and craft ale, great wine and exceptional service.
The Company also has 817 boutique bedrooms in its Managed estate.
The Fuller's pub estate stretches from Brighton to Birmingham and
from Bristol to the Greenwich Peninsula, including 173 locations
within the M25. In June 2018 Fuller's acquired Bel & The
Dragon, comprising six stunning country inns (included in the pub
numbers above), and the Company also owns The Stable, a craft cider
and gourmet pizza restaurant business, which has 16 sites in
England and Wales. In April 2019, Fuller's sold its brewing
division to Asahi Europe Ltd.
Photography is available from the Fuller's Press Office on 020
8996 2175 or by email at pr@fullers.co.uk.
Copies of this statement, the Annual Report and results
presentation will be available on the Company's website,
www.fullers.co.uk. The presentation will be available from 12 noon
on 25 July 2019.
FULLER, SMITH & TURNER P.L.C.
FINANCIAL RESULTS FOR THE 52 WEEKSED 30 MARCH 2019
CHAIRMAN'S STATEMENT
It has been another good year for your Company, with revenue
rising 7% to GBP431.1 million (2018: GBP403.6 million) and adjusted
profit(6) level at GBP43.2 million (2018: GBP43.2 million).
A large proportion of management time and effort in recent
months has revolved around the transaction, announced in January,
to sell the Fuller's Beer Business to Asahi Europe Ltd for an
enterprise value of GBP250 million. Over the years, we have brewed,
marketed and sold fantastic beers including London Pride - which
was the brand leader in premium ale.
(6) Adjusted profit is the profit before tax excluding
separately disclosed items for total Group operations
However, to really compete on a worldwide stage and take these
beers to the next level, they need the ownership of a global
brewing giant and I'm excited to see the heady heights to which
Asahi can take a beer such as London Pride. The proceeds generated
from the sale will, in time, be reinvested in a focused manner to
grow our pubs and hotels business. This is the dawn of a very
exciting new era for your Company.
The decision to sell was not an easy one but it is the right
one. While the Brewery has historically been an integral part of
our heritage and culture, the majority of our profit has derived
from Fuller's Inns for many years now. I know that Simon Emeny and
his team will be looking to retain that special culture as we move
forward, and there is no doubt that this financial year is going to
be a transformational one for the business as Fuller, Smith &
Turner embarks on a new chapter.
For our shareholders, our adjusted earnings per share(7) ("EPS")
has remained level at 62.78p (2018: 62.90p). The sale of the
Fuller's Beer Business will provide additional shareholder returns
in due course and I'm delighted that, on top of any return of
proceeds, our full year dividend has risen once again.
7 Calculated on total Group operations, using adjusted profit
after tax and the same weighted average number of shares as for the
basic earnings per share (EPS) and using a 40p ordinary share.
Basic EPS was 35.12p (2018: 64.89p)
At the heart of Fuller, Smith & Turner today is a leading
premium pubs and hotels business. Built around iconic sites in
stunning locations, often with beautiful bedrooms, we serve
delicious, fresh-cooked, seasonal food and an interesting portfolio
of premium drinks, with exceptional team members dedicated to
providing outstanding customer service.
Last year our Managed Pubs and Hotels grew like for like sales
by 4.9% (2018: 2.9%). All three key elements - food, accommodation
and drink sales - were in growth. The acquisitions we made at the
start of the year - six wonderful Bel & The Dragon country inns
and the four We Are Bar City sites - have performed well, and the
four City bars have already been refurbished to the high standard
our customers expect from Fuller's.
Our Tenanted Inns division, which remains an essential part of
our business model, has also produced a good performance during the
year with like for like profit rising 1% (2018: 3%), a figure which
has been tempered due to a high level of investment in our Tenanted
pubs. It is pleasing to see the number of applicants for our
Tenanted Inns rising - this is testament to the work we have put
into the new turnover agreement, which is proving popular with our
Tenanted partners. We now have 35 pubs on this exciting business
model.
This year has seen a number of changes to the Board. John
Dunsmore, a Non-Executive Director since 2009, stepped down
following our last Board meeting. He was due to step down last
year, but kindly agreed to stay for an additional 12 months. John
has been of immense value during his tenure, especially in his role
as the Senior Independent Director, and I would like to thank him
for his support and contribution. We also said goodbye to Simon
Dodd, who was Managing Director of The Fuller's Beer Company. Simon
was a very gifted and valuable team member both in his MD role and,
prior to this, leading our City pubs. I wish him every success in
his future career. James Douglas stepped down as Finance Director
in November, after 11 years with Fuller's, to join his wife and
children in Germany. I would like to thank him for his contribution
over this time.
We have also welcomed Helen Jones to the Board - a talented
entrepreneur who brings vast consumer leisure and retail experience
from her time launching Ben & Jerry's ice cream in the UK and
running Zizzi, the Italian casual dining group, and coffee chain
Caffè Nero. Helen has a vibrancy and creativity that will add
further depth to our Board and we are excited to be working with
her.
Fuller's success is wholly attributable to its people - and I
would like to take this opportunity to thank them all for their
dedication, commitment and loyalty. They are an amazing team and
have dealt with the roll out of the new enterprise resource
planning (ERP) system and the radical changes of recent months with
patience, professionalism and understanding. My Board colleagues
and I greatly appreciate that.
I would also like to personally recognise my former colleagues
in the Fuller's Beer Business. Asahi has gained an amazing team of
people who have, in many cases, given a lifetime of service and
friendship. I wish them all every success and future happiness.
DIVID
The Board is pleased to announce a final dividend of 4.35p
(2018: 12.00p) per 40p 'A' and 'C' ordinary share and 0.435p (2018:
1.20p) per 4p 'B' ordinary share. This takes account of the second
interim dividend of 8.00p per 40p 'A' and 'C' ordinary share and
0.800p per 4p 'B' ordinary share already paid on 12 July 2019. The
final dividend will be paid on 6 September 2019 to shareholders on
the share register as at 2 August 2019. The total dividend of
20.15p per 40p 'A' and 'C' ordinary share and 2.015p per 4p 'B'
ordinary share represents an increase of 3% on last year and is
covered more than 3.1 times by adjusted EPS.
Evaluation of the best and most efficient way to return proceeds
to shareholders, from the sale of the brewing assets to Asahi, is
currently underway and the Board looks forward to updating the
market in this regard in due course.
Michael Turner
Chairman
24 July 2019
CHIEF EXECUTIVE'S REVIEW
It would be impossible to start this review without mentioning
the sale, post year end, of the Fuller's Beer Business - a
transformational move that has changed the face of our Company.
Fuller's has always taken decisions for the very long term and this
sale was no exception. It gives us an even clearer focus on
sustainable growth from the higher margin part of our business and
has the added advantage of putting us in a strong position to deal
with potentially turbulent times ahead as the UK navigates the
implications of exiting the European Union. I cannot think of a
better time to be entering a transitional year, having bolstered
the balance sheet and reduced our debt, putting our business in
pole position to take advantage of attractive opportunities that
arise.
Underpinning this position is a premium pubs and hotels business
in robust health. We have had another year of like for like growth
that has outperformed the industry, while our successful Tenanted
business has continued to build on the new turnover agreement that
creates genuine, sustainable partnerships between our Tenants and
ourselves.
The sale of the Fuller's Beer Business to Asahi, and the
completion of the roll out of our new ERP system, have taken up
significant management time during the year, but with new systems
in place and the transaction completed we can turn our attention to
building for the future. We will concentrate our focus on growing
sales and profits by providing more reasons for customers to visit
our wonderful pubs.
To take Fuller's into the future, we have a vibrant, creative
and energetic executive team in place - which will be complete when
our new Finance Director, Adam Councell, joins in August, and we
finalise the recruitment of a new leader for our Tenanted Inns.
Fred Turner, who has been instrumental in introducing the new
turnover agreement during his tenure heading our Tenanted division,
moves to become Retail Director where he will be responsible for
our Managed Pubs and Hotels. Peter Turner retains his brief as
Property Director and Jane Jones remains as Marketing Director.
Dawn Browne, previously Head of Operations for our City pubs, joins
the executive team in her new role as People and Talent Director.
It is early days - but I am very excited by the potential of this
team.
As a new team, we have already started to plan for the future
and refine our vision and strategy. We will be continuing to build
on our fantastic estate of iconic pubs in stunning locations, an
exciting portfolio of interesting drinks - which will be supported
by our long-term supply agreement with Asahi - our commitment to
delicious, fresh-cooked, seasonal food and outstanding
accommodation, together with a great team of people and our
financial strength. There is no doubt that this is a transitional
year for the business - but it will be exciting, full of
opportunity, and enables us to take this wonderful Company to new
heights.
MANAGED PUBS AND HOTELS
Our Managed Pubs and Hotels have had a strong year with revenue
rising 8% to GBP293.8 million (2018: GBP271.2 million) and
operating profit(8) rising by 5% to GBP35.1 million (2018: GBP33.4
million). This performance comes against a backdrop of rising cost
pressures with the rise in both the National Living Wage and the
Apprenticeship Levy, further increases in Business Rates and rising
pension contributions. We do not anticipate these cost pressures
abating in the near future.
Our like for like sales have continued to outperform the
industry(9) , rising 4.9% over the year (2018: 2.9%), driven by an
ongoing strong performance from our wet sales which rose 5.2%. The
Football World Cup last June and July, combined with some excellent
summer weather, drove sales up and that momentum continued for the
rest of the year. Food sales strengthened in the second half of the
year, to grow 3.9% in total, while accommodation also had a good
year, rising 4.2%.
(8) Operating profit before separately disclosed items
(9) Coffer Peach Tracker index for pubs - year to 31 March 2019,
+3.1%
Our people front and centre
Our success is down to the people who make Fuller's the company
it is. During the year, 120 team members completed at least one
level of the Chefs' Guild, continuing our commitment to growing our
Head Chefs of the future, and many of these colleagues had started
on our chef apprentice programme. We recruited around 100
apprentices in the full year and anticipate recruiting another 100
in September 2019. Our long-term ambition is to recruit around 200
apprentices each year.
In addition to our chef training programmes, we are continuing
to invest heavily in our front of house teams too with a
combination of on the job learning, e-learning through our Fuse
digital training and communications platform and more formal
classroom development for those interested in furthering their
career with us, on topics such as local marketing. We also use a
successful Stop the Clock approach in pubs, which provides our
General Managers with the tools to run a 15-minute training session
on topics from our beer portfolio to mental health awareness.
Investing in our people has a direct return as in today's
digital world consumers have the power to share their customer
experiences with an immediacy that didn't exist even 10 years ago.
In response, we have developed a bespoke reputation management
platform that allows our pubs to monitor and respond to all their
online feedback in one place. Combined with training on reputation
management, we have seen our response rate increase by 35% year on
year and we have grown our reputation scores on every major channel
including Google, Facebook and TripAdvisor. At The Stable, the team
has received 32,000 responses through its Feeditback system, giving
an average Net Promoter Score of 66%.
Iconic pubs and new locations
During the year, we opened 11 new sites including six Bel &
The Dragon country inns located around the Home Counties. We also
acquired a package of four City bars from the We Are Bar group and
opened The Signal Box at Euston Station - a fantastic new addition
to our growing portfolio of sites in transport hubs. Located on the
mezzanine level overlooking the main station concourse, it is
already delivering good results.
We also opened two other new managed pubs - The Albert Arms in
Esher, which had been closed for redevelopment, and The Hercules by
Lambeth North station. We purchased the latter in March 2018 with a
sitting tenant. It reopened in March 2019 as a stunning pub with a
focus on craft beer and a look and feel to reflect the circus
history of the area. It has performed exceptionally well -
especially with regard to food sales. Both pubs are in areas where
we previously lacked presence.
Five of the Bel & The Dragon sites were freehold, and we
have since completed the purchase of the sixth freehold, located in
the shadow of Windsor Castle. Five also had bedrooms and the
commitment to outstanding fresh-cooked food and a high-end drinks
portfolio played to our operational strengths. We anticipate
realising a number of synergies as part of the purchase although
the Bel & The Dragon pubs continue to operate as a standalone
brand.
Finally, the four We Are Bar sites acquired in May 2018 have all
been refurbished and three have been renamed. These sites have
filled in gaps in our City footprint and we still have three of the
four original General Managers working in these pubs.
As well as acquiring new sites, we continue to invest in our
existing estate and this year we had 94 closure weeks during the
year (2018: 59), with the majority occurring in the first half. In
total, we invested GBP25.5 million in our existing estate during
the year and we will continue to ensure our iconic pubs are well
invested going forward. Investments included The Pavilion End near
St Paul's Cathedral, The Anglers at Teddington and The Bull Inn at
Sonning. We also carried out schemes at The Counting House on
Cornhill and The Blackbird at Earl's Court, where we added 24
bedrooms across the two sites.
A fresh and vibrant drinks portfolio
Bar sales have led the way, with a like for like sales increase
of 5.2% and, while we may have divested our beer business, we have
entered a long-term supply agreement with Asahi and Fuller's beer
continues to be a focal reason for visiting a Fuller's pub. During
the year, we identified 45 Beer Champions from within our pub teams
and helped them to complete their Cicerone qualification - a mark
of excellence in beer knowledge. We leverage our Beer Champions'
expertise by getting them together every three months to hear from
brewers, try new beers and share their knowledge within the wider
business.
While the long-term supply agreement gives us access to the best
range of Fuller's and Asahi beers, specials and collaborations, our
pubs are encouraged to provide a wide-ranging choice to their
customers from global, national and local microbrewers too. In
particular, we are proud to showcase beers that are unique to our
estate, with some even brewed with our managers and the pub teams,
giving an additional source of engagement in the beer. This keeps
the range fresh, piques consumer interest and ensures that we
always have something for our exploratory customers to try.
The same commitment to range and innovation can be seen at The
Stable where, during the year, this young and vibrant brand
launched its first ever Stable Cider Awards - won by Sheppy's 200.
This year's event has already been launched and over 20,000 votes
are expected to be cast. The Stable also broke the world record for
the largest ever cider tasting experience when 255 people descended
on The Stable in Exeter to simultaneously taste a selection of
three different ciders.
The trend for low and no alcohol beers is growing, albeit from a
small base. Our range now includes Heineken 0.0 and Peroni Libera,
as well as craft offerings from Big Drop, Thornbridge and BrewDog,
plus a non-alcoholic cider from Sheppey's and new soft drinks such
as Real Kombucha, Ugly and Square Root. We also continue to work
with a number of interesting suppliers, such as Seedlip, to promote
non-alcoholic spirits.
The popularity of G&T also continues to grow, supported by
an ever-growing range of tonic flavours. Gin sales are up 37% on a
like for like basis and now represent 39% of all spirit sales in
our pubs. We have partnered with established premium brands such as
Sipsmith to drive seasonal serves, and introduced new emerging pink
gins from distilleries including Chase, Warner Edwards and Whitley
Neal to capitalise on this continuing trend.
Food for thought
While non-alcoholic drink sales rise, the quest for a healthier
lifestyle continues to be played out in the food arena too. Our
food sales have grown by 3.9% on a like for like basis and within
this, we are seeing an increasing number of people eating
vegetarian or vegan meals more frequently. There is no doubt that
consumer lifestyles have changed with customers being more
flexitarian - for example electing to have a couple of meat-free
days each week. This is further evidenced by The Stable, which held
free Vegan Pizza events in a number of sites to celebrate
International Vegan Day.
Anecdotal evidence suggests that those who are committed to a
meat-free diet, and the younger generation in general, will
carefully study menus in advance. The Ten Kites system that we
implemented in the previous financial year, which allows customers
to search a menu by dietary requirements, is gaining significant
traction and 39% of site visitors are now searching the menu for
vegan and vegetarian options.
In addition to ensuring we have a balanced food offer that can
cater not just for different diets, but also for different day
parts, we continue to focus on building our Chefs' reputations
using signature dishes. Our pubs use these special, house-specific,
dishes to provide a sense of occasion for those looking for
something special - and we encourage our pubs to use their bespoke
signature dishes to celebrate the seasonal elements of their
menus.
We are very proud of our creative and motivated team of
Executive Chefs and it was great recognition for the work they do
when, in March this year, they were named Operations Team of the
Year at The Publican Awards.
Creating memorable experiences
The number of pre-planned events in our pubs continues to
increase and our head office sales team is focused on driving
function bookings across the estate. In support, we have recruited
and trained a network of sales and events personnel, based in our
pubs, who can handle function enquiries and manage those special,
memorable occasions. As a result, function sales in the last 12
months have grown by 12% and generated GBP9.3 million of
revenue.
It is this central sales team that has, for the last four years,
secured bookings from the American NFL when it plays matches each
year in London. The agreement sees our most iconic London pubs
become supporter hubs for the visiting teams - with a different
team in each pub. These vibrant sporting celebrations drive new
business, raise the profile of Fuller's as pubs of great character
with visiting US tourists and generate excitement in the pub like
no other. We are delighted to play such a key role in ensuring
that, when the NFL comes to London, the teams and their supporters
are treated to the best of British hospitality.
Accommodation sales across our beautiful boutique bedrooms have
also risen this year by 4.2% on a like for like basis with Average
Room Rate rising by GBP1.30. One of our targets has been to improve
the amount of direct bookings, which means we don't have to concede
the commission demanded by third party aggregators. Using targeted,
predominantly digital communications has resulted in a 26% increase
in bookings made through our website.
We have also worked to shorten the customer's digital journey -
the more clicks and questions, the higher the dropout rate. To that
end, we have made it as short and efficient an experience as
possible to book a room and we use post-booking emails to add value
through restaurant bookings and local information. We were
particularly delighted to be named Accommodation Operator of the
Year at The Publican Awards in March and the addition of 93
bedrooms during the year shows our commitment to this part of our
business.
Tenanted Inns
Our Tenanted Inns have had a good year with total revenue rising
2%, like for like profits(10) rising 1% (2018: 3%) and average
EBITDA per pub remaining level despite increased spend on repairs,
which also muted the like for like profit figure. During the period
we have sold the final five pubs earmarked for sale as part of our
strategic review. In addition, two pubs migrated across to the
Managed estate, with seven moving in the opposite direction.
We moved another 17 pubs onto our turnover agreement, taking the
total number of pubs on this model to 30 at the year end. We have
also maintained our investment programme in the Tenanted estate
with capex spend of GBP3.0 million for the year (2018: GBP3.0
million), reflecting the higher investment spend on pubs that are
being leased on a turnover basis. Examples of these schemes include
The Andover Arms in Brackenbury Village, The Horse & Jockey in
Curbridge, The Chequers in Chipping Norton and The Cross Keys in
Great Missenden.
We continue to support our tenants in a number of other ways
too. During the year, we completed the roll out of Fuse - our
digital learning and communication platform - to our Tenants, which
has improved the flow of information. We have also included more
Tenanted Inns as part of the Shakespeare in the Garden
programme.
It is in the food arena where a company with Managed and
Tenanted pubs can provide an extra level of support - and providing
access to Food Alert, our food hygiene consultants, helps our
Tenants to ensure compliance with Environmental Health regulations
with a regular independent food audit. Around 50 Tenants are now
using our preferred food suppliers and seeing a reduction in their
food costs of around 15%.
The proof of our success is in our recruitment and we have seen
a 50% increase in applications. This continued uplift comes on top
of a 250% increase the previous year, when we overhauled our
website and launched the turnover agreement. Our success depends on
the success of our Tenants, so it is fantastic to see such a high
level of interest in partnering with us.
(10) Operating profit before separately disclosed items and head
office costs
THE FULLER'S BEER COMPANY
The Fuller's Beer Company saw revenues grow by 6% (2018: 3%)
while volumes remained flat. We completed the integration of the
Dark Star Brewing Company, which we acquired towards the end of the
prior financial year.
Sales of Frontier rose by 4%, supported by a marketing campaign
to reposition the brand as a London premium lager, building on its
flavour credentials and independence. We also installed our first
ever Frontier tanks at The Distillers in Hammersmith. Meanwhile,
London Pride Unfiltered gained a listing in Waitrose and was the
Official Beer of Pride in London. Social feeds grew by 314% and,
combined with an excellent seasonal calendar and the second series
of Fuller's & Friends, The Fuller's Beer Company was perfectly
placed for its sale to Asahi Europe Ltd.
Sale of the Fuller's Beer Business
On 25 January 2019 the Group entered into an agreement for the
sale of its entire beer business to Asahi Europe Ltd ("AEL"), a
wholly owned subsidiary of Asahi Group Holdings, Ltd ("Asahi"), for
an enterprise value of GBP250 million on a debt free, cash free
basis. The disposal of the Fuller's Beer Company completed on 27
April 2019, subsequent to the end of the reporting period.
The business sold comprises the entirety of Fuller's beer, cider
and soft drinks brewing and production, wine wholesaling, and the
distribution thereof, and also included the Griffin Brewery,
Cornish Orchards, Dark Star Brewing and Nectar Imports (referred to
as the "Fuller's Beer Company", which was incorporated to acquire
certain assets and liabilities of the Fuller's Beer Business).
Accordingly, those divisions are reported as discontinued
operations in the 2019 financial statements with the remaining
Managed Pubs and Hotels and Tenanted Inns businesses being shown as
continuing operations.
Under the terms of the sale, AEL acquired the brands of the beer
business (including "London Pride") and will receive the benefit of
a licence, on a perpetual, global, exclusive and royalty-free
basis, to use certain trademarks (including the "Fuller's" name,
logo and cartouche) for the provision of beverages. Ownership of
the licensed trademarks has been retained by Fuller's.
As part of the transaction, we have formed a strategic alliance
with Asahi by entering into a long-term supply agreement for the
continuing supply of the brands of the Beer Business (and selected
Asahi brands) to Fuller's pubs and hotels. This agreement is for a
minimum period of five years, with both parties being able to renew
for a further five-year term. As a result, our team members and
management will continue to cherish, value and promote the brands
of the Fuller's Beer Business and our customers can continue to
enjoy their Fuller's beers of choice.
The amounts shown as discontinued operations in the financial
statements for the year ended 30 March 2019 are a profit before tax
and separately disclosed items of GBP6.8 million (2018: GBP7.6
million) and separately disclosed costs of GBP1.6 million (2018:
GBPnil). The net assets held for sale at 30 March 2019 in respect
of the Fuller's Beer Business are GBP57.0 million.
Net cash proceeds are expected to be approximately GBP205
million after relevant adjustments including reorganisation, tax,
restructuring and transaction costs. GBP7.0 million of these
disposal costs have been recognised in the year ended 30 March 2019
within separately disclosed items. The net proceeds will allow
Fuller's to make a return of capital to shareholders, make a
voluntary contribution to the pension scheme, reinvest in the
existing pubs and hotels business to drive growth and invest in
carefully selected acquisition opportunities as they arise.
Evaluation of the best and most efficient way to return capital to
shareholders is currently underway and the Board looks forward to
updating the market in this regard in due course.
FINANCIAL POSITION
Total Group revenue rose by 7% on the prior year, largely driven
by strong like for like trading within the Managed estate and the
contribution from our 10 acquisitions and one new opening made in
the early part of the year. Our operating profits before separately
disclosed items increased by 2% to GBP50.1 million (2018: GBP49.2
million) as adjusted operating profit(11) in the Managed Pubs and
Hotels division grew GBP1.7 million. The Fuller's Beer Company,
shown as discontinued operations, saw adjusted operating profit(12)
reduce by 11% against last year. Adjusted Group profit(2) remained
level at GBP43.2 million, as the revenue increase was offset by
increased finance costs following the acquisitions made in the
first half of the year.
Overall net debt has increased by GBP43.3 million to GBP245.2
million largely due to the acquisitions and capital investments
made during the year and as a result our pro forma net debt to
EBITDA ratio at 30 March 2019 increased a little to 3.1 times. The
Group has GBP260.0 million of available long-term facilities,
GBP176.7 million of which is available until August 2021, GBP33.3
million of which is available until August 2020, and GBP50.0
million of which is available until August 2019. Our undrawn
committed facilities at 30 March 2019 were GBP31.0 million, with a
further GBP11.0 million of cash held on the Balance Sheet.
Subsequent to the year end, the completion of the sale of the
Fuller's Beer Business in April 2019 has significantly increased
our available facilities. Net debt at 29 June 2019 was GBP21.7
million. Our very healthy balance sheet position gives us the
flexibility to invest strategically in the future as suitable
opportunities arise.
(1) (1) Operating profit before separately disclosed items
(12) Profit before tax before separately disclosed items from
total Group operations
The Group generated cash available for discretionary spend of
GBP35.1 million (2018: GBP51.0 million) with the decrease largely
due to a GBP20.9 million net working capital cash outflow in the
year compared to a GBP4.4 million net cash outflow last year. In
line with our long-term investment strategy, we invested GBP32.7
million in capital expenditure.
We spent GBP19.2 million on the corporate acquisition of six Bel
& The Dragon country inns and GBP3.3 million on the acquisition
of four sites formerly under the We Are Bar brand in great
locations across the City. We spent GBP3.7 million on acquiring the
remaining minority interests in two of our earlier acquisitions,
The Stable Pizza & Cider Limited and Nectar Imports Limited. We
also invested GBP32.7 million in our existing estate including 16
major refurbishments, the opening of The Signal Box at Euston
station and a number of investments in The Fuller's Beer Company,
including a new canning line for Cornish Orchards and a pilot plant
for new innovative beers. Our continuing investment in a new ERP
system of GBP6.7 million has been expensed within separately
disclosed items and went live at the end of October 2018. Asset
disposals from the sale of five properties within the Tenanted
portfolio and the termination of a Managed long leasehold raised
GBP7.3 million and generated a separately disclosed profit of
GBP1.9 million, which we used to further invest in our estate.
The separately disclosed items before tax of GBP17.1 million
comprises GBP6.7 million of ERP replacement costs, GBP7.0 million
of costs associated with the disposal of the Beer Business, GBP1.2
million of net impairment costs primarily in the Managed Pubs and
Hotels division, GBP1.9 million of onerous lease charges, GBP0.6
million of acquisition costs, GBP0.5 million of reorganisation
staff costs, a GBP0.3 million provision for Guaranteed Minimum
Pension equalisation charges and a net finance charge on our
pension deficit of GBP0.8 million, all partially offset by the
GBP1.9 million profit on property disposals.
Tax has been provided for at an effective rate of 19.7% (2018:
20.4%) on adjusted profits. The overall effective tax rate of 25.3%
is due to the net loss on separately disclosed items being taxed at
an effective tax rate of 11.1%.
The defined benefit pension scheme deficit has increased by
GBP3.9 million to GBP36.4 million (2018: GBP32.5 million). The
present value of pension obligations increased GBP6.3 million to
GBP148.3 million, driven by the discount rate falling from 2.6% to
2.4% and the RPI inflation assumption increasing from 3.20% to
3.30%. This was partly offset by an increase in the fair value of
scheme assets of GBP2.4 million from GBP109.5 million to GBP111.9
million. Deficit recovery payments of GBP2.0 million were made
during the financial year.
During the period 313,983 'A' ordinary 40p shares were purchased
into treasury for a total of GBP3.1 million (2018: 536,827 'A'
ordinary 40p shares for GBP5.3 million). In addition, 121,031 'B'
ordinary 4p shares were purchased for GBP0.1 million by or on
behalf of the Trustees of the Long-Term Incentive Plan to cover
future issuance (2018: 214,645 'B' ordinary 4p shares for GBP0.2
million).
IFRS 16 Accounting for Leases will be adopted by the Company for
the year ended March 2020. As a result, operating lease expense
will be replaced by depreciation and a finance charge. The net
impact to adjusted profit is expected to be between GBP1.0 million
and GBP2.0 million reduction to profit, as the increase to
depreciation and finance costs is slightly larger than the
reduction to lease operating costs. Both assets and liabilities are
expected to increase by between GBP75 million and GBP85 million,
with no net impact and no impact on cashflows.
CURRENT TRADING AND PROSPECTS
Against some incredibly tough comparatives from the hot weather
and football fervour of summer 2018, I am pleased to report steady
trading for the first 16 weeks of the new financial year with like
for like sales in our Managed Pubs and Hotels rising by 1.2% and
total revenue rising by 2.3%. Like for like profits in our Tenanted
Inns were down -3% against very tough comparatives.
We look to the future as a focused premium pubs and hotels
business. Having a long-term successful model, supported with low
debt and high capital reserves, positions us well as the nation
continues to navigate a number of political challenges.
Our new Finance Director, Adam Councell, joins us in August to
complete our new executive team. There is no doubt that this is a
transitional year and we have a real opportunity to look at every
element of our business and absolutely ensure that we have the
strategy, vision and goals to best position the business for
further long-term success.
We will be building on our long-term supply agreement with Asahi
to guarantee that a great range of Fuller's beers, backed up by
continued dedication to cellar quality, will be at the heart of
every Fuller's pub. In addition, we will work with a broad
portfolio of suppliers to keep our offer fresh, our customers
interested and our shareholders happy.
We continue to deliver transitional services to Asahi and, since
the year end, have acquired a new freehold head office overlooking
the River Thames at Strand on the Green, less than two miles from
the Griffin Brewery. We are aiming to move in by the New Year.
This is a transformational period for Fuller, Smith &
Turner, which coincides with a great deal of political and economic
uncertainty. However, we can see a clear way ahead for the Company.
With an exceptionally strong balance sheet, a predominantly
freehold estate and a proven long-term business model, there will
be undoubted opportunities and we are perfectly poised to leverage
those over time as we embark on the next phase in our history.
Simon Emeny
Chief Executive
24 July 2019
Fuller, Smith & Turner P.L.C.
Financial Highlights*
For the 52 weeks ended 30 March 2019
52 weeks ended 52 weeks ended Change
30 March 2019 31 March 2018 2018/2019
-------------------------------- -------------- -------------- ----------
Revenue GBP431.1m GBP403.6m +7%
Adjusted profit(1) GBP43.2m GBP43.2m Level
Adjusted earnings per share(2) 62.78p 62.90p Level
EBITDA(3) GBP73.2m GBP70.9m +3%
Basic earnings per share(4) 35.12p 64.89p -46%
Profit before tax GBP26.1m GBP43.6m -40%
Dividend per share(4) 20.15p 19.55p +3%
Net debt(5) GBP245.2m GBP201.9m
Pro forma net debt / EBITDA(6) 3.1x 2.9x
-------------------------------- -------------- -------------- ----------
(*) Figures are for total Group (continuing and discontinued
operations)
(1) Adjusted profit is the profit before tax excluding
separately disclosed items.
(2) Calculated using adjusted profit after tax and the same
weighted average number of shares as for the basic earnings per
share and using a 40p ordinary share.
(3) Earnings before separately disclosed items, interest, tax,
depreciation, loss on disposal of plant and equipment, and
amortisation.
(4) Calculated on a 40p ordinary share.
(5) Net debt comprises cash and short-term deposits, bank
overdraft, bank loans, debenture stock and preference shares.
(6) Pro forma net debt / EBITDA is calculated on a 12 month
basis adjusting as appropriate for acquisitions and disposals.
Fuller, Smith & Turner P.L.C.
Condensed Group Income Statement
for the 52 weeks ended 30 March 2019
Restated
52 weeks ended 30 52 weeks ended 31
March 2019 March 2018
---------------------------------- ----------------------------------
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
Note GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------------- ---- ----------- ------------ ------- ----------- ------------ -------
Revenue 2 324.7 106.4 431.1 301.4 102.2 403.6
Operating costs 2 (281.4) (99.6) (381.0) (259.8) (94.6) (354.4)
Operating separately disclosed
items (16.6) (1.6) (18.2) (4.7) - (4.7)
--------------------------------- ---- ----------- ------------ ------- ----------- ------------ -------
Operating profit 26.7 5.2 31.9 36.9 7.6 44.5
Finance costs 4 (6.9) - (6.9) (6.0) - (6.0)
Financing separately disclosed
items 3,4 (0.8) - (0.8) (1.0) - (1.0)
Profit on disposal of properties
separately disclosed items 3 1.9 - 1.9 6.1 - 6.1
--------------------------------- ---- ----------- ------------ ------- ----------- ------------ -------
Profit before tax 20.9 5.2 26.1 36.0 7.6 43.6
--------------------------------- ---- ----------- ------------ ------- ----------- ------------ -------
Adjusted profit before tax 36.4 6.8 43.2 35.6 7.6 43.2
Total separately disclosed
items 3 (15.5) (1.6) (17.1) 0.4 - 0.4
--------------------------------- ---- ----------- ------------ ------- ----------- ------------ -------
Profit before tax 20.9 5.2 26.1 36.0 7.6 43.6
--------------------------------- ---- ----------- ------------ ------- ----------- ------------ -------
Tax (5.5) (1.1) (6.6) (7.3) (1.5) (8.8)
--------------------------------- ---- ----------- ------------ ------- ----------- ------------ -------
Analysed as:
--------------------------------- ---- ----------- ------------ ------- ----------- ------------ -------
Underlying trading (7.1) (1.4) (8.5) (7.3) (1.5) (8.8)
Separately disclosed items 3 1.6 0.3 1.9 - - -
--------------------------------- ---- ----------- ------------ ------- ----------- ------------ -------
Profit for the year 15.4 4.1 19.5 28.7 6.1 34.8
--------------------------------- ---- ----------- ------------ ------- ----------- ------------ -------
Attributable to:
Equity shareholders of the
Parent Company 15.4 3.9 19.3 29.9 5.9 35.8
Non-controlling interest - 0.2 0.2 (1.2) 0.2 (1.0)
--------------------------------- ---- ----------- ------------ ------- ----------- ------------ -------
Earnings per share per 40p
'A' and 'C' ordinary share Pence Pence Pence Pence Pence Pence
--------------------------------- ---- ----------- ------------ ------- ----------- ------------ -------
Basic 6 28.02 7.10 35.12 54.20 10.69 64.89
Diluted 6 27.82 7.05 34.87 53.86 10.63 64.49
Adjusted 6 53.31 9.47 62.78 52.20 10.70 62.90
Diluted adjusted 6 52.94 9.40 62.34 51.88 10.63 62.51
--------------------------------- ---- ----------- ------------ ------- ----------- ------------ -------
Earnings per share per 4p
'B' ordinary share
--------------------------------- ---- ----------- ------------ ------- ----------- ------------ -------
Basic 6 2.80 0.71 3.51 5.42 1.07 6.49
Diluted 6 2.78 0.71 3.49 5.39 1.06 6.45
Adjusted 6 5.33 0.95 6.28 5.22 1.07 6.29
Diluted adjusted 6 5.29 0.94 6.23 5.19 1.06 6.25
--------------------------------- ---- ----------- ------------ ------- ----------- ------------ -------
Fuller, Smith & Turner P.L.C.
Condensed Group Statement of Comprehensive Income
for the 52 weeks ended 30 March 2019
52 weeks 52 weeks
ended ended
30 March 31 March
2019 2018
Note GBPm GBPm
----------------------------------------------------------- ---- --------- ---------
Profit for the year 19.5 34.8
Items that may be reclassified to profit or loss
Net gains on valuation of financial assets and liabilities 0.3 1.5
Tax related to items that may be reclassified to profit
or loss 5 - (0.2)
Items that will not be reclassified to profit or loss
Net actuarial (losses)/gains on pension schemes 12 (5.0) 4.4
Tax related to items that will not be reclassified to
profit or loss 5 0.8 (0.8)
----------------------------------------------------------- ---- --------- ---------
Other comprehensive (losses)/gains for the year, net
of tax (3.9) 4.9
----------------------------------------------------------- ---- --------- ---------
Total comprehensive income for the year, net of tax 15.6 39.7
----------------------------------------------------------- ---- --------- ---------
Total comprehensive income attributable to:
Equity shareholders of the Parent Company 15.4 40.7
Non-controlling interest 0.2 (1.0)
----------------------------------------------------------- ---- --------- ---------
Fuller, Smith & Turner P.L.C.
Condensed Group Balance Sheets
30 March 2019
Group Group
2019 2018
Note GBPm GBPm
---------------------------------------------------- ---- ------- -------
Non-current assets
Intangible assets 37.7 45.4
Property, plant and equipment 8 552.7 564.1
Investment properties 4.6 4.6
Other non-current assets 0.3 0.4
Total non-current assets 595.3 614.5
---------------------------------------------------- ---- ------- -------
Current assets
Inventories 5.0 13.5
Trade and other receivables 8.3 22.9
Cash and short term deposits 11 11.0 11.7
Assets classified as held for sale 10 87.0 2.1
Other financial assets 0.1 -
---------------------------------------------------- ---- ------- -------
Total current assets 111.4 50.2
---------------------------------------------------- ---- ------- -------
Current liabilities
Trade and other payables (29.6) (64.0)
Current tax payable (2.8) (4.0)
Provisions (0.5) (0.1)
Borrowings 11 (50.0) (30.0)
Other financial liabilities - (3.7)
Liabilities classified as held for sale 10 (30.0) -
---------------------------------------------------- ---- ------- -------
Total current liabilities (112.9) (101.8)
---------------------------------------------------- ---- ------- -------
Non-current liabilities
Borrowings 11 (206.2) (183.6)
Other financial liabilities (1.4) (1.8)
Retirement benefit obligations 12 (36.4) (32.5)
Deferred tax liabilities (9.2) (9.3)
Provisions (2.1) (0.6)
Other non-current payables - (0.2)
---------------------------------------------------- ---- ------- -------
Total non-current liabilities (255.3) (228.0)
---------------------------------------------------- ---- ------- -------
Net assets 338.5 334.9
---------------------------------------------------- ---- ------- -------
Capital and reserves
Share capital 22.8 22.8
Share premium account 4.8 4.8
Capital redemption reserve 3.1 3.1
Own shares (19.8) (19.2)
Hedging reserve (0.8) (1.1)
Retained earnings 328.4 328.4
---------------------------------------------------- ---- ------- -------
Equity attributable to equity holders of the parent 338.5 338.8
---------------------------------------------------- ---- ------- -------
Non-controlling interest - (3.9)
---------------------------------------------------- ---- ------- -------
Total equity 338.5 334.9
---------------------------------------------------- ---- ------- -------
Approved by the Board and signed on 24 July 2019.
M J Turner, FCA
Chairman
Fuller, Smith & Turner P.L.C.
Group Statement of Changes in Equity
for the 52 weeks ended 30 March 2019
Share Capital Non-
Share premium redemption Own Hedging Retained controlling Total
capital account reserve shares reserve earnings Total interest equity
Group GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------ -------- -------- ----------- ------- -------- --------- ------ ------------ -------
At 1 April 2017 22.8 4.8 3.1 (16.7) (2.6) 301.4 312.8 (3.1) 309.7
------------------------ -------- -------- ----------- ------- -------- --------- ------ ------------ -------
Profit for the year - - - - - 35.8 35.8 (1.0) 34.8
Other comprehensive loss
for
the year - - - - 1.5 3.4 4.9 - 4.9
------------------------ -------- -------- ----------- ------- -------- --------- ------ ------------ -------
Total comprehensive
income/(loss) for the
year - - - - 1.5 39.2 40.7 (1.0) 39.7
Shares purchased to be
held
in ESOT or as treasury - - - (5.5) - - (5.5) - (5.5)
Shares released from
ESOT
and treasury - - - 3.0 - (2.2) 0.8 - 0.8
Dividends (note 7) - - - - - (10.5) (10.5) - (10.5)
Share-based payment
charges - - - - - 0.8 0.8 - 0.8
Tax credited directly to
equity
(note 5) - - - - - (0.3) (0.3) - (0.3)
Adjustments arising from
change
in non-controlling
interest - - - - - - - 0.2 0.2
------------------------ -------- -------- ----------- ------- -------- --------- ------ ------------ -------
Total transactions with
owners - - - (2.5) - (12.2) (14.7) 0.2 (14.5)
------------------------ -------- -------- ----------- ------- -------- --------- ------ ------------ -------
At 31 March 2018 22.8 4.8 3.1 (19.2) (1.1) 328.4 338.8 (3.9) 334.9
------------------------ -------- -------- ----------- ------- -------- --------- ------ ------------ -------
Profit for the year - - - - - 19.3 19.3 0.2 19.5
Other comprehensive
income
for the year - - - - 0.3 (4.2) (3.9) - (3.9)
------------------------ -------- -------- ----------- ------- -------- --------- ------ ------------ -------
Total comprehensive
income
for the year - - - - 0.3 15.1 15.4 0.2 15.6
Shares purchased to be
held
in ESOT or as treasury - - - (3.2) - - (3.2) - (3.2)
Shares released from
ESOT
and treasury - - - 2.6 - (1.5) 1.1 - 1.1
Dividends (note 7) - - - - - (10.9) (10.9) - (10.9)
Share-based payment
charges - - - - - 1.0 1.0 - 1.0
Adjustments arising from
change
in non-controlling
interest - - - - - (3.7) (3.7) 3.7 -
------------------------ -------- -------- ----------- ------- -------- --------- ------ ------------ -------
Total transactions with
owners - - - (0.6) - (15.1) (15.7) 3.7 (12.0)
------------------------ -------- -------- ----------- ------- -------- --------- ------ ------------ -------
At 30 March 2019 22.8 4.8 3.1 (19.8) (0.8) 328.4 338.5 - 338.5
------------------------ -------- -------- ----------- ------- -------- --------- ------ ------------ -------
Fuller, Smith & Turner P.L.C.
Group Cash Flow Statements
for the 52 weeks ended 30 March 2019
Restated
Group Group
52 weeks 52 weeks
ended ended
30 March 31 March
2019 2018
Note GBPm GBPm
------------------------------------------------------ ---- --------- ---------
Profit before tax for continuing operations 20.9 36.0
Net finance costs before separately disclosed
items 6.9 6.0
Separately disclosed items 3 15.5 (0.4)
Depreciation and amortisation 19.5 17.9
------------------------------------------------------ ---- --------- ---------
62.8 59.5
Difference between pension charge and cash
paid (2.2) (2.0)
Share-based payment charges 1.0 0.8
Change in trade and other receivables 3.0 1.8
Change in inventories (0.9) 0.4
Change in trade and other payables (11.6) (13.7)
Cash impact of operating separately disclosed
items 3 (9.7) (4.0)
------------------------------------------------------ ---- --------- ---------
Cash generated from operations 42.4 42.8
Tax paid (8.6) (9.0)
------------------------------------------------------ ---- --------- ---------
Cash generated from operating activities -
continuing operations 33.8 33.8
Cash (absorbed by)/generated from operating
activities - discontinuing operations (0.8) 18.5
------------------------------------------------------ ---- --------- ---------
Total cash generated from operating activities 33.0 52.3
------------------------------------------------------ ---- --------- ---------
Cash flow from investing activities
Business combinations 9 (20.1) (10.6)
Purchase of property, plant and equipment (28.5) (23.5)
Sale of property, plant and equipment and
investment property 7.3 10.8
------------------------------------------------------ ---- --------- ---------
Cash absorbed by investing activities - continuing
operations (41.3) (23.3)
Cash absorbed by investing activities - discontinuing
operations (4.2) (4.1)
------------------------------------------------------ ---- --------- ---------
Net cash outflow from investing activities (45.5) (27.4)
------------------------------------------------------ ---- --------- ---------
Cash flow from financing activities
Purchase of own shares (3.2) (5.5)
Receipts on release of own shares to option
schemes 1.1 0.8
Interest paid (6.2) (5.6)
Preference dividends paid 7 (0.1) (0.1)
Equity dividends paid 7 (10.9) (10.5)
Drawdown of bank loans 42.3 10.0
Repayment of bank loans (6.0) (18.0)
Cost of refinancing (0.2) -
------------------------------------------------------ ---- --------- ---------
Cash generated from/(absorbed by) financing
activities - continuing operations 16.8 (28.9)
Cash generated from financing activities -
discontinuing operations - -
------------------------------------------------------ ---- --------- ---------
Net cash inflow/(outflow) from financing activities 16.8 (28.9)
------------------------------------------------------ ---- --------- ---------
Net movement in cash and cash equivalents 4.3 (4.0)
Cash acquired on acquisition 0.3 0.4
Cash and cash equivalents at the start of
the year 11 11.7 15.3
------------------------------------------------------ ---- --------- ---------
Cash and cash equivalents at the end of the
year 16.3 11.7
------------------------------------------------------ ---- --------- ---------
Included in the assets of the disposal group (5.3) -
------------------------------------------------------ ---- --------- ---------
Total cash and cash equivalents at the end
of the year 11 11.0 11.7
------------------------------------------------------ ---- --------- ---------
Cash and cash equivalents comprise cash and other short-term
highly liquid investments with a maturity of three months or
less.
There were no significant non-cash transactions during either
period.
Fuller, Smith & Turner P.L.C.
Notes to the condensed Financial statement
For the 52 weeks ended 30 March 2019
1. Preliminary statement
The consolidated financial statements of Fuller, Smith &
Turner P.L.C. for the 52 weeks ended 30 March 2019 were authorised
for issue by the Board of Directors on 24 July 2019.
This statement does not constitute statutory financial
statements as defined by Section 435 of the Companies Act 2006. The
financial information for the 52 weeks ended 30 March 2019 has been
extracted from the statutory financial statements on which an
unmodified audit opinion has been issued and will be delivered to
the Registrar of Companies following the Company's Annual General
Meeting. Statutory financial statements for the 52 weeks ended 31
March 2018, including an unmodified auditor's report which did not
make any statement under Section 498 of the Companies Act 2006,
have been delivered to the Registrar of Companies.
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 52 weeks ended 30 March 2019, which
will be mailed to shareholders on or before 2 August 2019 and
delivered to the Registrar of Companies. The financial statements
will also be available from the Company's registered office:
Griffin Brewery, Chiswick Lane South, Chiswick, London, W4 2QB, and
on its website, from that date.
2. Segmental Analysis
Operating Segments
For management purposes, the Group's operating segments are:
- Managed Pubs and Hotels, which comprises managed pubs, managed
hotels, The Stable Pizza & Cider Limited and Bel & The
Dragon;
- Tenanted Inns, which comprises pubs operated by third parties
under tenancy or lease agreements; and
- The Fuller's Beer Company, which comprises the brewing and
distribution of beer, cider, wines, spirits and soft drinks, Nectar
Imports Limited and The Dark Star Brewing Company Limited. The
Fuller's Beer Business was disposed of after year end. See note
10.
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. More details of these segments are given
in the Chief Executive Review. Segment performance is evaluated
based on operating profit before separately disclosed items and is
measured consistently with the operating profit before separately
disclosed items in the consolidated financial statements.
Transfer prices between operating segments are set on an arm's
length basis in a manner similar to transactions with third
parties. Segment revenue, segment expense and segment result
include transfers between operating segments. Those transfers are
eliminated on consolidation. Group financing, including finance
costs and revenue, and taxation are managed on a Group basis.
Fuller, Smith & Turner P.L.C.
Notes to the condensed Financial statement
For the 52 weeks ended 30 March 2019
2. Segmental Analysis continued
Discontinued
Operations
Managed -
Pubs Tenanted Continuing The Fuller's
and Hotels Inns Unallocated(1) Operations Beer Company(2) Total
52 weeks ended 30 March 2019 GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------- ----------- -------- -------------- ----------- ---------------- ------
Revenue
Segment revenue 293.8 30.9 - 324.7 161.4 486.1
Inter-segment sales - - - - (55.0) (55.0)
------------------------------------- ----------- -------- -------------- ----------- ---------------- ------
Revenue from third parties 293.8 30.9 - 324.7 106.4 431.1
------------------------------------- ----------- -------- -------------- ----------- ---------------- ------
Segment result 35.1 12.8 (4.6)(2) 43.3 6.8 50.1
Operating separately disclosed items (18.2)
------------------------------------- ----------- -------- -------------- ----------- ---------------- ------
Operating profit 31.9
Profit on disposal of properties 1.9
Net finance costs (7.7)
------------------------------------- ----------- -------- -------------- ----------- ---------------- ------
Profit before tax 26.1
------------------------------------- ----------- -------- -------------- ----------- ---------------- ------
Other segment information
Capital expenditure: property, plant
and equipment 25.5 3.0 - 28.5 4.2 32.7
Business combinations (note 9) 18.1 - - 18.1 2.0 20.1
Depreciation and amortisation 17.6 1.9 - 19.5 3.6 23.1
Impairment of property 3.0 - - 3.0 - 3.0
Reversal of impairment on property (1.3) (0.5) - (1.8) - (1.8)
------------------------------------- ----------- -------- -------------- ----------- ---------------- ------
1 Unallocated expenses represent primarily the salaries and
costs of central management.
2 Unallocated costs have been adjusted to include costs
previously allocated to The Fuller's Beer Business as they are
considered to be continuing in nature and therefore form part of
the continuing operations.
Fuller, Smith & Turner P.L.C.
Notes to the condensed Financial statement
For the 52 weeks ended 30 March 2019
2. Segmental Analysis continued
Discontinued
Operations
-The
Managed Fuller's
Pubs Tenanted Continuing Beer
and Hotels Inns Unallocated(1) Operations Company Total
52 weeks ended 31 March 2018 GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------- ----------- -------- -------------- ----------- ------------ ------
Revenue
Segment revenue 271.2 30.2 - 301.4 152.9 454.3
Inter-segment sales - - - - (50.7) (50.7)
------------------------------------- ----------- -------- -------------- ----------- ------------ ------
Revenue from third parties 271.2 30.2 - 301.4 102.2 403.6
------------------------------------- ----------- -------- -------------- ----------- ------------ ------
Segment result 33.4 12.9 (4.7)(2) 41.6 7.6 49.2
Operating separately disclosed items (4.7)
------------------------------------- ----------- -------- -------------- ----------- ------------ ------
Operating profit 44.5
Profit on disposal of properties 6.1
Net finance costs (7.0)
------------------------------------- ----------- -------- -------------- ----------- ------------ ------
Profit before tax 43.6
------------------------------------- ----------- -------- -------------- ----------- ------------ ------
Other segment information
Capital expenditure: property, plant
and equipment 18.8 3.0 - 21.8 5.8 27.6
Business combinations (note 9) 1.5 2.8 - 4.3 6.3 10.6
Depreciation and amortisation 16.4 1.5 - 17.9 3.8 21.7
Impairment of property 3.5 - - 3.5 - 3.5
Reversal of impairment on property (0.8) (0.8) - (1.6) - (1.6)
------------------------------------- ----------- -------- -------------- ----------- ------------ ------
1 Unallocated expenses represent primarily the salaries and costs of central management.
2 Unallocated costs have been adjusted to include costs
previously allocated to The Fuller's Beer Business as they are
considered to be continuing in nature and therefore form part of
the continuing operations.
Fuller, Smith & Turner P.L.C.
Notes to the condensed Financial statement
For the 52 weeks ended 30 March 2019
3. Separately Disclosed Items
52 weeks ended 52 weeks ended
30 March 2019 31 March 2018
GBPm GBPm
--------------------------------- --------------------------------
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
---------------------------------------------- ----------- ------------ ------ ----------- ------------ -----
Amounts included in operating profit:
Acquisition costs (0.6) - (0.6) (0.6) - (0.6)
Reorganisation costs (0.5) - (0.5) - - -
Disposal of the Fuller's Beer Business (5.4) (1.6) (7.0) - - -
Deemed remuneration on the future purchase
of shares in The Stable - - - 1.2 - 1.2
Impairment of properties (3.0) - (3.0) (3.5) - (3.5)
Reversal of impairment on property 1.8 - 1.8 1.6 - 1.6
Replacement of core IT systems (6.7) - (6.7) (3.4) - (3.4)
Onerous lease provision charge (1.9) - (1.9) - - -
Guaranteed Minimum Pension (GMP) equalisation
charge (0.3) - (0.3) - - -
---------------------------------------------- ----------- ------------ ------ ----------- ------------ -----
Total separately disclosed items included
in operating profit (16.6) (1.6) (18.2) (4.7) - (4.7)
---------------------------------------------- ----------- ------------ ------ ----------- ------------ -----
Profit on disposal of properties 1.9 - 1.9 6.1 - 6.1
---------------------------------------------- ----------- ------------ ------ ----------- ------------ -----
Separately disclosed finance costs:
Finance charge on net pension liabilities (0.8) - (0.8) (1.0) - (1.0)
---------------------------------------------- ----------- ------------ ------ ----------- ------------ -----
Total separately disclosed finance
costs (0.8) - (0.8) (1.0) - (1.0)
---------------------------------------------- ----------- ------------ ------ ----------- ------------ -----
Total separately disclosed items before
tax (15.5) (1.6) (17.1) 0.4 - 0.4
---------------------------------------------- ----------- ------------ ------ ----------- ------------ -----
Separately disclosed tax:
Profit on disposal of properties (0.3) - (0.3) (1.0) - (1.0)
Other items 1.9 0.3 2.2 1.0 - 1.0
---------------------------------------------- ----------- ------------ ------ ----------- ------------ -----
Total separately disclosed tax 1.6 0.3 1.9 - - -
---------------------------------------------- ----------- ------------ ------ ----------- ------------ -----
Total separately disclosed items (13.9) (1.3) (15.2) 0.4 - 0.4
---------------------------------------------- ----------- ------------ ------ ----------- ------------ -----
Acquisition costs of GBP0.6 million during the 52 weeks ended 30
March 2019 (31 March 2018: GBP0.6 million) relate to transaction
costs on property and business acquisitions. The reorganisation
costs of GBP0.5 million during the 52 weeks ended 30 March 2019 (31
March 2018: GBPnil) as a result of the change in IT system and
relate to staff costs.
The disposal of The Fuller's Beer Business costs of GBP5.4
million relates to the sale of the Group's entire beer business
(see note 10). The sale was completed in April 2019. An additional
GBP1.6 million of separately disclosed items have been recognised
within discontinued operations which relates to redundancies as
part of the sale.
The property impairment charge of GBP3.0 million during the 52
weeks ended 30 March 2019 relates to the write down of four
licensed properties to their recoverable value. During the 52 weeks
ended 31 March 2018, three licensed properties were written down to
their recoverable value totalling GBP3.5 million. The reversal of
impairment on property credit of GBP1.8 million during the 52 weeks
ended 30 March 2019 relates to the write back of previously
impaired licensed properties to their recoverable value (31 March
2018: GBP1.6 million).
The expenditure in relation to the upgrade of core IT systems of
GBP6.7 million (31 March 2018: GBP3.4 million) relates to the costs
associated with the development of a new ERP system for the Group.
The costs incurred primarily relate to consultancy and incremental
additional staff costs to support the project.
The onerous lease provision charge of GBP1.9 million during the
52 weeks ended 30 March 2019 (31 March 2018: GBPnil) relates to the
change in circumstances of three leasehold properties.
The Guaranteed Minimum Pension (GMP) equalisation charge is the
minimum pension which a UK occupational pension scheme must provide
for those employees who were contracted out of the State
Earnings-Related Pensions scheme between 6 April 1978 and 5 April
1997. The increase in liabilities of GBP0.3 million during the 52
weeks ended 30 March 2019 provides an estimate for the differences
in GMPs between males and females.
Fuller, Smith & Turner P.L.C.
Notes to the condensed Financial statement
For the 52 weeks ended 30 March 2019
3. Separately Disclosed Items continued
The profit on disposal of properties of GBP1.9 million during
the 52 weeks ended 30 March 2019 (31 March 2018: GBP6.1 million)
relates to the disposal of seven properties.
The cash impact of operating separately disclosed items before
tax for the 52 weeks ended 30 March 2019 was GBP9.7 million cash
outflow (31 March 2018: GBP4.0 million cash outflow).
4. Finance Costs
52 weeks 52 weeks
ended ended
30 March 31 March
2019 2018
GBPm GBPm
--------- ---------
Total Total
--------------------------------------------------------------- --------- ---------
Interest expense arising on:
Financial liabilities at amortised cost - loans and debentures 6.7 5.9
Financial liabilities at amortised cost - preference shares 0.1 0.1
--------------------------------------------------------------- --------- ---------
Total interest expense for financial liabilities 6.8 6.0
Unwinding of discounts on provisions 0.1 -
--------------------------------------------------------------- --------- ---------
Total finance costs before separately disclosed items 6.9 6.0
Finance charge on net pension liabilities (note 3) 0.8 1.0
--------------------------------------------------------------- --------- ---------
Total finance costs 7.7 7.0
--------------------------------------------------------------- --------- ---------
Fuller, Smith & Turner P.L.C.
Notes to the condensed Financial statement
For the 52 weeks ended 30 March 2019
5. Taxation
Tax on Profit on Ordinary Activities
Restated
52 weeks ended 52 weeks ended
30 March 2019 31 March 2018
Group GBPm GBPm
------------------------------------------ -------------------------------- --------------------------------
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
------------------------------------------ ----------- ------------ ----- ----------- ------------ -----
Tax charged in the Income Statement
Current income tax:
Corporation tax 5.9 1.2 7.1 6.9 1.4 8.3
Amounts under provided in previous
years 0.1 - 0.1 0.1 - 0.1
------------------------------------------ ----------- ------------ ----- ----------- ------------ -----
Total current income tax 6.0 1.2 7.2 7.0 1.4 8.4
------------------------------------------ ----------- ------------ ----- ----------- ------------ -----
Deferred tax:
Origination and reversal of temporary
differences (0.7) (0.1) (0.8) 0.3 0.1 0.4
Amounts over provided in previous years 0.2 - 0.2 - - -
------------------------------------------ ----------- ------------ ----- ----------- ------------ -----
Total deferred tax (0.5) (0.1) (0.6) 0.3 0.1 0.4
------------------------------------------ ----------- ------------ ----- ----------- ------------ -----
Total tax charged in the Income Statement 5.5 1.1 6.6 7.3 1.5 8.8
------------------------------------------ ----------- ------------ ----- ----------- ------------ -----
Analysed as:
Before separately disclosed items 7.1 1.4 8.5 7.3 1.5 8.8
Separately disclosed items (1.6) (0.3) (1.9) - - -
------------------------------------------ ----------- ------------ ----- ----------- ------------ -----
5.5 1.1 6.6 7.3 1.5 8.8
------------------------------------------ ----------- ------------ ----- ----------- ------------ -----
Reconciliation of the Total Tax Charge
The tax expense in the Income Statement for the year is higher
(2018: higher) than the standard rate of corporation tax in the UK
of 19% (2018: 19%). The differences are reconciled below:
52 weeks 52 weeks
ended ended
30 March 31 March
2019 2018
GBPm GBPm
-------------------------------------------------------------------- --------- ---------
Profit from operations before taxation 26.1 43.6
-------------------------------------------------------------------- --------- ---------
Accounting profit multiplied by the UK standard rate of corporation
tax of 19% (2018: 19%) 4.9 8.3
Items not deductible for tax purposes 1.6 0.5
Current and deferred tax under provided in previous years 0.3 0.1
Other (0.2) (0.1)
-------------------------------------------------------------------- --------- ---------
Total tax charged in the Income Statement 6.6 8.8
-------------------------------------------------------------------- --------- ---------
Fuller, Smith & Turner P.L.C.
Notes to the condensed Financial statement
For the 52 weeks ended 30 March 2019
5. Taxation continued
Deferred Tax Relating to Items (Credited)/ Charged to the Income
Statement
52 weeks ended 52 weeks ended
30 March 2019 31 March 2018
GBPm GBPm
-------------------------------- --------------------------------
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
------------------------------------- ----------- ------------ ----- ----------- ------------ -----
Deferred tax depreciation (1.0) (0.1) (1.1) (1.3) 0.1 (1.2)
Rolled over capital gains 0.3 - 0.3 1.0 - 1.0
Retirement benefit obligations 0.2 - 0.2 0.1 - 0.1
Employee share schemes 0.1 - 0.1 0.3 - 0.3
Pub acquisition costs (0.1) - (0.1) (0.1) - (0.1)
Others - - - 0.3 - 0.3
------------------------------------- ----------- ------------ ----- ----------- ------------ -----
Deferred tax in the Income Statement (0.5) (0.1) (0.6) 0.3 0.1 0.4
------------------------------------- ----------- ------------ ----- ----------- ------------ -----
Tax Relating to Items (Charged)/Credited to the Statement of
Comprehensive Income
52 weeks 52 weeks
ended ended
30 March 31 March
2019 2018
GBPm GBPm
--------------------------------------------------------------- --------- ---------
Deferred tax:
Valuation gains on financial assets and liabilities - 0.2
Net actuarial (gains)/losses on pension scheme (0.8) 0.8
--------------------------------------------------------------- --------- ---------
Total tax (charged)/credited in the Statement of Comprehensive
Income (0.8) 1.0
--------------------------------------------------------------- --------- ---------
Tax Relating to Items Charged Directly to Equity
52 weeks 52 weeks
ended ended
30 March 31 March
2019 2018
GBPm GBPm
----------------------------------------------------- --------- ---------
Deferred tax:
Increase in deferred tax liability due to indexation 0.1 0.3
Share-based payments (0.1) 0.2
Deferred tax depreciation - (0.1)
Current tax:
Share-based payments - (0.1)
----------------------------------------------------- --------- ---------
Total tax charged to equity - 0.3
----------------------------------------------------- --------- ---------
Fuller, Smith & Turner P.L.C.
Notes to the condensed Financial statement
For the 52 weeks ended 30 March 2019
6. Earnings Per Share
52 weeks ended 52 weeks ended
30 March 2019 31 March 2018
GBPm GBPm
-------------------------------- --------------------------------
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
------------------------------- ----------- ------------ ----- ----------- ------------ -----
Profit attributable to equity
shareholders 15.4 3.9 19.3 29.9 5.9 35.8
Separately disclosed items net
of tax 13.9 1.3 15.2 (1.1) - (1.1)
------------------------------- ----------- ------------ ----- ----------- ------------ -----
Adjusted earnings attributable
to equity shareholders 29.3 5.2 34.5 28.8 5.9 34.7
------------------------------- ----------- ------------ ----- ----------- ------------ -----
Number Number
------------------------------- ---------- ----------
Weighted average share capital 54,957,000 55,169,000
Dilutive outstanding options
and share awards 389,000 344,000
------------------------------- ---------- ----------
Diluted weighted average share
capital 55,346,000 55,513,000
------------------------------- ---------- ----------
40p 'A' and 'C' ordinary share Pence Pence Pence Pence Pence Pence
------------------------------- ----- ----- ----- ----- ----- -------
Basic earnings per share 28.02 7.10 35.12 54.20 10.69 64.89
Diluted earnings per share 27.82 7.05 34.87 53.86 10.63 64.49
Adjusted earnings per share 53.31 9.47 62.78 52.20 10.70 62.90
Diluted adjusted earnings per
share 52.94 9.40 62.34 51.88 10.63 62.51
------------------------------- ----- ----- ----- ----- ----- -------
4p 'B' ordinary share Pence Pence Pence Pence Pence Pence
------------------------------ ----- ----- ----- ----- ----- -----
Basic earnings per share 2.80 0.71 3.51 5.42 1.07 6.49
Diluted earnings per share 2.78 0.71 3.49 5.39 1.06 6.45
Adjusted earnings per share 5.33 0.95 6.28 5.22 1.07 6.29
Diluted adjusted earnings per
share 5.29 0.94 6.23 5.19 1.06 6.25
------------------------------ ----- ----- ----- ----- ----- -----
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 2,027,034 (2018:
1,815,668).
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 ordinary
shares into ordinary shares. Adjusted earnings per share are
calculated on profit before 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.
Fuller, Smith & Turner P.L.C.
Notes to the condensed Financial statement
For the 52 weeks ended 30 March 2019
7. Dividends
52 weeks 52 weeks
ended ended
30 March 31 March
2019 2018
GBPm GBPm
----------------------------------------------------- --------- ---------
Declared and paid during the year
Equity dividends on ordinary shares:
Final dividend for 2018: 12.00p (2017: 11.55p) 6.6 6.4
Interim dividend for 2019: 7.80p (2018: 7.55p) 4.3 4.1
----------------------------------------------------- --------- ---------
Equity dividends paid 10.9 10.5
----------------------------------------------------- --------- ---------
Dividends on cumulative preference shares (note 4) 0.1 0.1
----------------------------------------------------- --------- ---------
Declared and paid after the year:
Second interim dividend for 2019: 8.00p (2018: nil) 4.4 -
Proposed for approval at the Annual General Meeting:
Final dividend for 2019: 4.35p (2018: 12.00p)* 2.4 6.6
----------------------------------------------------- --------- ---------
* The final dividend proposed for 2019 takes into account the
level of interim dividends already paid during the year, which
includes a second interim dividend. The Directors do not intend to
pay a second interim dividend in the next financial year.
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.
Fuller, Smith & Turner P.L.C.
Notes to the condensed Financial statement
For the 52 weeks ended 30 March 2019
8. Property, Plant and Equipment
Plant, Containers,
Land machinery fixtures
& buildings & vehicles & fittings Total
Group GBPm GBPm GBPm GBPm
--------------------------------------------------- ------------ ----------- ----------- ------
Cost
--------------------------------------------------- ------------ ----------- ----------- ------
At 1 April 2017 516.9 40.4 152.8 710.1
--------------------------------------------------- ------------ ----------- ----------- ------
Additions 7.9 3.4 14.6 25.9
Acquisitions (note 9) 4.3 - - 4.3
Disposals (0.7) (0.8) (6.7) (8.2)
--------------------------------------------------- ------------ ----------- ----------- ------
At 31 March 2018 528.4 43.0 160.7 732.1
--------------------------------------------------- ------------ ----------- ----------- ------
Additions 12.5 4.1 17.3 33.9
Acquisitions (note 9) 20.6 - - 20.6
Disposals (2.5) (0.2) (3.6) (6.3)
Derecognition of assets - - (1.9) (1.9)
Transfer to asset held for sale (25.0) (40.7) (15.9) (81.6)
--------------------------------------------------- ------------ ----------- ----------- ------
At 30 March 2019 534.0 6.2 156.6 696.8
--------------------------------------------------- ------------ ----------- ----------- ------
Depreciation and impairment
--------------------------------------------------- ------------ ----------- ----------- ------
At 1 April 2017 34.1 25.3 93.2 152.6
--------------------------------------------------- ------------ ----------- ----------- ------
Provided during the year 4.3 2.2 14.4 20.9
Disposals (0.7) (0.8) (6.7) (8.2)
Impairment loss net of reversals 2.7 - - 2.7
--------------------------------------------------- ------------ ----------- ----------- ------
At 31 March 2018 40.4 26.7 100.9 168.0
--------------------------------------------------- ------------ ----------- ----------- ------
Provided during the year - continuing operations 3.6 0.5 14.4 18.5
Provided during the year - discontinued operations 0.4 1.9 1.0 3.3
Disposals (0.1) (0.1) (3.1) (3.3)
Impairment loss net of reversals (0.7) - 1.9 1.2
Derecognition of assets - - (0.9) (0.9)
Transfer to asset held for sale (3.9) (27.7) (11.1) (42.7)
--------------------------------------------------- ------------ ----------- ----------- ------
At 30 March 2019 39.7 1.3 103.1 144.1
--------------------------------------------------- ------------ ----------- ----------- ------
Net book value at 30 March 2019 494.3 4.9 53.5 552.7
--------------------------------------------------- ------------ ----------- ----------- ------
Net book value at 31 March 2018 488.0 16.3 59.8 564.1
--------------------------------------------------- ------------ ----------- ----------- ------
Net book value at 1 April 2017 482.8 15.1 59.6 557.5
--------------------------------------------------- ------------ ----------- ----------- ------
Fuller, Smith & Turner P.L.C.
Notes to the condensed Financial statement
For the 52 weeks ended 30 March 2019
9. Business Combinations
On the 6th June 2018, the Company acquired 100% of the shares of
Bel & The Dragon, a business incorporated in the UK and
consisting of six premium pubs. A further four pubs were bought and
treated as a business combination as they were operating as a
business at the point the Company acquired them. Both these
transactions have been accounted for by the purchase method of
accounting.
On the 20th June 2018, the Company purchased the remaining 24%
of the shares in The Stable Pizza & Cider Limited for GBP1.7
million and on the 7th July 2018, the remaining 49% of the shares
in Nectar Imports Limited were purchased for GBP2.0 million. Both
companies are now 100% owned.
Bel & The
Dragon Pubs
2019 2019
------------------------------- ---------- ------------ --------- -----
Number of pubs/restaurants
purchased 6 4
Bel & The
Fair value Dragon Pubs
Book Value adjustments 2019 2019
GBPm GBPm GBPm GBPm
Property, plant and equipment 11.2 9.4 20.6 3.5
Current assets 0.8 - 0.8 -
Current liabilities (2.4) - (2.4) -
Deferred tax (0.4) (1.6) (2.0) -
Borrowings (6.0) - (6.0) -
Cash and cash equivalents 0.3 - 0.3 -
------------------------------- ---------- ------------ --------- -----
Net assets acquired 3.5 7.8 11.3 3.5
------------------------------- ---------- ------------ --------- -----
Goodwill 1.8 -
------------------------------- ---------- ------------ --------- -----
Consideration 13.1 3.5
------------------------------- ---------- ------------ --------- -----
Cash consideration paid - - 13.1 3.3
Cash deposit paid in prior
year - - - 0.2
------------------------------- ---------- ------------ --------- -----
Total consideration - - 13.1 3.5
------------------------------- ---------- ------------ --------- -----
Net outflow of cash
Cash consideration paid 13.1 3.3
Repayment of third party loans
on acquisition 6.0 -
Repayment of liability arising
on acquisition 0.1 -
Cash and cash equivalents
acquired (0.3) -
------------------------------- ---------- ------------ --------- -----
Net cash outflow in respect
of purchase of businesses 18.9 3.3
------------------------------- ---------- ------------ --------- -----
If It is not practical to identify the revenue and profit on an
annualised basis as the months for which the businesses have been
owned are not representative of the annualised figures, and pre-
acquisition trading results are not indicative of the trading
expected going forwards. Pro-forma results have therefore not been
included.
Fuller, Smith & Turner P.L.C.
Notes to the condensed Financial statement
For the 52 weeks ended 30 March 2019
10. Assets Classified as Held For Sale and Discontinued
Operations
Group Group
2019 2018
GBPm GBPm
------------------------------------------------ ----- -----
Assets held for sale at the start of the year 2.1 5.9
Assets disposed of during the year (2.1) (4.6)
Reversal of impairment on assets held for sale - 0.8
Disposal of Fuller's Beer Business 57.0 -
------------------------------------------------ ----- -----
Net assets held for sale at the end of the year 57.0 2.1
------------------------------------------------ ----- -----
On the 25th January 2019 the Group entered into an agreement for
the sale of its entire beer business to Asahi Europe Ltd ("AEL"), a
wholly owned subsidiary of Asahi Group Holdings, Ltd ("Asahi"), for
an enterprise value of GBP250.0 million on a debt free basis plus
any cash left in the business. The disposal of the Fuller's Beer
Company completed on the 27th April 2019, subsequent to the end of
the reporting period.
The business being sold comprises the entirety of Fuller's beer,
cider and soft drinks brewing and production, wine wholesaling, as
well as the distribution thereof, and also includes the Griffin
Brewery, Cornish Orchards, Dark Star Brewing and Nectar Imports
(referred to as the "Fuller's Beer Business"). Accordingly those
divisions are reported as discontinued operations in the 2019
financial statements.
Under the terms of the sale, AEL will acquire the brands of the
beer business (including "London Pride") and will receive the
benefit of a licence, on a perpetual, global, exclusive and
royalty-free basis, to use certain trade marks (including the
"Fuller's" name, logo and cartouche) for the provision of
beverages. Ownership of the licensed trademarks will be retained by
Fuller's.
At the balance sheet date, the sale was deemed to be probable
within 12 months from the reporting date, and the disposal of the
Fuller's Beer Company will signal a departure from a major line of
business in which the Group previously operated. In accordance with
IFRS 5, this business has been treated as an asset held for sale
and the results of the Fuller's Beer Company are reported as
discontinued operations.
The net assets of this business as at 30 March 2019, which have
been presented gross on the Group balance sheet, are shown
below:
Group
The Fuller's
Beer Company
2019
GBPm
------------------------------ -------------
Non-current assets
Intangible assets 11.7
Property plant and equipment 38.9
Other financial assets 0.1
Total non-current assets 50.7
------------------------------ -------------
Current assets
Inventories 12.7
Cash and short term deposits 5.3
Trade and other receivables 18.3
------------------------------ -------------
Total current assets 36.3
------------------------------ -------------
Total assets 87.0
Current liabilities
Trade and other payables (28.0)
------------------------------ -------------
Total current liabilities (28.0)
------------------------------ -------------
Non-current liabilities
Other non-current payables (0.2)
Deferred tax liabilities (1.8)
------------------------------ -------------
Total non-current liabilities (2.0)
------------------------------ -------------
Total liabilities (30.0)
------------------------------ -------------
Net assets 57.0
------------------------------ -------------
Fuller, Smith & Turner P.L.C.
Notes to the condensed Financial statement
For the 52 weeks ended 30 March 2019
11. Cash, Borrowings and Net Debt
Analysis of Net Debt
At At
31 March Cash 30 March
2018 flows Non-cash(1) 2019
Group GBPm GBPm GBPm GBPm
----------------------------- --------- ------ ----------- ---------
Cash and cash equivalents
Cash and short-term deposits 11.7 (0.7) - 11.0
----------------------------- --------- ------ ----------- ---------
11.7 (0.7) - 11.0
----------------------------- --------- ------ ----------- ---------
Debt
Bank loans(2) (185.9) (42.3) (0.3) (228.5)
Other loans (0.2) - - (0.2)
Debenture stock (25.9) - - (25.9)
Preference shares (1.6) - - (1.6)
----------------------------- --------- ------ ----------- ---------
(213.6) (42.3) (0.3) (256.2)
----------------------------- --------- ------ ----------- ---------
Net debt (201.9) (43.0) (0.3) (245.2)
----------------------------- --------- ------ ----------- ---------
1 Non-cash movements relate to the amortisation of arrangement fees.
2 Bank loans net of arrangement fees.
At At
1 April Cash 31 March
2017 flows Non-cash(1) 2018
Group GBPm GBPm GBPm GBPm
----------------------------- -------- ------ ----------- ---------
Cash and cash equivalents
Cash and short-term deposits 15.3 (3.6) - 11.7
----------------------------- -------- ------ ----------- ---------
15.3 (3.6) - 11.7
----------------------------- -------- ------ ----------- ---------
Debt
Bank loans(2) (193.7) 8.0 (0.2) (185.9)
Other loans (0.2) - - (0.2)
Debenture stock (25.9) - - (25.9)
Preference shares (1.6) - - (1.6)
----------------------------- -------- ------ ----------- ---------
(221.4) 8.0 (0.2) (213.6)
----------------------------- -------- ------ ----------- ---------
Net debt (206.1) 4.4 (0.2) (201.9)
----------------------------- -------- ------ ----------- ---------
1 Non-cash movements relate to the amortisation of arrangement fees.
2 Bank loans net of arrangement fees.
Fuller, Smith & Turner P.L.C.
Notes to the condensed Financial statement
For the 52 weeks ended 30 March 2019
12. Pensions
Total amounts included in the Balance Sheet arising from the
Group's pension obligations in respect of its defined benefit
retirement plan are:
2019 2018
GBPm GBPm
------------------------------------ ------- -------
Fair value of Scheme assets 111.9 109.5
------------------------------------ ------- -------
Present value of Scheme liabilities (148.3) (142.0)
------------------------------------ ------- -------
Deficit in the Scheme (36.4) (32.5)
------------------------------------ ------- -------
Fair value
Defined benefit of Scheme Net defined
obligation assets benefit (deficit)
----------------- ------------ --------------------
2019 2018 2019 2018 2019 2018
GBPm GBPm GBPm GBPm GBPm GBPm
Balance at beginning of the year (142.0) (149.3) 109.5 111.4 (32.5) (37.9)
--------------------------------------- -------- ------- ----- ----- --------- ---------
Included in profit and loss
Current service cost - - - - - -
Net interest cost (3.6) (3.8) 2.8 2.8 (0.8) (1.0)
--------------------------------------- -------- ------- ----- ----- --------- ---------
(3.6) (3.8) 2.8 2.8 (0.8) (1.0)
--------------------------------------- -------- ------- ----- ----- --------- ---------
Included in Other Comprehensive Income
Actuarial gains/(losses) relating to:
Actual return less expected return
on Scheme assets - - 2.6 (0.9) 2.6 (0.9)
Experience gains/(losses) arising on
Scheme liabilities (7.6) 5.3 - - (7.6) 5.3
--------------------------------------- -------- ------- ----- ----- --------- ---------
(7.6) 5.3 2.6 (0.9) (5.0) 4.4
--------------------------------------- -------- ------- ----- ----- --------- ---------
Other
Employer contributions - - - - - -
Employer special contributions - - 2.2 2.0 2.2 2.0
Employee contributions - - - - - -
Benefits paid 5.2 5.8 (5.2) (5.8) - -
GMP Equalisation (0.3) - - - (0.3) -
--------------------------------------- -------- ------- ----- ----- --------- ---------
4.9 5.8 (3.0) (3.8) 1.9 2.0
--------------------------------------- -------- ------- ----- ----- --------- ---------
Balance at end of the year (148.3) (142.0) 111.9 109.5 (36.4) (32.5)
--------------------------------------- -------- ------- ----- ----- --------- ---------
Key assumptions
The key assumptions used in the 2019 valuation of the Scheme are
set out below:
Key financial assumptions used in the valuation of the Scheme 2019 2018
-------------------------------------------------------------- ----- -----
Rate of increase in pensions in payment 3.30% 3.20%
Discount rate 2.40% 2.60%
Inflation assumption - RPI 3.35% 3.20%
Inflation assumption - CPI 2.35% 2.20%
-------------------------------------------------------------- ----- -----
2019 2018
Mortality assumptions Years Years
------------------------------------- ------ ------
Current pensioners (at 65) - males 22.0 21.9
Current pensioners (at 65) - females 23.9 23.9
Future pensioners (at 65) - males 23.4 23.3
Future pensioners (at 65) - females 25.5 25.4
------------------------------------- ------ ------
Fuller, Smith & Turner P.L.C.
Notes to the condensed Financial statement
For the 52 weeks ended 30 March 2019
12. Pensions continued
2019 2018
Assets in the Scheme GBPm GBPm
----------------------------- ----- -----
Corporate bonds 27.4 21.9
UK equities 21.3 23.9
Overseas equities 22.3 24.8
Alternatives 36.5 34.3
Cash 0.8 1.2
Annuities 3.6 3.4
----------------------------- ----- -----
Total market value of assets 111.9 109.5
----------------------------- ----- -----
13. Post Balance Sheet Event
The disposal of the Fuller's Beer Company completed on 27(th)
April 2019, subsequent to the end of the reporting period (see note
10). The proceeds of the sale, expected to be approximately GBP205
million after relevant adjustments including transaction and
reorganisation costs, will allow Fuller's to make a return of
capital to shareholders, make a voluntary contribution to the
pension scheme, reinvest in the existing pubs and hotels business
to drive growth and invest in carefully selected acquisition
opportunities as they arise.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR QZLFLKDFEBBX
(END) Dow Jones Newswires
July 25, 2019 02:00 ET (06:00 GMT)
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