TIDMFSTA
RNS Number : 5316E
Fuller,Smith&Turner PLC
08 July 2021
STRICTLY EMBARGOED
UNTIL 7AM THURSDAY 8 JULY 2021
FULLER, SMITH & TURNER P.L.C.
("Fuller's", the "Company", or the "Group")
Financial results for the 52 weeks to 27 March 2021
Financial and Operational Summary
-- Resilient performance in an extraordinary year that started
and ended with our entire pub estate closed, and with social
distancing restrictions for 16 months to date
-- Closure of the estate for an average of 71% of the year due to Covid restrictions
-- High customer demand while sites were open gives us
confidence in our ability to rebound strongly as restrictions are
eased
-- Business remains firmly underpinned by our predominately
freehold estate of iconic, high quality pubs and hotels
-- Proactive GBP52 million equity issue successfully completed
in April 2021 to strengthen the Balance Sheet and ensure the
Company exits the pandemic in the best possible position
-- No full year dividend proposed in light of pandemic impact on
trading performance, but intention to return to progressive
dividend policy at the appropriate time.
FY 2021 FY 2020
GBPm GBPm
----------------------------------------- ------- -------
Revenue and other income 73.4 319.7
Group statutory (loss)/profit before
tax (59.2) 166.2
Adjusted (loss)/profit before tax(1) (48.7) 19.4
Net debt excluding lease liabilities(2) 218.1 178.9
All figures above are from continuing operations except for
Group statutory (loss)/profit before tax which includes
discontinued operations
1 Adjusted (loss)/profit before tax is the (loss)/profit before
tax excluding separately disclosed items.
2 Net debt comprises cash and short-term deposits, bank
overdraft, bank loans, CCFF, debenture stock and preference
shares.
Strategic Update
-- Continued investment in our predominately freehold estate
during periods of enforced closure to ensure we reopened in
excellent condition, including 10 transformational refurbishment
schemes and one new opening - The White Horse, Wembley
-- Strong performance in our hotels and pubs with rooms, when
restrictions permitted, benefiting from a strong boom in
staycations
-- Completed the integration of Cotswold Inns & Hotels, which has delivered immediate benefits
-- Transitional Services Agreement with Asahi successfully completed
-- Successful roll out of digital solutions such as Order &
Pay and enhanced central booking system, improving the digital
customer journey
-- Streamlined teams both at house level and in our support
centre ready to deliver future growth.
Current Trading and Outlook
-- Estate now fully reopened, albeit with restrictions
-- Balanced business in terms of operational style, geography
and demographics with varying recovery trajectories across the
estate
-- Current net debt levels below where they were pre-pandemic,
helped by strong cash generation since reopening
-- Managed like for like sales for 12 weeks to 3 July 2021 at
76% of 2019 levels, reflecting continued impact of social
distancing restrictions on trading, particularly in our London
pubs
-- Over 90 projects planned during the year to further improve
our pub gardens and outside spaces
-- Transformational refurbishments completed at The Kingswood
Arms, Banstead, and in Wendover with the opening of our seventh Bel
& The Dragon site
-- 100% occupancy in our Tenanted estate, with full commercial rent reintroduced on 26 June 2021
-- New central finance system on schedule to go live in the second half of the year
-- Looking forward to trading fully with no restrictions from 19 July
-- Company in excellent shape to continue to deliver long-term strategy and growth.
Chief Executive Simon Emeny said: "The end of restrictions is
now just 11 days away and our pubs and hotels are perfectly placed
to benefit from growing consumer confidence and the return of
normal life. Pubs are social spaces that thrive on spontaneity - a
quick pint, staying for a bit longer to chat to someone at the bar
or just walking past a beautiful pub garden and deciding to stop
for a bite to eat without pre-booking a table. I know that, across
our estate, our teams are excited to see those behaviours
return.
"The boom in staycations and desire to get back out with friends
has led to strong trading in parts of our estate - particularly
Cotswold Inns & Hotels and our rural pubs with rooms - and
there is an incredibly busy season to come with numerous weddings
and a high level of advance bookings. With our entire estate open,
like for like sales for the 12 weeks to 3 July 2021 are running at
76% of 2019 levels, cash generation is strong and our net debt
levels are below where they were pre-pandemic. The importance of
our perfectly balanced estate has come in to play with different
parts of the business showing different recovery trajectories and
we are very comfortable with the company's current position.
"We have a clear set of priorities for the next 12 months. We
will continue to deliver our strategic goals, invest in our estate,
and implement our new central finance system. Other projects, such
as our employer brand and further work around our digital customer
journey, will be progressed and we will, as ever, keep a watching
brief on appropriate opportunities in the market. In the short
term, we will continue to address challenges around recruitment and
supply chain, which are having an impact right across the
hospitality sector.
"The elements that combine to make Fuller's such an amazing
company have been reiterated many times before and are always worth
repeating. The foundations are our iconic, predominately freehold,
well-invested estate of stunning pubs and hotels, which are
geographically southern based and cover city, town, village and
rural locations. At our heart are the amazing team members and
entrepreneurial Tenants that make up the Fuller's family and we are
driven by a clear, consistent, long-term strategy. Combined with
our strong Balance Sheet, a cash generative business and the fact
that the enduring appeal of the high-quality British pub has never
been stronger, we look to the future with confidence."
-Ends-
For further information, please contact:
Fuller, Smith & Turner P.L.C.
Simon Emeny, Chief Executive 020 8996 2000
Adam Councell, Finance Director 020 8996 2000
Georgina Wald, Corporate Comms Manager 020 8996 2198
Instinctif Partners
Justine Warren 020 7457 2010
Notes to Editors:
Fuller, Smith & Turner PLC is the premium pubs and hotels
business that is famous for beautiful and inviting pubs with
delicious fresh food, a vibrant and interesting range of drinks,
and engaging service from passionate people. Fuller's has 209
managed businesses, with 1,027 boutique bedrooms, and 175 Tenanted
Inns. The estate is predominately located in the South of England
(44% of sites are within the M25) and stretches from our City of
London heartland to the Jurassic Coast via the New Forest. Our
Managed Pubs and Hotels include 15 iconic Ale & Pie pubs, seven
stunning hotels in the Cotswolds, and Bel & The Dragon - seven
exquisite country inns located in the Home Counties. In summary,
Fuller's is the home of great pubs, outstanding hospitality and
passionate people, where everyone is welcome and leaves that little
bit happier than they arrived.
Photography is available from the Fuller's Press Office on 020
8996 2198 or by email at pr@fullers.co.uk .
This statement will be available on the Company's website,
www.fullers.co.uk . An accompanying presentation will also be
available from 12 noon on 8 July 2021.
FULLER, SMITH & TURNER P.L.C.
FINANCIAL RESULTS FOR THE 52 WEEKSED 27 MARCH 2021
CHAIRMAN'S STATEMENT
I'm not sure that even the most robust of business continuity
exercises could have prepared us, the industry or the country, for
the year that we have just endured. Being Chairman of a closed
hospitality business has been challenging throughout, frustrating
most of the time, and yet often very rewarding due to the amazing
team of people that work at Fuller's.
I am delighted to see the way Simon and the Executive Team have
used this extraordinary period of enforced closure to review, plan
and implement new ways of working, which has enabled the Company to
emerge from the pandemic an even stronger business. The roll out of
digital initiatives such as Order & Pay improve the experience
for our customers and are developments that add value to the
business. Meanwhile, the investment we have made in providing
stunning beer gardens and outside trading space has increased the
number of covers in some of our most popular pubs and will make the
alfresco experience more appealing for our customers throughout the
whole year.
We have kept all our people at our heart during the last year -
those in our pubs and hotels, the support centre team, and our
Tenants - providing support in a wide variety of forms. I am proud
of the actions the team have taken during the year, from the
decision to top up furlough payments to ensure everyone received
80% of their wages and the salary sacrifice made in the first
lockdown by the Board and Exec Team, to the suspension of
commercial rent for our Tenants.
Our People Team has provided access to emotional and financial
support for team members who need it, and access to online training
for those team members who wanted an additional stimulus during the
long months of lockdown. Meanwhile Simon has provided regular video
blogs to keep the entire team informed, up to date and, frequently,
entertained while our team members and Tenants have played active
roles in their communities, providing meals for the homeless,
working in vaccine centres and undertaking numerous volunteering
opportunities.
During the year, we announced the departure of our Finance
Director Adam Councell, who will be returning to the services
sector later in the year. Adam has made an important and valued
contribution to Fuller's during one of the most difficult chapters
in its history and we thank him and wish him well in his new role.
Post year end, we were delighted to announce that Neil Smith, a
highly experienced Finance Director who has spent much of his
career in the pub sector, will be joining us later in the year.
Neil will be an excellent addition to Fuller's, the Executive Team
and the Board and we look forward to welcoming him to the Fuller's
family and working closely with him in the future.
Fuller's is a company that has always prided itself on its
long-term strategy and vision and that continues to stand us in
good stead and remains unchanged. Our predominately freehold estate
provides the base for our business and, while we may tweak the
tactics in the short term to reflect ever-changing situations, we
are excited about getting back on track to continue to deliver our
long-term strategy and return to growth.
Trading with social distancing is like trading with one arm
behind your back and, in light of the year we have just endured, we
have had to take actions that are outside the norm. These include
the equity raise undertaken at the start of the new financial year
and the decision not to propose a dividend this year. I realise the
latter is disappointing for our shareholders and I thank them for
their ongoing understanding in these difficult times. The Board
recognises the importance of dividends to our shareholders and
hopes to resume dividend payments once the business is again
trading profitably on a sustained basis.
I would like to thank all my colleagues at Fuller's for their
loyalty and perseverance in the face of this unprecedented
pandemic, and their enthusiasm to get back to their role of
welcoming and entertaining our customers once again.
Michael Turner
Chairman
7 July 2021
CHIEF EXECUTIVE'S REVIEW
With the country still awaiting the start of the return to
normality, we look back on a year that both started and ended with
our entire pub estate closed. During the year, we have traded for
the equivalent of just 29% of the financial year - and this is
reflected in our fiscal performance with revenue[1] down 77% to
GBP73.2 million (2020: GBP316.0 million).
Against this backdrop, I want to start this review of the year
by paying tribute to the incredible team of people that work at
Fuller's. From my Executive Team to all our team members in our
pubs, hotels and support centre, and our Tenants, all have dealt
with the ups and downs of the past year with positivity and
optimism - filling their time during the many periods of furlough
by working at vaccine centres, as delivery drivers, in food banks
or serving and supporting their local communities. At various
times, we have had 98% of the whole team furloughed and whenever we
have been ready to open up again, they have been match fit and
delivered a great Fuller's experience in the most challenging of
circumstances. I would like to personally thank them all most
whole-heartedly for their dedication, commitment and loyalty.
We have now reopened the entire estate, albeit with continued
social distancing and table service restrictions, and have used the
past year wisely - investing in our pubs and hotels, accelerating
digital projects and rightsizing our teams. While it may have been
an unusual year in terms of revenue, we have emerged in the best
possible position operationally as the country stands ready to
begin shaking off the spectre of coronavirus.
We started the year with a clear strategy, purpose and vision.
While the pandemic may have altered the short-term tactical
activity that delivers the strategy, the overarching principles are
unchanged. This clear focus, aimed at delivering sustainable
returns for the long term, is as relevant as ever and with our pubs
and hotels reopened and trading again, we are optimistic about the
future.
Prudent approach to navigating the pandemic
During the year under review, we have accessed the various
Government relief and coronavirus support measures available. For
much of the year, we have had 98% of our team members on the
Coronavirus Job Retention Scheme ("CJRS"), with the Company topping
up all salaries to 80%. We also put in place GBP100 million of
funding through the Covid Corporate Financing Facility ("CCFF") and
have benefited from the various grants that have been on offer, the
suspension of business rates and the hospitality VAT reduction. We
are grateful for all of these measures, but despite this our
average cash burn during the periods of total closure has been
GBP4-5 million per month. With the periods of enforced closure
lasting longer than anyone could have anticipated and a commitment
to exit the pandemic in a position of strength, we decided at the
end of the financial year to undertake an equity raise,
successfully generating GBP52 million of net proceeds in April
2021.
Looking after our teams and Tenants has been a priority during
the pandemic and communication has been at the heart of that. We
led the industry in cancelling commercial rent ahead of the
Government's enforced closure and this was very well received. For
our teams in our Managed Pubs and Hotels, and in the support
centre, the Fuse digital communication system we implemented back
in 2017 proved to be a popular and useful tool, providing a quick
and instant way to share information and video messages, which have
been really well received. We also hosted a number of webinars when
we had more detailed information to impart and these became a
regular fixture prior to each reopening. The success of these
webinars has cemented their place in our communications toolkit and
is another positive learning that we will take forward.
One of the areas we have paid particular attention to is the
health and wellbeing of our teams during the pandemic. Through
Fuse, we have shared hints, tips and courses on coping and
regularly promoted the wide range of support on offer from the
Licensed Trade Charity. We provided supermarket vouchers for those
most impacted during the tough third lockdown. The response from
our team members has been very positive. We also provided Fuller's
vouchers to team members who volunteered in their local communities
while furloughed for them to share with their fellow volunteers by
way of thanks.
On reopening our estate, we took a rational approach. Decisions
were taken on a site by site basis and were based on the data
available from a range of sources both internal and external - an
approach which allowed us to minimise losses for the periods in
which the estate was partially reopened. Following the last
lockdown, we reopened 121 Managed Pubs and Hotels on or soon after
12 April 2021 with outside trading only, with the remainder of the
estate opening on 17 May 2021.
Positioning the business for long-term growth
At the start of the year, we completed the integration of the
support functions for both Bel & The Dragon and Cotswold Inns
& Hotels, and the delivery of the Transitional Services
Agreement ("TSA") with Asahi. We also completed the sale of the
Stable Pizza and Cider Limited ("The Stable"), a leasehold
business, to Three Joes. This streamlined the business and allows
us to focus on the areas that will drive our growth in the
future.
These actions, combined with the sale of the Fuller's Beer
Business in April 2019, provided an opportunity to make further
changes in our central functions - creating a leaner, more
efficient, support centre team designed to assist a dedicated pubs
and hotels business.
This exercise was completed in the first half of the year and we
are confident we have the right people in the right places to
continue to grow the business in the future, both organically, and
through acquisitions and developments at the appropriate time. We
also reviewed the size and composition of our teams at house level
and, although we made a number of redundancies, these were kept to
a minimum. As part of this exercise, we also successfully
redeployed a number of people to other pubs and hotels within the
Fuller's estate.
During lockdown we introduced a new range of online learning
opportunities to help our teams develop both personally and
professionally. The courses were delivered through Fuse and focused
on wellbeing and developing important life skills, everything from
acquiring new digital skills to learning a new language. During the
year 1,616 courses were completed with the most popular courses
being around managing time, managing emotions, and wellbeing.
Finally, to underpin the right team, we need the right systems
and we have used the downtime during the year to identify an
appropriate, first-class central finance system. As a result, we
will be rolling out our new Microsoft Business Central software
package in October this year - simplifying our ordering and
accounts processes and crucially improving the flow and
understanding of data to the business.
Innovative solutions for a digital future
The onset of the coronavirus pandemic forced us to rethink our
customer journey, removing contact points and improving our use of
digital technology. While these were implemented as a solution to
an immediate problem, the learnings we have taken and the success
of these projects have now made them a permanent feature of our
business.
The pre-visit journey is now key to our customer, from searching
and viewing to booking and ordering. This encompasses a myriad of
digital touch points for the consumer in both pubs and hotels that,
to achieve optimal efficiency and a frictionless journey, all need
to be seamlessly interlinked. This work is on schedule and initial
enhancements in centralised bookings and Order & Pay are
working well.
The Order & Pay solution was put in place for the initial
reopening of the estate in July last year. The system, which allows
customers to scan a QR code to view the menu, place orders and pay
- all without having to leave the table, wait for a team member, or
download an app - proved both successful and popular with team
members and customers. We have successfully rolled this out across
the estate and customers that use it have given higher Net Promoter
Scores, better tips for the team and migrated to more premium
drinks.
The improvements to our booking platform shorten the customer
journey and auto-confirmed bookings now account for nearly
two-thirds of all reservations made. Meanwhile, the central sales
team has been instrumental in encouraging customers to look outside
our peak periods and, where necessary, consider alternative
Fuller's venues to deal with demand - broadening our peak trading
times and reducing lost sales. During July and August last year,
our central sales team delivered over one million covers.
At the tail end of 2019, we adapted our accommodation marketing
strategy to focus on the domestic tourism market - a decision that
has been vindicated with the uplift in staycations since the
outbreak of the pandemic. Access to this market has been further
boosted by search engine optimised hotel finders, focusing on
acquiring new customers around key domestic holiday activities such
as dog friendly hotels in the New Forest. This drove bookings in
our hotels and pubs with rooms and 15 of our accommodation sites
had record accommodation weeks despite the pandemic. In the
Cotswold Inns & Hotels business, which we acquired in October
2019, we worked particularly hard to build a good digital customer
journey for people booking and our success is reflected in the
website conversion rate rising 28% with a 19% rise in direct
website revenue.
This digital customer journey underpins our marketing strategy
and key to this is our single customer view database. During the
year this database has grown by 42% to 1.6 million people, of which
over 500,000 are opted in and fully contactable. The largest data
sources were our booking engine, Design My Night, and Wireless
Social, our wifi provider. The Cotswold Inns & Hotels database
also saw strong growth, increasing by 103%, and we have grown the
Fuller's social media audience too during the year with increases
across Facebook, Twitter and Instagram of 12%, 15% and 20%
respectively. While our pubs may have been closed for much of the
year, our website was very much open for business. We had more
customer engagement than ever on our new pub finders - with visits
up 55.7% against the prior year, largely driven by our Pubs
Reopening finder.
At all digital points of interaction, we collect data - which
helps us understand what consumers are buying and how they are
behaving. This gives us the ability to communicate easily and
efficiently with our customers and potential customers and
continues to successfully convert to increased bookings. It is
supported by incredible in-pub activity including Shakespeare in
the Garden and the forthcoming Comedy on Tap.
This mix of digital communications promoting exciting in-pub
activity drives spend per head, attracts new customers, and
provides more reasons for existing customers to visit. We will
continue to monitor which digital levers translate into the highest
profit and constantly review and revise our online communications,
while not jeopardising the legendary personal hospitality for which
Fuller's is famous.
Well-invested pubs in stunning locations
The foundation of our business is our predominately freehold pub
estate and investment in the estate is a key tenet of Fuller's
success. While many of our competitors suspended their capex
programmes during the pandemic, we did the opposite - maximising
this opportunity to complete planned investments and bringing
forward others to take advantage during the enforced closure.
During the year, we have completed a large number of investment
schemes including 10 transformational refurbishments at sites
including The Coach & Horses in Soho, The Elephant in Finchley,
The Fox & Pelican at Grayshott in Hampshire and The King's Arms
Hotel in Woodstock. We have two further ongoing schemes that began
in the last financial year - The Kingswood Arms in Kingswood near
Banstead, which opened towards the end of June, and The Red Lion in
Wendover, which opened on 7 July 2021 as our seventh Bel & The
Dragon site. We also opened one brand new site during the year -
The White Horse at Wembley, in the shadow of the iconic Wembley
Arch and perfectly poised to benefit from the delayed European
Championships. We have also used the closure period to undertake
smaller schemes across a number of Cotswold Inns & Hotels and
Bel & The Dragon sites, completing works to further enhance
these already wonderful properties.
The pandemic has put a firm focus on outside spaces and pub
gardens - which have seen an increased level of investment. We
invested heavily in "winterisation" projects during the year and we
will be investing a further GBP4 million in over 90 schemes during
this financial year, ready for the autumn. Outside spaces can now
be pre-booked and our customers are more accustomed to being in the
open air. With a huge range of innovative solutions, including
stretch tents, giant teepees, huts, sheds and pergolas to keep
customers warm and dry, we expect to see this trend continue. There
is no doubt that the status of the pub garden has been elevated and
the development of, and investment in, these outstanding areas will
ensure that the pub garden is now a year-round asset, not just for
enjoying on the August Bank Holiday.
TENANTED INNS
Our high quality Tenanted Inns continue to play an important
strategic role in our balanced estate and, at the very start of the
pandemic, we took the decision to suspend commercial rent for our
Tenants during periods of closure. The benefits of this decision
are now being realised as our Tenants used the savings to improve
their pubs and have emerged from the pandemic debt free and in pole
position for reopening. When trading has been possible, we have
taken a bespoke view by pub to ensure a fair and appropriate rent
has been charged.
Throughout the lockdown, we have kept our Tenants informed with
tips and training materials to help them through the closure
periods and to reopen safely and profitably. We have also provided
support on mental health and refunded unopened kegs and casks to
further help with cash flow.
In return, our Tenants have been quick to reopen when allowed.
All opened in July 2020, albeit some were a little cautious and
opened a few weeks after lockdown ended, but the pubs traded very
well during the summer, making the most of the Government's Eat Out
to Help Out scheme. Like the Managed estate, trading slowed as
restrictions tightened in the autumn, and most pubs struggled
through the staggered opening and closing of the tier system and
were already closed when the full lockdown was reintroduced in
January. I am pleased to confirm that all pubs are now open and
trading again.
During the lockdown, we progressed with plans to improve the
training and induction process for Tenants with the addition of a
new team member, whose sole focus is around recruiting new Tenants
and ensuring they are fully inducted and supported as they start
their partnership with Fuller's. This has been well received and
has been instrumental in reducing vacancies in our Tenanted Inns. I
am delighted to say that Iain Rippon has proved to be an excellent
leader for our Tenanted Inns business and when our Tenanted pubs
started to reopen from April, we did not have a single vacancy.
AN EVOLVING AND ENGAGING ESG STRATEGY
This year has seen a major change in our approach to corporate
social responsibility with an evolved Environmental Social
Governance ("ESG") programme now integral to our business strategy.
Under the banner of Life is too good to waste, we have three work
streams covering the environment, our communities and our people.
We are in the process of recruiting a dedicated Head of
Sustainability to drive the ESG programme - and in particular the
environment and community elements.
Our new approach to addressing ESG will see our commitment to
these three areas underpin our strategy, our decision making, and
our vision. We have always looked to reduce our carbon footprint,
and now it will be a requirement in our investment case. We have
always played a role in our communities - and we will bring the
community more into the business and ensure that our support is not
just financial, but a holistic and integrated approach to working
with our charity partners.
Under the framework of Our people are too good to waste, we will
focus on three areas - wellbeing, genuine careers and belonging
(inclusion). This forms part of the wider people plan to create a
compelling people proposition under the banner True to You.
FINANCIAL POSITION
Group revenue and other income fell by 77%, signifying the
detrimental impact that the enforced closure of our business
unsurprisingly had on the results. On average our pubs were only
open to trade for 29% of the days within the FY21 financial year
and even while open they were trading under severe restrictions.
The significant decline in revenue resulted in an adjusted loss
before tax of GBP48.7 million (FY20: profit of GBP19.4 million) and
statutory loss before tax of GBP57.8 million (FY20: profit GBP8.4
million). In periods where we have been able to trade, albeit with
restrictions, trading has been encouraging with positive cash
generation and like for like sales in Managed Pubs and Hotels at
80% during the period 4 July 2020 to 5 September 2020. Since then
the restrictions became more onerous, resulting in the eventual
closure of our entire estate around the end of December, until
those pubs with outside space could reopen on 12 April 2021.
The focus during the long periods of closure was to ensure that
the Group emerged strongly once the estate reopened, with continued
investment in capital projects and our digital offering. However,
it also meant ensuring we protected our financial position and kept
cash burn to a minimum. The Group implemented a number of
mitigating actions to reduce cash outflows and maintain liquidity,
including the decision not to pay a dividend for FY20 and FY21, no
bonuses for FY20, a voluntary salary reduction by the Board and
Executive Team members of 25% and 20% respectively, and carrying
out an exercise to rightsize teams across the entire pub estate and
streamline the support function.
As well as reducing costs internally, the Group also
participated in Government initiatives to protect the viability of
the business, including the CJRS, Eat Out to Help Out scheme and
Business Rates grants. Through the various schemes the financial
results benefited by GBP47.9 million. The Group was also confirmed
as an eligible issuer under the CCFF scheme and issued commercial
paper of GBP100.0 million. Even with all the measures put in place
and the assistance received from the Government, cash burn was
around GBP4-5 million per month.
Shortly after the end of the financial year the Group raised
GBP52 million, net of expenses, through the issue of new equity.
This leaves the Group in a strong financial position with sensible
levels of debt given our asset rich Balance Sheet. It is from this
position of strength that the business will be able to maximise the
opportunities open to it as the economy reopens and trading gains
momentum.
On 7 June 2020, the Group sold The Stable to Three Joes for an
enterprise value of GBP0.5 million, which resulted in a loss on
disposal of GBP0.9 million. As The Stable was sold during the
period, the results have been reported within discontinued
operations. The amounts shown as discontinued operations within the
financial statements are an operating loss of GBP0.5 million as
well as the loss on disposal. As part of the transaction, Fuller's
retained ownership of the five freehold properties associated with
The Stable business.
Overall net debt at 27 March 2021 has increased by GBP39.2
million to GBP218.1 million excluding leases, due to the enforced
closure of the business for a substantial part of the financial
year. Including leases, net debt has increased by GBP16.2 million
to GBP308.0 million, reflecting a reduction in lease liabilities of
GBP23.0 million driven by the sale of The Stable (GBP10.5 million)
and a number of rent concessions received in the year that were
treated as lease modifications (GBP10.0 million).
In June 2020, the Group increased its available facilities by
accessing the CCFF programme and issuing GBP100 million of
commercial paper.
At 27 March 2021, the Group had GBP319.5 million of available
facilities, of which GBP292 million was to mature within the next
12 months. Our undrawn committed facilities at 27 March 2021 were
GBP84.0 million, with a further GBP17.1 million of cash held on the
Balance Sheet.
Since the year end, the CCFF was repaid in May 2021 and the
Group agreed an Amend and Extend Refinancing of its existing debt
facilities with its relationship banks, extending the maturity of
GBP192 million of debt facilities to 19 February 2023 and amending
the financial covenants to a minimum liquidity level to 31 March
2022. The Group also raised a further GBP52 million, net of
expenses, from an equity raise in April 2021.
Total net finance costs (before separately disclosed items) have
increased by GBP0.8 million to GBP8.4 million. The increase is
driven by the interest cost recognised on the unwind of the lease
liabilities. This has increased by GBP0.6 million because of rent
concessions received during the course of the financial year which
have been treated as a lease modification and remeasured at an
increased incremental borrowing rate ("IBR") from the IBR used at
inception. Interest on loans has remained in line with prior year
despite the average monthly borrowings increasing by GBP74 million,
as this was offset by the lower interest rates on the CCFF.
The net position on separately disclosed items of GBP9.1 million
expense (2020: GBP11.0 million expense) comprises principally of
GBP12.9 million impairment of a number of properties, right-of-use
assets, lease receivable and goodwill. Additionally, GBP1.9 million
of reorganisation costs were recognised in the period which include
redundancies as a result of the pandemic as well as costs
associated with the hive up of Bel & The Dragon and Cotswold
Inns & Hotels. These costs were marginally offset by GBP5.8
million profit on disposal recognised in relation to seven
properties which were predominately unlicensed properties.
Tax has been provided for at an effective rate of 18.3% on
adjusted losses (2020 restated: 37.1% on adjusted profits) from
continuing operations. The overall effective tax rate of 16.6% is
due to the separately disclosed items being taxed at an effective
tax rate of 7.7%.
A prior year adjustment to the net deferred tax liability has
been recognised in the year, in respect of an understatement in the
base cost of property, plant and equipment recoverable on a sales
basis. This has resulted in an increase of GBP4.0 million in net
assets at 31 March 2019 and a reduction of GBP1.0 million to the
profit after tax for FY20. The net deferred tax liability at 28
March 2020 has reduced by GBP4.0 million from GBP17.1 million to
GBP13.1 million.
The defined benefit pension scheme deficit has decreased by
GBP1.2 million to GBP3.5 million (2020: GBP4.7 million) with both
the fair value of scheme assets and present value of pension
obligations increasing substantially. The present value of pension
obligations increased by GBP18.8 million to GBP147.3 million which
was driven by a decrease in the discount rate from 2.40% to 1.95%.
This was offset by an increase of the fair value of scheme assets
by GBP20.0 million from GBP123.8 million to GBP143.8 million.
Standard deficit recovery payments of GBP2.3 million were also made
during the financial year.
LOOKING FORWARD TO THE FUTURE
The end of restrictions is now just 11 days away and our pubs
and hotels are perfectly placed to benefit from growing consumer
confidence and the return of normal life. Pubs are social spaces
that thrive on spontaneity - a quick pint, staying for a bit longer
to chat to someone at the bar or just walking past a beautiful pub
garden and deciding to stop for a bite to eat without pre-booking a
table. I know that, across our estate, our teams are excited to see
those behaviours return.
The boom in staycations and desire to get back out with friends
has led to strong trading in parts of our estate - particularly
Cotswold Inns & Hotels and our rural pubs with rooms - and
there is an incredibly busy season to come with numerous weddings
and a high level of advance bookings. With our entire estate open,
like for like sales for the 12 weeks to 3 July 2021 are running at
76% of 2019 levels, cash generation is strong and our net debt
levels are below where they were pre-pandemic. The importance of
our perfectly balanced estate has come in to play with different
parts of the business showing different recovery trajectories and
we are very comfortable with the company's current position.
We have a clear set of priorities for the next 12 months. We
will continue to deliver our strategic goals, invest in our estate,
and implement our new central finance system. Other projects, such
as our employer brand and further work around our digital customer
journey, will be progressed and we will, as ever, keep a watching
brief on appropriate opportunities in the market. In the short
term, we will continue to address challenges around recruitment and
supply chain, which are having an impact right across the
hospitality sector.
The elements that combine to make Fuller's such an amazing
company have been reiterated many times before and are always worth
repeating. The foundations are our iconic, predominately freehold,
well-invested estate of stunning pubs and hotels, which are
geographically southern based and cover city, town, village and
rural locations. At our heart are the amazing team members and
entrepreneurial Tenants that make up the Fuller's family, and we
are driven by a clear, consistent, long-term strategy. Combined
with our strong Balance Sheet, a cash generative business and the
fact that the enduring appeal of the high quality British pub has
never been stronger, we look to the future with confidence.
Simon Emeny
Chief Executive
7 July 2021
[1] From continuing operations.
Fuller, Smith & Turner P.L.C.
Financial Highlights
For the 52 weeks ended 27 March 2021
52 weeks 52 weeks
ended 27 ended 28
March March
2021 2020
GBPm GBPm
------------------------------------------- --------- ---------
Revenue and other income 73.4 319.7
EBITDA(1) (13.1) 53.9
Group statutory (loss)/profit before tax (59.2) 166.2
Basic (loss)/earnings per share(2) (87.31)p 5.81p
Adjusted (loss)/profit before tax(3) (48.7) 19.4
Net debt excluding lease liabilities(4) 218.1 178.9
------------------------------------------- --------- ---------
All figures are for continuing operations except where
stated.
1 Pre-separately disclosed earnings before interest, tax,
depreciation, profit on disposal of plant and equipment and
amortisation.
2 Calculated on a 40p ordinary share.
3 Adjusted (loss)/profit is the (loss)/profit before tax excluding separately disclosed items.
4 Net debt comprises cash and short-term deposits, bank
overdraft, bank loans, CCFF, debenture stock and preference
shares.
Fuller, Smith & Turner P.L.C.
Condensed Group Income Statement
For the 52 weeks ended 27 March 2021
Restated(1)
52 weeks ended 52 weeks ended
27 March 2021 28 March 2020
Continuing operations Note GBPm GBPm
------------------------------------ ---- --------------- ---------------
Revenue 2 73.2 316.0
Operating costs before separately
disclosed items (113.7) (292.7)
Other income 2 0.2 3.7
------------------------------------ ---- --------------- ---------------
Adjusted operating (loss)/profit 2 (40.3) 27.0
------------------------------------ ---- --------------- ---------------
Operating separately disclosed
items 3 (14.8) (20.1)
------------------------------------ ---- --------------- ---------------
Operating (loss)/profit (55.1) 6.9
------------------------------------ ---- --------------- ---------------
Finance costs 4 (8.4) (7.6)
Financing separately disclosed
items 3,4 (0.1) (0.5)
Profit on disposal of properties 3 5.8 9.6
------------------------------------ ---- --------------- ---------------
(Loss)/profit before income tax (57.8) 8.4
------------------------------------ ---- --------------- ---------------
Adjusted (loss)/profit before
income tax (48.7) 19.4
------------------------------------ ---- --------------- ---------------
Total separately disclosed items 3 (9.1) (11.0)
------------------------------------ ---- --------------- ---------------
(Loss)/profit before income tax (57.8) 8.4
------------------------------------ ---- --------------- ---------------
Tax 5 9.6 (5.2)
------------------------------------ ---- --------------- ---------------
Analysed as:
Underlying trading 5 8.9 (7.2)
Separately disclosed items 3,5 0.7 2.0
------------------------------------ ---- --------------- ---------------
(Loss)/profit from continuing
operations (48.2) 3.2
------------------------------------ ---- --------------- ---------------
Net (loss)/profit from discontinued
operations after tax 13 (1.4) 157.7
------------------------------------ ---- --------------- ---------------
(Loss)/profit for the year (49.6) 160.9
------------------------------------ ---- --------------- ---------------
(1) Refer to Note 16 for details of restatement.
Fuller, Smith & Turner P.L.C.
Condensed Group Income Statement (continued)
For the 52 weeks ended 27 March 2021
Restated
52 weeks 52 weeks
ended 27 ended 28
March March
2021 2020
Group Note Pence Pence
------------------------------ ----- ---------- ---------
(Loss)/earnings per share
per 40p 'A' and 'C' ordinary
share
------------------------------ ----- ---------- ---------
Basic 6, 13 (89.84) 291.89
Diluted 6, 13 (89.84) 291.21
(Loss)/earnings per share
per 4p 'B' ordinary share
------------------------------ ----- ---------- ---------
Basic 6, 13 (8.98) 29.19
Diluted 6, 13 (8.98) 29.12
Continuing operations
------------------------------ ----- ---------- ---------
(Loss)/earnings per share
per 40p 'A' and 'C' ordinary
share
------------------------------ ----- ---------- ---------
Basic 6 (87.31) 5.81
Diluted 6 (87.31) 5.79
(Loss)/earnings per share
per 4p 'B' ordinary share
------------------------------ ----- ---------- ---------
Basic 6 (8.73) 0.58
Diluted 6 (8.73) 0.58
------------------------------ ----- ---------- ---------
Fuller, Smith & Turner P.L.C.
Condensed Group Statement of Comprehensive Income
For the 52 weeks ended 27 March 2021
Restated
52 weeks ended 27 March 52 weeks ended
2021 28 March
GBPm 2020
GBPm
Note
-------------------------------------------------------------------- ---- ------------------------- ---------------
(Loss)/profit for the year (49.6) 160.9
-------------------------------------------------------------------- ---- ------------------------- ---------------
Items that may be reclassified to profit or loss in subsequent years
(net of tax)
Net gains on valuation of financial assets and liabilities 0.5 0.2
Tax related to items that may be reclassified to profit or loss 5 (0.1) (0.1)
-------------------------------------------------------------------- ---- ------------------------- ---------------
Items that will not be reclassified to profit or loss in subsequent
years (net of tax)
Net actuarial (losses)/gains on pension schemes 12 (1.0) 5.9
Tax related to items that will not be reclassified to profit or loss 5 0.2 (1.1)
Other comprehensive (losses)/gains for the year, net of tax (0.4) 4.9
-------------------------------------------------------------------- ---- ------------------------- ---------------
Total comprehensive (expense)/income for the year, net of tax (50.0) 165.8
-------------------------------------------------------------------- ---- ------------------------- ---------------
Fuller, Smith & Turner P.L.C.
Condensed Group Balance Sheet
27 March 2021
Restated
At 27 March 2021 At 28 March 2020
Note GBPm GBPm
------------------------------- ---- ---------------- ------------------
Non-current assets
Intangible assets 27.3 27.5
Property, plant and equipment 8 590.2 617.7
Investment properties 3.1 4.8
Other non-current assets - 0.1
Right-of-use assets 10 81.9 107.0
------------------------------- ---- ---------------- ------------------
Total non-current assets 702.5 757.1
------------------------------- ---- ---------------- ------------------
Current assets
Inventories 2.1 4.0
Trade and other receivables 11.5 12.6
Current tax receivable 4.0 6.0
Cash and short-term deposits 11 17.1 20.3
Total current assets 34.7 42.9
------------------------------- ---- ---------------- ------------------
Assets classified as held for
sale 9.6 2.6
------------------------------- ---- ---------------- ------------------
Total assets 746.8 802.6
------------------------------- ---- ---------------- ------------------
Current liabilities
Trade and other payables (28.7) (37.7)
Provisions (4.0) (4.1)
Borrowings 11 (207.7) (171.7)
Lease liabilities 10 (6.7) (8.9)
Total current liabilities (247.1) (222.4)
------------------------------- ---- ---------------- ------------------
Non-current liabilities
Borrowings 11 (27.5) (27.5)
Lease liabilities 10 (83.2) (104.0)
Other financial liabilities (0.7) (1.1)
Retirement benefit obligations 12 (3.5) (4.7)
Deferred tax liabilities (5.3) (13.1)
Total non-current liabilities (120.2) (150.4)
------------------------------- ---- ---------------- ------------------
Net assets 379.5 429.8
------------------------------- ---- ---------------- ------------------
Fuller, Smith & Turner P.L.C.
Condensed Group Balance Sheet (continued)
27 March 2021
Restated
At 27 March 2021 At 28 March 2020
Note GBPm GBPm
--------------------------- ----- ---------------- ------------------
Capital and reserves
Share capital 22.8 22.8
Share premium account 4.2 4.2
Capital redemption reserve 3.7 3.7
Own shares (17.0) (17.1)
Hedging reserve (0.5) (0.9)
Retained earnings 366.3 417.1
---------------------------------- ---------------- ------------------
Total equity 379.5 429.8
---------------------------------- ---------------- ------------------
Fuller, Smith & Turner P.L.C.
Condensed Group Statement of Changes in Equity
For the 52 weeks ended 27 March 2021
Share Capital
Share premium redemption Own Hedging Retained
capital account Deferred Shares reserve shares reserve earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------- -------- -------- ----------------- ----------- -------- -------- ------------ --------
At 30 March 2019
(restated) 22.8 4.8 - 3.1 (19.8) (0.8) 332.4 342.5
---------------------- -------- -------- ----------------- ----------- -------- -------- ------------ --------
Profit for the year
(restated) - - - - - - 160.9 160.9
Other comprehensive
income for the year - - - - - 0.1 4.8 4.9
---------------------- -------- -------- ----------------- ----------- -------- -------- ------------ --------
Total comprehensive
income for the year - - - - - 0.1 165.7 165.8
Issue of share capital 0.6 (0.6) - - - - - -
Reclassification of
deferred shares (0.6) - 0.6 - - - - -
Cancellation of
deferred shares - - (0.6) 0.6 - - - -
Shares purchased to be
held in ESOT or as
treasury - - - - (0.5) - - (0.5)
Shares released from
ESOT and treasury - - - - 3.2 - (1.1) 2.1
Dividends (note 7) - - - - - - (80.5) (80.5)
Share-based payment
charges - - - - - - 0.5 0.5
Transfer to retained
earnings - - - - - (0.2) 0.2 -
Tax debited directly
to equity (note 5) - - - - - - (0.1) (0.1)
---------------------- -------- -------- ----------------- ----------- -------- -------- ------------ --------
Total transactions
with owners - (0.6) - 0.6 2.7 (0.2) (81.0) (78.5)
---------------------- -------- -------- ----------------- ----------- -------- -------- ------------ --------
As at 28 March 2020
(restated) 22.8 4.2 - 3.7 (17.1) (0.9) 417.1 429.8
---------------------- -------- -------- ----------------- ----------- -------- -------- ------------ --------
Loss for the year - - - - - - (49.6) (49.6)
Other comprehensive
income/(expense) for
the year - - - - - 0.4 (0.8) (0.4)
---------------------- -------- -------- ----------------- ----------- -------- -------- ------------ --------
Total comprehensive
income/(expense) for
the year - - - - - 0.4 (50.4) (50.0)
Shares purchased to be - - - - - - - -
held in ESOT or as
treasury
Shares released from
ESOT and treasury - - - - 0.1 - (0.1) -
Dividends (note 7) - - - - - - - -
Share-based payment
credits - - - - - - (0.3) (0.3)
Tax debited directly - - - - - - - -
to equity (note 5)
---------------------- -------- -------- ----------------- ----------- -------- -------- ------------ --------
Total transactions
with owners - - - - 0.1 - (0.4) (0.3)
---------------------- -------- -------- ----------------- ----------- -------- -------- ------------ --------
At 27 March 2021 22.8 4.2 - 3.7 (17.0) (0.5) 366.3 379.5
---------------------- -------- -------- ----------------- ----------- -------- -------- ------------ --------
Fuller, Smith & Turner P.L.C.
Condensed Group Cash Flow Statement
For the 52 weeks ended 27 March 2021
52 weeks ended 52 weeks ended
27 March 28 March
2021 2020
Note GBPm GBPm
------------------------------------------------------------------------------ ---- -------------- ----------------
(Loss)/profit before tax for continuing operations (57.8) 8.4
Net finance costs before separately disclosed items 4 8.4 7.6
Separately disclosed items 3 9.1 11.0
Depreciation and amortisation 27.2 26.9
------------------------------------------------------------------------------ ---- -------------- ----------------
(13.1) 53.9
Difference between pension charge and cash paid (2.3) (2.3)
Contribution to pension fund - (24.0)
Share-based payment (credit)/charges (0.3) 0.5
Change in trade and other receivables (0.4) (1.1)
Change in inventories 1.7 1.1
Change in trade and other payables (6.4) (1.5)
Cash impact of operating separately disclosed items 3 (1.5) (5.0)
------------------------------------------------------------------------------ ---- -------------- ----------------
Cash (absorbed by)/generated from operations (22.3) 21.6
Tax received/(paid) 3.4 (10.1)
------------------------------------------------------------------------------ ---- -------------- ----------------
Cash (absorbed by)/generated from operating activities - continuing operations (18.9) 11.5
------------------------------------------------------------------------------ ---- -------------- ----------------
Cash (absorbed by)/generated from operating activities - discontinued
operations 13 (0.4) 1.5
------------------------------------------------------------------------------ ---- -------------- ----------------
Net Cash (absorbed by)/generated from operating activities (19.3) 13.0
Cash flow from investing activities
Business combinations - (32.8)
Purchase of property, plant and equipment and intangibles (16.5) (46.7)
Sale of property, plant and equipment, right-of-use assets and assets held for
sale 10.8 11.4
Cash absorbed by investing activities - continuing operations (5.7) (68.1)
------------------------------------------------------------------------------ ---- -------------- ----------------
Cash generated from investing activities - discontinued operations 13 0.3 224.5
------------------------------------------------------------------------------ ---- -------------- ----------------
Net cash (outflow)/inflow from investing activities (5.4) 156.4
------------------------------------------------------------------------------ ---- -------------- ----------------
Cash flow from financing activities
Purchase of own shares - (0.5)
Receipts on release of own shares to option schemes - 2.3
Interest paid (4.5) (4.7)
Preference dividends paid (0.1) (0.1)
Equity dividends paid 7 - (80.5)
Drawdown of bank loans 11 99.4 -
Repayment of bank loans 11 (64.0) (65.4)
Repayment of obligations under leases 10 (9.2) (10.3)
Fuller, Smith & Turner P.L.C.
Condensed Group Cash Flow Statement (continued)
For the 52 weeks ended 27 March 2021
52 weeks ended 52 weeks ended
27 March 2021 28 March 2020
Note GBPm GBPm
-------------------------------------------------------------------------- ---- -------------- ----------------
Cash generated/(absorbed by) financing activities - continuing operations 21.6 (159.2)
-------------------------------------------------------------------------- ---- -------------- ----------------
Cash absorbed by financing activities - discontinued operations 13 (0.1) (0.9)
-------------------------------------------------------------------------- ---- -------------- ----------------
Net cash inflow/(outflow) from financing activities 21.5 (160.1)
-------------------------------------------------------------------------- ---- -------------- ----------------
Net movement in cash and cash equivalents (3.2) 9.3
-------------------------------------------------------------------------- ---- -------------- ----------------
Cash and cash equivalents at the start of the year 11 20.3 11.0
-------------------------------------------------------------------------- ---- -------------- ----------------
Total cash and cash equivalents at the end of the year 11 17.1 20.3
-------------------------------------------------------------------------- ---- -------------- ----------------
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 27 March 2021
1. Preliminary statement
The consolidated financial statements of Fuller, Smith &
Turner P.L.C. for the 52 weeks ended 27 March 2021 were authorised
for issue by the Board of Directors on 7July 2021.
The financial information presented does not constitute the
Group's annual report and accounts for either the 52 weeks ended 27
March 2021 or the 52 weeks ended 28 March 2020 within the meaning
of Section 435 of the Companies Act 2006, but is derived from those
accounts. The Group's statutory accounts for 2020 have been
delivered to the Registrar of Companies and those for 2021 will be
delivered following the Company's annual general meeting. The
independent auditor's reports on both the 2021 and 2020 accounts
were not qualified or modified, however both accounts drew
attention to material uncertainties in respect of going concern.
The independent auditor's reports for both 2021 and 2020 did not
contain any statements under Section 498 of the Companies Act
2006.
The Group financial statements are presented in Sterling and all
values are shown in millions of pounds (GBPm) rounded to the
nearest hundred thousand pounds, except when otherwise indicated.
The accounting policies used have been applied consistently, except
where set out below, and are described in full in the statutory
financial statements for the 52 weeks ended 27 March 2021, which
will be mailed to shareholders on or before 4 August 2021 and
delivered to the Registrar of Companies. The financial statements
will also be available from the Company's registered office: Pier
House, 86-93 Strand-on-the-Green, London, England, W4 3NN, and on
its website, from that date.
Going concern
The Directors have prepared the 2021 financial statements on a
going concern basis after assessing the continued impact of the
coronavirus pandemic including further lockdowns and restrictions
as well as the Group's financing arrangement and other principal
risks and uncertainties.
At 27 March 2021, the Group had a strong Balance Sheet with 91%
of the estate being freehold properties and available headroom on
facilities of GBP84.0 million and GBP17.1 million of cash and
resulting net debt of GBP218.1 million excluding leases.
The Group had existing facilities of GBP292 million, GBP192
million was due to expire in August 2021 with the rest, being the
GBP100 million CCFF, which expired in May 2021. Post year end, the
Group agreed an Amend and Extend Refinancing of its existing debt
facilities with its relationship banks, extending the maturity of
the GBP192 million facilities to 19 February 2023 and amending the
financial covenants to a minimum liquidity level of GBP10 million
to be tested monthly until 31 March 2022. In June 2022 the company
will revert to a covenant suite of net debt to EBITDA (leverage)
and EBITDA to net finance charges.
After year end, the Group proposed placing new 'A' shares up to
appropriately 20% of existing issued 'A' ordinary share capital.
The refinancing of the facilities was conditional on the successful
equity raise. On 20 April 2021 the equity raise was approved by the
shareholders at the Extraordinary General Meeting ("EGM") and the
net proceeds of GBP52 million were received the same day. The
proceeds of the equity raise, along with the Group's existing
facilities, were used to repay the CCFF on 12 May 2021.
As well as extending the bank facilities and raising funds
through an equity raise, the Group has implemented a number of
mitigating actions to reduce cash outflows and maintain liquidity,
as follows:
- A final dividend was not declared for FY20, nor has one been
declared for FY21.
- Participated in government initiatives to protect the
viability of the business, including the CJRS, Eat Out to Help Out
scheme, Business Rates Relief and grants, and was confirmed as an
eligible issuer under the CCFF.
- Rightsized staff across the entire pub estate and streamlined
the support function to reduce the cost base.
- Board and Executive Team members took a temporary voluntary
salary reduction.
The Group has modelled two financial scenarios covering the
period to 27 December 2022 (the "going concern assessment period")
that reflect the potential continued impact of the coronavirus
pandemic:
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 27 March 2021
1. Preliminary statement (continued)
The Group's "base case" assumes that even through the estate was
fully open from May 2021, sales in FY22 will still be impacted by
reduction in international travel, slow return to offices and
continued impact on consumer confidence. This will be marginally
offset by increase in weddings, staycations and small increase in
suburban areas as people stay at home to work. Under this scenario
there would be significant headroom and all covenants would be
compiled with for the duration of the going concern period.
A "downside case" assumes there will be three months of full
lockdown in FY22, being December 2021 through to February 2022, and
a further three months with severe restrictions akin to those
experienced in October 2020. In FY23, there will be one further
month of severe restrictions in place and then from May 2022
trading will resume in line with the base case.
Under the "downside case" without additional mitigating action,
the covenants on reinstatement in June 2022 through to December
2022 would be breached. The Directors consider the significant
reduction in sales modelled under this scenario, which largely
reflects a repeat of FY21 in the second half of the year, to be
unlikely given the continued successful rollout of the vaccine.
However, with the continued threat of variants and the unknown
impact that these could have, this downside scenario whilst severe
is plausible.
Although the model shows there would be adequate liquidity
headroom even under this scenario, the Directors would need to seek
waivers for debt and interest coverage covenants that will be
reinstated from June 2022 under the terms of the loan extensions.
The Directors are confident that in this case it would be possible
to agree waivers for these covenants with its lending banks (as has
been the case in prior lockdown scenarios). In addition, the Group
could also implement further mitigating actions before this point
in time comprising deferring capital expenditure, further disposals
of parts of the Group's valuable freehold property estate and cost
reductions such as redundancies. It is possible that the extent of
these mitigating actions would negate the need to get waivers in
place.
After due consideration of the matters set out above, the
Directors are satisfied that there is a reasonable expectation that
the Group and Company has adequate resources to continue in
operational existence for at least the going concern assessment
period to 27 December 2022. However, as the downside scenario shows
that the covenants would be breached when reinstated from June 2022
through to December 2022, within the going concern period, and not
all the mitigating actions required to prevent this are within
management's control, there is a material uncertainty that may cast
doubt on the Group's and Company's ability to continue as a going
concern. The financial statements do not reflect any adjustments
that would be required to be made, if they were prepared on a basis
other than the going concern basis.
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 27 March 2021
2. Segmental Analysis
Operating segments
For management purposes, the Group's operating segments are:
- Managed Pubs and Hotels, which comprises managed pubs, managed
hotels, Bel & The Dragon and Cotswold Inns & Hotels.
- Tenanted Inns, which comprises pubs operated by third parties
under tenancy or lease agreements.
The most important measure used to evaluate the performance of
the business is adjusted profit, which is the profit before tax,
adjusted for separately disclosed items. The operating segments are
organised and managed separately according to the nature of the
products and services provided, with each segment representing a
strategic operating unit. The Managed Pubs and Hotels operating
segments have been aggregated to one reportable segment on the
basis they have similar economic characteristics. Economic
indicators assessed in determining that the aggregated operating
segments share similar characteristics included expected future
financial performance, operating and competitive risks and return
on capital. As such the operating segments meet the aggregation
criteria in paragraph 12 IFRS 8 Operating Segments.
As segment assets and liabilities are not regularly provided to
the Chief Operating Decision Maker ('CODM'), the Group has elected,
as provided under IFRS 8 Operating Segments (amended), not to
disclose a measure of segment assets and liabilities.
Managed
Pubs Tenanted Total continuing
and Hotels Inns Unallocated(1) operations
52 weeks ended 27 March 2021 GBPm GBPm GBPm GBPm
------------------------------------- ----------- -------- -------------- ----------------
Revenue
------------------------------------- ----------- -------- -------------- ----------------
Sale of goods and services 56.6 6.9 - 63.5
Accommodation income 5.9 - - 5.9
------------------------------------- ----------- -------- -------------- ----------------
Total revenue from contracts with
customers 62.5 6.9 - 69.4
------------------------------------- ----------- -------- -------------- ----------------
Rental income 1.5 2.3 - 3.8
------------------------------------- ----------- -------- -------------- ----------------
Revenue 64.0 9.2 - 73.2
Other income - - 0.2 0.2
------------------------------------- ----------- -------- -------------- ----------------
Segment result (26.1) 1.2 (15.4) (40.3)
------------------------------------- ----------- -------- -------------- ----------------
Operating separately disclosed
items (14.8)
------------------------------------- ----------- -------- -------------- ----------------
Operating loss (55.1)
------------------------------------- ----------- -------- -------------- ----------------
Profit on disposal of properties 5.8
Net finance costs (8.5)
------------------------------------- ----------- -------- -------------- ----------------
Loss before income tax (57.8)
------------------------------------- ----------- -------- -------------- ----------------
Other segment information
Additions to property, plant &
equipment 12.6 0.7 0.5 13.8
Depreciation 24.7 1.8 0.7 27.2
Impairment of property, right-of-use
assets, assets held for sale,
lease receivable and goodwill 11.3 1.6 - 12.9
------------------------------------- ----------- -------- -------------- ----------------
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 27 March 2021
2. Segmental Analysis (continued)
Managed
Pubs Tenanted Total continuing
and Hotels Inns Unallocated(1) operations
52 weeks ended 28 March 2020 GBPm GBPm GBPm GBPm
------------------------------------- ------------ -------- -------------- ----------------
Revenue
------------------------------------- ------------ -------- -------------- ----------------
Sale of goods and services 261.5 21.7 - 283.2
Accommodation income 23.3 - - 23.3
------------------------------------- ------------ -------- -------------- ----------------
Total revenue from contracts with
customers 284.8 21.7 - 306.5
------------------------------------- ------------ -------- -------------- ----------------
Rental income 1.5 8.0 - 9.5
------------------------------------- ------------ -------- -------------- ----------------
Revenue 286.3 29.7 - 316.0
Other income - - 3.7 3.7
------------------------------------- ------------ -------- -------------- ----------------
Segment result 30.6 11.8 (15.4) 27.0
------------------------------------- ------------ -------- -------------- ----------------
Operating separately disclosed
items (20.1)
------------------------------------- ------------ -------- -------------- ----------------
Operating profit 6.9
------------------------------------- ------------ -------- -------------- ----------------
Profit on disposal of properties 9.6
Net finance costs (8.1)
------------------------------------- ------------ -------- -------------- ----------------
Profit before income tax 8.4
------------------------------------- ------------ -------- -------------- ----------------
Other segment information
Additions to property, plant &
equipment 23.6 3.6 23.6 50.8
Business combinations 32.8 - - 32.8
Depreciation 24.8 2.0 0.1 26.9
Impairment of property, right-of-use
assets and goodwill 14.4 0.7 - 15.1
------------------------------------- ------------ -------- -------------- ----------------
1 Unallocated expenses represent primarily the salary and costs
of central management. Unallocated revenue represents Transitional
Services Agreement ('TSA') income while unallocated capital
expenditure relates to the purchase of a new head office.
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 27 March 2021
3. Separately Disclosed Items
The Group presents separately disclosed items on the face of the
Income Statement for those material items of income and expense
which, because of the nature or expected infrequency of the events
giving rise to them, merit separate presentation to allow
shareholders to understand better the elements of financial
performance in the year.
52 weeks ended 52 weeks ended
27 March 2021 28 March 2020
Continuing operations GBPm GBPm
--------------------------------------------------------------------- ---------------- -----------------
Amounts included in operating (loss)/profit:
Acquisition costs - (1.4)
Reorganisation costs (1.9) (2.1)
Impairment of intangible assets, properties and right-of-use assets (12.9) (15.1)
IT maintenance, support and rectification costs - (1.5)
Total separately disclosed items included in operating (loss)/profit (14.8) (20.1)
--------------------------------------------------------------------- ---------------- -----------------
Profit on disposal of properties 5.8 9.6
Separately disclosed finance costs:
Finance charge on net pension liabilities (0.1) (0.6)
Finance credit on the cancellation of interest rate swaps - 0.1
--------------------------------------------------------------------- ---------------- -----------------
Total separately disclosed finance costs (0.1) (0.5)
--------------------------------------------------------------------- ---------------- -----------------
Total separately disclosed items before tax (9.1) (11.0)
--------------------------------------------------------------------- ---------------- -----------------
Exceptional tax:
Profit on disposal of properties (0.2) (1.9)
Other items 0.9 3.9
--------------------------------------------------------------------- ---------------- -----------------
Total separately disclosed tax 0.7 2.0
--------------------------------------------------------------------- ---------------- -----------------
Total separately disclosed items (8.4) (9.0)
--------------------------------------------------------------------- ---------------- -----------------
The reorganisation costs of GBP1.9 million during the 52 weeks
ended 27 March 2021 (28 March 2020: GBP2.1 million) were largely
incurred as a result of a corporate reorganisation of the Group,
specifically the hive up of the trade and assets of Bel & The
Dragon and Cotswold Inns & Hotels, and redundancy costs as a
result of restructuring due to the coronavirus pandemic.
The total impairment charge of GBP12.9 million during the 52
weeks ended 27 March 2021 relates to the write down of 37 licensed
properties to their recoverable value (GBP9.0 million relating to
property, plant and equipment and GBP1.6 million to right-of-use
assets) as well as the write down in value of previously acquired
goodwill recognised on acquisition of Jacomb Guinness Limited of
GBP0.6 million, assets held for sale impairment of GBP0.2 million
and lease receivable impairment of GBP1.5 million (28 March 2020:
GBP15.1 million).
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 27 March 2021
3. Separately Disclosed Items (continued)
The profit on disposal of properties of GBP5.8 million during
the 52 weeks ended 27 March 2021 (28 March 2020: GBP9.6 million)
relates to the disposal of seven licensed and unlicensed properties
(28 March 2020: three properties).
The cash impact of operating separately disclosed items before
tax for the 52 weeks ended 27 March 2021 was GBP1.5 million cash
outflow (28 March 2020: GBP5.0 million cash outflow).
4. Finance Costs
52 weeks ended 52 weeks ended
27 March 2021 28 March 2020
GBPm GBPm
------------------------------------------------------------------- -------------- ----------------
Finance Income
Interest income from financial assets - 0.2
Finance Costs
Interest expense arising on:
Financial liabilities at amortised cost - loans and debentures(1) (5.3) (5.3)
Financial liabilities at amortised cost - preference shares (0.1) (0.1)
Financial liabilities at amortised cost - lease liabilities (3.0) (2.4)
------------------------------------------------------------------- -------------- ----------------
Total interest expense for financial liabilities (8.4) (7.8)
------------------------------------------------------------------- -------------- ----------------
Total finance costs before separately disclosed items (8.4) (7.6)
------------------------------------------------------------------- -------------- ----------------
Finance charge on net pension liabilities (note 3) (0.1) (0.6)
Finance credit on the cancellation of interest rate swaps (note 3) - 0.1
Total finance costs (8.5) (8.1)
------------------------------------------------------------------- -------------- ----------------
(1) Interest expense on loans and debentures is shown net of
GBP0.6 million of grant income recognised in relation to CCFF.
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 27 March 2021
5. Taxation
Restated
52 weeks ended 52 weeks ended
27 March 2021 28 March 2020
Group GBPm GBPm
----------------------------------------------------- ---------------- ----------------
Tax (credited)/charged in the Income Statement
Current income tax:
Current tax on (loss)/profits for the year (1.0) 0.8
Adjustments for current tax on prior periods (0.5) 0.3
----------------------------------------------------- ---------------- ----------------
Total current income tax (credit)/expense (1.5) 1.1
----------------------------------------------------- ---------------- ----------------
Deferred income tax:
Origination and reversal of temporary differences (8.1) 2.2
Change in corporation tax rate - 1.6
Adjustments for current tax on prior periods - 0.3
Total deferred tax (benefit)/expense (8.1) 4.1
----------------------------------------------------- ---------------- ----------------
Total tax (credited)/charged in the Income Statement (9.6) 5.2
----------------------------------------------------- ---------------- ----------------
Analysed as:
----------------------------------------------------- ---------------- ----------------
Before separately disclosed items (8.9) 7.2
----------------------------------------------------- ---------------- ----------------
Separately disclosed items (0.7) (2.0)
----------------------------------------------------- ---------------- ----------------
(9.6) 5.2
----------------------------------------------------- ---------------- ----------------
Reconciliation of the Total Tax (Credit)/Charge
The tax credit in the Income Statement for the year is lower
(2020: tax expense is higher) than the standard rate of corporation
tax in the UK of 19% (2020: 19%). The differences are reconciled
below:
Restated
52 weeks ended 52 weeks ended
27 March 2021 28 March 2020
GBPm GBPm
----------------------------------------- -------------- ---------------
(Loss)/profit from continuing operations
before income tax (credit)/expense (57.8) 8.4
Accounting profit multiplied by
the UK standard rate of corporation
tax of 19% (2020: 19%) (11.0) 1.6
Items not deductible for tax purposes 1.9 1.6
Current and deferred tax (over)/under
provided in previous years (0.5) 2.0
Total tax (credited)/charged in
the Income Statement (9.6) 5.2
----------------------------------------- -------------- ---------------
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 27 March 2021
5. Taxation (continued)
Restated
52 weeks ended 52 weeks ended
Deferred tax relating to items (credited)/charged 27 March 2021 28 March 2020
to the Income Statement GBPm GBPm
-------------------------------------------------- -------------- ---------------
Deferred tax depreciation (0.6) -
Unrealised capital gains (on PP&E) (0.4) 3.2
Retirement benefit obligations 1.6 0.6
Tax losses (7.4) -
Other (0.1) 0.3
Corporate interest restriction (1.2) -
Deferred tax in the Income Statement (8.1) 4.1
-------------------------------------------------- -------------- ---------------
Tax relating to Items (credited)/charged to the
Statement of Comprehensive Income
Deferred tax:
Valuation gains on financial assets
and liabilities 0.1 0.1
Net actuarial (gains)/losses on pension
scheme (0.2) 1.1
Total tax (credited)/charged in the
Statement of Comprehensive Income (0.1) 1.2
---------------------------------------- ----- ---
Tax relating to items charged directly to equity
Deferred tax:
Share-based payments - 0.1
Total tax charged to equity - 0.1
---------------------------- ------------------
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 27 March 2021
6. (Loss)/Earnings Per Share
Restated
26 weeks ended 52 weeks ended
27 March 2021 28 March 2020
Group GBPm GBPm
------------------------------------------------------------- ---------------- ----------------
(Loss)/profit attributable to equity shareholders (49.6) 160.9
Separately disclosed items net of tax 9.3 (149.6)
------------------------------------------------------------- ---------------- ----------------
Adjusted (loss)/earnings attributable to equity shareholders (40.3) 11.3
------------------------------------------------------------- ---------------- ----------------
Number Number
--------------------------------- ---------- ----------
Weighted average share capital 55,207,000 55,124,000
Dilutive outstanding options and
share awards 139,000 128,000
--------------------------------- ---------- ----------
Diluted weighted average share
capital 55,346,000 55,252,000
--------------------------------- ---------- ----------
40p 'A' and 'C' ordinary share Pence Pence
----------------------------------- ------- ------
Basic (loss)/earnings per share (89.84) 291.89
Diluted (loss)/earnings per share (89.84) 291.21
Adjusted (loss)/earnings per share (73.00) 20.50
Diluted adjusted (loss)/earnings
per share (73.00) 20.45
----------------------------------- ------- ------
4p 'B' ordinary share Pence Pence
----------------------------------- ------ -----
Basic (loss)/earnings per share (8.98) 29.19
Diluted (loss)/earnings per share (8.98) 29.12
Adjusted (loss)/earnings per share (7.30) 2.05
Diluted adjusted (loss)/earnings
per share (7.30) 2.05
----------------------------------- ------ -----
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 27 March 2021
6. (Loss)/Earnings Per Share (continued)
Restated
52 weeks ended 52 weeks ended
27 March 2021 28 March 2020
Continuing operations GBPm GBPm
(Loss)/profit attributable to equity shareholders (48.2) 3.2
Separately disclosed items net of tax 8.4 9.0
------------------------------------------------------------- ---------------- ---------------
Adjusted (loss)/earnings attributable to equity shareholders (39.8) 12.2
------------------------------------------------------------- ---------------- ---------------
Number Number
--------------------------------- ---------- ----------
Weighted average share capital 55,207,000 55,124,000
Dilutive outstanding options and
share awards 139,000 128,000
--------------------------------- ---------- ----------
Diluted weighted average share
capital 55,346,000 55,252,000
--------------------------------- ---------- ----------
40p 'A' and 'C' ordinary share Pence Pence
----------------------------------- ------- -----
Basic (loss)/earnings per share (87.31) 5.81
Diluted (loss)/earnings per share (87.31) 5.79
Adjusted (loss)/earnings per share (72.09) 22.13
Diluted adjusted (loss)/earnings
per share (72.09) 22.08
----------------------------------- ------- -----
4p 'B' ordinary share Pence Pence
----------------------------------- ------ -----
Basic (loss)/earnings per share (8.73) 0.58
Diluted (loss)/earnings per share (8.73) 0.58
Adjusted (loss)/earnings per share (7.21) 2.21
Diluted adjusted (loss)/earnings
per share (7.21) 2.21
----------------------------------- ------ -----
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 1,777,248 (2020:
1,860,777).
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
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 27 March 2021
6. (Loss)/Earnings Per Share (continued)
earnings per share measures have been included as the Directors
consider that these measures better reflect the underlying earnings
of the Group.
7. Dividends
52 weeks ended 52 weeks ended
27 March 2021 28 March 2020
GBPm GBPm
------------------------------------ ---------------- --------------
Declared and paid during the period
Final dividend for 2020: 0p (2019:
4.35p) - 2.4
Second interim dividend for 2020:
0p (2019: 8.00p) - 4.4
First interim dividend for 2021:
0p (2020: 7.80p) - 4.3
'D' share single dividend for
2021: 0p (2020: 125p) - 69.4
------------------------------------ ---------------- --------------
Equity dividends paid - 80.5
------------------------------------ ---------------- --------------
Dividends on cumulative preference
shares (note 4) 0.1 0.1
------------------------------------ ---------------- --------------
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.
As indicated in the circular published on 28 March 2019 relating
to the disposal of the Fuller's Beer Business, the Board made an
additional cash return of GBP1.25 per 'A' and 'C' ordinary share
and 12.5p per 'B' ordinary share through a 'D' share scheme. Each
ordinary shareholder as at the record date was issued with ten 'D'
shares for every existing 'A' and 'C' ordinary share and one 'D'
share for every one 'B' ordinary share held at the time. Numis
(acting as principal, and not as agent, nominee or trustee for the
Company) made an offer to purchase the 'D' shares for an amount of
12.5p per 'D' share (free of all expenses and commissions). The
Company accepted the offer on behalf of shareholders and paid a
single dividend to Numis as holder of all the 'D' shares of GBP69.4
million representing the sum of 12.5p per 'D' share plus the stamp
duty payable by Numis in connection with the purchase of all the
'D' shares in issue.
Following the approval of all the resolutions presented to the
Company's Extraordinary General Meeting on 1 October 2019,
552,030,154 'D' shares of 0.1p each were allotted and issued to
shareholders on 2 October 2019 on the basis of ten 'D' shares for
every existing 'A' and 'C' ordinary share of 40p each and one 'D'
share for every existing 'B' ordinary share of 4p each held at the
record date. Following the purchase by Numis of all of the 'D'
shares, and payment by the Company of a single dividend to Numis of
GBP69.4 million as holder of all of the 'D' shares on 7 October
2019, the 'D' shares were reclassified as deferred shares of 0.1p
and were immediately repurchased and cancelled by the Company on 8
October 2019.
No final dividend for 2021 has been proposed for approval at the
Annual General Meeting as a result of the business being closed for
the majority of the 52 week period ending 27 March 2021 due to the
continued impact of the coronavirus pandemic.
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 27 March 2021
8. Property, Plant and Equipment
Plant,
Land machinery Fixtures
& buildings & vehicles & fittings Total
Group GBPm GBPm GBPm GBPm
------------------------------------------------------ ------------ ----------- ------------ ------
Cost
------------------------------------------------------ ------------ ----------- ------------ ------
At 30 March 2019 534.0 6.2 156.6 696.8
------------------------------------------------------ ------------ ----------- ------------ ------
Additions 36.0 0.3 15.4 51.7
Acquisitions 42.2 - 2.1 44.3
Disposals (2.2) - (5.0) (7.2)
Transfer to investment property (0.2) - - (0.2)
Transfer to assets held for sale (2.2) - (0.2) (2.4)
------------------------------------------------------ ------------ ----------- ------------ ------
At 28 March 2020 607.6 6.5 168.9 783.0
------------------------------------------------------ ------------ ----------- ------------ ------
Additions 0.6 - 13.2 13.8
Disposals (1.7) - (0.6) (2.3)
Disposals of discontinued operations (6.8) (0.1) (7.6) (14.5)
Transfer to assets held for sale (9.2) (0.1) (2.3) (11.6)
------------------------------------------------------ ------------ ----------- ------------ ------
At 27 March 2021 590.5 6.3 171.6 768.4
------------------------------------------------------ ------------ ----------- ------------ ------
Depreciation and impairment
------------------------------------------------------ ------------ ----------- ------------ ------
At 30 March 2019 39.7 1.3 103.1 144.1
------------------------------------------------------ ------------ ----------- ------------ ------
Provided during the year 3.8 0.5 13.6 17.9
Disposals (0.7) - (4.4) (5.1)
Impairment loss net of reversals 8.5 - 0.1 8.6
Transfer to assets held for sale (0.1) - (0.1) (0.2)
------------------------------------------------------ ------------ ----------- ------------ ------
At 28 March 2020 51.2 1.8 112.3 165.3
------------------------------------------------------ ------------ ----------- ------------ ------
Provided during the year 4.6 - 14.0 18.6
Disposals (0.2) - (0.6) (0.8)
Disposals of discontinued operations (4.7) - (5.8) (10.5)
Impairment loss 9.0 - - 9.0
Transfer to assets held for sale (1.0) (0.1) (1.9) (3.0)
Reclassification of impairment to right-of-use-assets (0.4) - - (0.4)
------------------------------------------------------ ------------ ----------- ------------ ------
At 27 March 2021 58.5 1.7 118.0 178.2
------------------------------------------------------ ------------ ----------- ------------ ------
Net book value at 27 March 2021 532.0 4.6 53.6 590.2
------------------------------------------------------ ------------ ----------- ------------ ------
Net book value at 28 March 2020 556.4 4.7 56.6 617.7
------------------------------------------------------ ------------ ----------- ------------ ------
Net book value at 30 March 2019 494.3 4.9 53.5 552.7
------------------------------------------------------ ------------ ----------- ------------ ------
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 27 March 2021
9. Impairment
2021 2020
Group GBPm GBPm
------------------------------ ----- -----
Impairment losses
Intangible assets 0.6 3.7
Property, plant and equipment 9.0 8.6
Right-of-use assets 1.6 6.6
Assets held for sale 0.2 -
Lease receivable 1.5 -
------------------------------ ----- -----
Total net impairment charge 12.9 18.9
------------------------------ ----- -----
During the 52 weeks ended 27 March 2021, the Group recognised an
impairment loss of GBP9.0 million (2020: GBP8.6 million) on
property, plant and equipment and GBP1.6 million (2020: GBP6.6
million) of impairment of right-of-use assets in respect of the
write down of a number of licensed properties where their asset
values exceeded the higher of fair value less costs to sell or
their value in use. The impairment losses were driven principally
by changes in the local competitive environment in which the pubs
are situated as well as the significant impact coronavirus will
continue to have on these pubs.
10. Leases
Amounts recognised in the Balance Sheet
2021 2020
Group GBPm GBPm
-------------------- ----- -----
Right-of-use assets
Properties 81.3 105.1
Equipment 0.2 0.8
Vehicles 0.4 1.1
-------------------- ----- -----
81.9 107.0
-------------------- ----- -----
Lease liabilities
Current 6.7 8.9
Non-current 83.2 104.0
-------------------- ----- -----
89.9 112.9
-------------------- ----- -----
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 27 March 2021
10. Leases (continued)
Set out below are the carrying amounts of right-of-use assets
recognised and the movements during the period:
Property Vehicles Equipment Total
Group GBPm GBPm GBPm GBPm
---------------------------------------------- -------- -------- --------- ------
Net carrying value as at 28 March 2020 105.1 1.1 0.8 107.0
---------------------------------------------- -------- -------- --------- ------
Additions 2.6 - - 2.6
Lease amendments - rent concessions (10.0) - - (10.0)
Lease amendments - other (1) 1.3 (0.4) 0.1 1.0
Disposal (8.1) - - (8.1)
Depreciation (7.6) (0.3) (0.7) (8.6)
Impairment - transferred from property, plant
and equipment (0.4) - - (0.4)
Impairment (1.6) - - (1.6)
---------------------------------------------- -------- -------- --------- ------
Net carrying value as at 27 March 2021 81.3 0.4 0.2 81.9
---------------------------------------------- -------- -------- --------- ------
1 Lease amendments include lease terminations, modifications,
reassessments and extensions to existing lease agreements.
11. Analysis of Net Debt
At 28 March Cash Non At 27 March
52 weeks ended 27 March 2020 flows cash(1) 2021
2021 GBPm GBPm GBPm GBPm
--------------------------- -------------------- ------ -------- -----------
Cash and cash equivalents:
Cash and short-term
deposits 20.3 (3.2) - 17.1
--------------------------- -------------------- ------ -------- -----------
20.3 (3.2) - 17.1
--------------------------- -------------------- ------ -------- -----------
Financial liabilities:
Lease liabilities (112.9) 9.2 13.8 (89.9)
(112.9) 9.2 13.8 (89.9)
Debt:
Bank loans(2) (171.7) 64.0 (0.2) (107.9)
CCFF - (99.4) (0.4) (99.8)
Debenture stock (25.9) - - (25.9)
Preference shares (1.6) - - (1.6)
---------------------------- -------------------- ------ -------- -----------
Total borrowings (199.2) (35.4) (0.6) (235.2)
---------------------------- -------------------- ------ -------- -----------
Net debt (291.8) (29.4) 13.2 (308.0)
---------------------------- -------------------- ------ -------- -----------
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 27 March 2021
11. Analysis of Net Debt (continued)
At 30 March 2019 Transition to IFRS 16 Cash flows Non cash(1) At 28 March 2020
52 weeks ended 28 March 2020 GBPm GBPm GBPm GBPm GBPm
----------------------------- ---------------- --------------------- ---------- ----------- ----------------
Cash and cash equivalents:
Cash and short-term deposits 11.0 - 9.3 - 20.3
----------------------------- ---------------- --------------------- ---------- ----------- ----------------
11.0 - 9.3 - 20.3
----------------------------- ---------------- --------------------- ---------- ----------- ----------------
Financial liabilities
Lease liabilities - (100.4) 11.2 (23.7) (112.9)
----------------------------- ---------------- --------------------- ---------- ----------- ----------------
- (100.4) 11.2 (23.7) (112.9)
----------------------------- ---------------- --------------------- ---------- ----------- ----------------
Debt:
Bank loans(2) (228.5) - 57.0 (0.2) (171.7)
Other loans (0.2) - - 0.2 -
Debenture stock (25.9) - - - (25.9)
Preference shares (1.6) - - - (1.6)
----------------------------- ---------------- --------------------- ---------- ----------- ----------------
Total borrowings (256.2) - 57.0 - (199.2)
----------------------------- ---------------- --------------------- ---------- ----------- ----------------
Net debt (245.2) (100.4) 77.5 (23.7) (291.8)
----------------------------- ---------------- --------------------- ---------- ----------- ----------------
(1) Non-cash movements relate to the amortisation of arrangement
fees, arrangement fees accrued, movements in lease liabilities and
corporate acquisitions.
(2) Bank loans net of arrangement fees.
12. Retirement Benefit Obligations
The amount included in the Balance Sheet arising from the
Group's obligations in respect of its defined benefit retirement
plan are:
52 weeks ended 52 weeks ended
27 March 2021 28 March 2020
GBPm GBPm
------------------------------------ ---------------- --------------
Fair value of Scheme assets 143.8 123.8
Present value of Scheme liabilities (147.3) (128.5)
------------------------------------ ---------------- --------------
Deficit in the Scheme (3.5) (4.7)
------------------------------------ ---------------- --------------
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 27 March 2021
12. Retirement Benefit Obligations (continued)
Fair value
Defined benefit of Scheme Net defined
obligation assets deficit
----------------- ------------- --------------
2021 2020 2021 2020 2021 2020
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------------- -------- ------- ----- ------ ------ ------
Balance at beginning of the year (128.5) (148.3) 123.8 111.9 (4.7) (36.4)
----------------------------------- -------- ------- ----- ------ ------ ------
Included in profit and loss
Current service cost - - - - - -
Net interest cost (3.0) (3.7) 2.9 3.1 (0.1) (0.6)
----------------------------------- -------- ------- ----- ------ ------ ------
(3.0) (3.7) 2.9 3.1 (0.1) (0.6)
----------------------------------- -------- ------- ----- ------ ------ ------
Included in Other Comprehensive
Income
Actuarial gains/(losses) relating
to:
Actual return less expected return
on Scheme's assets - - 19.5 (13.2) 19.5 (13.2)
Experience gains/(losses) arising
on Scheme liabilities (20.5) 19.1 - - (20.5) 19.1
----------------------------------- -------- ------- ----- ------ ------ ------
(20.5) 19.1 19.5 (13.2) (1.0) 5.9
----------------------------------- -------- ------- ----- ------ ------ ------
Other
Employer special contribution - - - 24.0 - 24.0
Employer contributions - - 2.3 2.4 2.3 2.4
Benefits paid 4.7 4.4 (4.7) (4.4) - -
4.7 4.4 (2.4) 22.0 2.3 26.4
----------------------------------- -------- ------- ----- ------ ------ ------
Balance at end of the year (147.3) (128.5) 143.8 123.8 (3.5) (4.7)
----------------------------------- -------- ------- ----- ------ ------ ------
Key assumptions
The key assumptions used in the 2021 valuation of the Scheme are
set out below:
Key financial assumptions used
in the valuation
of the Scheme 2021 2020
--------------------------------- --------- -----
Rate of increase in pensions
in payment 3.35% 2.85%
Discount rate 1.95% 2.40%
Inflation assumption - RPI 3.40% 2.85%
Inflation assumption - CPI (pre
2030/post 2030) 2.5%/3.4% 1.95%
--------------------------------- --------- -----
2021 2020
Mortality assumptions Years Years
------------------------------------ ------- -------
Current pensioners (at 65) -
males 22.2 22.1
Current pensioners (at 65) -
females 24.4 24.3
Future pensioners (at 65) - males 23.5 23.4
Future pensioners (at 65) - females 25.9 25.8
------------------------------------ ------- -------
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 27 March 2021
12. Retirement Benefit Obligations (continued)
2021 2020
Assets in the Scheme GBPm GBPm
------------------------------ ----- -----
Corporate bonds 25.5 26.9
Index linked debt instruments 28.3 -
Gilts - 24.0
UK equities - 17.0
Overseas equities 30.6 20.9
Alternatives 53.7 30.5
Cash 1.9 0.9
Annuities 3.8 3.6
------------------------------ ----- -----
Total market value of assets 143.8 123.8
------------------------------ ----- -----
13. Discontinued operations
On 7 June 2020, the Group sold its subsidiary Stable Pizza &
Cider Limited ("The Stable") to Sourdough South Limited ("Three
Joes"), for an enterprise value of GBP0.5 million on a debt free
basis including any cash left in the business. Accordingly this
business has been reported as discontinued operations in the annual
report for the 52 weeks ended 27 March 2021.
On 27 April 2019, the Group sold 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 including any cash left in the business.
The business sold comprised 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 have
been reported as discontinued operations in the annual report for
the 52 weeks ended 28 March 2020.
(a) Financial performance and cash flow
The financial performance and cash flow information presented
for the 52 weeks ended 27 March 2021 reflects the operations for
the period ended 7 June 2020. The financial performance and cash
flow presented for the 52 weeks ended 28 March 2020 reflects the
full year of The Stable and the period ended 27 April 2019 for the
Fuller's Beer Business.
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 27 March 2021
13. Discontinued operations (continued)
52 weeks ended 52 weeks ended
27 March 2021 28 March 2020
Revenue
Segment revenue - 26.4
Inter-segment sales - (4.1)
---------------------------------------- --------------------------------------- --------------
Revenue from third parties - 22.3)
---------------------------------------- --------------------------------------- --------------
Segment result (0.5) (0.5)
---------------------------------------- --------------------------------------- --------------
Operating separately disclosed
items - (3.8)
---------------------------------------- --------------------------------------- --------------
Operating loss (0.5) (4.3)
---------------------------------------- --------------------------------------- --------------
Net finance costs - (0.3)
---------------------------------------- --------------------------------------- --------------
Loss from operating activities
- discontinued operations (0.5) (4.6)
---------------------------------------- --------------------------------------- --------------
(Loss)/gain on sale of discontinued
operation (0.9) 162.4
---------------------------------------- --------------------------------------- --------------
Income tax on (loss)/gain on
sale of discontinued operation - -
---------------------------------------- --------------------------------------- --------------
(Loss)/profit before tax - discontinued
operations (1.4) 157.8
---------------------------------------- --------------------------------------- --------------
Taxation - (0.1)
---------------------------------------- --------------------------------------- --------------
Analysed as:
---------------------------------------- --------------------------------------- --------------
Underlying trading - (0.1)
---------------------------------------- --------------------------------------- --------------
Separately disclosed items - -
---------------------------------------- --------------------------------------- --------------
(Loss)/profit from discontinued
operations (1.4) 157.7
---------------------------------------- --------------------------------------- --------------
Net cash (outflow)/inflow from
operating activities (0.4) 1.5
Net cash inflow from investing
activities 0.3 224.5
Net cash outflow from financing
activities (0.1) (0.9)
------------------------------------------ ----------------- -------
Net (decrease)/increase in cash
generated by discontinued operations (0.2) 225.1
------------------------------------------ ----------------- -------
Other segment information
Additions to property, plant
& equipment - 0.9
Depreciation and amortisation 0.3 1.6
Impairment - 3.8
------------------------------------------ ----------------- -------
(Loss)/earnings per share - discontinued
operations
------------------------------------------ ----------------- -------
40p 'A' and 'C' ordinary share Pence Pence
------------------------------------------ ----------------- -------
Basic (loss)/earnings per share (2.54) 286.08
Diluted (loss)/earnings per share (2.54) 285.42
Adjusted (loss)/earnings per
share (0.91) (1.63)
Diluted adjusted (loss)/earnings
per share (0.91) (1.63)
------------------------------------------ ----------------- -------
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial
Statements For the 52 weeks ended
27 March 2021
13. Discontinued operations (continued)
4p 'B' ordinary share Pence Pence
Basic (loss)/earnings per share (0.25) 28.61
Diluted (loss)/earnings per share (0.25) 28.54
Adjusted (loss)/earnings per
share (0.09) (0.16)
Diluted adjusted (loss)/earnings
per share (0.09) (0.16)
------------------------------------------ ----------------- -------
(b) Details of the sale of the subsidiary
52 weeks ended
27 March 2021
GBPm
----------------------------------- ----------------
Consideration received
Cash 0.4
Carrying amount of net assets sold (1.2)
Loss on sale before income tax (0.8)
----------------------------------- ----------------
Transaction costs (0.1)
----------------------------------- ----------------
Loss net of transaction costs (0.9)
----------------------------------- ----------------
Income tax expense on loss -
----------------------------------- ----------------
Loss on sale after income tax (0.9)
----------------------------------- ----------------
14. Post Balance Sheet Events
On 31 March 2021, the Group agreed an Amend and Extend
Refinancing of its existing debt facilities with its relationship
banks, extending the maturity of the GBP192 million facilities to
19 February 2023 and amending the financial covenants to a minimum
liquidity level of GBP10 million to 31 March 2022.
On the same day it was also announced that the Group proposed
placing new 'A' shares up to approximately 20 percent of existing
issued 'A' Ordinary share capital. The refinancing of the
facilities was conditional on the successful equity raise. On 20
April 2021 the equity raise was approved by the Shareholders at the
Extraordinary General Meeting ('EGM') and the net proceeds of GBP52
million were received the same day.
On 13 May 2021, using the Group's available facilities and the
proceeds of the equity raise, the Group repaid the CCFF in
full.
15. Prior year adjustment
The Group identified an error within its assessment of deferred
tax which dates back prior to the earliest prior period presented
within these financial statements. In line with IAS 8, the group
has restated balances as at 31 March 2019, and restated its
financial results for the period ending 28 March 2020.
The issue identified as at 31 March 2019 related to how deferred
tax was being calculated on property, plant and equipment
('PP&E') and the assumptions used for the intended manner of
recovery of each pub. Management had understated the base cost of
PP&E recoverable on a sales basis and not recognised a deferred
tax liability on a use basis. Additionally, an adjustment was
recognised to goodwill for the acquisition of Bel & The Dragon
as a result of incorrect application of the initial recognition
exemption.
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 27 March 2021
16. Prior year adjustment (continued)
The financial impact of the errors identified are as
follows:
As at 28 March As at 31 March
2020 2019
-------------------- -------------------- --------
Reported Adjustment Restated Reported Adjustment Restated
Group GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------- -------- ---------- -------- -------- ---------- --------
Deferred tax asset/(liability) (17.1) 4.0 (13.1) (9.2) 4.8 (4.4)
------------------------------- -------- ---------- -------- -------- ---------- --------
Retained earnings (414.1) (3.0) (417.1) (328.4) (4.0) (332.4)
------------------------------- -------- ---------- -------- -------- ---------- --------
Corporation tax 6.2 (0.2) 6.0 (2.8) - (2.8)
------------------------------- -------- ---------- -------- -------- ---------- --------
Goodwill 28.3 (0.8) 27.5 29.4 (0.8) 28.6
------------------------------- -------- ---------- -------- -------- ---------- --------
Income statement for 52 weeks ended 28 March 2020:
Reported Adjustment Restated
GBPm GBPm GBPm
------------------ -------- ---------- --------
Profit before tax 166.2 - 166.2
------------------ -------- ---------- --------
Tax (4.3) (1.0) (5.3)
------------------ -------- ---------- --------
Profit after tax 161.9 (1.0) 160.9
------------------ -------- ---------- --------
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END
FR UBONRAWUBRAR
(END) Dow Jones Newswires
July 08, 2021 02:00 ET (06:00 GMT)
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