TIDMFSTA
RNS Number : 2253O
Fuller,Smith&Turner PLC
09 June 2022
STRICTLY EMBARGOED
UNTIL 7AM THURSDAY 9 JUNE 2022
FULLER, SMITH & TURNER P.L.C.
("Fuller's", the "Company", or the "Group")
Financial results for the 52 weeks to 26 March 2022
Return to profitable growth with a strengthened Balance
Sheet
Financial and Operational Highlights
FY 2022 FY 2021
GBPm GBPm
Revenue 253.8 73.2
Group statutory profit/(loss) before
tax 11.5 (59.2)
Adjusted profit/(loss) before tax(1) 7.2 (48.7)
Net debt(2) 131.9 218.1
Adjusted earnings per share(3) 9.79p (72.09)p
Basic earnings per share(4) 11.59p (87.31)p
Dividend per share(4) 11.31p Nil
All figures above are from continuing operations except for
Group statutory profit/(loss) before tax which includes
discontinued operations in the prior year
1 Adjusted profit/(loss) before tax is the profit/(loss) before
tax excluding separately disclosed items.
2 Net debt comprises cash and short-term deposits, bank
overdraft, bank loans, CCFF, debenture stock, preference shares and
excludes IFRS 16 lease liabilities.
3 Calculated using adjusted profit/(loss) after tax and the same
weighted average number of shares as for the basic earnings/(loss)
per share and using a 40p ordinary share.
4 Calculated on a 40p ordinary share.
-- Revenues recovered to GBP253.8 million (2021: GBP73.2
million) despite being significantly impacted during the year by
coronavirus related closures, restrictions and working from home
guidance
-- Adjusted profit before tax returning to growth at GBP7.2 million (2021: loss GBP48.7 million)
-- Net debt excluding leases reduced to GBP131.9 million and
headroom for future growth in place with new four-year GBP200
million bank facilities
-- New Directors' valuation of the total property portfolio at
GBP995.6 million, approximately GBP400 million above our current
book value, which implies an adjusted net asset value per share of
GBP13.80, demonstrating the underlying Balance Sheet strength of
the business
-- Return to a progressive dividend policy with a proposed final
dividend of 7.41p in addition to the interim dividend of 3.90p paid
earlier in the year.
Strategic Highlights
-- Digital Transformation project delivered, improving the
customer experience and enhancing our analytical capabilities to
target new and existing customers
-- Successfully implemented our new central finance system,
which has enhanced the quality and timeliness of business
information
-- Launched new recruitment platform and employer brand to help
attract and retain outstanding people
-- Deployed our ESG strategy and honed our Life is too good to waste programme
-- Continued to maintain capital investment in the estate, with
GBP26 million invested in the year to enhance capital values and
drive growth
-- Secured new four-year bank facilities to provide headroom for future growth
-- Strengthened and refined our long-term strategy to ensure we
are evolving and responding to changes in consumer behaviour and
market dynamics.
Chief Executive Simon Emeny said:
"During the year we have returned to profitable growth with
revenues of GBP253.8 million and adjusted profit before tax of
GBP7.2 million. It is testament to the dedication and resilience of
our team, across the business, that we have managed to trade
profitability under such difficult circumstances.
"As a company, we have used the last two years wisely. While
steering the business through challenging trading conditions, we
have also completed a number of strategic projects that will
deliver benefits over the coming years. We have successfully honed
our offer, completed a digital transformation project, rolled out a
new central finance system, delivered an employer brand and new
recruitment platform. We have also refined our branding and
reviewed and evolved our long-term strategy.
"The new strategic framework, driven by our purpose to create
experiences that nourish the soul, and the pillars that underpin
it, will give everyone in the company clear direction and ensure we
work as a team, from our kitchens to our boardroom, to deliver
excellent results for all our stakeholders.
"In addition, we have worked hard to strengthen our Balance
Sheet and highlight how we will continue to deliver long-term value
through the application of our capital allocation framework. The
completion of the bank refinancing provides us with the headroom to
grow and the Directors' valuation of the estate demonstrates that
the implicit net asset value per share of our business is GBP13.80.
Through the successful delivery of our strategic objectives, we
plan to grow this value over the long term.
"While the last financial year has adversely affected Fuller's -
with some of our key sites being the most impacted by the pandemic,
we have built a balanced business which positions us well to
navigate the continued evolution in consumer trends and behaviour.
The current year has started well. We welcome the gradual return of
workers to the City and tourists to Central London, which is now
underway, and we are seeing steady growth in our total weekly
sales, which will have a positive impact in FY2023. Momentum in the
City and Central London continues to build, and we are confident
that we will see the benefits of our estate's composition come into
play.
"In the first 10 weeks of the new financial year total sales are
up 4% on pre pandemic levels and are up 130% on the same period
last year. On a like-for-like basis, excluding closed periods,
sales in the first 10 weeks of the year are up 21.4% on last year.
Furthermore, the investments we have made in the last two years are
not yet comparable and the return on our capex projects will
benefit the current year's results.
"Market conditions remain challenging with fragile consumer
confidence and well-documented high inflationary pressures. Our
premium offering provides some protection from inflation, however
we are certainly not immune from its effects. In common with our
peers, we have seen significant increases in food and utility costs
and are proactively working with our suppliers, and actively
managing our offering, to mitigate the effects of inflation without
impairing the customer experience.
"We remain confident that, despite the current market
challenges, we will maintain our growth trajectory for revenues and
profits and as such we are pleased to announce a final dividend of
7.41p, which means a total dividend to shareholders of GBP7.0
million for the year.
"In conclusion, we are looking back on a volatile year of highs
and lows with many moving parts - but we are starting the new
financial year on a high. We may be facing some bracing headwinds,
especially around energy and inflation, but we are well placed to
tackle the issues with clear measures and solutions in place.
"The great British pub has always been, and will always be, an
affordable treat and has proved its resilience over time with its
position at the very heart of the communities we serve. With an
amazing team of people, great pubs and a clear strategy, we look
forward to the future with confidence and excitement."
-Ends-
For further information, please contact:
Fuller, Smith & Turner P.L.C.
Simon Emeny, Chief Executive 020 8996 2000
Neil Smith, Finance Director 020 8996 2000
Georgina Wald, Corporate Comms Manager 020 8996 2198
Instinctif Partners
Justine Warren 020 7457 2010
Notes to Editors:
Fuller, Smith & Turner PLC is the premium pubs and hotels
business that is famous for beautiful and inviting pubs with
delicious fresh food, a vibrant and interesting range of drinks,
and engaging service from passionate people. Fuller's has 207
managed businesses, with 1,030 boutique bedrooms, and 178 Tenanted
Inns. The estate is predominately located in the South of England
(44% of sites are within the M25) and stretches from our London
heartland to the Jurassic Coast via the New Forest. Our Managed
Pubs and Hotels include 16 iconic Ale & Pie pubs, seven
stunning hotels in the Cotswolds, and Bel & The Dragon - seven
exquisite country inns located in the Home Counties (with an eighth
due to open imminently). In summary, Fuller's is the home of great
pubs, outstanding hospitality and passionate people, where everyone
is welcome and leaves that little bit happier than they
arrived.
Photography is available from the Fuller's Press Office on 020
8996 2000 or by email at pr@fullers.co.uk .
This statement will be available on the Company's website,
www.fullers.co.uk . An accompanying presentation will also be
available from 12 noon on 9 June 2022.
FULLER, SMITH & TURNER P.L.C.
FINANCIAL RESULTS FOR THE 52 WEEKSED 26 MARCH 2022
CHAIRMAN'S STATEMENT
Once again, the spectre of coronavirus has left its mark on our
financial performance. However, when we were allowed to trade
fully, our customers came back, and our teams delivered the
Fuller's experience we are famous for. The contribution of our team
members across our estate is a real source of pride. Their
resilience in dealing with the constant highs and lows of the last
two years is outstanding and I pay tribute to each and every one of
them.
From the gradual reopening of the hospitality sector on 12 April
2021, when we could only open for groups of six and only outside,
through 17 May 2021, when we could allow that group of six inside,
to the high of the so-called Freedom Day last July, it was a
delight to see our customers return. As we headed towards
Christmas, everything was looking increasingly positive. I cannot
express strongly enough my disappointment at the Government's
handling of the Omicron variant. Despite all the information from
South Africa, the decision to effectively close our businesses down
at the busiest time of the year disproportionally impacted
hospitality and, over and above the financial cost, set consumer
confidence back six months at the precise moment it was beginning
to return to normal. The subsequent total removal of restrictions
showed how unnecessary they had been.
At Fuller's, under Simon Emeny's leadership, the Executive Team
has used these strange times to focus on high level, strategic
projects, which will be covered in the Chief Executive's Review.
These projects will deliver financial returns in the coming months
and years, and put Fuller's in a great place for the new financial
year. We have refined our brand identity, there is a new buzz that
comes from the open plan and collaborative layout of our support
centre at Pier House, and the energy that has been sucked from us
throughout the pandemic has returned.
Over the years we have acquired, developed and continually
invested in our wonderful iconic pubs. While others cut their
investment programme during the pandemic, Fuller's did the
opposite. This has proved to be the right decision and with pubs,
people and systems aligned, we look forward to seeing the fruits of
our labours in the next financial year and beyond.
Our Tenanted Inns division is in a strong position, and I am
delighted to see a number of joint investments in this key part of
our business. Our Tenants are well funded, with debt at a very low
level, and there is an energy and positivity that is delivering
good results. Our entrepreneurial Tenants are a constant source of
inspiration and the symbiotic relationship, with both parts of our
business learning from the other, continues to deliver mutual
benefit.
During the year, we welcomed Neil Smith to the Board as Finance
Director. Neil joined us in November 2021, replacing Adam Councell,
and comes with a wealth of relevant experience, having previously
held positions at Domino's Pizza and Ei Group. Neil is already
making an impact - as well as excellent financial acumen, he has a
clear head, thoughtful insight, empathy and good judgement, all of
which add further depth to both our Board and the Executive
Team.
DIVID
Finally, the Board is pleased to announce a final dividend of
7.41p (2021: nil) per 40p 'A' and 'C' ordinary share and 0.74p
(2021: nil) per 4p 'B' ordinary share. This will be paid on 27 July
2022 to shareholders on the share register as at 8 July 2022. The
total dividend of 11.31p per 40p 'A' and 'C' ordinary share and
1.13p per 4p 'B' ordinary share is over 50% of the 2019 dividend
and marks a return to a progressive dividend policy.
Michael Turner
Chairman
8 June 2022
CHIEF EXECUTIVE'S REVIEW
OVERVIEW
While we are once again reporting on a year that has seen the
devastating impact of coronavirus, and the Government's
over-zealous response, the future is looking more positive. We
didn't trade unfettered until July last year, from which point
customers were returning and success was impeded more by the widely
reported labour shortages than a lack of customers. Advice to work
from home returned in December, destroying the Christmas trade, but
despite the impact of Omicron, we ended the year where we expected
to be financially, having effectively only traded fully for around
six months.
During the year, the Company generated revenues of GBP253.8
million (2021: GBP73.2 million), with an adjusted profit before tax
of GBP7.2 million (2021: loss of GBP48.7 million). We have also
reduced our net debt [1] to GBP131.9 million (2021: GBP218.1
million). It is testament to the dedication and resilience of our
team, across the business, that we have managed to deliver so much
under such difficult circumstances.
As a Company, we have used the last two years wisely -
undertaking a number of projects that will deliver benefits over
the coming years - and I will cover these in more detail further on
in this report. In short, we have successfully honed our offer,
completed a digital transformation project, rolled out a new
central finance system, and delivered an employer brand and new
recruitment platform.
From a financial perspective, we have completed a refinancing,
on more favourable terms, giving us GBP200 million of bank
facilities, which provides a great platform for future growth. We
have also reviewed our capital allocation strategy and completed a
Directors' revaluation of our estate. The latter, which has not
been done since 1999, has highlighted the intrinsic value - just
shy of GBP1 billion - of our predominately freehold estate, around
GBP400 million above our current book value. It is this solid
financial foundation that provides the base for Fuller's current
and future success and moves our net asset value from GBP7.27 per
share to GBP13.80 per share.
We have also refined our branding. Having sold the Fuller's Beer
Business in 2019, we need our look and feel to reflect our position
as a leading, premium pubs and hotels business. While the continued
use of the Griffin reflects the pride we have in our heritage and
experience, the new look is cleaner, clearer and more concise - a
great representation of our business as a whole.
Finally, we have also reviewed our long-term strategy. Like any
company, we are cognisant that we need to evolve to meet the
changing consumer environment and ensure we remain relevant to both
existing and potential customers. Much remains the same, but we
have tightened our focus on ensuring we continue that evolution and
further increased our commitments around the ESG agenda.
This work has been undertaken by the Executive Team as a whole
and is based around our existing values - which have not changed.
We have a clear purpose, to deliver experiences that nourish the
soul, and to do that we are crafting a family of distinctive pubs
and hotels where people feel they belong. Underpinning this are
five strategic pillars and I look forward to reporting on the
delivery of this strategy both in this report and in the
future.
While there are still some major external issues to deal with -
particularly around recruitment, inflation and energy - I am
pleased and confident that we have taken all the actions we can as
a company to put us in the best possible place to clear these
hurdles and take Fuller's forward on the next leg of our
journey.
STRATEGIC AND BUSINESS REVIEW
Delight our customers
The first pillar of our strategy is to surprise and delight our
customers with the quality of our offer and distinctive service.
One of our values is to celebrate individuality and that allows our
team members to tailor the experience for our customers in every
one of our pubs and hotels. In order for a trip to a Fuller's pub
to truly nourish the soul, it must match and exceed the
expectations of the customer - and those expectations will be very
different from a business lunch in the City to a romantic weekend
in the Cotswolds. Whatever the occasion, our team will be ready and
waiting to deliver the right experience at the right time.
Food is a key part of that customer experience, and our chefs,
trained in-house through our Chefs' Guild academy, continue to
deliver interesting, inspired and delicious dishes for our
customers. Our focus on seasonal ingredients, and a supply chain
that is founded on mutual trust and support with British-based
suppliers and primarily local produce, is built on true
partnerships, and this has also helped us to mitigate some of the
worst of the well-documented supply chain issues across the wider
industry.
Our connection with the Bocuse d'Or - the world's largest
cooking contest - has further helped us to delight our customers
with a range of dishes, available Only at Fuller's, and created by
chefs including Simon Rogan and former Fat Duck head chef, Ashley
Palmer-Watts. We are also delighted to have just agreed to work in
partnership with Made in Hackney, a wonderful social enterprise
focused on plant-based food. We will be working together to improve
our plant-based choices - further underpinning our commitment to
ensuring we can also delight those customers on a vegetarian or
vegan diet, or just looking for a meat-free day.
Inspire our people
It is, without doubt, our people that make the real difference -
and it will be no surprise that this is a pillar of our strategy.
The widely-reported recruitment shortages faced across the industry
have highlighted the benefits of excellent training and development
- allowing us to retain our best people, which in turn helps to
recruit new talent.
In order to inspire our people, we need to understand how they
feel - to ensure they feel part of the Fuller's family and have a
voice within that family. Consequently, during the year we ran our
first employee engagement survey for some years and this has shaped
the people programme going forward.
In addition, we reviewed our benefits package across the
business - driven by feedback from team members regarding elements
that would be of genuine benefit and a feeling that loyalty could
be better recognised. As a result, we now have an industry-leading
healthcare cash plan, a portal of benefits across a range of retail
and leisure providers, an improved discount in our Managed Pubs and
Hotels that increases with tenure of service, and a range of other
benefits such as access to mental health and wellbeing
programmes.
We continue to grow and invest in our team members' development
and in our award-winning apprenticeship programme - with another
100 apprentices being recruited this year. We have also aligned our
internal development programmes with the apprenticeship framework
so that completion results in a nationally recognised
qualification. Our success is reflected in the fact that 123 of the
general managers in our Managed Pubs and Hotels business are
internal appointments.
Finally, all of this work is supported by a clear, identifiable
employer brand and a compelling employee proposition around reward
and development. Through this, we can use all our other channels to
tell our stories and recruit the best talent to shape through our
development programme and, underpinned with a new recruitment
system which was launched at the start of this financial year, we
maintain our strong position to recruit, retain and develop the
best people.
Enhance our estate
The secure financial foundations of our business lie in our
predominately freehold estate of iconic sites across the South of
England - and this is reinforced by the recent Directors' valuation
to the tune of GBP1 billion.
Throughout the pandemic, we have continued to invest in our
capex programme, spending GBP26 million during the year on a range
of projects including transformational refurbishments at The White
Star Hotel in Southampton, The Jack Horner - an Ale & Pie site
in Tottenham Court Road, The Kingswood near Banstead, an upgrade of
the rooms at The Fox & Goose Hotel in Ealing, and a total
repositioning of The Saint (formerly The Fine Line) at Bow
Churchyard - the latter demonstrating our continued commitment to
the City.
We acquired one new site during the year - The Carpenter's Arms
in Sunninghill - and disposed of two leases. In addition, one site
- The Plough at East Sheen - transferred from our Tenanted Inns
estate to our Managed Pubs and Hotels business. Post the year end,
four sites have gone the other way - into our Tenanted estate,
reflecting the benefit of running both Managed and Tenanted pubs.
We will continue to flex our estate in this way while also looking
for suitable opportunities to grow both organically and through
acquisition and we currently have four sites in advanced stages of
negotiation.
Evolve our business
While our strategy may be designed for the long term, like all
great businesses it is imperative that we continue to evolve over
time. We must innovate to excite and attract future customers and
grow our profitability through encouraging more customers to visit
our premium pubs and hotels more often.
The key elements of this strategic pillar will be delivered
through our digital transformation project - the benefits of which
will start to be realised in the coming year. We know the value of
data and the work we have undertaken will vastly improve our
connectivity across our various digital touchpoints and, more
importantly, create a seamless digital customer journey.
This completed project opens the door to better understanding of
our customers and their habits, better communication with them, and
increases our ability to identify and target like-minded potential
customers. We expect this to grow our contactable database by over
10%. Finally, the project will improve our conversion rates -
turning browsers into buyers, thus increasing our hotel bookings,
table reservations and function sales.
There are four workstreams to this digital transformation
project - websites, bookings, system integration and CRM - with
each area bringing its own range of benefits to the Company. Our
new websites will be easier to maintain and update, deliver a
tailored customer journey through increased personalisation and
bespoke offers, which will drive loyalty. These new websites have
already gone live.
The new booking engine will allow customers to book all of their
requirements in one place, rather than booking a room and then
having to book a table for dinner separately. All the data will be
held centrally - building on our already successful single customer
view database. The key benefit to building a great booking engine -
with strong marketing capabilities - is that it will further
increase direct bookings, reducing the commission fees paid to
online travel agents. This booking engine will run across Fuller's,
Bel & The Dragon and Cotswold Inns and Hotels, further
strengthening our data. The new booking journey is going live this
month.
Finally, the system integration and the move to a new CRM system
- Acteol Adreemo - perfectly combines these initiatives. This new
system will act as a gateway for all our digital communications
across the Company and will improve the ability and methods of
communication and marketing to our customers. The increased
visibility of data will allow us to cross sell between our brands,
deliver personalised communications and capture a wider set of data
about customers through the insight we will gain from their
behaviour and spending patterns. For our customers, the benefit is
that they will receive relevant marketing, tailored to them, which
will drive frequency of spend and loyalty. The first targeted
emails under this system went out in April and we are very excited
by the possibilities this system will bring in the coming
years.
Own our impact - because Life is too good to waste
The final pillar of our strategy - and the one that underpins
all the others - is our commitment to ESG and the work that has
been carried out through our Life is too good to waste
campaign.
Focused on our planet, our people, and our communities, we are
already seeing a broad range of initiatives implemented under the
stewardship of our first Sustainability Director, Oliver Rosevear.
While these will be covered in greater detail in the Annual Report
and Accounts, I would like to focus on a couple of the areas around
carbon footprint.
We have ambitious targets and are aiming to have Net Zero carbon
emissions for our operations by 2030, and within our supply chain
by 2040. In October 2021 we committed to ensuring all Company-owned
sites used 100% certified green electricity, primarily wind and
hydroelectricity.
We have also taken additional steps to tackle our energy
consumption - which is often hindered by the nature of our estate.
We have many wonderful and iconic pubs - but they are often old and
listed buildings, which makes for an interesting challenge and
means they tend to be heated by natural gas or oil. Before we can
move to greener systems such as heat pumps, electric fryers and
induction hobs, we need to reduce our current electrical demand
within these sites through the use of LED lights, energy audits and
monitoring systems, cellar heat recovery units and educating our
team members to ensure they take responsibility for lowering our
energy usage.
Finally, we have also undertaken a number of other steps to
reduce our carbon footprint and reduce waste. By 2025, we aim to
recycle at least 75% of our operational waste and divert 100% from
landfill and by 2030, we aim to eliminate all unnecessary plastic
from our operation. Steps already taken include glass-only bottles
for water, working with our toiletry suppliers across our
accommodation businesses to introduce refillable bottles, trialling
a new reusable plastic cup system at certain pubs where plastic
glasses are used for big sporting occasions, and improving our
recycling through a new partnership with Veolia, the waste
management and recycling solutions business.
Tenanted Inns
Our Tenanted Inns remain a key part of our strategy and
complement our strategic framework and, as such, it seems fitting
to add some further colour on the performance of this part of the
business. The Tenanted division has remained consistently
profitable when open, regardless of restrictions, with EBITDA
margins of 51.6%, delivering operating profit of GBP11.1 million.
We ended the year strongly with an increase in the number of
Tenants on longer agreements and very low levels of debt -
substantially ahead of the industry average.
The commitment we showed to our Tenants throughout the pandemic
continued during this year. Our approach, which saw us sharing the
financial pain, led to all those Tenants that had a garden opening
as soon as they were allowed (from 12 April 2021) and the remaining
pubs following suit and opening at the earliest opportunity. Our
Tenants started this year in a strong financial position, and this
is reflected in the investments they have made, both independently
and jointly with Fuller's, in their pubs and businesses.
Our focus on five-year agreements - both on a traditional and
turnover basis - has continued to prove popular with our Tenants.
To help grow sales in our turnover pubs, we appointed a sales
development manager to work with them, ensuring standards remain
high and there is a portfolio of customer-building activity. This
has been further supported across the estate with the relaunch of
our regular Tenant's Magazine, which has proved popular as a way of
sharing ideas, generating interest for new products and helping to
build trade.
In the coming year, there will be a sharp focus on utility costs
- with many Tenants being forced to pay vastly inflated rates to
renew their energy contracts. In light of this, we are currently
undertaking a trial project whereby Tenants can acquire their
utilities through Fuller's. The project is in its infancy but will
also further enhance Fuller's buying power making it a win-win for
both entities. It is early days, but the move is yet another
example of the symbiotic relationship that exists between Fuller's
and its Tenants.
FINANCIAL REVIEW
Income statement
The results for this financial year continued to be severely
impacted by the pandemic. The year began with the entire estate
closed, from 12 April 2021 trading outdoors was allowed, indoor
space opened from 17 May 2021 before all restrictions were lifted
and the entire estate reopened on 19 July 2021. The Group began to
build trading momentum as workers started to return to offices and
visiting tourist numbers began to increase.
In the run up to Christmas our bookings were in good shape, and
we were confident that December would be a strong month as
customers could finally celebrate unencumbered. However, on 8
December 2021, the Government announced Plan B guidance following
the rapid spread of the Omicron variant. This had a severe impact
on sales as it meant Christmas parties were cancelled and people
were once again advised to work from home. Fortunately, Omicron was
short-lived and by the end of January we started to see sales build
week on week, with like for like sales at 96% of pre-pandemic
levels for the last week of the financial year.
Group revenue and other income was GBP253.8 million for the
financial year, which was a 246% increase on FY2021, reflecting the
steady momentum in sales post restrictions. Adjusted profit before
tax increased substantially from a loss of GBP48.7 million in
FY2021 to a profit of GBP7.2 million in the current financial year.
The increase was largely due to our ability to open the estate to
trade for more of the year. Both financial years were bolstered by
support from the Government through the Coronavirus Job Retention
Scheme ("CJRS") and the business rates holiday, as well as property
grants. In FY2022, the Group received GBP9.7 million, net of
operating costs (2021: GBP45.9 million), through such support.
In FY2022, costs were impacted by the sharp increase in utility
costs, predominately in the second half of the year. We were able
to mitigate some of that increase through the energy agreements we
had in place from the beginning of FY2022 which hedged 94% of our
gas and 76% of our electricity pricing for the entirety of FY2022.
We have continued to hedge in FY2023 and have locked in our pricing
for Q1 FY2023 for both electricity and gas, and 50%/75%
respectively for the remainder of the year. Despite this, we still
anticipate utilities cost to increase by c.GBP4 million in
FY2023.
Total net finance costs (before separately disclosed items) have
increased by GBP2.9 million to GBP11.3 million. The increase is
largely due to higher interest rate margins on the banking
facilities. In the prior year, the Group utilised the Covid
Corporate Financing Facility ('CCFF'), which had an interest rate
margin of 64bps compared to an increased interest rate margin
agreed as part of the Amend and Extend in April 2021. The CCFF was
repaid in May 2021. This meant that the average cost of borrowing
was 4.2% in the current financial year compared to 2.5% in the
prior year.
The net position on separately disclosed items of GBP4.3 million
profit (2021: GBP9.1 million expense) comprises GBP6.3 million of
profits on the disposal of 12 predominately unlicensed properties,
impairments of GBP3.3 million on six properties, reorganisation
costs of GBP0.8 million incurred as a result of corporate
reorganisation and the implementation of new infrastructure offset
by a GBP2.1 million credit on the release of a provision relating
to the sale of the Fuller's Beer Business.
The overall effective tax rate of 38.3% (2021: 16.6%) is due to
the change in corporation tax rate which is expected to come into
effect from April 2023. This has resulted in deferred tax
liabilities increasing by GBP3.3 million and the movement has been
shown in tax on separately disclosed items as it is unrelated to
underlying trade.
Balance sheet
In April 2021, the Group completed an equity placing which
raised net proceeds of GBP51.8 million. The proceeds of the equity
placing, along with the Group's existing facilities, were used to
repay the GBP100 million of commercial paper drawn under the CCFF
on 12 May 2021. At the same time as the equity placing, the Group
also 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.
Since year end, the Group has refinanced all its banking
facilities with a new unsecured GBP200 million facilities agreement
for a tenure of four years, split between a revolving credit
facility of GBP110 million and a term loan of GBP90 million.
The Group has also completed a Directors' valuation of the
entire property estate. The outcome of the valuation was a total
value of GBP995.6 million, which is c.GBP400 million higher than
the net book value of GBP592.7 million included with the accounts.
This would imply an increase in the current Net Asset Value per
share from GBP7.27 to GBP13.80. We have not changed our accounting
policies with regard to asset valuations but thought it useful for
all stakeholders to provide a current assessment of the valuation
of the Group's property portfolio.
Overall net debt at 26 March 2022 had decreased by GBP86.2
million to GBP131.9 million, excluding leases, which was largely
due to the equity placing in April 2021 which raised net proceeds
of GBP51.8 million, but also the improvement in EBITDA in the year.
Including leases, net debt has decreased by GBP95.4 million to
GBP212.6 million, reflecting a reduction in lease liabilities of
GBP9.2 million mainly driven by the unwind of the liabilities but
also partially due to some further rent concessions received in the
first quarter of FY2022.
The defined benefit pension scheme deficit has decreased by
GBP17.8 million to a GBP14.3 million accounting surplus (2021:
GBP3.5 million deficit) as the fair value of scheme assets stayed
largely in line with prior year but the present value of pension
obligations decreased substantially. The present value of pension
obligations decreased by GBP17.7 million to GBP129.6 million, which
was driven by an increase in the discount rate from 1.95% to 3.00%.
As the Group has an unconditional right to a refund under the
pension trust deed, an asset can be recognised. Standard deficit
recovery payments of GBP2.3 million were also made during the
financial year.
Capital allocation framework
The Board has reviewed and refined its capital allocation
framework with the aim of enhancing shareholder value while
targeting leverage at around 3x net debt/EBITDA.
The framework provides stakeholders with clarity on where and
why we will deploy capital. We will continue to invest in the
long-term growth of the core estate applying a returns-based
approach to the c.GBP20-30 million planned annual investment. In
addition, we will maintain a sustainable and progressive dividend
with the aim of operating at a normalised dividend cover range of
2.5-3.0 times. Inorganic growth opportunities will be considered on
a disciplined internal rate of return basis and finally, should all
other uses of cash be satisfied and we are operating at our desired
leverage level, then other forms of return to shareholders,
including resumption of share buybacks, will be considered.
CURRENT TRADING AND OUTLOOK
While the last financial year has adversely affected Fuller's -
with some of our key sites being the most impacted by the pandemic,
we have built a balanced business which positions us well to
navigate the continued evolution in consumer trends and behaviour.
The current year has started well. We welcome the gradual return of
workers to the City and tourists to Central London, which is now
underway, and we are seeing steady growth in our total weekly
sales, which will have a positive impact in FY2023. Momentum in the
City and Central London continues to build, and we are confident
that we will see the benefits of our estate's composition come into
play.
In the first 10 weeks of the new financial year total sales are
up 4% on pre pandemic levels and are up 130% on the same period
last year. On a like-for-like basis, excluding closed periods,
sales in the first 10 weeks of the year are up 21.4% on last year.
Furthermore, the investments we have made in the last two years are
not yet comparable and the return on our capex projects will
benefit the current year's results.
Market conditions remain challenging with fragile consumer
confidence and well-documented high inflationary pressures. Our
premium offering provides some protection from inflation, however
we are certainly not immune from its effects. In common with our
peers, we have seen significant increases in food and utility costs
and we are proactively working with our suppliers and actively
managing our offering to mitigate the effects of inflation without
impairing the customer experience.
We remain confident that, despite the current market challenges,
we will maintain our growth trajectory for revenues and profits and
as such were pleased to announce a final dividend of 7.41p, which
means a total dividend return to shareholders of GBP7.0 million for
the year.
In conclusion, we are looking back on a volatile year of highs
and lows with many moving parts - but we are starting the new
financial year on a high. We may be facing some bracing headwinds,
especially around energy and inflation, but we are well placed to
tackle the issues with clear measures and solutions in place.
The work we have undertaken in the last year implementing our
digital transformation project, launching a new recruitment
platform, undertaking a Directors' revaluation of the estate and
completing the refinancing of our bank facilities puts us in a
great place to tackle the future.
The strategic framework, driven by our purpose to create
experiences that nourish the soul, and the pillars that underpin it
will give everyone in the Company clear direction and ensure we
work cohesively as a team, from our kitchens to our boardroom, to
deliver excellent results for all our stakeholders.
The great British pub has always been, and will always be, an
affordable treat and has proved its resilience over time with its
position at the very heart of the communities we serve. With an
amazing team of people, great pubs and a clear strategy, we look
forward to the future with confidence and excitement.
Simon Emeny
Chief Executive
8 June 2022
Fuller, Smith & Turner P.L.C.
Financial Highlights
For the 52 weeks ended 26 March 2022
52 weeks 52 weeks
ended ended
26 March 27 March
2022 2021
GBPm GBPm
Revenue 253.8 73.2
EBITDA (1) 44.3 (13.1)
Group statutory profit/(loss) before tax 11.5 (59.2)
Adjusted profit/(loss) before tax(2) 7.2 (48.7)
Net debt excluding lease liabilities(3) 131.9 218.1
Adjusted earnings/(loss) per share(4) 9.79p (72.09)p
Basic earnings/(loss) per share(5) 11.59p (87.31)p
Dividend per share(5) 11.31p -
All figures are for continuing operations except for Group
statutory profit/(loss) which includes discontinued operations in
the prior year.
1 Earnings before separately disclosed items, interest, tax, depreciation and amortisation.
2 Adjusted profit/(loss) before tax is the profit/(loss) before
tax excluding separately disclosed items.
3 Net debt comprises cash and short-term deposits, bank
overdraft, bank loans, CCFF, debenture stock and preference
shares.
4 Calculated using adjusted profit/(loss) after tax and the same
weighted average number of shares as for the basic earnings/(loss)
per share and using a 40p ordinary share.
5 Calculated on a 40p ordinary share.
Fuller, Smith & Turner P.L.C.
Condensed Group Income Statement
For the 52 weeks ended 26 March 2022
52 weeks ended 26 March 52 weeks ended 27 March
2022 2021
Before Before
separately Separately separately Separately
disclosed disclosed disclosed disclosed
items items Total items items Total
Note GBPm GBPm GBPm GBPm GBPm GBPm
Continuing
Revenue 2 253.8 - 253.8 73.2 - 73.2
Operating costs (235.3) (2.0) (237.3) (113.7) (14.8) (128.5)
Other income 2 - - - 0.2 - 0.2
Operating
profit/(loss) 18.5 (2.0) 16.5 (40.3) (14.8) (55.1)
Finance costs 4 (11.3) - (11.3) (8.4) (0.1) (8.5)
Profit on
disposal
of properties 3 - 6.3 6.3 - 5.8 5.8
Profit/(loss)
before
tax 7.2 4.3 11.5 (48.7) (9.1) (57.8)
Tax 5 (1.2) (3.2) (4.4) 8.9 0.7 9.6
Profit/(loss) for
the year from
continuing
operations 6.0 1.1 7.1 (39.8) (8.4) (48.2)
Net loss from
discontinued
operations after
tax - - - (0.5) (0.9) (1.4)
Profit/(loss) for
the year 6.0 1.1 7.1 (40.3) (9.3) (49.6)
Fuller, Smith & Turner P.L.C.
Condensed Group Income Statement (continued)
For the 52 weeks ended 26 March 2022
52 weeks ended 52 weeks ended
26 March 27 March
2022 2021
Group Note Pence Pence
Earnings/(loss) per share
per 40p 'A' and 'C' ordinary
share
Basic 6 11.59 (89.84)
Diluted 6 11.51 (89.84)
Adjusted 6 9.79 (73.00)
Diluted adjusted 6 9.73 (73.00)
Earnings/(loss) per share
per 4p 'B' ordinary share
Basic 6 1.16 (8.98)
Diluted 6 1.15 (8.98)
Adjusted 6 0.98 (7.30)
Diluted adjusted 6 0.97 (7.30)
Continuing operations
Earnings/(loss) per share
per 40p 'A' and 'C' ordinary
share
Basic 6 11.59 (87.31)
Diluted 6 11.51 (87.31)
Adjusted 6 9.79 (72.09)
Diluted adjusted 6 9.73 (72.09)
Earnings/(loss) per share
per 4p 'B' ordinary share
Basic 6 1.16 (8.73)
Diluted 6 1.15 (8.73)
Adjusted 6 0.98 (7.21)
Diluted adjusted 6 0.97 (7.21)
Fuller, Smith & Turner P.L.C.
Condensed Group Statement of Comprehensive Income
For the 52 weeks ended 26 March 2022
52 weeks ended 26 March 52 weeks ended 27 March
2022 2021
GBPm GBPm
Note
Profit/(loss) for the year 7.1 (49.6)
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 0.5
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 gains/(losses) on pension schemes 12 15.5 (1.0)
Tax related to items that will not be reclassified to
profit or loss 5 (3.8) 0.2
Other comprehensive gains/(losses) for the year, net of
tax 12.1 (0.4)
Total comprehensive income/(expenses) for the year, net of
tax 19.2 (50.0)
Fuller, Smith & Turner P.L.C.
Condensed Group Balance Sheet
26 March 2022
At 26 March 2022 At 27 March 2021
Note GBPm GBPm
Non-current assets
Intangible assets 29.5 27.3
Property, plant and equipment 8 592.7 590.2
Investment properties 1.6 3.1
Retirement benefit obligations 12 16.2 -
Right-of-use assets 10 73.8 81.9
Total non-current assets 713.8 702.5
Current assets
Inventories 3.6 2.1
Trade and other receivables 10.7 11.5
Current tax receivable 0.6 4.0
Cash and short-term deposits 11 15.6 17.1
Total current assets 30.5 34.7
Assets classified as held for
sale 5.4 9.6
Total assets 749.7 746.8
Current liabilities
Trade and other payables (57.1) (28.7)
Provisions (0.5) (4.0)
Borrowings 11 (120.0) (207.7)
Lease liabilities 10 (6.8) (6.7)
Other financial liabilities (0.1) -
Total current liabilities (184.5) (247.1)
Non-current liabilities
Borrowings 11 (27.5) (27.5)
Lease liabilities 10 (73.9) (83.2)
Other financial liabilities - (0.7)
Retirement benefit obligations 12 (1.9) (3.5)
Deferred tax liabilities (12.7) (5.3)
Total non-current liabilities (116.0) (120.2)
Net assets 449.2 379.5
Fuller, Smith & Turner P.L.C.
Condensed Group Balance Sheet (continued)
26 March 2022
At 26 March 2022 At 27 March 2021
Note GBPm GBPm
Capital and reserves
Share capital 25.4 22.8
Share premium account 53.2 4.2
Capital redemption reserve 3.7 3.7
Own shares (16.6) (17.0)
Hedging reserve (0.1) (0.5)
Retained earnings 383.6 366.3
Total equity 449.2 379.5
Fuller, Smith & Turner P.L.C.
Condensed Group Statement of Changes in Equity
For the 52 weeks ended 26 March 2022
Share Capital
Share premium redemption Own Hedging Retained
capital account reserve shares reserve earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 28 March 2020 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/(loss) for the
year - - - - 0.4 (50.4) (50.0)
Shares released from ESOT and treasury - - - 0.1 - (0.1) -
Share-based payment credits - - - - - (0.3) (0.3)
At 27 March 2021 22.8 4.2 3.7 (17.0) (0.5) 366.3 379.5
Profit for the year - - - - - 7.1 7.1
Other comprehensive income for the year - - - - 0.4 11.7 12.1
Total comprehensive income for the year - - - - 0.4 18.8 19.2
Issue of share capital 2.6 49.0 - 0.2 - - 51.8
Shares released from ESOT and treasury - - - 0.2 - - 0.2
Dividends (note 7) - - - - - (2.4) (2.4)
Share-based payment charges - - - - - 0.8 0.8
Tax credited directly to equity - - - - - 0.1 0.1
At 26 March 2022 25.4 53.2 3.7 (16.6) (0.1) 383.6 449.2
Fuller, Smith & Turner P.L.C.
Condensed Group Cash Flow Statement
For the 52 weeks ended 26 March 2022
52 weeks ended 52 weeks ended
26 March 27 March
2022 2021
Note GBPm GBPm
Profit/(loss) before tax for continuing operations 11.5 (57.8)
Net finance costs before separately disclosed items 4 11.3 8.4
Separately disclosed items 3 (4.3) 9.1
Depreciation and amortisation 25.8 27.2
44.3 (13.1)
Difference between pension charge and cash paid (2.3) (2.3)
Share-based payment charges/(credit) 0.8 (0.3)
Change in trade and other receivables 0.5 (0.4)
Change in inventories (1.5) 1.7
Change in trade and other payables 28.8 (6.4)
Cash impact of operating separately disclosed items 3 (1.9) (1.5)
Cash generated from/(absorbed by) operations 68.7 (22.3)
Tax received 2.5 3.4
Cash generated from/(absorbed by) operating activities - continuing operations 71.2 (18.9)
Cash absorbed by operating activities - discontinued operations - (0.4)
Net cash generated from/(absorbed by) operating activities 71.2 (19.3)
Cash flow from investing activities
Purchase of property, plant and equipment and intangibles (25.8) (16.5)
Sale of property, plant and equipment, right-of-use assets and assets held for
sale 10.0 10.8
Cash absorbed by investing activities - continuing operations (15.8) (5.7)
Cash generated from investing activities - discontinued operations - 0.3
Net cash (outflow) from investing activities (15.8) (5.4)
Cash flow from financing activities
Receipts on release of own shares to option schemes 0.1 -
Interest paid (7.2) (4.5)
Preference dividends paid 7 (0.1) (0.1)
Equity dividends paid 7 (2.4) -
Net proceeds from equity placing 51.8 -
(Repayment)/drawdown of the CCFF 11 (100.0) 99.4
Drawdown/(repayment)of bank loans 11 12.6 (64.0)
Surrender of leases (1.9) -
Principal and interest elements of lease payments 10 (8.6) (9.2)
Payment of loan arrangement fees (1.2) -
Fuller, Smith & Turner P.L.C.
Condensed Group Cash Flow Statement (continued)
For the 52 weeks ended 26 March 2022
52 weeks ended 52 weeks ended
26 March 2022 27 March 2021
Note GBPm GBPm
Cash (absorbed by)/generated from financing activities - continuing operations (56.9) 21.6
Cash absorbed by financing activities - discontinued operations - (0.1)
Net cash (outflow)/inflow from financing activities (56.9) 21.5
Net movement in cash and cash equivalents (1.5) (3.2)
Cash and cash equivalents at the start of the year 11 17.1 20.3
Total cash and cash equivalents at the end of the year 11 15.6 17.1
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 26 March 2022
1. Preliminary statement
The consolidated financial statements of Fuller, Smith &
Turner P.L.C. for the 52 weeks ended 26 March 2022 were authorised
for issue by the Board of Directors on 8 June 2022.
The financial information presented does not constitute the
Group's annual report and accounts for either the 52 weeks ended 26
March 2022 or the 52 weeks ended 27 March 2021 within the meaning
of Section 435 of the Companies Act 2006, but is derived from those
accounts. The Group's statutory accounts for 2021 have been
delivered to the Registrar of Companies and those for 2022 will be
delivered following the Company's annual general meeting. The
independent auditor's reports on both the 2022 and 2021 accounts
were not qualified or modified, however the 2021 accounts drew
attention to material uncertainties in respect of going concern.
The independent auditor's reports for both 2022 and 2021 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 26 March 2022, which
will be mailed to shareholders on or before 23 June 2022 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 2022 financial statements on a
going concern basis after assessing the Group's financing
arrangement and other principal risks and uncertainties.
At 26 March 2022, the Group had a strong Balance Sheet with 92%
of the estate being freehold properties and available headroom on
facilities of GBP72.0 million and GBP15.6 million of cash and
resulting pre IFRS 16 net debt of GBP131.9 million. At year end,
the Group had existing facilities of GBP192 million.
The Group completed an equity placing on 20 April 2021 which
raised net proceeds of GBP51.8 million. The proceeds of the equity
placing, along with the Group's existing facilities, were used to
repay the CCFF on 12 May 2021. At the same time as the equity
placing, the Group also 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.
Since year end, the Group has secured a new facility of GBP200
million, split between a revolving credit facility of GBP110
million and a term loan of GBP90 million, for a tenure of four
years to May 2026. Under the new agreement, the minimum liquidity
covenant of GBP10 million tested monthly remains until November
2022. From December 2022 (and tested quarterly thereafter) the
covenant suite will consist of net debt to EBITDA (leverage) and
EBITDA to net finance charges.
The Group has modelled financial projections for the going
concern period, which is defined as the 12-month period from the
date of approval of these financial statements to June 2023, based
upon two scenarios, the base case and the downside scenario. The
base case scenario indicates that it will have significant
resources, to continue to settle its debts as they fall due and
operate well within its covenants for the going concern assessment
period. The base case is the Board approved FY2023 budget as well
as the Q1 FY2024 plan which forms part of the Board approved
three-year plan. The base case assumes that there will still be
some impact felt, particularly in urban areas, from the pandemic
and costs will be impacted by the level of inflation currently seen
and the increase in the national minimum wage.
The Group has also modelled a downside scenario whereby sales
drop by c.7% from that assumed in the base case and inflation
continues at an even higher rate than in the base case specifically
utilities (10% increase from base) and food inflation (3% higher
peak than the base case). Under this scenario the Group will still
have sufficient resources and headroom on its covenants throughout
the assessment period.
1. Preliminary statement (continued)
The Group has also performed a reverse stress case which has
shown that the Group could withstand a further 5% fall in sales, a
further 5% increase in food inflation and another 10% increase in
utilities during October - February 2023 compared to the downside
scenario, before the covenant levels would be exceeded on 31
December 2022. The model assumes increased costs for this period as
October 2022 is when the energy price cap is expected to increase
again, and it is assumed this will have an impact on consumers and
hence sales volumes. The stress test represents a 39% decline in
EBITDA and therefore the Directors believe the scenario to be
remote.
Under both the base case and downside scenarios modelled the
Group would have sufficient headroom on its facilities throughout
the going concern assessment period. Additionally, neither the
downside scenario or the reverse stress test include any mitigating
factors which the Group have in their control to either improve
EBTIDA or reduce net debt such as disposals of licensed and
unlicensed properties, reduction in capex spend to only essential
maintenance and decision not to pay dividends and bonuses.
The Directors have also determined that, over the period of the
going concern assessment, there is not expected to be a significant
impact on the Group because of climate change.
At the half year two material uncertainties were reported: (1)
the refinance of the debt was not formalised which presented a
material uncertainty; and (2) that under a severe but not
implausible scenario of further government imposed closures, the
Group's forecast showed it would be able to withstand two months of
closure before it would forecast a breach of its leverage covenant
at June 2022. The matters that gave rise to the above uncertainties
have been resolved either in the year or post year end. On this
basis, along with the facts and circumstances set out above, the
Directors are satisfied that there is a reasonable expectation that
the Group has adequate resources to continue in operational
existence for the going concern assessment period, being the 12
months from the date of signing these financial statements through
to June 2023.
2. Segmental Analysis
Operating Segments
For management purposes, the Group's operating segments are:
- Managed Pubs and Hotels, which comprises managed pubs, managed
hotels, Bel & The Dragon and Cotswold Inns & Hotels.
- Tenanted Inns, which comprises pubs operated by third parties
under tenancy or lease agreements.
The most important measure used to evaluate the performance of
the business is adjusted profit, which is the profit before tax,
adjusted for separately disclosed items. The operating segments are
organised and managed separately according to the nature of the
products and services provided, with each segment representing a
strategic operating unit. The Managed Pubs and Hotels operating
segments have been aggregated to one reportable segment on the
basis they have similar economic characteristics. Economic
indicators assessed in determining that the aggregated operating
segments share similar characteristics include expected future
financial performance, operating and competitive risks, and return
on capital. As such the operating segments meet the aggregation
criteria in paragraph 12 IFRS 8 Operating Segments (amended).
As segment assets and liabilities are not regularly provided to
the Chief Operating Decision Maker ("CODM"), the Group has elected,
as provided under IFRS 8 Operating Segments (amended), not to
disclose a measure of segment assets and liabilities.
Managed Total
Pubs Tenanted continuing
and Hotels Inns Unallocated(1) operations
52 weeks ended 26 March 2022 GBPm GBPm GBPm GBPm
Revenue
Sale of goods and services 205.1 17.9 - 223.0
Accommodation income 21.9 - - 21.9
Total revenue from contracts with
customers 227.0 17.9 - 244.9
Rental income 1.8 7.1 - 8.9
Revenue 228.8 25.0 - 253.8
Segment result 24.7 11.1 (17.3) 18.5
Operating separately disclosed
items (2.0)
Operating profit 16.5
Profit on disposal of properties 6.3
Net finance costs (11.3)
Profit before tax 11.5
Other segment information
Additions to property, plant and
equipment and intangible assets 20.2 2.3 2.6 25.1
Depreciation and amortisation 23.3 1.8 0.7 25.8
Impairment of property 3.0 0.3 - 3.3
2. Segmental Analysis (continued)
Managed Total
Pubs Tenanted 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 and
equipment and intangible assets 12.6 0.7 1.1 14.4
Depreciation and amortisation 24.7 1.8 0.7 27.2
Impairment of property, right-of-use
assets, assets held for sale, and
goodwill 11.3 1.6 - 12.9
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 additions to the head office and additions
to IT development costs.
3. Separately Disclosed Items
The Group presents separately disclosed items on the face of the
Income Statement for those material items of income and expense
which, because of the nature or expected infrequency of the events
giving rise to them, merit separate presentation to allow
shareholders to understand better the elements of financial
performance in the year.
52 weeks ended 52 weeks ended
26 March 2022 27 March 2021
GBPm GBPm
Amounts included in operating profit/(loss):
Reorganisation costs (0.8) (1.9)
Impairment of intangible assets, properties and right-of-use assets (3.3) (12.9)
Release of provision on final settlement of the Beer Business 2.1 -
Total separately disclosed items included in operating profit/(loss) (2.0) (14.8)
Profit on disposal of properties 6.3 5.8
Separately disclosed finance costs:
Finance charge on net pension liabilities - (0.1)
Total separately disclosed finance costs - (0.1)
Total separately disclosed items before tax 4.3 (9.1)
Exceptional tax:
Profit on disposal of properties (1.3) (0.2)
Change in tax rate (3.3) -
Other items 1.4 0.9
Total separately disclosed tax (3.2) 0.7
Total separately disclosed items 1.1 (8.4)
The reorganisation costs of GBP0.8 million during the 52 weeks
ended 26 March 2022 (2021: GBP1.9 million) were largely incurred as
a result of a corporate reorganisation of the Group, costs
associated with the loan refinancing and licence costs associated
with the implementation of a new finance system.
The GBP2.1 million credit is the release of the provision, net
of the final settlement amount on the sale of the Fuller's Beer
Business.
The property impairment charge of GBP3.3 million during the 52
weeks ended 26 March 2022 (2021: GBP12.9 million) relates to the
write down of six licensed properties (2021: 37 licensed
properties) to their recoverable value.
The profit on disposal of properties of GBP6.3 million during
the 52 weeks ended 26 March 2022 (2021: GBP5.8 million) relates to
the disposal of 12 predominately unlicensed properties (2021: seven
properties).
The 2021 Budget in March last year announced an increase in the
UK corporation tax rate to 25% with effect from 1 April 2023. This
was substantively enacted on 24 May 2021. The UK corporation rate
increase has resulted in an increase to the deferred tax liability
of GBP3.3 million. This has been recognised
3. Separately Disclosed Items (continued)
within separately disclosed items in the tax charge for the
period as it is unrelated to underlying trading and is one off in
nature.
The cash impact of operating separately disclosed items before
tax for the 52 weeks ended 26 March 2022 was GBP1.9 million cash
outflow (27 March 2021: GBP1.5 million cash outflow).
4. Finance Costs
52 weeks ended 52 weeks ended
26 March 2022 27 March 2021
GBPm GBPm
Finance Costs
Interest expense arising on:
Financial liabilities at amortised cost - loans and debentures(1) (8.1) (5.3)
Financial liabilities at amortised cost - preference shares (0.1) (0.1)
Financial liabilities at amortised cost - lease liabilities (3.1) (3.0)
Total finance costs before separately disclosed items (11.3) (8.4)
Finance charge on net pension liabilities (note 3) - (0.1)
Total finance costs after separately disclosed items (11.3) (8.5)
(1) In the prior year, interest expense on loans and debentures
is shown net of GBP0.6 million of grant income recognised in
relation to the CCFF.
5. Taxation
52 weeks ended 52 weeks ended
26 March 2022 27 March 2021
Group GBPm GBPm
Tax charged/(credited) in the Income Statement
Current income tax:
Current tax on profit/(loss) for the year 0.2 (1.0)
Adjustments for current tax on prior periods 0.6 (0.5)
Total current income tax expense/(credit) 0.8 (1.5)
Deferred income tax:
Origination and reversal of temporary differences 2.2 (8.1)
Change in corporation tax rate 3.3 -
Adjustments for deferred tax on prior periods (1.9) -
Total deferred tax expense/(benefit) 3.6 (8.1)
Total tax charged/(credited) in the Income Statement 4.4 (9.6)
Analysed as:
Before separately disclosed items 1.2 (8.9)
Separately disclosed items 3.2 (0.7)
4.4 (9.6)
Reconciliation of the Total Tax Charge/(Credit)
The tax expense in the Income Statement for the year is higher
(2021: tax credit is lower) than the standard rate of corporation
tax in the UK of 19% (2021: 19%). The differences are reconciled
below:
52 weeks ended 52 weeks ended
26 March 2022 27 March 2021
GBPm GBPm
Profit/(loss) from continuing operations
before income tax expense/(credit) 11.5 (57.8)
Accounting profit/(loss) multiplied
by the UK standard rate of corporation
tax of 19% (2021: 19%) 2.2 (11.0)
Items not (taxable)/deductible for
tax purposes (0.3) 0.5
Current and deferred tax (over)
provided in previous years (1.3) (0.5)
Net movements in respect of property 0.5 1.4
Change in corporation tax rate 3.3 -
Total tax charged/(credited) in
the Income Statement 4.4 (9.6)
5. Taxation (continued)
52 weeks ended 52 weeks ended
Deferred tax relating to items charged/(credited) 26 March 2022 27 March 2021
to the Income Statement GBPm GBPm
Deferred tax depreciation (0.8) (0.6)
Unrealised capital gains (on PP&E) 5.2 (0.4)
Retirement benefit obligations 1.6 1.6
Tax losses (2.8) (7.4)
Other (0.7) (0.1)
Corporate interest restriction 1.1 (1.2)
Deferred tax in the Income Statement 3.6 (8.1)
Tax relating to items charged/(credited) to the
Statement of Comprehensive Income
Deferred tax:
Valuation gains on financial liabilities 0.1 0.1
Net actuarial gains/(losses) on pension
scheme 3.8 (0.2)
Total tax charged/(credited) in the
Statement of Comprehensive Income 3.9 (0.1)
Tax relating to items credited directly to equity
Deferred tax:
Share-based payments (0.1) -
Total tax credited to equity (0.1) -
6. Earnings/(Loss) Per Share
52 weeks ended 52 weeks ended
26 March 2022 27 March 2021
Group GBPm GBPm
Profit/(loss) attributable to equity shareholders 7.1 (49.6)
Separately disclosed items net of tax (1.1) 9.3
Adjusted earnings/(loss) attributable to equity shareholders 6.0 (40.3)
Number Number
Weighted average share capital 61,264,000 55,207,000
Dilutive outstanding options and
share awards 413,000 139,000
Diluted weighted average share
capital 61,677,000 55,346,000
40p 'A' and 'C' ordinary share Pence Pence
Basic earnings/(loss) per share 11.59 (89.84)
Diluted earnings/(loss) per share 11.51 (89.84)
Adjusted earnings/(loss) per share 9.79 (73.00)
Diluted adjusted earnings/(loss)
per share 9.73 (73.00)
4p 'B' ordinary share Pence Pence
Basic earnings/(loss) per share 1.16 (8.98)
Diluted earnings/(loss) per share 1.15 (8.98)
Adjusted earnings/(loss) per share 0.98 (7.30)
Diluted adjusted earnings/(loss)
per share 0.97 (7.30)
6. Earnings/(Loss) Per Share (continued)
52 weeks ended 52 weeks ended
26 March 2022 27 March 2021
Continuing operations GBPm GBPm
Profit/(loss) attributable to equity shareholders 7.1 (48.2)
Separately disclosed items net of tax (1.1) 8.4
Adjusted earnings/(loss) attributable to equity shareholders 6.0 (39.8)
Number Number
Weighted average share capital 61,264,000 55,207,000
Dilutive outstanding options
and share awards 413,000 139,000
Diluted weighted average share
capital 61,677,000 55,346,000
40p 'A' and 'C' ordinary share Pence Pence
Basic earnings/(loss) per share 11.59 (87.31)
Diluted earnings/(loss) per share 11.51 (87.31)
Adjusted earnings/(loss) per share 9.79 (72.09)
Diluted adjusted earnings/(loss)
per share 9.73 (72.09)
4p 'B' ordinary share Pence Pence
Basic earnings/(loss) per share 1.16 (8.73)
Diluted earnings/(loss) per share 1.15 (8.73)
Adjusted earnings/(loss) per share 0.98 (7.21)
Diluted adjusted earnings/(loss)
per share 0.97 (7.21)
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 1,744,564 (2021:
1,777,248).
Diluted earnings per share amounts are calculated using the same
earnings figure as for basic earnings per share, divided by the
weighted average number of ordinary shares outstanding during the
year plus the weighted average number of ordinary shares that would
be issued on the conversion of all the dilutive potential options
into ordinary shares.
Adjusted earnings per share are calculated on profit after tax
excluding separately disclosed items and on the same weighted
average ordinary share capital as for the basic and diluted
earnings per share. Adjusted earnings per share measures have been
included as the Directors consider that these measures better
reflect the underlying earnings of the Group.
7. Dividends
52 weeks ended 52 weeks ended
26 March 2022 27 March 2021
GBPm GBPm
Declared and paid during the
period
Equity dividends on ordinary shares:
Final dividend for 2021: 0p (2020:
0p) - -
Interim dividend for 2022: 3.90p
(2021: 0p) 2.4 -
Equity dividends paid 2.4 -
Dividends on cumulative preference
shares (note 4) 0.1 0.1
Proposed for approval at the
Annual General Meeting
Final dividend for 2022: 7.41p
(2021: 0p) 4.6 -
The pence figures above are for the 40p 'A' ordinary shares and
40p 'C' ordinary shares. The 4p 'B' ordinary shares carry dividend
rights of one-tenth of those applicable to the 40p 'A' ordinary
shares. Own shares held in the employee share trusts do not qualify
for dividends as the Trustees have waived their rights. Dividends
are also not paid on own shares held as treasury shares.
8. Property, Plant and Equipment
Land & Land & buildings
buildings - owned & Plant,
- owned acting as machinery Fixtures
& used lessor & vehicles & fittings Total
Group GBPm GBPm GBPm GBPm GBPm
Cost
At 28 March 2020 498.4 109.2 6.5 168.9 783.0
Additions 0.6 - - 13.2 13.8
Disposals (1.4) (0.3) - (0.6) (2.3)
Disposals of discontinued operations (6.8) - (0.1) (7.6) (14.5)
Transfer to assets held for sale (8.1) (1.1) (0.1) (2.3) (11.6)
At 27 March 2021 482.7 107.8 6.3 171.6 768.4
Additions 11.3 1.8 - 9.6 22.7
Disposals (1.3) - - (1.9) (3.2)
Transfer to assets held for sale (1.5) - - (0.4) (1.9)
Transfer from assets held for
sale 2.4 - - 0.6 3.0
At 26 March 2022 493.6 109.6 6.3 179.5 789.0
Depreciation and impairment
At 28 March 2020 43.7 7.5 1.8 112.3 165.3
Provided during the year 3.9 0.7 - 14.0 18.6
Disposals (0.2) - - (0.6) (0.8)
Disposals of discontinued operations (4.7) - - (5.8) (10.5)
Impairment loss 7.4 1.6 - - 9.0
Transfer to assets held for sale (0.9) (0.1) (0.1) (1.9) (3.0)
Reclassification of impairment
to right-of-use-assets (0.4) - - - (0.4)
At 27 March 2021 48.8 9.7 1.7 118.0 178.2
Provided during the year 4.2 0.6 - 13.1 17.9
Disposals (1.3) - - (1.9) (3.2)
Impairment loss 3.3 - - - 3.3
Transfer to assets held for sale (0.1) - - (0.3) (0.4)
Transfer from assets held for
sale - - - 0.5 0.5
At 26 March 2022 54.9 10.3 1.7 129.4 196.3
Net book value at 26 March 2022 438.7 99.3 4.6 50.1 592.7
Net book value at 27 March 2021 433.9 98.1 4.6 53.6 590.2
Net book value at 28 March 2020 454.7 101.7 4.7 56.6 617.7
9. Impairment
2022 2021
Group GBPm GBPm
Impairment losses
Intangible assets - 0.6
Property, plant and equipment 3.3 9.0
Right-of-use assets - 1.6
Assets held for sale - 0.2
Lease receivable - 1.5
Total net impairment charge 3.3 12.9
During the 52 weeks ended 26 March 2022, the Group recognised an
impairment loss of GBP3.3 million (2021: GBP9.0 million) on
property, plant and equipment and GBPnil (2021: GBP1.6 million) of
impairment on right-of-use assets in respect of the write down of
six properties where their asset values exceeded the higher of fair
value less costs to sell or their value in use. The impairment
losses were driven principally by changes in the local competitive
environment in which the pubs are situated.
10. Leases
Amounts recognised in the Balance Sheet
2022 2021
Group GBPm GBPm
Right-of-use assets
Properties 73.1 81.3
Equipment 0.6 0.2
Vehicles 0.1 0.4
73.8 81.9
Lease liabilities
Current 6.8 6.7
Non-current 73.9 83.2
80.7 89.9
10. Leases (continued)
Set out below are the carrying amounts of right-of-use assets
recognised and the movements during the period:
Property Equipment Vehicles Total
Group GBPm GBPm GBPm GBPm
Net carrying value as at 27 March 2021 81.3 0.2 0.4 81.9
Lease amendments - rent concessions (2.6) - - (2.6)
Lease amendments - other (1) 1.3 1.1 (0.2) 2.2
Depreciation (6.9) (0.7) (0.1) (7.7)
Net carrying value as at 26 March 2022 73.1 0.6 0.1 73.8
(1) Lease amendments include lease terminations, modifications,
reassessments and extensions to existing lease agreements.
11. Analysis of Net Debt
At 27 March Cash Non- At 26 March
52 weeks ended 26 March 2021 flows cash(1) 2022
2022 GBPm GBPm GBPm GBPm
Cash and cash equivalents:
Cash and short-term
deposits 17.1 (1.5) - 15.6
17.1 (1.5) - 15.6
Financial liabilities:
Lease liabilities (89.9) 8.6 0.6 (80.7)
(89.9) 8.6 0.6 (80.7)
Debt:
Bank loans(2) (107.9) (11.4) (0.7) (120.0)
CCFF (99.8) 100.0 (0.2) -
Debenture stock (25.9) - - (25.9)
Preference shares (1.6) - - (1.6)
Total borrowings (235.2) 88.6 (0.9) (147.5)
Net debt (308.0) 95.7 (0.3) (212.6)
11. Analysis of Net Debt (continued)
Cash Non-
At 28 March 2020 flows cash(1) At 27 March 2021
52 weeks ended 27 March 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)
(1) Non-cash movements relate to the amortisation of arrangement
fees, arrangement fees accrued and movements in lease
liabilities.
(2) Bank loans net of arrangement fees and cashflows include the
payment 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:
2022 2021
GBPm GBPm
Fair value of Scheme assets 143.9 143.8
Present value of Scheme liabilities (129.6) (147.3)
Surplus/(deficit) in the Scheme 14.3 (3.5)
12. Retirement Benefit Obligations (continued)
Fair value
Defined benefit of Scheme Net defined
obligation assets benefit surplus/(deficit)
2022 2021 2022 2021 2022 2021
GBPm GBPm GBPm GBPm GBPm GBPm
Balance at beginning of the year (147.3) (128.5) 143.8 123.8 (3.5) (4.7)
Included in profit and loss
Net interest cost (2.8) (3.0) 2.8 2.9 - (0.1)
(2.8) (3.0) 2.8 2.9 - (0.1)
Included in Other Comprehensive
Income
Actuarial gains/(losses) relating
to:
Actual return less expected return
on Scheme's assets - - 0.6 19.5 0.6 19.5
Experience gains/(losses) arising
on Scheme liabilities 14.9 (20.5) - - 14.9 (20.5)
14.9 (20.5) 0.6 19.5 15.5 (1.0)
Other
Employer contributions - - 2.3 2.3 2.3 2.3
Benefits paid 5.6 4.7 (5.6) (4.7) - -
5.6 4.7 (3.3) (2.4) 2.3 2.3
Balance at end of the year (129.6) (147.3) 143.9 143.8 14.3 (3.5)
Key assumptions
The key assumptions used in the 2022 valuation of the Scheme are
set out below:
Key financial assumptions used in the
valuation of the Scheme 2022 2021
Rate of increase in pensions in payment 3.75% 3.35%
Discount rate 3.00% 1.95%
Inflation assumption - RPI 3.80% 3.40%
Inflation assumption - CPI (pre 2030/post 2.9%/3.8% 2.5%/3.4%
2030)
2022 2021
Mortality assumptions Years Years
Current pensioners (at 65) -
males 22.2 22.2
Current pensioners (at 65) -
females 24.5 24.4
Future pensioners (at 65) - males 23.6 23.5
Future pensioners (at 65) - females 25.9 25.9
12. Retirement Benefit Obligations (continued)
2022 2021
Assets in the Scheme GBPm GBPm
Corporate bonds 25.0 25.5
Index linked debt instruments 26.0 28.3
Overseas equities 31.5 30.6
Alternatives (1) 56.5 53.7
Cash 1.6 1.9
Annuities 3.3 3.8
Total market value of assets 143.9 143.8
(1) Alternatives is composed of holdings in diversified growth
investment funds.
13. Post Balance Sheet Events
On 27 May 2022, the Group successfully completed the refinance
of its debt facilities of GBP192 million, which were due to mature
in February 2023. The new debt facilities consist of a GBP90
million term loan and a GBP110 million revolving credit facility
provided by a syndicate of seven banks. The new facilities have an
initial maturity date of 27 May 2026 with an option to extend by a
further year. The facilities are unsecured, and the borrowing cost
of the facilities is determined by the level of Company
leverage.
[1] Pre IFRS 16
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR BKFBQABKDAAK
(END) Dow Jones Newswires
June 09, 2022 02:10 ET (06:10 GMT)
Fuller Smith & Turner (LSE:FSTA)
Historical Stock Chart
From Jun 2024 to Jul 2024
Fuller Smith & Turner (LSE:FSTA)
Historical Stock Chart
From Jul 2023 to Jul 2024