TIDMTHW
DANIEL THWAITES PLC
RESULTS FOR YEARED 31 MARCH 2022
CHAIRMAN'S STATEMENT
After another challenging year Daniel Thwaites has emerged from the COVID-19
pandemic in a strong financial position. Our priority for the past two years
has been to take decisive action to control our cost base and debt levels to
protect the business for a time when we could put restrictions and a loss of
liberty behind us.
The Company and our teams have risen to this task in the most impressive
fashion and I am immensely proud of the way in which they have responded.
Our decision to reinstate quality cues within our properties at the earliest
opportunity after government restrictions were removed has been vindicated by
strong trading, profitability being restored and the business generating
significant cashflows. This has allowed us to initiate investments for the
future, start to make acquisitions and confidently set ourselves back on a path
for growth which the pandemic temporarily disrupted.
Once more our family values, and the strong culture within the business has
helped us to come through all that has been thrown at us. Well publicised
issues with recruitment coupled with natural attrition to our teams from
repeated lockdowns and closure has meant that for much of the year we have had
significant numbers of vacancies across all of the business. This has been
extremely testing for our teams and the way that they have responded by going
the extra mile, being inventive and resourceful is humbling.
Different parts of the business have pulled at different speeds throughout the
year, with outdoor areas playing a hugely important role for our pubs, despite
there being no prolonged period of sunny weather last summer. Likewise, the
leisure facilities in our hotels and spas and the honeypot locations of our
inns have been very helpful in a strong staycation market. As a result, despite
long periods of disruption the business has traded well and has been able to
capitalise on its premium levels of service and positioning, which in turn has
produced a strong set of results.
Results
For the second year running the business was not able to trade without some
form of government restrictions for 23 weeks. We started the year with the
business shut, opening with outdoor trading space only on 12 April, which
accounted for about half of our pubs and all of our inns and hotels.
The remaining properties opened on 17 May, with limited capacity due to social
distancing measures, which were removed on 19 July. Trading throughout the key
summer period was very encouraging and in the first half of the year the pubs
and the inns traded strongly, particularly those with good outside areas, which
benefited from investments made in anticipation of people wanting to get out
and about but nervous of indoor areas.
The leisure market for our hotels was also strong and we were able to achieve
strong growth in room rates in both the hotels and inns as a result of the
strong summer staycation market. The corporate hotel market began to pick up
once the summer leisure business tailed off in September, and this built
steadily over the following month.
On 10 December we embarked upon Plan B measures in the face of trying to
pre-empt the unknown Omicron variant. These measures mandated and advised the
use of face masks in most public settings as well as COVID passes and guidance
to work from home. Although hospitality settings were excluded for customers
who were seated the measures destroyed confidence and the all-important
Christmas season was largely lost.
Plan B measures were ended on 27 January, with the business starting to rebuild
itself once more between 27 January and its year end on 31 March.
Despite these material levels of disruption, the financial performance has been
resilient given the circumstances, with turnover increasing to £96.0m (2021: £
32.2m; 2020: £98.1m) and an operating profit of £12.3m (2021: £(9.6)m; 2020: £
12.6m). The earnings per share was 20.6p (2021: (17.8)p; 2020: 5.6p).
Net Debt at 31 March 2022 was £61.6m (2021: £78.8m; 2020: £65.4m), broadly
similar to that at the interim results at 30 September 2021 despite the
disruption to the winter season.
The Bank of England has now started to respond to higher inflation arising from
the unprecedented amounts of monetary and fiscal stimulus funded through
central government debt in response to the pandemic, and subsequently the
actions of Russia in Eastern Europe.
Interest rates have now risen from their all-time low of 0.1% to 1% with market
speculation that they will rise further. Increases in interest rates and the
discount rate used to value the Company's pension scheme and swap liabilities
have a positive impact on their mark to market valuations. As a result, we have
seen a gain of £3.8m on our swap liabilities and a decrease in our pension
liabilities of £30.0m, such that the pension scheme is now showing a surplus of
£10.1m for the first time in many years.
The profits retained for the year together with these mark to market gains
provided a net asset value per share at the year-end of £3.62 (2021: £3.00;
2020: £3.02).
Acquisitions, Developments and Disposals
During the year we acquired The Red Lion at Burnsall to join our Inns. This is
an iconic coaching inn, sitting alongside the River Wharfe in the Yorkshire
Dales, and we have exciting plans to develop its 25 bedrooms and 5 holiday
cottages in the coming year.
In addition, we have acquired a number of staff houses to assist us in
recruiting team members in some of our more rural locations and we believe that
this gives us an advantage in these local markets, particularly in Cumbria and
the Yorkshire Dales.
The Company has sold 15 bottom end pubs and our old brewery site in Blackburn,
with total proceeds of £7.5m.
Dividend
The Board understands that the dividend plays an important role for
shareholders and that one has not been paid whilst the Company was making
losses and sought to protect its financial health for the future. Now that the
Company is making profits once more the Board recommends reinstating a final
dividend. There is still much uncertainty about the pace and strength of any
recovery, as well as an increasingly challenging domestic economic picture. The
Board is mindful of maintaining a dividend distribution that is prudent and
sustainable, with a view to increasing it as conditions permit, as a result the
Board recommends a final dividend of 2.2 pence per share.
People
I have written above of the way that our teams have pulled us through the last
two years, and we would not be in the strong position that we are without them.
I was delighted that we recently held our Pride of Thwaites Awards, which
celebrates and recognises the outstanding contribution that they make. Whilst I
am immensely grateful to all of our team members, I would like to highlight the
role that the area business managers of our tenanted pubs have played over the
past two years. It has been far from easy and we have asked much of them,
however they are justly our winners of our Team of the Year Award.
I would also like to thank our shareholders, who have supported the business so
strongly over the past two years. I am pleased that we have been able to
restart paying them a dividend and hopeful that we are embarking on a path of
dividend growth.
Outlook
It is possible that the interruption of COVID may have been contained within
the past two sets of financial results, certainly we all hope that is the case.
From 1 April 2022 government financial support was largely withdrawn and the
business is now trading with a new set of challenges.
Our new headwinds are of a different nature, largely outside our control, which
we are working our way through. Staffing our properties, particularly our
kitchens, continues to be a major issue and everywhere you turn inflation of
our everyday goods is rampant, a dynamic that has not been present for many
years.
Supply chain issues are continuing to cause major problems with on-going
out-of-stock products and shortages. Investment schemes are experiencing long
lead times and cost increases, both of underlying goods and from the exchange
rate impact of a weak pound. Together these are threatening to undermine the
feasibility of some projects that for the time being are expensive to deliver
and so hamper our ability to invest.
As we grapple with these issues the country now, more than ever, needs its
businesses to be trading freely and investing to help to pay off our national
debt. The government is in a position to help businesses firstly by seeing
through its promised reform of business rates and secondly by opening up the
labour market by relaxing measures to allow some foreign workers to come into
the country in a controlled manner through short term employment licenses. We
continue to lobby the government strongly in both areas as well as other tax
reforms to lessen the burden on pubs.
None of these issues are ours alone, we are only able to manage our own destiny
and are confident in our ability to do so. To that end we continue to improve
the quality of our estate and our offering and our recent trading over Easter
has been promising. Our properties are well invested and attractive, ready to
make the most of the coming summer season. Our customers are becoming more
adventurous and people's new socialising habits are becoming clearer.
Like us, our customers are ready to put the pandemic behind them, meet their
friends and family and rediscover that time spent with others, and the
enjoyment of our pubs, inns and hotels makes life a little brighter.
R A J Bailey
Chairman
14 June 2022
OPERATING REVIEW
Overview
The biggest challenge in the year was not the managing of COVID and opening and
closing, which we learnt to do last year, but the staffing of the teams in our
pubs, inns, hotels, and spas. For much of the year we had vacancies across many
of the departments, particularly in our kitchens, housekeeping teams and front
of house.
It is not completely clear why the UK, like much of the world is facing a
shortage of employable labour, it is also not possible to separate the effects
of Brexit, which was now nearly six years ago, from the pandemic. However,
reports of around 1.5 million people leaving employment through either going
back overseas, leaving the hospitality industry or choosing to retire early
probably cover most of this shortfall, none of it helpful.
It is very frustrating when the customer demand is there not to be able to make
the most of it and we have worked hard to make sure that we are better
positioned for this coming summer, that said the business turned in a strong
performance for the year given the disruption that it faced.
We have developed our order and pay capabilities further which has the benefit
of reducing the intensity of front line order taking and allows the team to
focus on delivering food and drink. We have obtained a sponsorship license to
bring skilled labour in from abroad, which has had some impact in helping to
bolster our kitchens and senior front of house teams. We are having to be much
more flexible in our rotas, as people generally seem to want to work fewer
hours, and we have recruited a number of older people returning to the
workforce in retirement, as well increasingly some of those who have left the
industry but miss the human contact.
We have boosted our employee benefits, as well as moving to a higher than
minimum wage for younger team members. We have had some success with our URefer
scheme, which rewards team members for helping us to find new people and we
have strengthened our induction and training process, together with developing
our ELMA happiness and performance reviews. There is no silver bullet, but many
threads create the tapestry of our teams and we continue to think of new ways
to attract and retain the best talent.
Increasing costs are also a major challenge and we have been forced to increase
our prices in response, continuing to monitor the pricing of our competition to
make sure that we stay within the cohort but at a level that reflects the
quality of our properties. We raised our prices in December, tweaked again in
April and are likely to have to increase again later this year. Utility prices
are also a major concern and whilst we have had the benefit of some forward
contracts these will expire towards the latter part of this year, at which
point we will be exposed to market increases. We will protect our position as
far as possible, however some real pain will be felt, which will put our
profits under pressure.
Our supply chain has been fragile and in response to this we have reformulated
menus to take advantage of what is available. This has meant slimming the menus
down and relying more on specials, which helps us to create more interesting
and seasonal alternatives. We have also had interruptions to our drinks
supplies, which have been difficult to manage, particularly in our tenanted
pubs, where the temptation is to go elsewhere.
The steps that we continue to take to premiumise our offer across all of our
properties have been helpful as we are riding a strong consumer trend. The
investments in our properties over the last few years puts us in a position to
make the most of that trend. Premiumisation extends not only to the drinks
ranges in our pubs, where premium world lagers, cocktails and gin amongst other
things have been very popular, but also in our restaurants where people have
been treating themselves when out and we have had significant interest in
lobsters, Exmoor caviar, fillet steaks and large premium sharing platters, all
of which present good margin opportunities.
Financial Results
Turnover for the year was £96.0m (2021: £32.2m), the business was shut for 3%
of the year and traded under restrictions for a further 40% of the time. When
trading under Plan B and the associated government messaging our customers lost
confidence and people socialised less in December to protect Christmas and to
shield the vulnerable from infection at this time. The operating profit for the
year was £12.3m (2021: operating loss £9.6m). Net debt decreased to £61.6m
(2021: £78.8m) a decrease of £17.2m. At the year end the company had banking
facilities of £83m.
The results in the year benefited from government support in the form of
business rate concessions, lower rates of VAT and grants. This support was
withdrawn from 1 April 2022 with the exception of the 2022/23 Retail,
Hospitality and Leisure Business Rates Relief (RHL) scheme which provides
eligible, occupied, retail, hospitality, and leisure properties with a 50%
relief, up to a cash cap limit of £110,000 per business from 1 April 2022 to 31
March 2023. This is of benefit to our tenanted pubs but our managed properties
do not qualify.
Pubs and Inns
Understanding our Pubs
Our freehold estate of tenanted pubs numbers approximately 215 properties. We
continue to recycle capital into new, more attractive tenanted and managed pub
opportunities, where there is the potential to invest and add value and so we
continue to dispose of pubs that we do not believe have a long-term future with
us.
Our pub estate encompasses community locals to destination food led pubs in
both rural and town centre locations, ranging geographically from Cumbria to
the Midlands, and from North Wales to Yorkshire. In the trading environment
during the pandemic the geographic diversity of the pub estate and the lack of
exposure to major city centres has provided some resilience.
We have been operating tenanted pubs for a long time, and we have a strong
reputation for our well-established approach. We strongly value our reputation
as a partner of choice, acting with integrity, and focusing on investing
alongside proven operators to expand and improve the premises with a focus on
establishing good quality food offerings. Where the property has the scope, and
we believe the demand exists, we support the development of letting bedrooms.
We have an estate of high quality, sustainable businesses with multiple income
streams that have the ability to generate attractive cashflows.
Our tenanted pubs are a mature business and we aim to deliver returns at least
in line with inflation. They tend to be heavily influenced by weather and so
are subject to the vagaries of the British summer.
Pubs performance
The tenanted pubs re-opened their outdoor areas with table service only after
lockdown from 12 April and about two-thirds of them were able to do so. The
creativity that our tenanted operators showed to maximise the number of
customers that they could serve by converting carparks, pavements and spare
land into trading space, together with erecting tents, marquees and other
structures to deal with the inclement weather was truly inspiring and
epitomised why pubs are at the heart of their communities. The steps that the
government has since taken to extend pavement licenses permanently will be
helpful.
It was the case that the more real and obvious the effort put in to re-opening
these pubs was directly correlated to their success and with a patch of good
spring weather, customers were quick to flock back to their local and support
it after winter months of lockdown and confinement.
The remaining pubs opened on 17 May, when indoor trading was permitted, albeit
with social distancing measures in place until 19 July. There was no further
sustained period of good weather throughout the summer but beer sales grew
steadily, such that by the autumn they had regained their 2019 volume levels,
before another period of disruption in the winter, after which they started to
rebuild their trade once again.
There were no acquisitions of tenanted pubs in the year and very little has
come to the market which would suit us. We disposed of 15 pubs to which we
could no longer add any future value.
During the year we completed four development projects at a cost of £0.7m. The
largest of which was The Foundry in Blackburn, with schemes also completed at
the Fox & Hounds, Ewood, the Eagle & Child, Ramsbottom and The Clockface,
Prescot.
The financial support provided to the tenanted pubs from government grants and
business rate support has given a period of protection ahead of the spring and
a plethora of cost increases. This will not fully mitigate the pressure that is
coming to bear from price rises, particularly from utilities which are creating
immense pressure on pub profitability.
Partly as a result of this and partly as a result of people reassessing their
life options, we have seen an increase in the number of pubs where our tenanted
partner has decided to move on. We monitor this statistic closely as it is a
lead indicator of the financial health of our tenanted pubs, it has hovered at
about 20 pubs all year (9% of the estate), compared with about half this number
two years ago. We are continuing to receive high numbers of enquiries for new
customers and are taking care to make sure that we match candidates to pubs
that we believe will be successful for both parties.
Brewery
Our craft brewery has gone from strength to strength. It has won awards for the
quality of its ales and the customer feedback on the beers has been very
positive, although the cask market has been challenged by changing habits. We
were delighted to be recognised by CAMRA for our contribution to the beer
market over the past 50 Years and to celebrate their same anniversary, as well
as receiving design awards for our beer range.
We have started to reintroduce our popular range of guest ales, but cask ales
have suffered significant declines over the past two years whilst people have
been drinking packaged beers at home. Whilst we are proud of the beers that we
produce we are investigating broadening our range into some new craft keg
products. This will require a low level of investment in the brewery in the
coming year.
Understanding our Inns
We own and manage a growing portfolio of inns and we will continue to look to
expand this segment of our business in the future through the acquisition of
high quality properties in outstanding locations.
Our Inns are positioned at the premium end of the market, they have a busy bar
at their core, a home cooked food offering and high quality, comfortable
accommodation - they focus on providing outstanding hospitality and offer an
attractive and more personal alternative to the mid-market hotel chains.
This segment of the market has performed strongly over the past few years and
is positioned for continued growth as customers look for something special that
is authentic and honest, delivered by operators who can provide a quality
experience consistently.
Inns performance
Almost all of the Inns have large outside trading areas and so they were able
to open from 12 April and very quickly started to trade strongly. Over the
summer period we were seeing weeks where the trading performance was up by 20%
per week, but this benefited from VAT support from the government, on a like
for like performance this was more like 12%. The Inns even showed single digit
growth against the Eat Out to Help Out Scheme in the previous year.
In parts the Inns performance was held back by not being able to recruit
sufficient team members, where in order to protect the offering and quality of
the service we restricted trade. This was most acute in the National Parks,
which are presently devoid of any foreign workers, a resource that they have
relied upon in the past.
When all was said and done, the Inns had an outstanding year, with some star
performances, particularly at The Royal Oak, Keswick, The Lister Arms, Malham,
The Beverley Arms and the Bulls Head, Earlswood.
The Pendle Inn, Barley joined the Inns for its first full year of trading and
we have plans to develop this in the coming year, Barley is a beautiful
location at the foot of Pendle Hill and walkers flock to it throughout the
year. In October we purchased the Red Lion, Burnsall; another honeypot rural
location, and after some teething problems in assembling a new team, this
property is now performing strongly and will be a high performer for the
future.
The opportunity arose in the autumn to acquire Lendal House, a beautiful listed
building adjacent to the Judge's Lodgings, York and this will be developed to
provide an additional ten bedrooms, which will complement the 21 bedrooms that
we have already.
We have also acquired additional staff houses to strengthen our ability to
recruit team members in Keswick, Penrith and Beverley. This has been a
necessary reaction to the problems of recruitment but should give us an
advantage in each of those markets.
Understanding our Hotels & Spas
We own and operate ten hotels which are spread across England. Our hotels are
positioned towards the premium end of the market and most have leisure and spa
facilities. In recent years we have invested in them to amplify the individual
character of each hotel in its local area, supported by a great food and drink
offering with local nuances. Our vision, similar to our inns, is to create a
collection of interesting, characterful contemporary hotels, that are the best
in their local area.
Hotels & Spas performance
The hotels were slower to build sales after re-opening as for the second year
running they were not allowed to open properly until late July. Once they did
open, they traded well and were well positioned to take advantage of the
staycation market. We worked hard to add to their offer to maximise spend per
head and cash margin. This included upgrading supplements to room packages,
expanding the range of treatments in our spa treatment rooms, which were very
busy, upscaling our restaurant specials and serving thousands of cocktails.
The corporate bedroom and conference business overall was weak throughout the
year but gaining momentum by the autumn. This was put into sharp reverse by the
work from home order in December and January which was a major setback and at
the time impacted the all-important Christmas party season - which was a
write-off. Weddings had a busy season in the summer and autumn as people took
the opportunity to catch up on those lost the previous year. This seems to be
a trend that looks like it will continue into the coming year as we have strong
forward bookings. The leisure business has been strong all year and reflects a
changing mix in the sales for the hotels, we will aim to hold onto this
business and use the corporate business to backfill our occupancy, typically at
marginally lower rates.
Hotel profitability returned to a level equivalent to 2019/20, which was a very
satisfactory result given the level of disruption.
Summary and future developments
Our strategy last year was to maintain the quality of our offering in all
areas, push service levels higher than our competition and trade the business
for cash, to protect the strength of our balance sheet and the financial health
of the business coming out of the pandemic. The business has re-established its
profitability, albeit with some government support and saving a disaster, it
really does feel like we have been able to move on from the past two years of
closure and disruption.
The issues now facing the business are different but no less immediate.
Managing high levels of inflation requires us to be nimble in our offering,
whilst not diluting it and be agile in responding to price rises, passing them
on wherever possible without overly subduing demand.
Our approach in the coming year will therefore not be radically different, the
major change being that now we have more confidence about our ability to trade
uninterrupted by government intervention, which means that we can position
ourselves to start to reinvest in the properties and the business, to regain
our growth and momentum for next year and beyond.
We are therefore in the advanced stages of developing a number of investment
schemes that will help to grow our profits, and these will be started once we
have a few months clear trading under our belts.
The cost of living squeeze has been much discussed in the press and will no
doubt have an impact on the business. At this stage it is difficult to assess
exactly how detrimental it will be, nor whether the UK economy will contract
and so we should be cautious, having been careful to put the business in a
position of financial strength.
We will consider acquisitions on a case by case basis, but our focus for the
moment must be on the core business and sticking to the knitting. We are
likely to have a challenging year or two that will need all of our attention.
Where outstanding opportunities do arise, we will work hard to convert them and
add them to our portfolio as we have the resources to do so.
The early part of the year has seen encouraging trading, but our continuing
recovery has been disjointed and halting, with a series of strong weeks then
seeing inexplicable lapses. The overall trend is however positive and we are
forecasting to grow our sales year on year, despite the loss of government
support.
The hospitality industry is likely to face some challenging months ahead,
particularly next winter if the cost of utilities does not subside. However,
our businesses have been positioned to appeal to the mid-market and above,
where there is more disposable income and affordability. In the medium to
longer term people still want to socialise, treat themselves to a trip away or
a meal out with their family and friends, so whilst we may see some short term
challenges the business is invested in long term sustainable markets. The pub
will continue to play its critical role - it is the social glue that holds
communities together and helps people to fend off loneliness and it is
difficult to see that changing in the coming years.
We are a strong business that has endured one of the most testing of times. The
philosophy of freehold ownership of our assets is of huge benefit and the steps
we have taken over the past year means that we do not have a legacy of debts
and unpaid bills to deal with.
Real focus on our purpose, values and culture; maintaining the quality of our
approach; being creative and single minded in facing the inflationary threat;
and confidence in the strength of offering will mean that we will continue to
strive to be the best we can be and will grow the business for the future.
Financial Review
Results
Turnover for the year ended 31 March 2022 increased by 198% to £96.0m (2021: £
32.2m). An operating profit of £13.3m was made compared to an operating loss of
£9.4m in the prior year.
The measurement of the interest rate swaps at fair value resulted in a credit
to the profit and loss account of £3.8m (2021: £1.6m).
Profit before taxation for the year was £12.7m (2021: loss of £12.4m).
Business Review
The key issues facing the Group are covered in the Chairman's Statement and
Strategic Report. The KPIs used by the Group to monitor its overall financial
position can be summarised as follows:
2022 2021
Group £m £m
Turnover 96.0 32.2
EBITDA 20.1 (2.2)
Depreciation 6.8 7.2
Operating profit (loss) 13.3 (9.4)
Profit (loss) before tax 12.7 (12.4)
Net debt 61.6 78.8
Earnings (loss) per share (pence) 20.6 (17.8)
Pubs and Inns
£m £m
Turnover 52.1 19.0
EBITDA 18.8 5.4
Depreciation 3.2 3.5
Operating profit (before Group central charges) 15.6 1.9
Average number
Tenanted 219 226
Managed 14 12
Hotels & Spas
£m £m
Turnover 43.9 13.2
EBITDA 10.1 (1.0)
Depreciation 3.1 3.3
Operating (loss) profit (before Group central charges) 7.0 (4.3)
Average number 10 10
The principal non-financial indicators monitored by management are:
Pubs and Inns
Utility consumption, health and safety incidents, beer volumes, customer
ratings and tenant recruitment.
Hotels
Room occupancy rates, customer ratings, health and safety incidents, spa
memberships and wedding and event numbers.
Interest rate swaps measured at fair value
The Group has interest rate swaps for £55m which are recognised as a financial
liability. The recent increases in interest rates and expectations of further
increases led to a reduction in the fair value of the interest rate swaps,
which resulted in a credit to the profit and loss account for the year ended 31
March 2022 of £3.8m (2021: £1.6m).
Interest payable
Whilst loan capital has reduced from £78.5m at the start of the year to £67.0m
at the year end, increasing interest rates resulted in net interest payable
increasing slightly to £4.0m (2021: £3.9m).
Taxation
There is a tax charge of £0.6m on the profit for the year, an effective rate of
4.7% due to a credit to deferred tax in respect of the pension schemes.
Earnings per share
Earnings per share of 20.6p (2021: loss per share 17.8p).
Dividend
The last dividend paid by the Company was in January 2020, prior to the start
of the pandemic. As the performance of the business has recovered strongly over
the past year, the Board recommends a final dividend in respect of the year
ended 31 March 2022 of 2.2p per share.
Cash ?ow and ?nancing
The Group's net borrowing decreased by £17.2m, from £78.8m at 31 March 2021 to
£61.6m at 31 March 2022 due to the recovery of the business.
The Group has £45m of long-term debt, £22m of bank loans and cash balances of £
5.4m at 31 March 2022. The Group has three-year revolving credit bank
facilities which are due to be renewed in the first quarter of 2023, which is
less than 12 months from the date of the balance sheet. Consequently, bank
loans are shown within current liabilities at 31 March 2022.
Pensions
The Group made contributions to the defined benefit pension schemes of £1.2m
(2021: £0.4m). Whilst these schemes were closed in August 2009, the Group is
committed to the long-term funding of the schemes. At 31 March 2022 the schemes
had a combined surplus, before tax, of £10.1m which was a movement of £30.0m
from a deficit of £19.9m, before tax, at 31 March 2021.
The movement from deficit to surplus was due to an increase in the value of
scheme assets and a significant fall in liabilities due to increases in bond
yields.
Property
During the year we sold 15 pubs and our old brewery site for a total of £7.5m
generating a profit against book value, after disposal costs, of £1.0m.
In line with our accounting policy, 20% of our properties were subject to a
formal revaluation, and additionally an impairment review was carried out on
the rest of our property estate. This resulted in an increase in the total
value of our property portfolio of £1.9m, of which £2.2m was added to the
revaluation reserve and £0.3m deducted from cost and charged to the profit and
loss account.
Treasury policy and ?nancial risk management
Treasury policies are subject to Board approval. All borrowings are in sterling
and comprise a mixture of fixed interest loans and facilities carrying SONIA
related floating rates. The Group has interest rate swaps for £55m where it is
committed to pay the difference between SONIA and fixed interest rates. At 31
March 2022 a financial liability of £11.4m has been recognised in respect of
these interest rate swap contracts.
Going Concern
At 31 March 2022 the Company had total borrowing facilities of £83m, which were
made up of the long-term loan of £45m, revolving credit facilities of £35m, and
overdraft facilities of £3m. When compared to net debt of £61.6m at 31 March
2022, this gave headroom of £21.4m.
The Company has generated positive cashflows over the period, such that it has
reduced its net debt by £17.2m during the year and has comfortably met all of
its banking covenants. Its financial modelling shows that it is expected to be
cash generative and meet its banking covenants for at least the next twelve
months.
The revolving credit facilities are due to be renewed in the first quarter of
2023 and the Directors believe that this process will have a satisfactory
outcome.
The Directors therefore believe that the Company has the cash flows and
facilities to meet its needs for the foreseeable future.
Kevin Wood
Finance Director
14 June 2022
EXTRACT FROM AUDITED FULL FINANCIAL STATEMENTS FOR THE YEARED
31 MARCH 2022
GROUP PROFIT AND LOSS ACCOUNT
2022 2021
£'m £'m
Turnover 96.0 32.2
Cost of sales (72.7) (42.8)
Gross profit (loss) (10.6)
23.3
Distribution costs (3.3) (2.5)
Administrative expenses (9.4) (7.8)
Other operating income 1.7 11.3
Operating profit (loss) before 12.3 (9.6)
property disposals
Property disposals 1.0 0.2
Operating profit (loss) 13.3 (9.4)
Net interest payable (4.0) (3.9)
Gain on interest rate swaps
measured at fair value 3.8 1.6
Finance charge on pension (0.4) (0.7)
liability
Profit (loss) on ordinary (12.4)
activities before taxation 12.7
Taxation on profit (loss) for (0.6)
the year 1.9
Profit (loss) on ordinary (10.5)
activities after taxation 12.1
Earnings (loss) per
share
20.6p (17.8)p
DANIEL THWAITES PLC
GROUP BALANCE SHEET
At 31 March 2022 2022 2021
£'m £'m
___________________________________________________________________________ _______ _______
Fixed Assets
Tangible assets 292.9 291.0
Investments 0.6 0.6
___________________________________________________________________________ _______ _______
293.5 291.6
Current assets
Stocks 0.7 0.5
Trade and other debtors 5.5 10.4
Cash at bank and in hand 5.4 0.3
___________________________________________________________________________ _______ _______
Creditors due within one year 11.6 11.2
Trade and other creditors (20.6) (9.8)
Loan capital and bank overdraft
___________________________________________________________________________ (22.0) (11.6)
_______
_______
(21.4)
(42.6)
Net current liabilities (31.0) (10.2)
___________________________________________________________________________ _______ _______
Total assets less current liabilities 262.5 281.4
Creditors due after one year (60.0) (85.0)
___________________________________________________________________________ ______ _______
Net assets excluding pension asset (liability) 202.5 196.4
___________________________________________________________________________ _______ _______
Pension asset (liability) 10.1 (19.9)
___________________________________________________________________________ _______ _______
Net assets including pension asset (liability) 212.6 176.5
___________________________________________________________________________ _______ _______
Capital and reserves
Called up share capital 14.7 14.7
Capital redemption reserve 1.1 1.1
Revaluation reserve 75.1 74.8
Profit and loss account 121.7 85.9
___________________________________________________________________________ _______ ________
Equity shareholders' funds 212.6 176.5
___________________________________________________________________________ ________ ________
DANIEL THWAITES PLC
GROUP CASH FLOW STATEMENT
For the year ended 31 March 2022
2022 2021
£'m £'m
__________________________________________________________________________ _______ _______
Cash flow from operating activities 28.2 (5.4)
Tax received (paid) 1.4 (0.2)
Cash flow from financing activities (17.9) 6.9
Cash flow from investing activities (6.0) (1.7)
Equity dividends paid -
__________________________________________________________________________ _______ -
_______
Increase (decrease) in cash and cash equivalents 5.7 (0.4)
Cash and cash equivalents at beginning of year (0.3) 0.1
__________________________________________________________________________ _______ _______
Cash and cash equivalents at end of year 5.4 (0.3)
Loan capital (67.0) (78.5)
__________________________________________________________________________ _______ _______
Net debt (61.6) (78.8)
Reconciliation of net cash flow to movement in net debt
Increase (decrease) in cash (0.4)
5.7
Cash flow from decrease (increase) in debt (13.0)
___________________________________________________________________________ 11.5 _______
_______
(13.4)
17.2
Net debt at beginning of year (78.8) (65.4)
___________________________________________________________________________ _______ _______
Net debt at end of year (61.6) (78.8)
___________________________________________________________________________ ________ ________
END
(END) Dow Jones Newswires
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