Thwaites (Daniel) Plc Half-year Report
10 November 2023 - 8:00PM
UK Regulatory
TIDMTHW
INTERIM RESULTS FOR THE SIX MONTHSED 30 SEPTEMBER 2023
CHAIRMAN'S STATEMENT
OVERVIEW
The Company has turned in a solid performance over the last six months, a period
in which we have continued to operate in volatile markets with large swings in
our costs, particularly utility costs, increasing interest rates, embedded
inflation and pressure on people's discretionary spend.
RESULTS
Turnover for the half year was £60.3m, which is a 4% increase compared to
turnover last year of £57.9m.
An operating profit of £8.8m for the half year compares to £9.9m last year, the
drop being due to the impact of property disposals, on which we made a profit of
£0.2m in the period (2022: £1.3m). Underlying operating profit before the impact
of property disposals remained flat year on year at £8.6m.
Interest rates have continued to rise, and inflation has remained higher than
the Bank of England forecast in the Spring. It seems that we have entered a new
period where interest rates will remain higher than we have experienced during
the past decade reverting to the historic norm of a 3-5% rate band. Once again
this has had a positive impact on the mark to market fair value of our interest
rate swaps, resulting in a decrease in the provision of £2.1m at the half year
(2022: £7.6m), and this positive movement is shown in our profit and loss
account.
Net debt at 30 September 2023 was £70.6m (2022: £61.1m); an increase of £9.5m
compared to last year, and up from £66.7m at 31 March 2023. The business has
comfortable headroom against total banking facilities of £82m and is trading
well within it banking covenants.
PUBS AND INNS
The pubs got off to a strong start with some fine spring weather, although this
deteriorated with a terrible wet spell throughout July and August returning to a
glorious start to September, which overall has resulted in beer volumes down 1%
year on year, but ahead on contribution.
Our inns performed very strongly over the summer months with sales up 10% on
last year and profits up 12%. After a relatively quiet summer last year as
people opted for overseas holidays, this summer saw an improved staycation
market as cost pressures encouraged more people to opt for short breaks in the
UK and we have seen strong occupancy and room rate growth in our leisure
locations.
HOTELS & SPAS
The hotels & spas have delivered a steady growth in sales, which are up on a
like for like basis by 2% year on year, and with a close eye on their cost base,
particularly labour and utility costs, profits increased by 5%.
We have seen increased demand for rooms driving both occupancy and rate. Our gym
memberships have increased, but treatment sales have suffered slightly as
customers rein in their spending. After a bumper year for weddings in 2022
catching up after the pandemic, this summer saw a much lower number, which
impacted both food and drink sales, forward bookings for next year suggest that
the post pandemic boom in weddings is now behind us and we will revert to normal
numbers.
ACQUISITIONS, DEVELOPMENTS AND DISPOSALS
We have made no acquisitions during the period although we continue to look at
opportunities for high quality properties.
We closed Langdale Chase in September last year and embarked upon the
development and repositioning of this hotel, which we acquired in 2017, and is
situated on the banks of Lake Windermere. This has been a major undertaking and
a significant investment. I am pleased to say that it is due to reopen in
November 2023, largely on time and on budget and we believe that it will make a
real mark in its market once it is properly re-established.
We have also continued to divest of pubs that no longer suit our requirements
and sold six pubs and two ancillary properties in the period. We received total
proceeds from these disposals of £2.5m, making a profit on disposal of £0.2m.
EARNINGS PER SHARE
Earnings per share for the period is 11.2p per share, which compares to 22.6p
per share in 2022. The earnings per share benefitted in each year from mark to
market gains on our interest rate swaps. These gains are a result of the
increases in interest rates over the last eighteen months and reverse unrealised
losses on the swaps incurred in prior periods.
DIVID
The Board recommends an interim dividend of 0.85p per share (2022: 0.75p) to be
paid on 9 January 2024 to shareholders on the register on 8 December 2023.
CHANGE OF AUDITOR
The Board has conducted a review of the Group's audit arrangements and has
decided to appoint MHA Moore and Smalley to replace BDO LLP for the financial
year ending 31 March 2024.
SUMMARY AND OUTLOOK
The Company has a diversified property portfolio situated across much of
England, however it is not immune from the impact of international events. The
risk premium of shocks such as the war in Ukraine and recent developments in
Israel and Palestine continue to pose a sizeable threat to our input costs and
bring considerable volatility which is difficult to predict.
Furthermore, the government, whilst ostensibly saying that it wishes to control
inflation and support economic growth, is scheduled to withdraw the current
support on the overburden that pubs contribute to the government coffers in
respect of business rates in the spring. Such an increase can only be borne by
pubs increasing their prices at a time when it is unclear how much more the
customer will stand. This issue disproportionately affects the hospitality
industry at a time when it is already under stress and may lead to more pub
failures.
World events and the UK specific tax burden on pubs are not positive and mean
that we are cautious about how consumer spend will hold up over the next 6-12
months, with the media once more talking up a mild recession. However, so far
both we and the general economy have continued to grow our top line and navigate
the current cost and tax challenges, so we look forward with overall, albeit
tempered, optimism.
Richard Bailey
Chairman
10 November 2023
Profit and Loss Account for the six months ended 30 September 2023
Unaudited
Unaudited Audited
6 months 6
months 12 months ended
ended
ended 31 March
30 30
2023
September
September
2023
2022 £'m
£'m
£'m
Turnover 60.3
57.9 108.8
Operating profit before property disposals 8.6
8.6 10.9
Property disposals 0.2
1.3 1.4
______
______ ______
Operating profit 8.8
9.9 12.3
(2.6)
(2.0) (4.1)
Net interest payable 2.1
7.6 6.6
Gain on interest rate swaps measured at fair
value
Finance income on pension asset 0.2
0.2 0.3
______
______ ______
Profit on ordinary activities before taxation 8.5
15.7 15.1
Taxation (1.9)
(2.4) (2.2)
______
______ ______
Profit on ordinary activities after taxation 6.6
13.3 12.9
______
______ ______
Earnings per share 11.2 p
22.6 21.9 p
p
Balance Sheet as at 30 September 2023
Unaudited
Unaudited Audited
30 30
31
September
September March
2023 2022
2023
£'m £'m
£'m
Fixed assets 308.4 293.9
302.0
Tangible assets 0.7 0.6
0.8
Investments ______
______ ______
309.1 294.5
302.8
Current assets
Stocks 0.9 0.8
0.9
Trade and other debtors 7.3 8.0
5.9
Cash at bank and in hand 2.4 2.9
2.0
______
______ ______
10.6 11.7
8.8
Creditors due within one year
Trade and other creditors (20.6)
(21.9) (20.0)
Loan capital and bank overdraft -
(19.0) (1.7)
______
______ _____
Net current liabilities (20.6)
(40.9) (21.7)
(10.0)
(29.2) (12.9)
______
______ ______
Total assets less current liabilities 299.1 265.3
289.9
Creditors due after one year (73.0)
(45.0) (67.0)
Loan capital (9.5) (3.7)
(9.5)
Deferred tax (1.6) (2.8)
(3.6)
Interest rate swaps
______
______ ______
Net assets excluding pension asset (84.1)
(51.5) (80.1)
215.0 213.8
209.8
Pension asset 32.2 10.8
32.2
______
______ ______
Net assets including pension asset 247.2 224.6
242.0
______
______ ______
Capital and reserves
Called up share capital 14.7 14.7
14.7
Capital redemption reserve 1.1 1.1
1.1
Revaluation reserve 76.5 74.8
77.2
Profit and loss account 154.9 134.0
149.0
______
______ ______
Equity shareholders' funds 247.2 224.6
242.0
______
______ ______
NOTES:-
1.Basis of preparation
The interim accounts, which have not been audited, have been prepared on the
basis of the accounting policies set out in the Annual Report and Accounts for
the year ended 31 March 2023.
2.Taxation
The taxation charge is based on the estimated tax rate for the year.
This information was brought to you by Cision http://news.cision.com
https://news.cision.com/thwaites--daniel--plc/r/half-year-report,c3872918
The following files are available for download:
https://mb.cision.com/Main/22885/3872918/2420435.pdf DT Interim Report 2023
END
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