TIDMFSTA
RNS Number : 4511T
Fuller,Smith&Turner PLC
15 November 2023
STRICTLY EMBARGOED
UNTIL 7AM WEDNESDAY 15 NOVEMBER 2023
FULLER, SMITH & TURNER P.L.C.
("Fuller's", the "Company", or the "Group")
Financial results for the 26 weeks to 30 September 2023
Strong progress as revenues and profits continue to rise
Financial and Operational Highlights
Unaudited Unaudited Audited
26 weeks 26 weeks ended 53 weeks
ended 24 September ended
30 September 1 April
2023 2022 2023
GBPm GBPm GBPm
---------------------------- ------------- -------------- ---------
Revenue and other income 188.8 168.9 336.6
EBITDA(1) 34.8 28.9 51.8
Adjusted profit before
tax(2) 14.5 9.8 12.7
Statutory profit before
tax 14.9 10.7 10.3
Basic earnings per share(3) 17.65p 13.13p 12.98p
Adjusted earnings per
share(3) 17.16p 12.48p 16.10p
Dividend per share 6.63p 4.68p 14.68p
Net debt excluding lease
liabilities(4) 129.4 129.2 132.8
---------------------------- ------------- -------------- ---------
All figures above are from continuing operations.
1 Earnings before interest, tax, depreciation, amortisation,
profit on disposal of property, plant and equipment, and separately
disclosed items.
2 Adjusted profit before tax is the profit before tax excluding separately disclosed items.
3 Per 40p 'A' or 'C' ordinary share. Basic EPS is calculated
using earnings attributable to equity shareholders after tax
including separately disclosed items. Adjusted EPS excludes
separately disclosed items.
4 Net debt excluding lease liabilities comprises cash and
short-term deposits, bank overdraft, bank loans, debenture stock
and preference shares.
Financial and Operational Highlights (cont)
-- Revenue up 12% to GBP188.8 million (H1 2023: GBP168.9
million), driven by strong performances across the estate
-- Like for like sales in H1 up 12.7%, demonstrating market
outperformance, substantially ahead of the industry's Coffer CGA
Business Tracker
-- Adjusted profit before tax increased by 48% to GBP14.5
million (H1 2023: GBP9.8 million) - demonstrating strong profit
conversion despite inflationary challenges
-- Net debt is at GBP129.4 million (H1 2023: GBP129.2 million)
with cash used to enhance the estate and finance shareholder
returns
-- Interim dividend increased in line with earnings to 6.63p (H1
2023: 4.68p), representing a 42% increase on last year
-- Completed buy back of one million 'A' shares at an average
price of 580p, and today announcing our intention to buyback an
additional one million 'A' shares.
Strategic Highlights
-- An excellent customer experience, resulting in like for like
sales growth across all areas during the first half
o Food sales up 15.5%
o Drink sales up 10.9%
o Accommodation sales up 13.4%
-- Continuing to invest for the long-term
o Enhancing the estate with GBP9.0 million capital
investment
o Significant pipeline of investments planned
o Increased investment in our people, including new leadership
training programme for all general managers
o Deployment of numerous ESG initiatives as part of our Life is
too good to waste programme
-- Effective proactive portfolio management with 21 of 23 pubs
earmarked for transfer from managed to tenanted completed -
remaining sites will complete imminently
-- Further strengthening of the Balance Sheet, with reduced
leverage, and headroom for acquisitions to drive long-term
growth.
Current Trading
-- Like for like sales for the 32 weeks to 11 November 2023 up 11.7%
-- Primed for a strong Christmas with bookings already 11% ahead of prior year.
Chief Executive Simon Emeny said:
"We have had a strong start to the year - delivering excellent
financial results and building a superb platform for future growth.
While there are still a number of macro-economic elements to
navigate, certain external factors are moving in our favour with
office workers continuing to return to their desks and the City
becoming a seven day operation with increased leisure spend at the
weekend.
"There has been a welcome return of major events. Customers are
increasingly seeking premium experiences when they are spending
their money, and we have the benefit of the lucrative international
tourist trade to come with inbound tourism still below pre-covid
levels.
"These factors play to our strengths which, combined with our
teams' operational excellence, have resulted in our like for like
sales rising 12.7% from the prior year - outperforming the market
and well ahead of the industry's Coffer CGA Business Tracker. There
is demonstrable momentum and positivity in the business, we have an
amazing group of dedicated team members, excellent leaders, and a
keen focus on continuing to grow profitable sales using all the
levers available to us.
"We have continued with our strong progress since the period
end, with like for like sales for the first 32 weeks of the year
growing by 11.7%. Trading in the City continues to grow and
although we cannot rule out further tube or train strikes, we are
looking forward to a good Christmas with bookings currently 11%
ahead of last year.
"Our capital investment programme for the year will see us
undertaking a number of large projects across the estate during the
remainder of this financial year, enhancing our iconic pubs and
hotels. We will also continue to invest in further development for
our exceptional team members including the roll out of a new online
training platform, to support our face to face learning, that will
increase engagement.
"Fuller's has a long-term vision, strong values and a clear
strategy - all underpinned by our predominately freehold estate of
iconic pubs in fantastic locations. While there is still a
challenging economic environment to navigate, we have had a strong
first half and with exciting plans in the pipeline, we are looking
forward to the second half of the year with confidence."
-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
Forthcoming dates in the financial calendar:
Interim dividend payment: 2 January 2024
Trading update: 25 January 2024
Full year results announcement FY 2024: 13 June 2024
AGM: 23 July 2024
Half year results announcement FY 2025: 14 November 2024
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. Our purpose in life is
to create experiences that nourish the soul. Fuller's has 183
managed businesses, with 1,015 boutique bedrooms, and 193 Tenanted
Inns. The Fuller's pub estate stretches from Brighton to Birmingham
and from Bristol to the Greenwich Peninsula, including 163
locations within the M25. Our Managed Pubs and Hotels include
Cotswold Inns & Hotels - seven stunning hotels in the
Cotswolds, and Bel & The Dragon - six exquisite modern English
inns located in the Home Counties. In summary, Fuller's is the home
of great pubs, outstanding hospitality and passionate people, where
everyone is welcome and leaves that little bit happier than they
arrived.
Photography is available from the Fuller's Press Office on 020
8996 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 be available
from 12 noon on 15 November 2023.
FULLER, SMITH & TURNER P.L.C.
FINANCIAL RESULTS FOR THE 26 WEEKSED 30 SEPTEMBER 2023
CHAIRMAN'S STATEMENT
I am very pleased to report that your Company has made excellent
progress in the first half of the year. While the cost-of-living
crisis, train strikes and conflict across the globe runs on,
Fuller's continues to focus on the long-term - delivering growing
sales and profits and investing in our people, our properties and a
constantly evolving customer offer.
I am delighted to see all our key metrics heading in the right
direction. Revenues have risen by 12%, adjusted profit before tax
is up by 48%, and in order to rebalance the interim dividend as a
proportion of the total dividend, we have increased the interim
dividend payment by 42%, which also brings it closer to
pre-pandemic levels. Simon Emeny and the Executive Team are showing
strong leadership and the business is delivering across its
strategic pillars.
While we are in great shape, the hospitality industry as a whole
still needs the support of Government. Forthcoming changes to
business rates, including an inflation-linked rise in the
all-important business rates multiplier, will hit the industry hard
and while well-funded companies like Fuller's have the bandwidth to
withstand (albeit reluctantly) these increases, many will not. I
urge this Government - and any future incumbent - to consider the
important role that pubs play in delivering jobs and tax revenues,
and their key role in local communities and society as a whole.
One of the highlights of the first half of this financial year
was the promotion of our People & Talent Director, Dawn Browne,
to the Main Board in July. This was in recognition of the
importance of people to our business, and I am pleased to say she
is already making an excellent contribution. In addition, her team
has undertaken a number of initiatives around leadership training,
diversity and inclusion, recruitment, development and retention -
with labour turnover rates improving significantly.
We are also making good inroads in hitting our Net Zero target
by 2030. With a large number of small changes we have already
substantially reduced our operational emissions - aided by
switching to renewable energy sources - and the accompanying
savings in energy have been most welcome. It is in all our
interests to operate in a way that reduces our impact on resources
and on the planet and I look forward to seeing this work develop
further.
Finally, I would like to thank the amazing team of people that
work at Fuller's for their contribution to these results. They are
an inspiration from the bar to the boardroom and it is their joie
de vivre that continues to deliver for our customers, for their
colleagues, and for our shareholders.
DIVID
The Board is pleased to announce an interim dividend of 6.63p
(H1 2023: 4.68p) per 40p 'A' and 'C' ordinary share and 0.663p (H1
2023: 0.468p) per 4p 'B' ordinary share. This will be paid on 2
January 2024 to shareholders on the share register as at 15
December 2023. This payment equates to 85% of the 2019 interim
payment and continues our return to a progressive dividend
policy.
Michael Turner
Chairman
14 November 2023
CHIEF EXECUTIVE'S REVIEW
OVERVIEW
We have had a strong start to the year - delivering excellent
financial results and building a superb platform for future growth.
While there are still a number of macro-economic elements to
navigate, certain external factors are moving in our favour with
office workers continuing to return to their desks and the City
becoming a seven day operation with increased leisure spend at the
weekend.
There has been a welcome return of major events. Customers are
increasingly seeking premium experiences when they are spending
their money, and we have the benefit of the lucrative international
tourist trade to come with inbound tourism still below pre-covid
levels.
These factors play to our strengths which, combined with our
teams' operational excellence, have resulted in our like for like
sales rising 12.7% from the prior year, outperforming the market
and well ahead of the industry's Coffer CGA Business Tracker. There
is demonstrable momentum and positivity in the business, we have an
amazing group of dedicated team members, excellent leaders, and a
keen focus on continuing to grow profitable sales using all the
levers available to us.
While growing sales will generate profits in the near term, we
continue to invest in our long-term strategy - delighting our
customers, inspiring our people, enhancing our estate through
investment, staying one step ahead by constantly evolving our
business and owning our impact. This strategy is driven by the
Executive Team and we are confident that its successful execution
will deliver sustainable growth for the future.
TRADING UPDATE
During the first half, we have ensured that everything we do,
every decision we make, and every training course we deliver has
the customer at its heart. Irrespective of location, we target a
discerning consumer - and pride ourselves on delivering delicious
food, a first-class range of drinks, beautiful bedrooms and
outstanding hospitality, promoted using data from our digital
systems. This delights our customers, keeps them coming back for
more and takes market share from our competitors.
Giving our customers reasons to visit
As well as expecting an excellent offer as outlined above, the
desire for a premium experience is clear and customers are often
looking for that extra something to entice them to the pub. The
range of events that we now offer across the estate ensures that
our customers have more reasons to visit than ever. These include
joint activations with our suppliers, cultural events that bring
theatre, opera and even panto to the pub, and an increased focus on
ensuring the pub is the best place to watch live sport outside of
the stadium.
We use all the tools available to us to promote these activities
including geo and demographic targeted digital marketing with
compelling content, regular communication to our database of 1.7
million engaged customers, and in-pub point of sale to
cross-promote future offers and events. We know this is working
with pre-booked revenue for the half year rising by 9%.
Strong growth across food, drink and accommodation
We have been delighted to see like for like sales growth across
all three main revenue streams - food, drink and accommodation.
Food like for like sales have risen by 15.5% and drink by 10.9%.
Accommodation like for like revenue is up 13.4%, while RevPAR has
risen by 15% and Average Room Rate has increased to GBP129 (H1
2023: GBP117).
While always delicious, the menu across our varied estate is
carefully targeted towards the local market - and we have a
customer-driven approach to menu design. I am delighted to see
innovative new dishes being rolled out including an exciting
children's menu and a new brunch offer that is opening up an
additional trading day part in a number of sites.
We aim to provide flexibility within a framework for our
kitchens, allowing creativity in our food team and exciting options
that are tailored for the site, the kitchen and our customers.
Dishes are designed through a collaborative process involving
chefs, managers, the food team and our suppliers, and are supported
by new photography and targeted digital and social marketing,
designed to tempt and tantalise the tastebuds of new and existing
customers.
We continue to leverage the benefits of our long-term supply
agreement with Asahi, while also working with a wide range of other
suppliers across all drink segments. Our tie up with Mirabeau
delivered a real boost to rosé wine sales over the summer, adding
an incremental GBP1m of revenue. We outperform the market in sales
of beer and cider and are category leaders in cask ale - a position
we are aiming to emulate in wine, premium spirits and cocktails,
and this will be an area of development in the second half of the
year.
Accommodation continues to perform well and the new booking
engine we rolled out across our Fuller's sites with rooms, Bel
& The Dragon and Cotswold Inns & Hotels is delivering
further benefits around upselling and driving direct bookings -
which have increased by 18.6% against the prior year.
Investing for the future in our pubs and people
We are very proud of our premium position in the marketplace and
during the period we have invested GBP7.4 million across 80 Managed
Pubs and Hotels. We also completed major schemes at The Sanctuary
House Hotel and The Admiralty, which were started in the last
financial year.
During the first half, we added six new bedrooms to The Counting
House in Cornhill. This fantastic scheme is realising benefits with
the rooms opening in early October and achieving occupancy levels
of 95%. Post period end, we acquired the freehold of The Crown in
Islington, a pub we have operated for many years.
We have several large and exciting investment schemes scheduled
for the second half of the year. These include projects at The
Alice Lisle in Ringwood, The Head of the River in Oxford, The Manor
at Moreton-in-Marsh, The Forester in Ealing - which was a recent
Tenanted to Managed transfer - The Rising Sun in the New Forest and
The Pilot at Greenwich. We look forward to updating on these
investments at the full year.
I could not be prouder of the amazing teams that work in our
pubs and we have increased our training budget by 25% to continue
to invest in them. In the first half, we have delivered 2,059
training days, recruited 88 new apprentices, and started the roll
out of a new leadership development programme for all general
managers across the business. It is always rewarding to be
recognised by your peers and we are delighted to be shortlisted in
three categories in the forthcoming BII NITA training awards.
Ultimately, the success of our activities around recruitment and
development is measured in happiness, engagement and retention.
Having just completed our latest Happiness Index employee survey,
we are very pleased to be reporting an increase in participation
rates, happiness and engagement scores for the second year running.
Even more pleasing is that labour turnover rates are now below
pre-pandemic levels.
Life is too good to waste
Across the business, we have made excellent progress during the
half year across our Life is too good to waste programme. We
continue to deliver for our corporate charity, Special Olympics
Great Britain, and have raised over GBP122,000 for this excellent
cause in the first half.
I am very pleased with the progress we have made around the
diversity, equity and inclusion agenda too. We launched our
Inclusion Action Plan, completed inclusive leadership development
for all senior leaders and operations managers and rolled out
menopause training that was accessible to all those in the
business.
We are making headway on our route to Net Zero by 2030 for Scope
1 and 2 emissions and have had our near-term science-based
emissions reduction target for Scope 1, 2 and 3 approved by the
Science Based Targets initiative. Our work in this area is
underpinned by new systems of measurement including smart meters
and energy dashboards in all our Managed Pubs and Hotels. We now
have 11 fully electric kitchens in place, we've increased the
amount of cooking oil recycling that takes place, progressed
refillable water solutions and added 30kW solar panels to the roof
of Pier House (our support centre office), as well as a raft of
other solutions.
While doing the right thing for the planet, we have also seen a
decrease in gas usage of 8.5% and a reduction in electricity
consumption of 5% in the period, on top of substantial reductions
last year. We have been recognised for the work undertaken in this
area with a BII Sustainability Award and a Green Tourism Award for
five Fuller's sites with rooms, and all seven Cotswold Inns &
Hotels sites.
TENANTED INNS
It has been an excellent first half for the Tenanted Inns
division, which has delivered revenues of GBP16.3 million and
profits of GBP6.9 million. We have completed the transfer of 21 of
the 23 sites earmarked to move from Managed to Tenanted and the
last two transfers are imminent. Moving these 23 sites to the
Tenanted model is expected to add GBP1 million of incremental
profit contribution.
We continue to undertake joint schemes with our Tenants, with
the Company investing GBP1.6 million across 23 sites in the first
half. We now have 54 tenanted pubs operating with turnover based
contracts - which allows us to share in non-beer revenues.
Finally, we have improved our Tenanted website, specifically
improving the listings of pubs to let, and moved to a new
recruitment system. These elements in tandem have freed up
additional resource in the Tenanted team which will allow us to
further support Tenants on turnover agreements to grow their
businesses which is, of course, mutually profitable.
FINANCIAL REVIEW
Group revenue and other income increased by 12% to GBP188.8
million (H1 2023: GBP168.9 million) and adjusted profit has
increased by 48% to GBP14.5 million (H1 2023: GBP9.8 million).
Managed Pubs and Hotels revenue increased by 12% with like for
like sales up by 12.7% compared with the prior year. Operating
profit in Managed Pubs and Hotels increased from GBP18.0 million to
GBP25.4 million with operating margin improving from 11.7% to 14.7%
despite the continued inflationary environment. This improvement in
operating margin is through a focus on sales growth and operational
excellence.
Tenanted Inns revenue improved by 8% to GBP16.3 million (H1
2023: GBP15.1 million) and EBITDA increased to GBP8.3 million (H1
2023: GBP7.8 million). EBITDA margin slightly declined from 51.7%
to 50.9% largely due to one-off costs associated with the transfer
of sites from Managed Pubs and Hotels to Tenanted Inns.
The Group has unsecured banking facilities of GBP200 million,
split between a revolving credit facility of GBP110 million and a
term loan of GBP90 million. During the period, the Group agreed
with its lenders to extend these facilities for a further year
through to May 2027. The Group also has GBP26 million of
debentures, GBP6 million of which is due for repayment in December
2023 and will be repaid out of the Group's current facilities. The
Group's undrawn committed facilities at 30 September 2023 were
GBP86.5 million, with a further GBP10.2 million of cash held on the
balance sheet.
Net debt (excluding leases) was at GBP129.4 million (H1 2023:
GBP129.2 million) and was down GBP3.4 million from net debt at year
end. The Group has delivered on its capital allocation framework
through investment in the estate and returns to shareholders. A
total of GBP9.0 million was invested in the existing estate in the
period, a dividend of GBP6.1 million was paid to shareholders, and
GBP3.5 million was used for share buybacks as part of a one million
share buyback programme which completed in November.
The Group has continued to strengthen its Balance Sheet during
the period with a ratio of net debt to pro forma EBITDA reducing to
2.6 times (down from 3.0 times at year end) and significant
headroom on its facilities. This will be further boosted with the
sale of The Mad Hatter, Southwark, in July 2024 which will realise
GBP20 million in value.
Adjusted finance cost increased to GBP6.9 million (H1 2023:
GBP5.8 million) with average cost of borrowing increasing from 5.4%
to 7.6% due to the increase in Bank of England base rates. The
Group has a zero-premium cap and collar over GBP60 million of the
term facility. This instrument is in place for a three-year period
to September 2025 to hedge some of the variability in interest
rates. The Group sold a floor of 310bps and bought a cap of 500bps
which has given some protection from the Bank of England rate since
it increased to 525bps on 3 August 2023.
Separately disclosed items before tax were a credit of GBP0.4
million (H1 2023: GBP0.9 million credit) which principally consists
of a release of a VAT provision of GBP1.1 million on settlement of
a claim, GBP0.4m credit received as part settlement of an ongoing
legal claim, and GBP0.4 million interest credit on the Group's
pension surplus. Net of this is an impairment charge of GBP1.5
million recognised in relation to the write down of three
properties and one right-of-use asset to their recoverable
value.
Tax has been provided at an effective rate before separately
disclosed items of 28.3% (H1 2023: 21.4%). The increase in the
effective tax rate is mainly due to the increase in the corporation
tax from 19% to 25% which came into effect in April 2023. The main
driver of the increase in effective tax rate on adjusted profits
over the standard rate of tax is a result of non-deductible
depreciation on assets that do not qualify for capital allowances.
Disclosure on tax is set out in note 5.
The net impact of these items results in the basic earnings per
share increasing by 4.52p to 17.65p (H1 2023: 13.13p) and adjusted
earnings per share increasing by 4.68p to 17.16p (H1 2023:
12.48p).
The growth in earnings per share has enabled the Group to
declare an interim dividend of 6.63p (H1 2023: 4.68p), which is an
increase of 42% on last year, in line with the 38% increase in
adjusted earnings per share. In addition to the dividend, the Group
announced in July 2023 the intent to repurchase one million 'A'
ordinary shares, which it has just recently completed. Today, the
Group has announced its intention to buyback an additional one
million 'A' ordinary shares.
The surplus on the defined benefit pension schemes has decreased
by GBP1.5 million from the year end and is now showing an
accounting surplus of GBP13.1 million (1 April 2023: surplus
GBP14.6 million, 24 September 2022: surplus GBP20.4 million). This
is predominately as a result of a decrease in the fair value of
scheme assets from GBP113.4 million to GBP103.8 million. The
present value of the scheme liabilities also decreased due to an
increase in the discount rate from 4.75% to 5.60%. As the Group has
an unconditional right to refund under the pension trust deed, an
asset has been recognised at 30 September 2023.
CURRENT TRADING AND OUTLOOK
We have continued with our strong progress since the period end,
with like for like sales for the first 32 weeks of the year growing
by 11.7%. Trading in the City continues to grow and although we
cannot rule out further tube or train strikes, we are looking
forward to a good Christmas with bookings currently 11% ahead of
last year.
Our capital investment programme for the year will see us
undertaking a number of large projects across the estate during the
remainder of this financial year, enhancing our iconic pubs and
hotels. We will also continue to invest in further development for
our exceptional team members including the roll out of a new online
training platform, to support our face to face learning, that will
increase engagement.
Fuller's is a great company with a superb team of dedicated
people at all levels. We have a long-term vision, strong values and
a clear strategy and all of this is underpinned by our
predominately freehold estate of iconic pubs in fantastic
locations.
While there is still a challenging economic environment to
navigate, we have had a strong first half. With exciting plans in
the pipeline, we are looking forward to the second half of the year
with confidence.
Simon Emeny
Chief Executive
14 November 2023
Fuller, Smith & Turner P.L.C.
Condensed Group Income Statement
For the 26 weeks ended 30 September 2023
Audited - 53 weeks
Unaudited - 26 weeks ended Unaudited - 26 weeks ended ended
30 September 2023 24 September 2022 1 April 2023
--------------------------------------- --------------------------------------------------- -----------------------
Before Before Before
separately Separately separately Separately separately Separately
disclosed disclosed disclosed disclosed disclosed disclosed
items items Total items items Total items items Total
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------ ---- ---------- ------------------ ------- ---------- ------------------ ------- ---------- -------------- -------
Revenue 2 188.8 - 188.8 168.9 - 168.9 336.6 - 336.6
Operating
costs 3 (167.4) - (167.4) (153.3) (3.2) (156.5) (311.5) (14.2) (325.7)
------------ ---- ---------- ------------------ ------- ---------- ------------------ ------- ---------- -------------- -------
Operating
profit 21.4 - 21.4 15.6 (3.2) 12.4 25.1 (14.2) 10.9
Profit on
disposal of
properties 3 - - - - 4.4 4.4 - 11.8 11.8
Finance
costs 4 (6.9) 0.4 (6.5) (5.8) (0.3) (6.1) (12.4) - (12.4)
------------ ---- ---------- ------------------ ------- ---------- ------------------ -------
Profit
before tax 14.5 0.4 14.9 9.8 0.9 10.7 12.7 (2.4) 10.3
Tax 5 (4.1) (0.1) (4.2) (2.1) (0.5) (2.6) (2.9) 0.5 (2.4)
------------ ---- ---------- ------------------ ------- ---------- ------------------ ------- ---------- -------------- -------
Profit for
the
period/year 10.4 0.3 10.7 7.7 0.4 8.1 9.8 (1.9) 7.9
------------ ---- ---------- ------------------ ------- ---------- ------------------ ------- ---------- -------------- -------
Fuller, Smith & Turner P.L.C.
Condensed Group Income Statement (continued)
For the 26 weeks ended 30 September 2023
Unaudited - 26 weeks ended Unaudited - 26 weeks ended Audited - 53 weeks ended
30 September 2023 24 September 2022 1 April 2023
------------------------ ---- ---------------------------- ---------------------------- --------------------------
Note Adjusted Statutory Adjusted Statutory Adjusted Statutory
------------------------ ---- -------------- ------------ -------------- ------------ --------------- ---------
Earnings per share per
40p 'A' and 'C' ordinary
share Pence Pence Pence Pence Pence Pence
------------------------ ---- -------------- ------------ -------------- ------------ --------------- ---------
Basic 6 17.16 17.65 12.48 13.13 16.10 12.98
Diluted 6 17.14 17.63 12.42 13.07 16.07 12.96
Earnings per share per
4p 'B' ordinary share
------------------------ ---- -------------- ------------ -------------- ------------ --------------- ---------
Basic 6 1.72 1.77 1.25 1.31 1.61 1.30
Diluted 6 1.71 1.76 1.24 1.31 1.61 1.30
------------------------ ---- -------------- ------------ -------------- ------------ --------------- ---------
Fuller, Smith & Turner P.L.C.
Condensed Group Statement of Comprehensive Income
For the 26 weeks ended 30 September 2023
Unaudited Unaudited Audited
26 weeks ended 26 weeks ended 53 weeks ended
30 September 2023 24 September 2022 1 April 2023
GBPm GBPm GBPm
Note
---------------------------------------------------- ---- ------------------- ------------------- ----------------
Profit for the period/year 10.7 8.1 7.9
---------------------------------------------------- ---- ------------------- ------------------- ----------------
Items that may be reclassified to profit or loss
Net gains on valuation of financial assets and
liabilities 0.4 1.2 0.1
Tax related to items that may be reclassified to
profit or loss 5 (0.1) (0.3) -
---------------------------------------------------- ---- ------------------- ------------------- ----------------
Items that will not be reclassified to profit or
loss
Net actuarial (losses)/gains on pension schemes 11 (3.1) 4.8 (2.5)
Tax related to items that will not be reclassified
to profit or loss 5 0.8 (1.2) 0.6
---------------------------------------------------- ---- ------------------- ------------------- ----------------
Other comprehensive (expense)/income for the
period/year, net of tax (2.0) 4.5 (1.8)
---------------------------------------------------- ---- ------------------- ------------------- ----------------
Total comprehensive income for the period/year, net
of tax 8.7 12.6 6.1
---------------------------------------------------- ---- ------------------- ------------------- ----------------
Fuller, Smith & Turner P.L.C.
Condensed Group Balance Sheet
30 September 2023
Audited
Unaudited Unaudited At
At At 1 April
30 September 2023 24 September 2022 2023
Note GBPm GBPm GBPm
----------------------------------- ---- ------------------ ------------------ ---------
Non-current assets
Intangible assets 28.7 29.3 29.0
Property, plant and equipment 8 580.5 591.8 583.3
Investment properties 1.5 1.6 1.5
Other financial assets 0.5 1.0 0.1
Right-of-use assets 62.8 69.2 66.4
Retirement benefit obligations 11 14.5 22.0 16.1
----------------------------------- ---- ------------------ ------------------ ---------
Total non-current assets 688.5 714.9 696.4
----------------------------------- ---- ------------------ ------------------ ---------
Current assets
Inventories 4.0 4.3 4.2
Trade and other receivables 10.3 17.9 10.2
Current tax receivable - 0.1 0.7
Cash and short-term deposits 10 10.2 20.4 14.1
Total current assets 24.5 42.7 29.2
----------------------------------- ---- ------------------ ------------------ ---------
Assets classified as held for sale 9 7.0 8.3 7.0
----------------------------------- ---- ------------------ ------------------ ---------
Total assets 720.0 765.9 732.6
----------------------------------- ---- ------------------ ------------------ ---------
Current liabilities
Trade and other payables (49.3) (63.1) (54.6)
Current tax payable (0.5) - -
Provisions (0.5) (0.5) (0.5)
Borrowings 10 (6.0) - (6.0)
Lease liabilities 10 (4.8) (6.0) (4.8)
Total current liabilities (61.1) (69.6) (65.9)
----------------------------------- ---- ------------------ ------------------ ---------
Non-current liabilities
Borrowings 10 (133.6) (149.6) (140.9)
Lease liabilities 10 (64.0) (71.6) (67.0)
Retirement benefit obligations 11 (1.4) (1.6) (1.5)
Deferred tax liabilities (17.1) (16.4) (14.7)
Total non-current liabilities (216.1) (239.2) (224.1)
----------------------------------- ---- ------------------ ------------------ ---------
Net assets 442.8 457.1 442.6
----------------------------------- ---- ------------------ ------------------ ---------
Fuller, Smith & Turner P.L.C .
Condensed Group Balance Sheet (continued)
30 September 2023
Unaudited Unaudited Audited
At At At
30 September 24 September 1 April
2023 2022 2023
GBPm GBPm GBPm
---------------------- -------------- ------------- ---------
Capital and reserves
Share capital 25.4 25.4 25.4
Share premium account 53.2 53.2 53.2
Capital redemption
reserve 3.7 3.7 3.7
Own shares (24.8) (16.6) (21.3)
Hedging reserve 0.3 0.8 -
Retained earnings 385.0 390.6 381.6
----------------------- -------------- ------------- ---------
Total equity 442.8 457.1 442.6
----------------------- -------------- ------------- ---------
Fuller, Smith & Turner P.L.C.
Condensed Group Statement of Changes in Equity
For the 26 weeks ended 30 September 2023
Share Capital
Share premium redemption Own Hedging Retained
capital account reserve shares reserve earnings Total
Unaudited - 26 weeks ended 30 September 2023 GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------------------- -------- -------- ----------- --------- -------- --------- -------
At 1 April 2023 25.4 53.2 3.7 (21.3) - 381.6 442.6
-------------------------------------------- -------- -------- ----------- --------- -------- --------- -------
Profit for the period - - - - - 10.7 10.7
Other comprehensive expense for the period - - - - 0.3 (2.3) (2.0)
-------------------------------------------- -------- -------- ----------- --------- -------- --------- -------
Total comprehensive income for the period - - - - 0.3 8.4 8.7
Dividends (note 7) - - - - - (6.1) (6.1)
Shares purchased to be held in ESOT or as
treasury - - - (3.5) - - (3.5)
Share-based payment charges - - - - - 1.1 1.1
At 30 September 2023 25.4 53.2 3.7 (24.8) 0.3 385.0 442.8
-------------------------------------------- -------- -------- ----------- --------- -------- --------- -------
Unaudited - 26 weeks ended 24 September 2022
-------------------------------------------- -------- -------- ----------- --------- -------- --------- -------
At 26 March 2022 25.4 53.2 3.7 (16.6) (0.1) 383.6 449.2
-------------------------------------------- -------- -------- ----------- --------- -------- --------- -------
Profit for the period - - - - - 8.1 8.1
Other comprehensive income for the period - - - - 0. 9 3.6 4.5
-------------------------------------------- -------- -------- ----------- --------- -------- --------- -------
Total comprehensive income for the period - - - - 0. 9 11.7 12.6
Dividends (note 7) - - - - - (4.6) (4.6)
Share-based payment charges - - - - - 0.1 0.1
Tax charged directly to equity (note 5) - - - - - (0.2) (0.2)
At 24 September 2022 25.4 53.2 3.7 (16. 6 ) 0. 8 390.6 457 .1
-------------------------------------------- -------- -------- ----------- --------- -------- --------- -------
Fuller, Smith & Turner P.L.C.
Condensed Group Statement of Changes in Equity
For the 26 weeks ended 30 September 2023
Share Capital
Share premium redemption Own Hedging Retained
capital account reserve shares reserve earnings Total
Audited - 53 weeks ended 1 April 2023 GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------------- -------- -------- ----------- --------- -------- ----------- ---------
At 26 March 2022 25.4 53 .2 3.7 (16.6) ( 0. 1) 383.6 449.2
---------------------------------------- -------- -------- ----------- --------- -------- ----------- ---------
Profit for the year - - - - - 7.9 7. 9
Other comprehensive expense for the year - - - - 0. 1 (1.9) (1.8)
---------------------------------------- -------- -------- ----------- --------- -------- ----------- ---------
Total comprehensive income for the
period - - - - 0. 1 6.0 6.1
Shares purchased to be held in ESOT or
as treasury - - - (4.8) - - (4.8)
Shares released from ESOT and treasury - - - 0.1 - - 0.1
Dividends (note 7) - - - - - ( 7 .4) ( 7 .4)
Share-based payment credits - - - - - (0.4) (0.4)
Tax charged directly to equity (note 5) - - - - - (0.2) ( 0. 2)
At 1 April 2023 25.4 53.2 3.7 ( 21.3 ) - 381.6 442.6
---------------------------------------- -------- -------- ----------- --------- -------- ----------- ---------
Fuller, Smith & Turner P.L.C.
Condensed Group Cash Flow Statement
For the 26 weeks ended 30 September 2023
Audited
Unaudited Unaudited 53 weeks ended
26 weeks ended 26 weeks ended 1 April
30 September 2023 24 September 2022 2023
Note GBPm GBPm GBPm
------------------------------------------------------ ---- ------------------ ------------------ ----------------
Profit before tax 14.9 10.7 10.3
Net finance costs before separately disclosed items 4 6.9 5.8 12.4
Separately disclosed items 3 (0.4) (0.9) 2.4
Depreciation and amortisation 2 13.4 13.3 26.7
------------------------------------------------------ ---- ------------------ ------------------ ----------------
34.8 28.9 51.8
Difference between pension charge and cash paid (1.2) (1.1) (2.3)
Share-based payment charges 1.1 0.2 (0.4)
Change in trade and other receivables (1.0) (7.4) 2.5
Change in inventories 0.2 (0.7) (0.6)
Change in trade and other payables (3.4) 5.6 (3.0)
Cash impact of operating separately disclosed items 3 1.2 (0.3) (0.5)
------------------------------------------------------ ---- ------------------ ------------------ ----------------
Cash generated from operations 31 .7 25.2 47.5
Tax received - - -
------------------------------------------------------ ---- ------------------ ------------------ ----------------
Cash generated from operating activities 31.7 25.2 47.5
----------------
Cash flow from investing activities
Purchase of property, plant and equipment (9.0) (14.9) (30.7)
Sale of property, plant and equipment, investment
property and assets held for sale 0.1 6.7 16.0
------------------------------------------------------ ---- ------------------ ------------------
Net cash outflow from investing activities (8.9) (8.2) (14.7)
------------------------------------------------------ ---- ------------------ ------------------ ----------------
Cash flow from financing activities
Purchase of own shares (3.5) - (4.8)
Receipts on release of own shares to option schemes - - 0.1
Interest paid (5.1) (3.9) (8.7)
Preference dividends paid (0.1) (0.1) (0.1)
Equity dividends paid (6.1) (4.6) (7.4)
(Repayment)/drawdown of bank loans (7.0) 3.0 -
Payment of loan arrangement fees (0.4) (1.5) (1.5)
Surrender of leases 10 - (0.4) (2.1)
Principal elements of lease payments 10 (4.5) (4.7) (9.8)
------------------------------------------------------ ---- ------------------ ------------------ ----------------
Net cash outflow from financing activities (26.7) (12.2) (34.3)
------------------------------------------------------ ---- ------------------ ------------------ ----------------
Net movement in cash and cash equivalents 10 (3.9) 4.8 (1.5)
------------------------------------------------------ ---- ------------------ ------------------ ----------------
Cash and cash equivalents at the start of the period 14.1 15.6 15.6
------------------------------------------------------ ---- ------------------ ------------------ ----------------
Cash and cash equivalents at the end of the
period/year 10 10.2 20.4 14.1
------------------------------------------------------ ---- ------------------ ------------------ ----------------
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 26 weeks ended 30 September 2023
1. Half Year Report
Basis of Preparation
The half year financial statements for the 26 weeks ended 30
September 2023 have been prepared in accordance with the Disclosure
and Transparency Rules ("DTRs") of the Financial Conduct Authority
and with International Accounting Standard ("IAS") 34, Interim
Financial Reporting and should be read in conjunction with the
Annual Report and Financial Statements for the 53 weeks ended 1
April 2023.
The half year financial statements do not constitute full
accounts as defined by Section 434 of the Companies Act 2006. The
figures for the 53 weeks ended 1 April 2023 are derived from the
published statutory accounts. Full accounts for the 53 weeks ended
1 April 2023, including an unqualified auditor's report which did
not make any statement under Section 498 of the Companies Act 2006,
have been delivered to the Registrar of Companies.
The Directors have adopted the going concern basis in preparing
these accounts after assessing the Group's principal risks, which
are predominately the uncertainty over the UK economy and the cost
pressures impacting the UK from food inflation, rising staff costs
and utility prices and, in turn, the effect the cost-of-living
crisis is having on consumer spending. The Directors are confident
that the Group has sufficient liquidity to withstand these ongoing
challenges for the 12-month going concern assessment period to
November 2024 (the 'going concern period').
The continued uncertainty over the UK economy makes it difficult
to forecast the future financial performance and cash flows of the
Group. When assessing the ability of the Group to continue as a
going concern, the Directors have considered the Group's financing
arrangements, the pattern of trading in the first half of the
financial year, the possibility of further trading disruptions
caused by the tube and train strikes and the principal risks and
uncertainties as disclosed in the Group's latest Annual Report.
At 30 September 2023, the Group had a strong Balance Sheet with
92% of the estate being freehold properties along with available
headroom on undrawn facilities of GBP86.5 million and GBP10.2
million of cash resulting in net debt (excluding leases) of
GBP129.4 million. The Group has unsecured banking facilities of
GBP200 million, split between a revolving credit facility of GBP110
million and a term loan of GBP90 million. Under the facilities
agreement, the covenant suite (tested quarterly) consists of net
debt to adjusted EBITDA (leverage) and adjusted EBITDA to net
finance charges.
During the period, the Group agreed with its lenders to extend
these facilities for a further year through to May 2027. The Group
also has GBP26 million of debentures of which GBP6 million is due
for repayment in December 2023 and will be repaid out of the
Group's current facilities.
The Group has modelled financial projections for the going
concern period based upon two scenarios, the base case and the
severe but plausible ('downside case'). The base case is the Board
approved forecast for FY 2024 as well as the first eight months of
the FY 2025 plan which forms part of the Board approved three-year
plan. The base case assumes that costs will be impacted
predominately by the cost inflation currently seen. It also assumes
as a result of the continued cost of living challenges there will
be some impact on consumer confidence and hence volumes. Under this
scenario there would be liquidity headroom and all covenants would
be complied with for the duration of the going concern period.
The Group has also modelled a downside scenario whereby sales in
the Managed Division drop by c.4% from that assumed in the base
case and inflation continues at an even higher rate than in the
base case. The model still assumes that investment in the estate
will remain at the same levels as the base, that no further
disposals of properties will happen, and there is no reduction in
overhead spend. These are all mitigating factors that the Group has
in its control. Under this scenario the Group will still have
sufficient resources and headroom on its covenants throughout the
assessment period.
Given the uncertainties surrounding the UK economy, the Group
has also performed a reverse stress test to assess at which point
the Group would breach its covenants or not have sufficient
liquidity in the assessment period. The reduction in sales or
increase in costs to breach the covenant is thought to be too
remote that those scenarios are therefore considered
implausible.
The Directors have concluded that in both the base and downside
scenarios, the Group has sufficient debt facilities to finance
operations for the going concern assessment period and it would not
be in breach of any of its covenants and that the combination of
adverse events that would trigger a covenant breach are highly
unlikely at the current time.
After due consideration of the matters 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 to November
2024.
The half year financial statements were approved by the
Directors on 14 November 2023.
New Accounting Standards
The accounting policies adopted in the preparation of the half
year financial statements are consistent with those followed in the
preparation of the Group's annual consolidated financial statements
for the 53 weeks ended 1 April 2023. The Group has not early
adopted any standard, interpretation or amendment that has been
issued but is not yet effective.
Taxation
Taxes on income in the interim periods are accrued using the tax
rate that is expected to be applicable to total annual earnings for
the full year in each tax jurisdiction based on substantively
enacted or enacted tax rates at the interim date.
2. Segmental Analysis
Managed
Pubs Tenanted
Unaudited - 26 weeks ended and Hotels Inns Unallocated(1) Total
30 September 2023 GBPm GBPm GBPm GBPm
Revenue
---------------------------------------- ------------ -------- -------------- -----
Sales of goods and services 151.9 11.8 - 163.7
Accommodation income 19.8 - - 19.8
---------------------------------------- ------------ -------- -------------- -----
Total revenue from contracts
with customers 171.7 11.8 - 183.5
Rental income 0.8 4.5 - 5.3
---------------------------------------- ------------ -------- -------------- -----
Revenue 172.5 16.3 - 188.8
---------------------------------------- ------------ -------- -------------- -----
Segment result 25.4 6.9 (10.9) 21.4
Operating separately disclosed
items -
---------------------------------------- ------------ -------- -------------- -----
Operating profit 21.4
Net finance costs (6.5)
---------------------------------------- ------------ -------- -------------- -----
Profit before tax 14.9
---------------------------------------- ------------ -------- -------------- -----
Other segment information
Additions: property, plant and
equipment 6.4 1.7 0.1 8.2
Depreciation and amortisation 11.7 1.4 0.3 13.4
Impairment of property and right-of-use
assets 1.3 0.2 - 1.5
EBITDA 37.1 8.3 (10.6) 34.8
---------------------------------------- ------------ -------- -------------- -----
Managed
Pubs Tenanted
Unaudited - 26 weeks ended and Hotels Inns Unallocated(1) Total
24 September 2022 GBPm GBPm GBPm GBPm
Revenue
---------------------------------------- ------------ -------- -------------- -----
Sales of goods and services 135.2 10.8 - 146.0
Accommodation income 17.8 - - 17.8
---------------------------------------- ------------ -------- -------------- -----
Total revenue from contracts
with customers 153.0 10.8 - 163.8
Rental income 0.8 4.3 - 5.1
---------------------------------------- ------------ -------- -------------- -----
Revenue 153.8 15.1 - 168.9
---------------------------------------- ------------ -------- -------------- -----
Segment result 18.0 6.8 (9.2) 15.6
Operating separately disclosed
items (3.2)
---------------------------------------- ------------ -------- -------------- -----
Operating profit 12.4
Profit on disposal of properties 4.4
Net finance costs (6.1)
---------------------------------------- ------------ -------- -------------- -----
Profit before tax 10.7
---------------------------------------- ------------ -------- -------------- -----
Other segment information
Additions: property, plant and
equipment 12.9 2.0 0.1 15.0
Depreciation and amortisation 12.0 1.0 0.3 13.3
Impairment of property 2.7 - - 2.7
EBITDA 30.0 7.8 (8.9) 28.9
---------------------------------------- ------------ -------- -------------- -----
2. Segmental Analysis (continued)
Managed
Pubs Tenanted
Audited - 53 weeks ended and Hotels Inns Unallocated(1) Total
1 April 2023 GBPm GBPm GBPm GBPm
Revenue
------------------------------------- ----------- -------- -------------- --------
Sale of goods and services 271.6 21.2 - 292.8
Accommodation income 33.7 - - 33.7
------------------------------------- ----------- -------- -------------- --------
Total revenue from contracts
with customers 305.3 21.2 - 326.5
Rental income 1.5 8.6 - 10.1
------------------------------------- ----------- -------- -------------- --------
Revenue 306.8 29.8 - 336.6
------------------------------------- ----------- -------- -------------- --------
Segment result 30.0 13.2 (18.1) 25.1
Operating separately disclosed
items (14.2)
------------------------------------- ----------- -------- -------------- --------
Operating Profit 10.9
Profit on disposal of properties 11.8
Net finance costs (12.4)
------------------------------------- ----------- -------- -------------- --------
Profit before tax 10.3
------------------------------------- ----------- -------- -------------- --------
Other segment information
Additions: property, plant and
equipment 25.2 4.7 0.1 30.0
Depreciation and amortisation 23.4 2.3 1.0 26.7
Impairment of property, right-of-use
assets and goodwill 12.5 1.8 - 14.3
EBITDA 53.4 15.5 (17.1) 51.8
------------------------------------- ----------- -------- -------------- ------
1 Unallocated expenses represent primarily the salary and costs of central teams and management.
3. Separately Disclosed Items
Audited
Unaudited Unaudited 53 weeks ended
26 weeks ended 26 weeks ended 1 April
30 September 2023 24 September 2022 2023
GBPm GBPm GBPm
----------------------------------------------------------- ------------------- ------------------ ----------------
Amounts included in operating profit:
Reorganisation costs - (0.5) (0.5)
Impairment of properties, right-of-use assets and
intangible assets (1.5) (2.7) (14.3)
Insurance claim 0.4 - (0.2)
VAT provision release 1.1 - 0.8
Total separately disclosed items included in operating
profit - (3.2) (14.2)
Profit on disposal of properties - 4.4 11.8
Separately disclosed finance costs:
Finance credit on net pension surplus (note 11) 0.4 0.2 0.5
Finance charge on the write down of arrangement fees - (0.5) (0.5)
Total separately disclosed finance costs 0.4 (0. 3 ) -
----------------------------------------------------------- ------------------- ------------------ ----------------
Total separately disclosed items before tax 0.4 0. 9 (2.4)
----------------------------------------------------------- ------------------- ------------------ ----------------
Separately disclosed tax:
Profit on disposal of properties - (0.7) (1.0)
Change in tax rates - - 0.5
Other items (0.1) 0.2 1.0
----------------------------------------------------------- ------------------- ------------------ ----------------
Total separately disclosed tax (0.1) (0.5) 0.5
----------------------------------------------------------- ------------------- ------------------ ----------------
Total separately disclosed items 0.3 0.4 (1.9)
----------------------------------------------------------- ------------------- ------------------ ----------------
The impairment charge of GBP1.5 million (24 September 2022:
GBP2.7 million, 1 April 2023: GBP14.3 million) relates to the write
down of three properties and one right-of-use asset to their
recoverable value.
The insurance claim of GBP0.4 million relates to the part
settlement of a legal claim that the Group has brought against its
insurers in relation to the pandemic. The matter is still ongoing.
In the prior year ending 1 April 2023, GBP0.2m is the write off of
property, plant and equipment net of insurance monies claimed.
The VAT provision release relates to the unwind of a provision
on the settlement of a VAT claim.
The cash impact of operating separately disclosed items before
tax for the 26 weeks ended 30 September 2023 was GBP1.2 million
cash inflow (24 September 2022: GBP0.3 million cash outflow, 1
April 2023: GBP0.5 million cash outflow).
4. Finance Costs
Audited
Unaudited Unaudited 53 weeks ended
26 weeks ended 26 weeks ended 1 April
30 September 2023 24 September 2022 2023
GBPm GBPm GBPm
----------------------------------------------------------- ------------------- ------------------ ----------------
Finance costs
Interest income from financial assets 0.1 - 0.2
Interest expense arising on:
Financial liabilities at amortised cost - loans and
debentures (5.5) (4.2) (9.6)
Financial liabilities at amortised cost - preference shares (0.1) (0.1) (0.1)
Financial liabilities at amortised cost - lease liabilities (1.4) (1.5) (2.9)
----------------------------------------------------------- ------------------- ------------------ ----------------
Total finance costs before separately disclosed items (6.9) (5.8) (12.4)
Finance credit on net pension liabilities (note 11) 0.4 0.2 0.5
Finance charge on the write down of arrangement fees - (0.5) (0.5)
Total finance costs (6.5) (6.1) (12.4)
----------------------------------------------------------- ------------------- ------------------ ----------------
5. Taxation
Audited
Unaudited Unaudited 53 weeks ended
26 weeks ended 26 weeks ended 1 April
30 September 2023 24 September 2022 2023
GBPm GBPm GBPm
--------------------------------------------------- ------------------- ------------------ ----------------
Tax on profit on ordinary activities
Current income tax:
Current tax on profit for the period 1.2 0.5 -
Adjustment for current tax on prior periods - - -
--------------------------------------------------- ------------------- ------------------ ----------------
Total current income tax 1.2 0.5 -
--------------------------------------------------- ------------------- ------------------ ----------------
Deferred tax:
Origination and reversal of temporary differences 3.1 2.0 3.6
Adjustments for deferred tax on prior periods (0.1) 0.1 (1.2)
Total deferred tax 3.0 2.1 2.4
--------------------------------------------------- ------------------- ------------------ ----------------
Total tax charged in the Income Statement 4.2 2.6 2.4
--------------------------------------------------- ------------------- ------------------ ----------------
Analysed as:
Before separately disclosed items 4.1 2.1 2.9
Separately disclosed items 0.1 0.5 (0.5)
--------------------------------------------------- ------------------- ------------------ ----------------
Total tax charged in the Income Statement 4.2 2.6 2.4
--------------------------------------------------- ------------------- ------------------ ----------------
Tax relating to items (credited)/charged to the
Statement of Comprehensive Income
Deferred tax:
Valuation gains on financial assets and liabilities 0.1 0.3 -
Net actuarial (losses)/gains on pension scheme (0.8) 1.2 (0.6)
--------------------------------------------------- ------------------- ------------------ ----------------
Tax (credit)/charge included in the Statement of
Comprehensive Income (0.7) 1.5 (0.6)
--------------------------------------------------- ------------------- ------------------ ----------------
Tax relating to items charged directly to equity
Deferred tax:
Share-based payments - 0.2 0.2
Tax charge included in the Statement of Changes in
Equity - 0.2 0.2
--------------------------------------------------- ------------------- ------------------ ----------------
The taxation charge is calculated by applying the Directors'
best estimate of the annual effective tax rate to the profit for
the period/year.
6. Earnings Per Share
Audited
Unaudited Unaudited 53 weeks ended
26 weeks ended 26 weeks ended 1 April
30 September 2023 24 September 2022 2023
Continuing operations GBPm GBPm GBPm
------------------------------------------------------ ------------------ ------------------ ---------------
Profit attributable to equity shareholders 10.7 8.1 7.9
Separately disclosed items net of tax (0.3) (0.4) 1.9
------------------------------------------------------ ------------------ ------------------ ---------------
Adjusted earnings attributable to equity shareholders 10.4 7.7 9.8
------------------------------------------------------ ------------------ ------------------ ---------------
Number Number Number
------------------------------- ---------- ---------- ----------
Weighted average share capital 60,610,000 61,712,000 60,875,000
Dilutive outstanding options
and share awards 70,000 275,000 90,000
------------------------------- ---------- ---------- ----------
Diluted weighted average share
capital 60,680,000 61,987,000 60,965,000
------------------------------- ---------- ---------- ----------
40p 'A' and 'C' ordinary
share Pence Pence Pence
---------------------------- ----- ----- -----
Basic earnings per share 17.65 13.13 12.98
Diluted earnings per share 17.63 13.07 12.96
Adjusted earnings per share 17.16 12.48 16.10
Diluted adjusted earnings
per share 17.14 12.42 16.07
---------------------------- ----- ----- -----
4p 'B' ordinary share Pence Pence Pence
---------------------------- ----- ----- -----
Basic earnings per share 1.77 1.31 1.30
Diluted earnings per share 1.76 1.31 1.30
Adjusted earnings per share 1.72 1.25 1.61
Diluted adjusted earnings
per share 1.71 1.24 1.61
---------------------------- ----- ----- -----
For the purposes of calculating the number of shares to be used
above, 'B' shares have been treated as one-tenth of an 'A' or 'C'
share. The earnings per share calculation is based on earnings from
continuing operations and on the weighted average ordinary share
capital which excludes shares held by trusts relating to employee
share options and shares held in treasury of 2,843,217 (24
September 2022: 1,741,713, 1 April 2023: 2,134,152).
Diluted earnings per share is calculated using the same earnings
figure as for basic earnings per share, divided by the weighted
average number of ordinary shares outstanding during the period
plus the weighted average number of ordinary shares that would be
issued on the conversion of all the dilutive potential ordinary
shares into ordinary shares.
Adjusted earnings per share is 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. An adjusted earnings per share measure has been
included as the Directors consider that this measure better
reflects the underlying earnings of the Group.
7. Dividends
Unaudited Unaudited Audited
26 weeks 26 weeks 53 weeks
ended ended ended
30 September 24 September 1 April
2023 2022 2023
GBPm GBPm GBPm
----------------------------------- ------------- ------------- ---------
Declared and paid during the
period
Interim paid in the period for
2023 - - 2.8
Final dividend paid in the period
for 2022 - 4.6 4.6
Final dividend paid in period
for 2023 6.1 - -
Equity dividends paid 6.1 4.6 7.4
----------------------------------- ------------- ------------- ---------
Dividends on cumulative preference
shares (note 4) 0.1 0.1 0.1
----------------------------------- ------------- ------------- ---------
Pence Pence Pence
----------------------------------- ------------- ------------- ---------
Dividends per 40p 'A' and 'C'
ordinary share
declared in respect of the period
Interim 6.63 4.68 4.68
Final - - 10.00
----------------------------------- ------------- ------------- ---------
6.63 4.68 14.68
----------------------------------- ------------- ------------- ---------
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.
The Directors have declared an interim dividend for the 40p 'A'
ordinary shares and 40p 'C' ordinary shares of 6.63p (2023: 4.68p)
and 0.663p (2023: 0.468p) for the 4p 'B' ordinary shares.
8. Property, Plant and Equipment
Unaudited Unaudited Audited
26 weeks 26 weeks 53 weeks
ended ended ended
30 September 24 September 1 April
2023 2022 2023
GBPm GBPm GBPm
--------------------------------------- ------------- ------------- ---------
Net book value at start of period/year 583.3 592.7 592.7
Additions 8.2 15.0 30.0
Disposals (0.2) - (1.2)
Impairment loss net of reversals (1.1) (2.7) (13.4)
Transfers to assets classified
as held for sale - (3.9) (5.7)
Depreciation provided during
the period (9.7) (9.3) (19.1)
Net book value at end of period/year 580.5 591.8 583.3
--------------------------------------- ------------- ------------- ---------
During the 26 weeks ended 30 September 2023, the Group
recognised a charge of GBP1.1 million (24 September 2022: GBP2.7
million, 1 April 2023 : GBP13.4 million) in respect of the write
down in value of its properties to their recoverable value.
The Group considers each trading outlet to be a cash generating
unit ("CGU") and each CGU is reviewed at each reporting date for
indicators of impairment. In assessing whether an asset has been
impaired, the carrying amount of the CGU is compared to its
recoverable amount. The recoverable amount is the higher of its
fair value less costs to sell ("FVLCS") and its value in use.
The Group uses a range of methods for estimating FVLCS which
include applying a market multiple to the CGU EBITDA and, for
leasehold sites, present value techniques using a discounted cash
flow method.
For the purposes of estimating the value in use of CGUs,
management have used a discounted cash flow approach. The
calculations use cash flow projections based on the following plans
covering a four-year period.
The key assumptions used by management are:
-- A long-term growth rate of 2.0% (1 April 2023: 2.0%) was used
for cash flows subsequent to the four-year approved budget/forecast
period.
-- An EBITDA multiple is estimated based on a normalised trading
basis and market data obtained from external sources. This resulted
in an average multiple of 10.5x (freehold 11.8x) on the Managed
estate and 10.9x on the Tenanted estate.
-- The discount rate is based on the Group's weighted average
cost of capital, which is used across all CGUs due to their similar
characteristics. The pre-tax discount rate is 10.5% (1 April 2023:
10.3%).
Impairments are recognised where the property valuation is also
lower than the CGU's carrying value for those determined to be at
risk of impairment. This is measured as the difference between the
carrying value and the higher of FVLCS and its value in use. Where
the property valuation exceeds the carrying value, no impairment is
required.
8. Property, Plant and Equipment (continued)
The value in use calculations are sensitive to the assumptions
used. The Directors consider a movement of 1.5% in the discount
rate and 0.5% in the growth rate to be reasonable with reference to
current market yield curves and the current economic conditions.
The additional impairment/(reversal) is set out as follows:
GBPm
Increase discount rate by 1.5% 19.2
-------
Decrease discount rate by 1.5% (15.9)
-------
Increase growth rate by 0.5% (4.8)
-------
Decrease growth rate by 0.5% 5.2
-------
The additional CGUs that would need to be considered for
impairment would have their FVLCS determined in order to conclude
on whether an impairment is required. A general decrease in
property values across the portfolio would have a similar effect to
that set out above i.e. any reduction in property values would lead
to assets being at risk of impairment. In the current year, a
decrease of 5% in the FVLCS would have led to an additional
impairment of GBP2.8 million for the CGUs where recoverable amount
has been assessed on FVLCS.
9. Assets held for sale
Unaudited Unaudited Audited
26 weeks 26 weeks 53 weeks
ended ended ended
30 September 24 September 1 April
2023 2022 2023
GBPm GBPm GBPm
----------------------------------- ------------- ------------- ---------
Assets held for sale at the start
of the period/year 7.0 5.4 5.4
Assets disposed of during the year - (1.0) (3.7)
Assets transferred from property,
plant and equipment - 3.9 5.7
Impairment of assets - - (0.4)
----------------------------------- ------------- ------------- ---------
Assets held for sale at the end of
the period/year 7.0 8.3 7.0
----------------------------------- ------------- ------------- ---------
10. Analysis of Net Debt
At At
1 April Cash Non 30 September
Unaudited - 26 weeks 2023 flows cash(1) 2023
ended 30 September 2023 GBPm GBPm GBPm GBPm
---------------------------- -------- ------ -------- -------------
Cash and cash equivalents:
Cash and short-term
deposits 14.1 (3.9) - 10.2
---------------------------- -------- ------ -------- -------------
14.1 (3.9) - 10.2
---------------------------- -------- ------ -------- -------------
Financial liabilities
Lease liabilities (71.8) 4.5 (1.5) (68.8)
(71.8) 4.5 (1.5) (68.8)
Debt:
Bank loans(2) (119.4) 7.4 (0.1) (112.1)
Debenture stock (25.9) - - (25.9)
Preference shares (1.6) - - (1.6)
Total borrowings (146.9) 7.4 (0.1) (139.6)
----------------------------- -------- ------ -------- -------------
Net debt (204.6) 8.0 (1.6) (198.2)
----------------------------- -------- ------ -------- -------------
As of 30 September 2023, the Group has agreed a one-year
extension of its GBP200m unsecured facility from 27 May 2026 to 27
May 2027.
At At
Unaudited - 26 weeks 26 March Cash Non 24 September
ended 24 September 2022 flows cash(1) 2022
2022 GBPm GBPm GBPm GBPm
--------------------------- --------- ------ -------- -------------
Cash and cash equivalents:
Cash and short-term
deposits 15.6 4.8 - 20.4
--------------------------- --------- ------ -------- -------------
15.6 4.8 - 20.4
--------------------------- --------- ------ -------- -------------
Financial liabilities
Lease liabilities (80.7) 5.1 (2.0) (77.6)
(80.7) 5.1 (2.0) (77.6)
Debt:
Bank loans(2) (120.0) (1.5) (0.6) (122.1)
Debenture stock (25.9) - - (25.9)
Preference shares (1.6) - - (1.6)
--------------------------- --------- ------ -------- -------------
Total borrowings (147.5) (1.5) (0.6) (149.6)
--------------------------- --------- ------ -------- -------------
Net debt (212.6) 8.4 (2.6) (206.8)
--------------------------- --------- ------ -------- -------------
10. Analysis of Net Debt (continued)
At At
26 March Cash Non 1 April
Audited - 53 weeks 2022 flows cash(1) 2023
ended 1 April 2023 GBPm GBPm GBPm GBPm
--------------------------- --------- ------ -------- --------
Cash and cash equivalents:
Cash and short-term
deposits 15.6 (1.5) - 14.1
--------------------------- --------- ------ -------- --------
15.6 (1.5) - 14.1
--------------------------- --------- ------ -------- --------
Financial liabilities
Lease liabilities (80.7) 11.9 (3.0) (71.8)
(80.7) 11.9 (3.0) (71.8)
Debt:
Bank loans(2) (120.0) 1.5 (0.9) (119.4)
Debenture stock (25.9) - - (25.9)
Preference shares (1.6) - - (1.6)
--------------------------- --------- ------ -------- --------
Total borrowings (147.5) 1.5 (0.9) (146.9)
--------------------------- --------- ------ -------- --------
Net debt (212.6) 11.9 (3.9) (204.6)
--------------------------- --------- ------ -------- --------
1 Non-cash movements relate to the amortisation of arrangement
fees, arrangement fees accrued and movement in lease
liabilities.
2 Bank loans are net of arrangement fees and cashflows include the payment of arrangement fees.
11. Retirement Benefit Obligations
Unaudited Unaudited Audited
The amount included in the Balance At At At
Sheet arising from the Group's 30 September 24 September 1 April
obligations in respect of its 2023 2022 2023
defined benefit retirement plan GBPm GBPm GBPm
------------------------------------ ------------- ------------- --------
Fair value of Scheme assets 103.8 114.2 113.4
Present value of Scheme liabilities (90.7) (93.8) (98.8)
------------------------------------ ------------- ------------- --------
Surplus in the Scheme 13.1 20.4 14.6
------------------------------------ ------------- ------------- --------
The net position of the defined benefit retirement plan for the
26 weeks ended 30 September 2023 shows a surplus of GBP13.1
million. In accordance with IFRIC 14, the Group is able to
recognise an asset as it has an unconditional right to a refund of
any surplus in the event of the plan winding down.
Included within the total present value of Group and Company
Scheme liabilities of
GBP90.7 million (24 September 2022: GBP93.8 million, 1 April
2023: GBP98.8 million) are liabilities of
GBP1.4 million (24 September 2022: GBP1.6 million, 1 April 2023:
GBP1.5 million) which are entirely
unfunded. These have been shown separately on the Balance Sheet
as there is no right to offset the
assets of the funded Scheme against the unfunded Scheme.
Key financial assumptions used
in the valuation
of the Scheme
-------------------------------- ----------- --------- ---------
Rate of increase in pensions
in payment 3.25% 3.65% 3.20%
Discount rate 5.60% 5.20% 4.75%
Inflation assumption - RPI 3.25% 3.70% 3.20%
Inflation assumption - CPI (pre 2.35%/3.25% 2.8%/3.7% 2.3%/3.2%
2030/post 2030)
-------------------------------- ----------- --------- ---------
Mortality Assumptions
The mortality assumptions used in the valuation of the Scheme as
at 30 September 2023 are as set out in the financial statements for
the 53 weeks ended 1 April 2023.
Unaudited Unaudited Audited
At At At
30 September 24 September 1 April
2023 2022 2023
Assets in the Scheme GBPm GBPm GBPm
------------------------------ ------------- ------------- --------
Corporate bonds 43.5 19.8 56.4
Index linked debt instruments 30.4 18.6 28.7
Overseas equities 6.9 31.1 6.6
Alternatives 19.7 41.6 19.0
Cash 1.1 0.6 0.3
Annuities 2.2 2.5 2.4
------------------------------ ------------- ------------- --------
Total market value of assets 103.8 114.2 113.4
------------------------------ ------------- ------------- --------
11. Retirement Benefit Obligations (continued)
Unaudited Unaudited Audited
26 weeks 26 weeks 53 weeks
ended ended ended
30 September 24 September 1 April
2023 2022 2023
Movement in surplus during period GBPm GBPm GBPm
---------------------------------- ------------- ------------- ---------
Surplus in Scheme at beginning
of the period 14.6 14.3 14.3
Movement in period:
Net interest cost (note 3) 0.4 0.2 0.5
Net actuarial (losses)/gains (3.1) 4.8 (2.5)
Contributions 1.2 1.1 2.3
Surplus in Scheme at end of
the period 13.1 20.4 14.6
---------------------------------- ------------- ------------- ---------
On 1 January 2015 the plan was closed to future accruals.
12. Principal Risks and Uncertainties
In the course of normal business, the Group continually assesses
and takes action to mitigate the various risks encountered that
could impact the achievement of its objectives. Systems and
processes are in place to enable the Board to monitor and control
the Group's management of risk, which are detailed in the Corporate
Governance Report of the Annual Report and Financial Statements
2023. The principal risks and uncertainties and their associated
mitigating and monitoring controls which may affect the Group's
performance in the next six months are not substantially different
from those detailed on pages 34 to 39 of the Annual Report and
Financial Statements 2023, and are available on the Fuller's
website, www.fullers.co.uk.
The challenging economic environment within the UK and beyond
continues to impact many of our identified principal risks,
including increased inflationary pressure, supply chain uncertainty
and changes to consumer demand. The controls and mitigations we
have in place to address our risks remain effective in reducing the
impact on the business. We are well placed to withstand these
pressures and ultimately withstand long periods of uncertainty
through the strength of our Balance Sheet. Our strong financial
position supports our long-term strategy that focuses on ensuring
we develop and retain the best people, build strong relationships
with our suppliers and deliver a premium experience with the
agility to respond to both short and long-term changes in consumer
behaviour.
13. Shareholders' information
Shareholders holding 40p 'C' ordinary shares are reminded that
they have 30 days from 15 November 2023 should they wish to convert
those 'C' shares to 'A' shares. The next available opportunity
after that will be June 2024. For further details, please contact
the Company's registrars, Computershare, on 0870 889 4096.
14. Statement of Directors' Responsibilities
The Directors confirm, to the best of their knowledge, that this
condensed set of financial statements gives a true and fair view of
the assets, liabilities, financial position and profit or loss of
the issuer or the undertakings included in the consolidation as a
whole and has been prepared in accordance with IAS 34, Interim
Financial Reporting, as adopted by the United Kingdom. The interim
management report herein includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during
the first six months and their impact on the financial statements
and a description of the principal risks and uncertainties for the
remaining six months of the financial year
-- disclosure of material related party transactions in the
first six months and any material changes to related party
transactions.
By order of the Board
MICHAEL TURNER SIMON EMENY
CHAIRMAN CHIEF EXECUTIVE
14 NOVEMBER 202 3
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IR ZZMMMNDKGFZM
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