TIDMYNGA
RNS Number : 1003P
Young & Co's Brewery PLC
24 May 2018
Young & Co.'s Brewery, P.L.C.
Preliminary results for the 52 weeks ended 2 April 2018
2018 2017
52 weeks 53 weeks %
GBPm GBPm change
-------------------------------------- --------- --------- -------
Revenue 279.3 268.9 +3.9
Adjusted operating profit(1) 46.9 46.1 +1.7
Operating profit 43.5 42.7 +1.9
Adjusted profit before tax(1) 41.0 40.4 +1.5
Profit before tax 37.6 37.0 +1.6
Net cash generated from operations 61.4 63.5 -3.3
Adjusted basic earnings per share(1) 67.74p 66.43p +2.0
Basic earnings per share 61.60p 61.51p +0.1
Dividend per share 19.61p 18.50p +6.0
(interim and recommended final)
Net assets per share(2) GBP11.24 GBP10.10 +11.3
-------------------------------------- --------- --------- -------
All of the results above are from continuing operations.
(1) Reference to an "adjusted" item means that item has been
adjusted to exclude exceptional items (see notes 3 and 4).
(2) Net assets per share are the group's net assets divided
by the shares in issue at the period end.
PERFORMANCE HIGHLIGHTS
(All numbers below on a comparable 52 week vs 52 week basis)
-- Another highly successful year, despite a challenging market
backdrop, with total revenue up 6.2% to GBP279.3m;
-- Managed house operations outperformed the sector once again
with revenues up 6.9% to GBP266.4 million, underpinned by
industry-leading like-for-like sales growth of 4.2%;
-- Like-for-like revenues at the Ram Pub Company up 1.6%;
-- Continued investment in future growth - GBP53.0m of
investment made during the year through acquisitions and upgrades
to our existing estate;
-- Highly cash generative, with operating cash flow of GBP61.4
million - net debt to adjusted EBITDA ratio is one of the lowest in
the sector at 2.0;
-- 21(st) consecutive year of dividend growth with a proposed
6.0% increase in final dividend to 10.20 pence, resulting in a
total dividend of 19.61 pence (2017: 18.50 pence);
-- Good start to the current financial year since the period
end; managed house revenue in the first seven weeks was up 11.0% in
total and up 7.5% on a like-for-like basis, despite very strong
comparatives.
Patrick Dardis, Chief Executive of Young's, commented:
"I am delighted with this strong set of results, delivered
against a challenging market backdrop, as they demonstrate the
benefit of our strategy of running a differentiated, premium and
well-invested pub estate in superb locations and with a highly
customer-centric approach.
"We have continued to invest in our future growth through a
combination of exciting acquisitions and investment in our existing
estate while also upgrading our technology to enhance the customer
experience and realise productivity gains.
"We've started the year well and, despite being up against very
strong comparatives in the previous year, managed houses revenue in
the first seven weeks was up 11.0% in total and up 7.5% on a like-
for-like basis.
"Although uncertainty prevails in both the political and
economic environment, we are confident that our strategy will
continue to deliver superior shareholder returns. I am a firm
believer that the traditional British pub will never go out of
fashion and, as a result, I'm both excited and optimistic about the
year ahead."
For further information, please contact:
Young & Co.'s Brewery, P.L.C. 020 8875 7000
Patrick Dardis, Chief Executive
Steve Robinson, Chief Financial Officer
MHP Communications 020 3128 8100
James White/Alistair de Kare-Silver/Robert
Collett-Creedy
PRELIMINARY RESULTS FOR THE 52 WEEKSED 2 april 2018
The prior period was a 53 week period but all figures below have
been adjusted by removing the final week of the last period to be
on a comparable 52 week basis unless specified.
I am very pleased to announce such a strong set of results. This
past year has been tough for our industry as a whole, but these
results are a testament to the quality of our incredible people who
bring our premium positioned pubs to life. These results
demonstrate that our strategy continues to deliver.
On a comparable 52 week basis, total revenue was up 6.2% to
GBP279.3 million, underpinned by an industry-leading managed house
like-for-like performance, enhanced by complementary, eye-catching
acquisitions. Through strong conversion, on a comparable 52 week
basis, profit before tax was up 5.4% to GBP37.6 million or up 4.8%
to GBP41.0 million once adjusted for exceptional items.
Managed house like-for-like sales in the period were up 4.2%,
representing the seventh consecutive year of delivering
like-for-like sales at the top end of the industry. Over the last
seven years, we've delivered increases of between 4.2% and
6.7%.
PROVEN TRACK RECORD DURING DIFFICULT TIMES
We have delivered these results against the challenges of
declining real wages, heightened food and energy costs and a
challenging economic environment. Our asset-backed, predominantly
freehold estate helps maintain our competitive advantage.
These macro challenges are on top of huge fixed cost increases
burdening the hospitality industry. I have previously stated my
view on business rates and will continue to appeal to the
Government to review and reverse recent unjustified increases.
These, combined with the introduction of the National Living Wage,
the Apprenticeship Levy and the most recent increases to pension
auto-enrolment, have created one of the most difficult business
environments I have ever experienced.
Given this backdrop, our financial performance is all the more
impressive and is further testament to our very clear strategy of
owning clearly differentiated, premium and well-invested pubs run
by talented and attentive people. Differentiation and the provision
of consumer experiences are critical to our success.
DevelopING growth opportunities
We have continued to execute our growth strategy through ongoing
investment in our existing estate and selective acquisitions.
Our estate now has 255 pubs, predominantly across London and
Southern England. Last November we acquired the iconic Smiths of
Smithfield ("Smiths") and its smaller sister site in Cannon Street,
which has just re-opened having been re-branded as the Candlemaker.
Smiths, a four storey Grade II listed building situated in the
vibrant Smithfield Market, offers a unique experience on each level
and has already achieved the highest weekly sales of any property
within our estate. Having recently completed a major refurbishment
project, we look forward to seeing the results.
Just before the financial year-end we increased the total number
of bedrooms in our hotel portfolio by 19.3% to 580 rooms through
the freehold acquisitions of the Park (Teddington) with 43 bedrooms
and the Bridge (Chertsey) with 51 rooms. The Park is a stunning
Victorian building dating back to 1866 and occupies a prominent
position in an affluent area within our own backyard. The Bridge,
anchored on the Thames riverbank, has strong business and leisure
guest appeal. We added two further freehold pubs through our
purchase of the Chequers (Hanham Mills, near Bristol) and the Old
Bear (Cobham), and one additional leasehold, the Bull
(Bracknell).
Following completion of its acquisition in May 2018, we are on
site at the Naturalist (Woodberry Down), our 11th Berkeley Group
pub. We are also poised to start fitting out our 12th in Kidbrooke
Village.
Within the existing estate, many opportunities remain. This
coming year's most exciting plan is a transformational development
at the King's Head (Islington) with its new dining room, events
space and a stunning roof terrace.
We also continue to invest in technology. By the end of this
summer all our pubs will have new till software that will allow us
to capitalise on greater sales opportunities and provide our
general managers and teams with enhanced tools to continue to
surprise and delight our customers. The new software will allow us
to interact with multiple third party providers; our own app,
"Young's On Tap", will also evolve to allow our customers to order
in advance and receive tailored rewards based on their unique
habits and preferences.
Through our carefully selected growth opportunities and
freehold-backed balance sheet, we are confident our strategy will
continue to deliver. The ongoing development of our people and
helping them achieve their full potential will create an even more
vibrant experience for our customers who are at the forefront of
everything we do.
PROGRESSIVE DIVID POLICY
Given these strong results, the board is delighted to recommend
our 21st consecutive annual dividend increase, by 6.0% again, to
10.20 pence. If approved by shareholders, this will result in a
total dividend for the year of 19.61 pence (2017: 18.50 pence). The
final dividend is expected to be paid on 12 July 2018 to
shareholders on the register at the close of business on 8 June
2018.
MANAGED HOUSES
Once again, our managed houses have performed at the top of the
pub sector, with strong revenue growth, up 6.9% to GBP266.4
million, underpinned by industry-leading like-for-like sales growth
of 4.2% (2017: 4.7%). Managed houses represent the vast majority of
our business and our managed estate now comprises 181 pubs
(including 25 hotels), an increase of eight pubs (including two
hotels) during the year, making up 95.4% of our total revenue.
Continuing to drive and challenge the pubs and their teams to
outperform the market is a relentless pursuit, but it's one that we
embrace wholeheartedly. Our longstanding record of consistently
raising the bar creates its own challenges, but our ambition and
work ethic gives us that extra spring in our step to continue to
excel.
REVENUE AND PROFITS
Revenue growth has been very consistent throughout the year.
Like-for-like sales were up 4.7% for the first seven weeks of the
year, up 4.6% for the first half, and we have now closed the year
with like-for-like sales up 4.2% despite the impact of the
exceptionally cold weather in late February and early March.
Drink sales have had a buoyant year, with the continued trend of
customers trading up to more premium products, further increasing
sales values. As a result, total drinks sales were up 7.9% and up
4.8% on a like-for-like basis.
Today's consumers are more knowledgeable and discerning, with
technology helping to fuel this. As a trend-setter, we continue to
evolve our market-leading drinks offering to stimulate the changing
nature of consumers' drinking habits. Keg ales are a fine example
of this, with consumers switching from traditional products to try
new keg beers such as Founders IPA, a beer for all occasions
naturally brewed in Michigan, and Beavertown Neck Oil, a punchy,
go-to beer. In total, sales of draught keg ale were up 28.1%,
taking share from other draught drinks.
Our cask-focussed, "local hero" programme continues to grow our
reputation both for being a stage to showcase the finest new brews
from gifted smaller entrepreneurial brewers and for having
discerning customers ready to discover them.
We are delighted to have extended our partnership with Berkmann
Wine Cellars, our sole wine and spirits supplier. During the past
two years, we've benefitted from their expertise, a wider range of
new world wines and a more engaged workforce through the jointly
run "Grape Masters" programme. Our customers have, in turn, enjoyed
the journey from traditional house wines to more complex grape
varieties, most recently the rosé revolution.
Spirit sales continued their resurgence, with volumes up 5.4%.
Gin sales have once again grown at over 20%, with continued
'premiumisation' and new craft gins coming to market. "Cucumber
currency" created a social media buzz which saw us working together
with Hendricks and Schweppes to celebrate the start of spring by
offering a G&T to customers in exchange for one thing and one
thing only: a cucumber. This fun initiative was well received by
our vegetable-bearing customers and the 3,416 cucumbers we
collected were donated to food banks the following day.
This was the year of the cocktail at Young's, in fact the year
of the 'Cocktail Collective', with astonishing sales growth of
46.1%, albeit from a low base. Leading the Collective, which
focusses on the quality, not quantity, of cocktails and the perfect
serve every time, has been Aperol Spritz, which has seen a boom of
88.9%.
While others have faltered in the current highly-competitive
eating-out market, our food sales remain robust. Sales were up 4.9%
in total and up 2.6% on a like-for-like basis, driven in particular
by good growth in our all-day brunch offer, our Sunday lunches and
our Burger Shack concept which is now across 35 sites.
All our pubs relaunched their individual food menus to attract
different audiences at different times, but with Britishness,
seasonal and fresh produce at the heart of each dish. Our Burger
Shack offering, including its little sister, 'Shack-in-a-Box',
benefitted from the additional openings made last year and is now
gaining industry accreditation, with one of our five burger
offerings, "The Streaky", being a finalist at the 2018 National
Burger Awards.
These initiatives in food and drink combine with an innovative
approach to create enhanced sales, for example during the winter,
sitting just 27 metres above sea level, the Devonshire (Balham)
invited customers to join them at the "Balham Peaks" après ski pop
up resort. Customers were treated to cosy cabins, Winter Negronis
and traditional proper pub grub.
Our hotel business continues to flourish, with sales up 4.7% on
a like-for-like basis. Occupancy rates were 74.7%, down by 0.2% on
the previous year, but RevPAR increased by GBP2.29 or 3.8% to
GBP63.15. Just before the year-end, we completed on two exciting
acquisitions that represent a real step change in our hotel
portfolio: the Park (Teddington) and the Bridge (Chertsey) have
together increased our room stock by 94 rooms or 19.3%.
Despite unfavourable cost headwinds such as the significant hike
in business rates, the second instalment of the National Living
Wage and the introduction of the Apprenticeship Levy, which in
total added over GBP4.0 million to our cost base, managed house
adjusted operating profit grew by 3.9% to GBP60.7 million.
INVESTMENT
During the year, we undertook some major purchases, openings and
transfers, all of which are unique in their own way yet still at
the premium end of the market. The highlights include:
-- Purchasing Smiths of Smithfield (Smithfield Market) which,
following its major refurbishment in April 2018, is looking better
than ever and is now our largest site by average weekly
turnover;
-- Relaunching and renaming the previous Smiths of Smithfield
site at Cannon Street as the Candlemaker;
-- Taking the Young's brand to new suburbs for our managed
houses by opening the Bull (Bracknell) and acquiring the Park
(Teddington);
-- Shifting our revenue mix by increasing our hotel presence
through the Park and the Bridge (Chertsey), both freeholds;
-- Capitalising on some of the growth opportunities that exist
within our Ram Pub Company by transferring the Hope and Anchor
(Brixton), King's Arms (Wandsworth) and the Lord Palmerston
(Tufnell Park) to our managed house estate; and
-- Acquiring the Chequers (Hanham Mills), a beautiful freehold
pub on the banks of the river Avon.
A common theme in all these acquisitions is their superb
locations which remains a fundamental factor in our investment
decisions.
During the course of the year, including acquisitions, we
invested GBP46.3 million in our managed estate.
Major development work was carried out at the Alexander Pope
(Twickenham), Betjeman Arms (St. Pancras), Brewers Inn
(Wandsworth), Duke of Clarence (Chelsea), Duke's Head (Putney),
Elgin (Ladbroke Grove), Mitre (Bayswater), Old Ship (Hammersmith),
Oyster Shed (Cannon Street), Plough (Beddington) and the Princess
of Wales (Clapton). The fresh botanical feel and "Juniper Terrace"
rooftop bar at the Spotted Horse (Putney) is proving a triumph with
its customers and was a finalist in the Casual Dining Awards 2018
for 'Best Designed Pub' of the year. We also secured the freehold
of the Phoenix (Chelsea), a pub that we previously leased.
CUSTOMER ENGAGEMENT
With two thirds of the UK population owning a smartphone and
almost 80% now buying goods or services online, today's consumers
want seamless interaction with technology that gives them a wide
range of choices while still remaining in complete control of their
own experiences.
With customer aspirations at the forefront of our minds, the
next stop on our digital journey has been to invest in a new
enhanced till system. In March 2018, we launched our first pilot
sites on this more interactive, intuitive system with an
infrastructure that connects with multiple third party platforms,
reflecting our belief that trading is only likely to become ever
more based on technology.
Young's On Tap, our own mobile app, has been available for
download for just over a year and I am pleased with the progress
we've made. We've had over 70,000 downloads and our "Appbassadors"
continue to promote usage and uptake. When the new till system is
fully up and running, Young's On Tap will, in time, go to the next
level, adding more content and functionality through online
ordering, enhanced booking capability and tailored customer
rewards.
All our pubs use a range of social media platforms to engage
with our customers through their favoured medium. A great example
is this year's #scotcheggchallenge (which was a cracking success in
its own right) - we reached over 1 million tweets, viewed more than
3.5 million times.
Delivering the ultimate pub experience to our customers every
time they visit us is at the core of everything we do. Our team
members, supported through hours of focussed training, live the
golden rules of service, built on the value of team work.
RAM PUB COMPANY
During the year we transferred three high turnover pubs to
managed houses to maximise their potential: the Hope and Anchor
(Brixton), the King's Arms (Wandsworth) and the Lord Palmerston
(Tufnell Park). Further transfer opportunities exist within the Ram
Pub Company which we will look to harvest when the time is right
for both us and our tenants.
We sold three pubs at the tail of the estate for combined
proceeds of GBP2.1 million: the Bell (Illminster), Court House
(Dartford) and the King's Arms (Epsom). In February 2018, we
acquired the Old Bear (Cobham), an attractive 16th century pub
situated in the heart of an affluent Surrey town.
As a result of the above movements, the Ram Pub Company ended
the year with 74 pubs, down from 79 in the previous year.
REVENUE AND PROFITS
In total, revenue within the Ram Pub Company was down 6.7% on a
comparable 52 week basis which is broadly in line with the net
reduction in pubs. However, on a like-for-like basis, revenue
growth was up a healthy 1.6%.
We offer a range of tenancy packages that differ in terms such
as length of lease and financial support. This year, we've
increased that support to a number of tenants, in turn reducing our
tenanted operating margins but with a view to igniting volume
growth.
On a like-for-like basis, adjusted operating profit was flat at
GBP4.4 million. Our average pub EBITDA was GBP80.8k (2017:
GBP80.8k), one of the highest in the sector.
The Ram Pub Company now represents 4.5% of our total revenue and
6.8% of adjusted operating profit at a pub level.
INVESTMENT
We welcomed the Old Bear (Cobham) and its tenant into the Ram
Pub Company flock following the purchase of this freehold pub.
Within our existing estate, we follow a structured and viable
investment programme to ensure that each tenanted pub is maintained
at an attractive standard to appeal to customers, current tenants
and future business partners.
In the past year we've completed major developments at the
Bristol Ram, Gardeners (Wandsworth), Grand Junction Arms
(Harlesden), Grove House (Camberwell), Heartbreakers (Southampton),
Prince William Henry (Southwark), Red Cow (Richmond) and the Robin
Hood (Sutton).
TENANT ENGAGEMENT
Our tenanted model is focussed upon developing and maintaining
businesses that offer a sustainable income for individual tenants
and sustainable profits for Young's. It's a partnership built on
trust and a common goal. Industry codes of practice mean that rents
can move down as well as up. Our entrepreneurial tenants, supported
by our own experienced in-house team, continue to operate bespoke
offerings, tailored to attract customers in the communities they
serve under the strapline "Everyone's local".
PROPERTY, TREASURY, GOING CONCERN, RETIREMENT BENEFITS,
EXCEPTIONAL ITEMS AND TAX
PROPERTY
Our balance sheet strength is underpinned by our predominantly
freehold estate in many highly desirable locations. 213 of our
total 255 pubs are freehold or long leaseholds with peppercorn
rents. Our total estate is now valued at GBP742.9 million (2017:
GBP689.1 million). The increased value has been driven by
acquisitions, major developments and improving existing pub values,
especially in our London heartland, assisted by our improving
trade.
Each year we undertake an exercise to revalue our pub estate to
reflect current market values. Savills, an independent and leading
commercial property adviser, revalued 20% of our estate, while an
internal review of the remaining 80% was led by Andrew Cox, MRICS,
our Director of Property and Tenancies. The valuation method used a
number of inputs of which the sustainable level of trade of each
pub is key. In accordance with International Financial Reporting
Standards, individual increases in value have been reflected in the
revaluation reserve in the balance sheet (except to the extent that
they had previously been revalued downwards) and individual falls
in value below depreciated cost have been accounted for through the
income statement. None of these adjustments have a cash impact.
The pub property market in London and the surrounding areas has
remained strong throughout the period, which, coupled with our
continued trading performance, has resulted in a net upward
revaluation movement of GBP29.5 million (2017: GBP22.6 million).
This is comprised of an upward movement of GBP29.2 million (2017:
GBP23.1 million) reflected in the revaluation reserve and a
reversal of a previously revalued downward movement of GBP0.3
million (2017: GBP0.5 million of downward movement) recognised in
the income statement under exceptional items.
TREASURY
We remain highly cash generative. Our operating cash flow was
GBP61.4 million (2017: GBP63.5 million) with our premium business
and predominantly freehold estate outperforming the market. The
slight decrease of GBP2.1 million in the period was caused by an
adverse movement in working capital.
Due to the increased acquisition activity and the larger
purchases all falling in the second half of the year, our net debt
has increased by GBP13.9 million to GBP140.5 million. Despite this
increased outlay, our net debt to adjusted EBITDA ratio remains
conservative and one of the lowest in the sector at 2.0 times
(2017: 1.9 times). Gearing is just 25.6% (2017: 25.7%).
GOING CONCERN
Our total facilities remain at GBP175 million, with nothing now
repayable until 2021. Of our drawn debt, 71.2% is on fixed interest
rates.
During the year, we refinanced a number of our banking
facilities and effectively extended their terms. In May 2017, we
borrowed GBP20 million over a seven year period (GBP10 million from
each of Barclays Bank plc and, a new lender to us, HSBC Bank plc)
to enable an equivalent sum to be repaid to the Royal Bank of
Scotland plc. In March 2018, we entered into a GBP75 million
revolving credit facility split evenly with Barclays and HSBC until
2023 with an option to extend through to 2025, to replace the
previous equivalent sum revolving credit facility with RBS and
Barclays.
Given these long-term facilities, our freehold estate,
significant free cash flow and the conservative financial ratios
above, we have prepared these financial statements on a going
concern basis.
RETIREMENT BENEFITS
We have a defined benefit pension scheme which has been closed
to new entrants since 2003. During the course of the year, our
pension and post retirement health care deficit has reduced by
GBP6.7 million to GBP6.1 million. Compared with last year, we have
witnessed a slight decrease in inflation and continued our
commitment with another year of special contributions, this time
totalling GBP1.2 million. We are committed to ensuring the pension
scheme is adequately funded.
EXCEPTIONAL ITEMS
The majority of the GBP3.4 million exceptional items expenditure
in the period relates to investment decisions to bring three
tenanted pubs into our managed house estate and to acquire new
businesses such as Smiths of Smithfield, the Park (Teddington) and
the Bridge (Chertsey). Acquisition costs associated with business
combinations have gone up as a result of increased activity this
year: GBP1.2 million (2017: GBP0.2 million).
From time to time, we believe that we can achieve greater
shareholder returns within our managed estate for certain pubs than
within the Ram Pub Company. When this happens, and when the time is
right for our tenants and us, we agree with the tenant the amount
of any compensation payable to terminate their lease agreements
early. This compensation is expensed under IFRS and has been
included within exceptional items.
The remaining exceptional items relate to a net increase in the
property valuation of our estate of GBP0.3 million, as mentioned
previously, along with a profit on disposal of a small number of
tenanted pubs of GBP0.3 million.
Last year's exceptional items included a GBP0.7 million loss
flowing from the expiry of our leases at Heathrow for the Three
Bells and the Five Tuns, with the majority reflecting the write-off
of goodwill recognised on the initial acquisition of Geronimo in
December 2010.
TAX
Our corporation tax charge for the year was GBP7.5 million
(2017: GBP7.0 million), with a fall of 0.5% pts in our effective
corporation tax rate for the year, adjusted for exceptional items,
to 19.3% mainly due to the decrease in the headline UK corporation
tax rate to 19.0%.
The group's tax strategy has been published on the Young's
website in accordance with recent UK tax law.
SHAREHOLDER RETURNS
Having started life in 1831, Young's is a long-standing business
and we are determined to continue our long-term, sustainable growth
story. We continue to deliver strong performances from our
developments, focussing on both immediate and maintainable
gains.
Our strong and sustainable cash flows support our acquisition
and development programs to maintain our pubs at the premium end of
the market, maximise future returns, maintain net debt at
acceptable levels and to continue our proud record of consecutive
dividend increases.
This year, we are pleased to recommend raising the annual
dividend for the 21(st) consecutive year, by 6.0% again, to 10.20
pence. If approved by shareholders, this represents a total
dividend for the year of 19.61 pence (2017: 18.50 pence),
representing a real income increase from Young's shares.
Our adjusted earnings per share now stands at 67.74 pence per
share, up 2.0%. On an unadjusted basis, earnings per share rose by
0.1% to 61.60 pence. These earnings per share figures result in a
healthy dividend cover of 3.5 times and 3.1 times respectively.
OUTLOOK
We have certainly enjoyed a couple of very warm and sunny weeks
recently. The first May Day Bank Holiday was a record breaker for
many of our garden and riverside pubs. A welcome boost at the start
of the new financial year, when we are up against very strong
comparatives in the previous year. Managed houses revenue in the
first seven weeks was up 11.0% in total and up 7.5% on a
like-for-like basis.
British consumers have had a tough time of late. However, things
are slowly beginning to look a little brighter with real wages now
increasing, the rate of inflation decreasing and unemployment
continuing to fall.
Our pub individuality, alongside our ability to give our
talented general managers the freedom and flexibility to continue
to innovate, is paramount to our continued success. Each general
manager shares the belief of making their pub "famous for" whatever
the community they serve requires, whether it be fabulous fish at
the Crown and Anchor (Chichester), award-winning steaks at the
Guinea (Mayfair) or continuing an association with a charity walk
launched in 1979 by a trio of regulars at the Nightingale
(Wandsworth).
This coming year, we face the second consecutive business rates
increase, this time c. GBP1.6 million (2018: GBP1.8 million).
Although we welcomed the Chancellor's announcement in the spring
statement to bring forward the next rates valuation, we were
disappointed that it didn't go far enough to modernise the method
of calculating business rates in this growing digital age.
Against cost pressures, we're confident that the investments
we've made during the past year will continue to propel us forward.
Our investment in our new till technology will create further
opportunities and bring productivity gains while our structured and
sustainable investment programme and acquisitions will bear fruit
in the coming year when we will see the full year benefit of Smiths
of Smithfield (Smithfield Market) and the recently renamed
Candlemaker (Cannon Street). We'll also benefit from a full year of
the three transfers made last year from the Ram Pub Company into
managed houses.
We still have plenty of opportunities to invest in our existing
estate and we will also start to see a good return from the
recently acquired Park (Teddington) and Bridge (Chertsey). Our new
pub the Naturalist (Woodberry Down) also opens its doors later in
the year. We are active in the acquisition market. Whilst we have
the necessary firepower thanks to our robust balance sheet, our
strict internal investment criteria remain: for us it's about
quality. We believe plenty of opportunities exist in our
sector.
Although uncertainty prevails in both the political and economic
environment, we are confident that our strategy of running
differentiated well-invested, individual, premium pubs in
high-demand locations will continue to deliver superior shareholder
returns. By remaining flexible in our offer and investing in our
people and technology, we will also continue to deliver outstanding
customer service. Together, these create a recipe where the
traditional British pub will never go out of fashion. As a result,
I'm both excited and optimistic about the year ahead.
Patrick Dardis
Chief Executive
23 May 2018
GROUP INCOME STATEMENT
For the 52 weeks ended 2 April 2018
2018 2017
52 weeks 53 weeks
Notes GBPm GBPm
---------------------------------------------- ------ --------- ---------
Revenue 279.3 268.9
Operating costs before exceptional items (232.4) (222.8)
---------------------------------------------- ------ --------- ---------
Operating profit before exceptional items 46.9 46.1
Operating exceptional items 3 (3.4) (3.4)
---------------------------------------------- ------ --------- ---------
Operating profit 43.5 42.7
Finance costs (5.6) (5.5)
Other finance charges (0.3) (0.2)
---------------------------------------------- ------ --------- ---------
Profit before tax 37.6 37.0
Taxation 5 (7.5) (7.0)
Profit for the period attributable to shareholders
of the parent company 30.1 30.0
------------------------------------------------------ --------- ---------
Pence Pence
------------------- ---- ------------ ------
Earnings per 12.5p ordinary share
Basic 7 61.60 61.51
Diluted 7 61.56 61.47
------------------- ---- ------------ ------
GROUP STATEMENT OF COMPREHENSIVE INCOME
For the 52 weeks ended 2 April 2018
2018 2017
52 weeks 53 weeks
Notes GBPm GBPm
-------------------------------------------------- ------ --------- ---------
Profit for the period 30.1 30.0
-------------------------------------------------- ------ --------- ---------
Other comprehensive income
Items that will not be reclassified subsequently to
profit or loss:
Unrealised gain on revaluation of property 8 29.2 23.1
Remeasurement of retirement benefit schemes 9 5.8 (7.7)
Tax on above components of other comprehensive
income (4.5) 1.2
Items that will be reclassified subsequently to profit
or loss:
Fair value movement of interest rate swaps 4.3 1.3
Tax on fair value movement of interest rate
swaps (0.7) (0.3)
-------------------------------------------------- ------ --------- ---------
34.1 17.6
-------------------------------------------------- ------ --------- ---------
Total comprehensive income for shareholders of the
parent company 64.2 47.6
---------------------------------------------------------- --------- ---------
GROUP BALANCE SHEET
At 2 April 2018
2018 2017
Notes GBPm GBPm
---------------------------------- ------ -------- --------
Non-current assets
Goodwill 19.7 19.9
Property and equipment 8 742.9 689.1
Deferred tax assets 6.4 7.4
Lease premiums 13.6 7.6
---------------------------------- ------ -------- --------
782.6 724.0
---------------------------------- ------ -------- --------
Current assets
Inventories 3.0 2.8
Trade and other receivables 7.0 7.2
Lease premiums 0.8 0.6
Cash 7.2 6.6
---------------------------------- ------ -------- --------
18.0 17.2
---------------------------------- ------ -------- --------
Assets held for sale - 1.3
---------------------------------- ------ -------- --------
Total assets 800.6 742.5
---------------------------------- ------ -------- --------
Current liabilities
Borrowings (10.0) (28.5)
Derivative financial instruments (1.9) (2.9)
Trade and other payables (30.9) (35.3)
Income tax payable (4.3) (4.7)
---------------------------------- ------ -------- --------
(47.1) (71.4)
---------------------------------- ------ -------- --------
Non-current liabilities
Borrowings (137.7) (104.7)
Derivative financial instruments (4.7) (7.9)
Deferred tax liabilities (54.6) (51.6)
Retirement benefit schemes 9 (6.1) (12.8)
Other liabilities (1.2) (1.1)
---------------------------------- ------ -------- --------
(204.3) (178.1)
---------------------------------- ------ -------- --------
Total liabilities (251.4) (249.5)
---------------------------------- ------ -------- --------
Net assets 549.2 493.0
---------------------------------- ------ -------- --------
Capital and reserves
Share capital 6.1 6.1
Share premium 5.7 5.2
Capital redemption reserve 1.8 1.8
Hedging reserve (5.2) (8.8)
Revaluation reserve 273.3 247.7
Retained earnings 267.5 241.0
---------------------------------- ------ -------- --------
Total equity 549.2 493.0
---------------------------------- ------ -------- --------
GROUP STATEMENT OF CASH FLOW
For the 52 weeks ended 2 April 2018
2018 2017
52 weeks 53 weeks
Notes GBPm GBPm
----------------------------------------------------- ------ --------- ---------
Operating activities
Net cash generated from operations 10 61.4 63.5
Tax paid (9.1) (7.6)
----------------------------------------------------- ------ --------- ---------
Net cash flow from operating activities 52.3 55.9
----------------------------------------------------- ------ --------- ---------
Investing activities
Sale of property and equipment 2.1 0.4
Purchases of property, equipment and lease premiums (30.4) (34.5)
Business combinations, net of cash acquired (23.0) (3.8)
----------------------------------------------------- ------ --------- ---------
Net cash used in investing activities (51.3) (37.9)
----------------------------------------------------- ------ --------- ---------
Financing activities
Interest paid (5.3) (5.7)
Issued equity - 0.2
Equity dividends paid 6 (9.3) (8.7)
Repayment of borrowings (20.0) (10.4)
Proceeds from borrowings 34.2 -
----------------------------------------------------- ------ --------- ---------
Net cash flow used in financing activities (0.4) (24.6)
------------------------------------------------------------- --------- ---------
Increase/(decrease) in cash 0.6 (6.6)
Cash at the beginning of the period 6.6 13.2
----------------------------------------------------- ------ --------- ---------
Cash at the end of the period 7.2 6.6
----------------------------------------------------- ------ --------- ---------
GROUP STATEMENT OF CHANGES IN EQUITY
At 2 April 2018
Capital
Share redemption Hedging Revaluation Retained Total
capital(1) reserve reserve reserve earnings equity
Notes GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------- ----------- ----------- -------- ------------ --------- -------
At 28 March 2016 10.2 1.8 (9.8) 224.6 225.7 452.5
Total comprehensive income
Profit for the period -
53 weeks - - - - 30.0 30.0
--------------------------------- ----------- ----------- -------- ------------ --------- -------
Other comprehensive income
Unrealised gain on revaluation
of property 8 - - - 23.1 - 23.1
Remeasurement of retirement
benefit schemes 9 - - - - (7.7) (7.7)
Fair value movement of interest
rate swaps - - 1.3 - - 1.3
Tax on above components
of other comprehensive income - - (0.3) 0.1 1.1 0.9
--------------------------------- ----------- ----------- -------- ------------ --------- -------
- - 1.0 23.2 (6.6) 17.6
--------------------------------- ----------- ----------- -------- ------------ --------- -------
Total comprehensive income - - 1.0 23.2 23.4 47.6
--------------------------------- ----------- ----------- -------- ------------ --------- -------
Transactions with owners recorded directly in equity
Share capital issued 1.1 - - - - 1.1
Dividends paid on equity
shares - - - - (8.7) (8.7)
Revaluation reserve realised
on disposal of properties - - - (0.1) 0.1 -
Share based payments - - - - 0.4 0.4
Tax on share based payments - - - - 0.1 0.1
--------------------------------- ----------- ----------- -------- ------------ --------- -------
1.1 - - (0.1) (8.1) (7.1)
--------------------------------- ----------- ----------- -------- ------------ --------- -------
At 3 April 2017 11.3 1.8 (8.8) 247.7 241.0 493.0
--------------------------------- ----------- ----------- -------- ------------ --------- -------
Total comprehensive income
Profit for the period -
52 weeks - - - - 30.1 30.1
--------------------------------- ----------- ----------- -------- ------------ --------- -------
Other comprehensive income
Unrealised gain on revaluation
of property 8 - - - 29.2 - 29.2
Remeasurement of retirement
benefit schemes 9 - - - - 5.8 5.8
Fair value movement of interest
rate swaps - - 4.3 - - 4.3
Tax on above components
of other comprehensive income - - (0.7) (3.5) (1.0) (5.2)
- - 3.6 25.7 4.8 34.1
--------------------------------- ----------- ----------- -------- ------------ --------- -------
Total comprehensive income - - 3.6 25.7 34.9 64.2
--------------------------------- ----------- ----------- -------- ------------ --------- -------
Transactions with owners recorded directly in equity
Share capital issued 0.5 - - - - 0.5
Dividends paid on equity
shares - - - - (9.3) (9.3)
Revaluation reserve realised
on disposal of properties - - - (0.1) 0.1 -
Share based payments - - - - 0.6 0.6
Tax on share based payments - - - - - -
Movement in shares held
by The Ram Brewery Trust
II - - - - 0.2 0.2
--------------------------------- ----------- ----------- -------- ------------ --------- -------
0.5 - - (0.1) (8.4) (8.0)
--------------------------------- ----------- ----------- -------- ------------ --------- -------
At 2 April 2018 11.8 1.8 (5.2) 273.3 267.5 549.2
--------------------------------- ----------- ----------- -------- ------------ --------- -------
(1) Total share capital comprises the nominal value of the share capital issued
and fully paid of GBP6.1 million (2017: GBP6.1 million) and the share premium
account of GBP5.7 million (2017: GBP5.2 million). Share capital issued in
the period comprises the nominal value of GBPnil (2017: GBPnil) and share
premium of GBP0.5 million (2017: GBP1.1 million).
1. Accounts
This preliminary announcement was approved by the board on 23
May 2018. The financial statements in it are not the group's
statutory financial statements. The statutory financial statements
for the period ended 3 April 2017 have been delivered to the
Registrar of Companies. The auditor has reported on those financial
statements and on the statutory financial statements for the period
ended 2 April 2018, which are expected to be delivered to the
Registrar of Companies shortly. Both audit reports were
unqualified, did not include a reference to any matters to which
the auditor drew attention by way of emphasis without qualifying
the reports and did not contain any statement under s.498(2) or (3)
of the Companies Act 2006.
The current period and prior period relate to the 52 weeks ended
2 April 2018 and the 53 weeks ended 3 April 2017 respectively. The
financial statements are presented in pounds sterling and all
values are rounded to the nearest hundred thousand (GBP0.1 million)
except where otherwise indicated.
This preliminary announcement has been agreed with the company's
auditor for release.
The audited financial information in this statement has been
prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted for use in the European Union. The
accounting policies used have been consistently applied and are
described in full in the statutory financial statements for the
period ended 2 April 2018, which are expected to be mailed to
shareholders on or before 13 June 2018. The financial statements
will also be available on the group's website,
www.youngs.co.uk.
2. Segmental reporting
The group is organised into the reporting segments referred to
below. These segments are based on the different resources and
risks involved in the running of the group. The executive board of
the group internally reviews each reporting segment's operating
profit or loss before exceptional items for the purpose of deciding
on the allocation of resources and assessing performance.
The group has three operating segments: Young's managed houses,
Geronimo managed houses and the Ram Pub Company. Both Young's and
Geronimo managed houses operate pubs. Revenue is derived from sales
of drink, food and the provision of accommodation. Due to common
economic characteristics, similar product offerings and customers,
the Young's managed houses and Geronimo managed houses operating
segments have been reported below as a single reportable segment:
managed houses. The Ram Pub Company consists of pubs owned or
leased by the company and leased or sub leased to third parties.
Revenue is derived from rents payable by, and sales of drink made
to, tenants. Unallocated relates to head office costs.
Total segment revenue is derived externally with no intersegment
revenues between the segments in either period. The group's revenue
is derived entirely from the UK.
Income statement Managed Ram Pub Segments Unallocated Total
houses Company total
2018 - 52 weeks GBPm GBPm GBPm GBPm GBPm
--------------------------------- --------- -------- --------- ------------ ---------
Total segment revenue 266.4 12.6 279.0 0.3 279.3
--------------------------------- --------- -------- --------- ------------ ---------
Operating profit/(loss) before
exceptional items 60.7 4.4 65.1 (18.2) 46.9
Operating exceptional items (4.0) 0.6 (3.4) - (3.4)
--------------------------------- --------- -------- --------- ------------ ---------
Operating profit/(loss) 56.7 5.0 61.7 (18.2) 43.5
--------------------------------- --------- -------- --------- ------------ ---------
2017 - 53 weeks
--------------------------------- --------- -------- --------- ------------ ---------
Total segment revenue 254.8 13.8 268.6 0.3 268.9
--------------------------------- --------- -------- --------- ------------ ---------
Operating profit/(loss) before
exceptional items 59.7 5.1 64.8 (18.7) 46.1
Operating exceptional items (4.7) 1.3 (3.4) - (3.4)
--------------------------------- --------- -------- --------- ------------ ---------
Operating profit/(loss) 55.0 6.4 61.4 (18.7) 42.7
--------------------------------- --------- -------- --------- ------------ ---------
The following is a reconciliation of the operating profit to the profit before
tax:
2018 2017
52 weeks 53 weeks
GBPm GBPm
--------------------------------- --------- -------- --------- ------------ ---------
Operating profit 43.5 42.7
Finance costs (5.6) (5.5)
Other finance charges (0.3) (0.2)
--------------------------------- --------- -------- --------- ------------ ---------
Profit before tax 37.6 37.0
------------------------------------------------------ --------- ------------ ---------
3. Exceptional items
2018 2017
52 weeks 53 weeks
GBPm GBPm
------------------------------------------------------------- --------- ---------
Amounts included in operating profit:
Upward movement on the revaluation of properties(1)
(note 8) 2.1 3.0
Downward movement on the revaluation of properties(1)
(note 8) (1.8) (3.5)
Tenant compensation(2) (2.8) (2.0)
Acquisition costs(3) (1.2) (0.2)
Goodwill disposal(4) - (0.7)
Net profit on sale of properties(5) 0.3 -
Loss on disposal of property(6) (0.5) -
Onerous lease provision released on disposal of property(6) 0.5 -
(3.4) (3.4)
------------------------------------------------------------- --------- ---------
Exceptional tax:
Tax attributable to above adjustments 0.4 0.1
Change in corporation tax rate - 0.9
0.4 1.0
------------------------------------------------------------- --------- ---------
Total exceptional items after tax (3.0) (2.4)
------------------------------------------------------------- --------- ---------
(1) The movement on the revaluation of properties is a non-cash
item that relates to the revaluation exercise that was completed
based on the period end date. The revaluation was conducted at an
individual pub level and identified an upward movement of GBP2.1
million (2017: GBP3.0 million) representing reversals of previous
impairments recognised in the income statement, and a downward
movement of GBP1.8 million (2017: GBP3.5 million), representing
downward movements in excess of amounts recognised in equity. These
resulted in a net upward movement of GBP0.3 million (2017: GBP0.5
million net downward) which has been recognised in the income
statement. The upward movement for the period ended 2 April 2018
was split between land and buildings of GBP0.3 million upward
(2017: GBP0.5 million downward) and fixtures and fittings of GBPnil
(2017: GBPnil).
(2) During the period, the group paid GBP2.8 million to the
previous tenants of the Hope & Anchor (Brixton), Grove
(Camberwell) and the King's Arms (Wandsworth), and in the prior
period, GBP2.0 million to the previous tenants of the Woolpack
(Bermondsey), in each case to terminate their lease agreement
early.
(3) The acquisition costs relate to the purchase of the Chequers
Inn (Hanham Mills), Smiths of Smithfield (Smithfield Market),
Smiths (Cannon Street), Park (Teddington) and the Bridge
(Chertsey). They include legal and professional fees and stamp duty
land tax. The prior period acquisition costs related to the
purchases of the Blue Boar (Chipping Norton) and the Riverstation
(Bristol).
(4) The prior period goodwill disposal was a non-cash item and
related to the Three Bells (Heathrow Airport) and the Five Tuns
(Heathrow Airport) whose leases expired during the prior period.
The Three Bells and Five Tuns formed part of the Geronimo group of
cash generating units (which are pubs under the Geronimo concept)
and fell within the Geronimo managed houses segment.
(5) The profit on sale of properties relates to the difference
between the cash, less selling costs, received from the sale of the
King's Arms (Epsom) and the carrying value of the assets on the
date of sale. In the prior period there was no profit or loss from
the sale of properties.
(6) The loss on disposal of properties relates to the difference
between cash, less selling costs, received from the sale of the
Court House (Dartford) and the carrying value of the net assets at
the date of sale. Previously an onerous lease was recognised in
respect of the property which was subsequently released on
disposal.
4. Other financial measures
The table below shows how adjusted group EBITDA, operating
profit and profit before tax have been arrived at. They exclude
exceptional items which due to their material or non-recurring
nature distort the group's performance. These alternative
performance measures have been provided to help investors assess
the group's underlying performance. Details of the exceptional
items can be seen in note 3. All the results below are from
continuing operations.
2018 - 52 weeks 2017 - 53 weeks
------------------------------------ ------------------------------------
Exceptional Exceptional
Unadjusted items Adjusted Unadjusted items Adjusted
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------ ----------- ------------ --------- ----------- ------------ ---------
EBITDA 65.0 3.7 68.7 63.6 2.9 66.5
Depreciation and net
movement on the revaluation
of properties (20.8) (0.3) (21.1) (20.3) 0.5 (19.8)
Amortisation of lease
premiums (0.7) - (0.7) (0.6) - (0.6)
------------------------------ ----------- ------------ --------- ----------- ------------ ---------
Operating profit 43.5 3.4 46.9 42.7 3.4 46.1
Net finance costs (5.6) - (5.6) (5.5) - (5.5)
Other finance charges (0.3) - (0.3) (0.2) - (0.2)
------------------------------ ----------- ------------ --------- ----------- ------------ ---------
Profit before tax 37.6 3.4 41.0 37.0 3.4 40.4
------------------------------ ----------- ------------ --------- ----------- ------------ ---------
5. Taxation
2018 2017
52 weeks 53 weeks
Tax charged in the group income statement GBPm GBPm
-------------------------------------------------------- --------- ---------
Current tax
Current tax expense 8.7 8.9
Adjustment in respect of current tax of prior periods - 0.2
-------------------------------------------------------- --------- ---------
8.7 9.1
-------------------------------------------------------- --------- ---------
Deferred tax
Origination and reversal of temporary differences (1.2) (0.7)
Change in corporation tax rate - (0.9)
Adjustment in respect of deferred tax of prior periods - (0.5)
-------------------------------------------------------- --------- ---------
(1.2) (2.1)
-------------------------------------------------------- --------- ---------
Tax expense 7.5 7.0
-------------------------------------------------------- --------- ---------
Deferred tax in the group income statement
-------------------------------------------------------- --------- ---------
Property revaluation and disposals (0.5) (1.4)
Capital allowances (0.9) (0.7)
Retirement benefit schemes 0.2 0.1
Share based payments - (0.1)
Tax credit (1.2) (2.1)
-------------------------------------------------------- --------- ---------
Deferred tax in the group statement of comprehensive income
------------------------------------------------------------------------------
Property revaluation and disposals 3.5 2.0
Retirement benefit schemes 1.0 (1.4)
Interest rate swaps 0.7 0.2
Change in corporation tax rate - (1.7)
-------------------------------------------------------- --------- ---------
Tax charge / (credit) 5.2 (0.9)
-------------------------------------------------------- --------- ---------
Changes to the UK corporation tax rate from 20% to 19%
(effective from 1 April 2017) and then to 17% (effective from 1
April 2020) were substantively enacted into law on 6 September
2016. Deferred tax balances that will be realised or settled
between 3 April 2018 and 1 April 2020 have been measured at 19%,
with the remainder re-measured at 17%.
6. Dividends on equity shares
2018 2017 2018 2017
52 weeks 53 weeks 52 weeks 53 weeks
Pence Pence GBPm GBPm
----------------------------------- --------- --------- --------- ---------
Final dividend (previous period) 9.62 9.07 4.7 4.4
Interim dividend (current period) 9.41 8.88 4.6 4.3
----------------------------------- --------- --------- --------- ---------
19.03 17.95 9.3 8.7
----------------------------------- --------- --------- --------- ---------
In addition, the board is proposing a final dividend in respect
of the period ended 2 April 2018 of 10.20 pence per share at a cost
of GBP5.0 million. If approved, it is expected to be paid on 12
July 2018 to shareholders who are on the register of members at the
close of business on 8 June 2018.
7. Earnings per ordinary share
(a) Earnings 2018 2017
52 weeks 53 weeks
GBPm GBPm
---------------------------------------------------------- ----------- -----------
Profit attributable to equity shareholders of the parent 30.1 30.0
Operating exceptional items 3.4 3.4
Tax attributable to above adjustments (0.4) (0.1)
Change in corporation tax rate - (0.9)
---------------------------------------------------------- ----------- -----------
Adjusted earnings after tax 33.1 32.4
---------------------------------------------------------- ----------- -----------
Number Number
---------------------------------------------------------- ----------- -----------
Basic weighted average number of ordinary shares in
issue 48,862,927 48,774,457
Dilutive potential ordinary shares from outstanding
employee share options 33,413 26,331
---------------------------------------------------------- ----------- -----------
Diluted weighted average number of shares 48,896,340 48,800,788
---------------------------------------------------------- ----------- -----------
(b) Basic earnings per share
Pence Pence
---------------------------------------------------------- ----------- -----------
Basic 61.60 61.51
Effect of exceptional items and other adjustments 6.14 4.92
---------------------------------------------------------- ----------- -----------
Adjusted basic 67.74 66.43
---------------------------------------------------------- ----------- -----------
(c) Diluted earnings per share
Pence Pence
---------------------------------------------------------- ----------- -----------
Diluted 61.56 61.47
Effect of exceptional items and other adjustments 6.13 4.92
---------------------------------------------------------- ----------- -----------
Adjusted diluted 67.69 66.39
---------------------------------------------------------- ----------- -----------
The basic earnings per share figure is calculated by dividing
the profit attributable to equity shareholders of the parent for
the period by the weighted average number of ordinary shares in
issue during the period.
Diluted earnings per share have been calculated on a similar
basis taking into account 33,413 (2017: 26,331) dilutive potential
shares under the SAYE scheme.
Adjusted earnings per share are presented to eliminate the
effect of the exceptional items and the tax attributable to those
items on basic and diluted earnings per share.
8. Property and equipment
Fixtures,
Land fittings
& &
buildings equipment Total
GBPm GBPm GBPm
------------------------------------------------------ ---------- ---------- -------
Cost or valuation
At 28 March 2016 623.8 118.8 742.6
Additions 9.4 25.0 34.4
Business combinations 3.0 0.8 3.8
Disposals (0.3) (0.2) (0.5)
Transfer out to assets held for sale (1.6) (0.3) (1.9)
Fully depreciated assets (6.5) (22.8) (29.3)
Revaluation(1)
-effect of upward movement in property valuation 27.0 - 27.0
-effect of downward movement in property valuation (7.5) - (7.5)
At 3 April 2017 647.3 121.3 768.6
Additions 9.3 20.7 30.0
Business combinations 12.7 3.5 16.2
Disposals (1.0) - (1.0)
Fully depreciated assets (0.7) (11.3) (12.0)
Transfers from lease premiums 0.4 - 0.4
Transfer in from subsidiary companies - - -
Revaluation(1) -
-effect of upward movement in property valuation 32.5 - 32.5
-effect of downward movement in property valuation (4.9) - (4.9)
------------------------------------------------------ ---------- ---------- -------
At 2 April 2018 695.6 134.2 829.8
------------------------------------------------------ ---------- ---------- -------
Depreciation and impairment
At 28 March 2016 38.9 53.9 92.8
Depreciation charge 1.6 18.2 19.8
Disposals - (0.1) (0.1)
Transfer out to assets held for sale (0.4) (0.2) (0.6)
Fully depreciated assets (6.5) (22.8) (29.3)
Revaluation(1)
-effect of downward movement in property valuation 3.6 - 3.6
-effect of upward movement in property valuation (6.7) - (6.7)
At 3 April 2017 30.5 49.0 79.5
Depreciation charge 1.8 19.3 21.1
Disposals - - -
Fully depreciated assets (0.7) (11.3) (12.0)
Transfers from lease premiums 0.2 - 0.2
Transfer in from subsidiary companies - - -
Revaluation(1) -
-effect of downward movement in property valuation 1.8 - 1.8
-effect of upward movement in property valuation (3.7) - (3.7)
------------------------------------------------------ ---------- ---------- -------
At 2 April 2018 29.9 57.0 86.9
------------------------------------------------------ ---------- ---------- -------
Net book value
At 28 March 2016 584.9 64.9 649.8
------------------------------------------------------ ---------- ---------- -------
At 3 April 2017 616.8 72.3 689.1
------------------------------------------------------ ---------- ---------- -------
At 2 April 2018 665.7 77.2 742.9
------------------------------------------------------ ---------- ---------- -------
(1) The group's net book value uplift during the period was
GBP29.5 million (2017: GBP22.6 million). This uplift was recognised
either in the revaluation reserve or the income statement, as
appropriate. The impact of the revaluations was as follows:
2018 2017
GBPm GBPm
---------------------------------------- ------ ------
Income statement
Revaluation loss charged as impairment (1.8) (3.5)
Reversal of past impairment 2.1 3.0
---------------------------------------- ------ ------
0.3 (0.5)
---------------------------------------- ------ ------
Revaluation reserve
Unrealised revaluation surplus 34.1 30.7
Reversal of past surplus (4.9) (7.6)
---------------------------------------- ------ ------
29.2 23.1
---------------------------------------- ------ ------
Net revaluation increase in property 29.5 22.6
---------------------------------------- ------ ------
9. Retirement benefit schemes
Movement in scheme deficits
in the period
2018 2017
Health Health
Pension care Pension care
scheme scheme Total scheme scheme Total
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------------- ---------- -------- -------- -------- ------- -------
Changes in the present value of the schemes are as follows:
Opening deficit (8.8) (4.0) (12.8) (2.2) (4.1) (6.3)
Current service cost (0.3) - (0.3) (0.3) - (0.3)
Contributions 1.3 0.2 1.5 1.5 0.2 1.7
Other finance charges (0.2) (0.1) (0.3) (0.1) (0.1) (0.2)
Remeasurement through other
comprehensive income 5.6 0.2 5.8 (7.7) - (7.7)
Closing deficit (2.4) (3.7) (6.1) (8.8) (4.0) (12.8)
----------------------------------- ---------- -------- -------- -------- ------- -------
10. Net cash generated from operations and analysis of net
debt
2018 2017
52 weeks 53 weeks
GBPm GBPm
---------------------------------------------------------------- --------- ---------
Profit before tax on continuing operations 37.6 37.0
Net finance cost 5.6 5.5
Other finance charges 0.3 0.2
---------------------------------------------------------------- --------- ---------
Operating profit on continuing operations 43.5 42.7
Depreciation 21.1 19.8
Amortisation of lease premiums 0.7 0.6
Goodwill impairment 0.2 0.7
Movement on revaluation of properties (0.3) 0.5
Net profit on sales of property (0.3) -
Loss on disposal 0.5 -
Difference between pension service cost and cash contributions
paid (1.2) (1.4)
Movement in other provisions 0.1 0.1
Share based payments 0.6 0.4
Movements in working capital
- Inventories (0.2) (0.3)
- Receivables 0.4 (0.8)
- Payables (3.7) 1.2
---------------------------------------------------------------- --------- ---------
Net cash generated from operations 61.4 63.5
---------------------------------------------------------------- --------- ---------
Analysis of net debt
2018 2017
GBPm GBPm
---------------------------------------------------------- -------- --------
Cash 7.2 6.6
Current borrowings - current borrowings and loan capital (10.0) (28.5)
Non-current borrowings - loan capital and finance lease (137.7) (104.7)
---------------------------------------------------------- -------- --------
Net debt (140.5) (126.6)
---------------------------------------------------------- -------- --------
11. Post balance sheet events
There were no post balance sheet events apart from the
acquisition of the Naturalist (Woodberry Down).
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR UOAWRWAAVUAR
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