REG - Fuller,Smith &Turner - Financial results for the 53 weeks to 1 April 2023
15/06/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230615:nRSO7647Ca&default-theme=true
RNS Number : 7647C Fuller,Smith&Turner PLC 15 June 2023
15 JUNE 2023
FULLER, SMITH & TURNER P.L.C.
("Fuller's", the "Company", or the "Group")
Financial results for the 53 weeks to 1 April 2023
Return to strong like for like growth
Financial and Operational Highlights
53 weeks 52 weeks ended
ended 26 March
1 April
2023 2022
£m £m
Revenue and other income 336.6 253.8
EBITDA(1) 51.8 44.3
Adjusted profit before tax(2) 12.7 7.2
Statutory profit before tax 10.3 11.5
Basic earnings per share(3) 12.98p 11.59p
Adjusted earnings per share(3) 16.10p 9.79p
Dividend per share 14.68p 11.31p
Net debt excluding lease liabilities(4) 132.8 131.9
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. Adjusted EPS is calculated using
earnings attributable to equity shareholders after tax excluding separately
disclosed items. Basic EPS includes separately disclosed items.
4 Net debt excluding lease liabilities comprises cash and short-term
deposits, bank overdraft, bank loans, debenture stock and preference shares.
· Revenues grew 33% to £336.6 million (FY2022: £253.8 million) as
the business recovered from the impact of covid-related restrictions on trade
· Like for like sales in the year grew by 17.5% compared to prior
year, with Central London growing by 40.1%
· Adjusted profit before tax increased by 76% to £12.7 million
(FY2022: £7.2 million)
· Net debt at £132.8 million (FY2022: £131.9 million) with cash
generated by the business funding investment in the estate and returns to
shareholders
· Directors' valuation of the total property portfolio in May 2022
at £995.6 million, approximately £400 million above our current book value -
giving implied adjusted net asset value per share of £14.07
· Total dividend of 14.68p declared, representing a 30% increase on
last year
· Board to keep further share buybacks under review in line with
its capital allocation framework.
Strategic Highlights
· Clear long-term strategy, with all elements contributing to
growing sales momentum and profitability
· Maintained investment in the existing estate, with £25 million
invested in the period to enhance capital values and drive further growth
· Maximising our pubs' potential through proactive portfolio
management to ensure all pubs are operated to deliver a great customer
experience, while optimising our returns
o Three new pubs opened during the year - The Rising Sun in the New Forest,
The Willow in Bourton-on-the-Water, and The Queen's Arms at Heathrow Terminal
2
o Four pubs transferred from Managed operations to Tenanted Inns in the
year, with a further 23 identified, of which four transfers have already
completed
o Small number of pubs earmarked for disposal
o Sale agreed on The Mad Hatter, Southwark, which will realise £20 million
in value and a profit on disposal of £17 million
· Continued investment in our people to develop the leaders of the
future and deliver best in class service for our customers
· Dawn Browne, People & Talent Director, promoted to Main Board
from 3 July 2023
· Implementing a wide range of energy reduction initiatives as part
of our Life is too good to waste programme.
Current Trading
· Strong sales momentum with like for like sales for the 10 weeks
to 10 June 2023 up 13.9%
· Reopened The Admiralty, our iconic pub on Trafalgar Square,
following a major fire last July and completed £2.5 million refurbishment at
The Sanctuary House, near Westminster Abbey
· Low level of vacancies across the estate and strong pipeline of
home-grown General Managers
· Delivering on our long-term strategy, purpose and vision to grow
our business in a sustainable manner.
Chief Executive Simon Emeny said:
"We have made good progress in the last year, with continued investment in our
people and properties, providing the perfect post-covid springboard for the
future. Looking forwards, that future looks very positive. We continue to
build on our five strategic pillars, investing in the areas that have the
greatest impact on our business and growing our profitability. We live by our
values and our culture, and despite having had a lot to contend with over the
last year - with interruptions from tube and train strikes and high-cost
inflation in energy, food and wages - our teams across the estate are
successfully delivering experiences that nourish the soul.
"We are delighted that our sales momentum has continued into the new financial
year and like for like sales for the first 10 weeks are up 13.9%. Our recent
investments at The Willow in Bourton-on-the-Water, The Sanctuary House by
Westminster Abbey, and The Admiralty in Trafalgar Square are outperforming our
expectations, and we have exciting projects planned for this financial year at
The Counting House in the City, The Forester in Ealing, and The Rising Sun
near Bashley in the New Forest.
"I am more optimistic about the future than I have been since before the
pandemic. While the well-documented inflationary environment has been a
challenge, there are positive signs on the horizon. In addition, we are ever
hopeful of a resolution to the ongoing train strikes to allow us to further
benefit from the increasing numbers of office workers and international
tourists returning to the Capital.
"We have a clear pathway to further growth based on enhancing profitability
from our underlying business, proactively managing our property portfolio to
ensure we are getting the best returns and continuing to seek out appropriate
acquisitions.
"I am excited by the opportunities ahead, optimistic about the future, and
confident in our ability to deliver excellent service to our customers,
careers for our people and returns for our shareholders."
-Ends-
For further information, please contact:
Fuller, Smith & Turner P.L.C.
Simon Emeny, Chief Executive
020 8996 2000
Neil Smith, Finance Director
020 8996 2000
Georgina Wald, Corporate Comms
Manager
020 8996 2198
Instinctif Partners
Justine Warren
020 7457 2010
Notes to Editors:
Fuller, Smith & Turner PLC is the premium pubs and hotels business that is
famous for beautiful and inviting pubs with delicious fresh food, a vibrant
and interesting range of drinks, and engaging service from passionate people.
Our purpose in life is to create experiences that nourish the soul. Fuller's
has 200 managed businesses, with 1,024 boutique bedrooms, and 177 Tenanted
Inns. The estate is predominately located in the South of England (44% of
sites are within the M25) and stretches from our London heartland to the
Jurassic Coast via the New Forest. Our Managed Pubs and Hotels include
Cotswold Inns & Hotels - seven stunning hotels in the Cotswolds, and Bel
& The Dragon - seven 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 (mailto:pr@fullers.co.uk) .
This statement will be available on the Company's website, www.fullers.co.uk
(http://www.fullers.co.uk) . An accompanying presentation will be available
from 12 noon on 15 June 2023.
FULLER, SMITH & TURNER P.L.C.
FINANCIAL RESULTS FOR THE 53 WEEKS ENDED 1 APRIL 2023
CHAIRMAN'S STATEMENT
The 2020s is fast becoming the decade that has seen an unprecedented use of
the word unprecedented. A year ago, I reflected on the impact of the Omicron
variant on our business. Since then, the war in Ukraine has continued, food
and energy inflation, together with the cost of living in general, has
spiralled, we have seen strikes across a wide range of industries and we have
had three Prime Ministers, four Chancellors of the Exchequer and fiscal
statements that have taken the economy in all manner of directions.
Against this backdrop, your Company has delivered a good performance, and in
times of short-term upheaval, long-term businesses come into their own. The
Executive Team, under the leadership and guidance of Simon Emeny, is
implementing our strategic plan to return to pre-pandemic levels of
profitability and deliver long-term growth for the Company, our shareholders
and our team members.
With our clear purpose to create experiences that nourish the soul, and five
defined strategic pillars, our teams throughout the business understand the
role they play in our success and have the skill, motivation and dedication to
deliver it. Despite the twists and turns, the stops and starts, they have
continuously bounced back to delight their customers and deliver an
outstanding level of service. They are the heart and soul of Fuller's, and I
would like to thank each and every one of them for their loyalty and
commitment.
Underpinning our success is, and has always been, the strength of our
excellent, predominately freehold estate. We have always maintained that
operating both managed and tenanted models offers a wide range of benefits,
particularly around portfolio management. And while I am always proud of all
parts of the Fuller's business, I was particularly delighted to see the
Tenanted Inns team pick up the award for Best Tenanted Pub Company at this
year's Publican Awards.
We are seeing rising numbers of international tourists and ever more workers
returning to the City and this, combined with the actions we are taking as
part of the strategy to continue to improve profitability, gives me confidence
and optimism in the future.
As part of our ongoing succession planning, I am delighted to announce that
Dawn Browne has accepted our invitation to join the Board with effect from 3
July 2023. Dawn joined Fuller's in 2011 and, following roles in the Learning
& Development Team and a successful term as Head of Operations for the
City, has been our People & Talent Director since 2019. As a
people-centric business, and given her unique skillset, she has an important
role to play on the Board. Her in-depth knowledge of our team members,
alongside her operational experience, will provide invaluable insight. We also
look forward to her support to help us to drive and prioritise diversity and
inclusion and to provide visibility on matters around culture and
organisational change. I know her appointment will be received extremely well
by the business.
DIVIDEND
The Board is pleased to announce a final dividend of 10.0p (FY2022: 7.41p) per
40p 'A' and 'C' ordinary share and 1.0p (FY2022: 0.741p) per 4p 'B' ordinary
share, representing a year-on-year increase of 35%. This will be paid on 27
July 2023 to shareholders on the share register as at 23 June 2023. The total
dividend of 14.68p (FY2022: 11.31p) per 40p 'A' and 'C' ordinary share and
1.468p (FY2022: 1.131p) per 4p 'B' ordinary share represents a 30%
year-on-year increase and continues our return to a progressive dividend
policy.
Michael Turner
Chairman
14 June 2023
CHIEF EXECUTIVE'S REVIEW
OVERVIEW
We have made good progress in the last year, with continued investment in our
people and properties providing the perfect post-covid springboard for the
future. Looking forwards, that future looks very positive. We continue to
build on our five strategic pillars, investing in the areas that have the
greatest impact on our business and growing our profitability. We live by our
values and our culture, and despite having had a lot to contend with over the
last year - with interruptions from tube and train strikes and high cost
inflation in energy, food and wages - our teams across the estate are
successfully delivering experiences that nourish the soul.
There is clearly more to come too, as international tourism numbers continue
to rise, the rhythm of life grows louder across offices in our towns and
cities, and cost pressures stabilise. Ongoing rail strikes are unhelpful -
particularly in the Capital - but commuters are a resilient bunch and the
impacts, while detrimental financially, are thankfully short-lived. Most
importantly to Fuller's is that we have a long-term vision, continuing to
stick to the things we do best, and this is validated by our customers'
continued loyalty.
STRATEGIC REVIEW
We have forward momentum, a great team of people, we are already building on
the 33% rise in total sales last year and have started the new financial year
with excellent like for like growth. We will continue to achieve this through
our long-term strategy - delighting our customers, inspiring our people,
enhancing our estate, evolving our business and owning our impact. These
strategic pillars have not changed, and they provide a framework that allows
us to grow our business in a sustainable manner.
We are a proactive asset manager and have taken some significant portfolio
management decisions to evolve our estate, ensuring it remains fit for the
future. In order to improve and sustain returns in the long term, post year
end we identified 23 of our Managed Pubs to transfer across into our Tenanted
Inns division - four of which have moved across already. We have also taken
the opportunity to crystallise the value of The Mad Hatter in Southwark, which
we have contracted to sell as part of a larger property redevelopment, in a
sale that will deliver Fuller's £20 million in value on completion next year.
These funds, combined with our ambition to continue to build our business,
will allow us to grow both organically and through acquisition.
Like all businesses, margins have been increasingly squeezed due to cost
inflation, but we are addressing this through a programme of action focused on
delivering sales-led growth while keeping a tight rein on costs.
Delight our customers
We are confident that a trip to the great British pub will always be an
affordable luxury and part of our national psyche. But customers have a
choice, and they will choose to go to the pubs and hotels that deliver an
outstanding customer experience at a price the consumer sees as good value.
In recent years, we have put a lot of effort and emphasis on the entire
customer journey - starting with the digital touchpoints that attract the
customer, through the in-pub experience around choice, service delivery and
reasons to visit, and finishing with the correct level of follow up and future
contact.
We are reaping the rewards of the digital transformation project that
completed in the previous financial year, and which allows for easy, low cost
per customer communications to promote the great activities that take place in
our pubs. One of the activities that we will be looking at for the coming year
is to build our presence around a premium sport experience - which will
increase frequency of visit, spend per head and help acquire new customers.
We know that there is a demand for premium sports occasions - both in terms of
near-stadium packages such as at The Cabbage Patch and The Turk's Head, both
at Twickenham, and when watching live sport on the television. The pub is
always seen as the next best place to being in the stadium for major sporting
events and we will be giving our customers amazing hospitality, bookable
spaces, great menus and atmosphere to build on these lucrative occasions, in
collaboration with our drinks partners - particularly Asahi, who are one of
the main sponsors of this year's Rugby World Cup.
To stay ahead of the competition, we are also in the process of a farm to fork
project to ensure we keep our food offer fresh, interesting and relevant. This
process has included some extensive customer segmentation work, which will
further help us to ensure that we target the right offer, in the right style
of venue, to the right customer - driving sales and reducing the acquisition
and retention costs of new and existing customers.
Inspire our people
Hospitality is a people business and it is our amazing team members at the
front line that can make the biggest impact on our customers. They will only
deliver great service and an experience that nourishes the soul if they are
well-trained, highly motivated, happy and engaged.
During the last year, we have worked hard to ensure we are listening to our
teams across the business - so we were delighted that response rates and
levels of happiness and engagement rose when we conducted our second Happiness
Index survey. In addition, we received a plethora of individual comments and
suggestions - all of which have been read, recorded and collated into common
themes and, in turn, shared and discussed by the Executive Team so future
actions can be taken. This is only one strand of our listening strategy and is
supported by new forums for our General Managers, our Head Chefs and our
support centre team and regular catch-up sessions with Helen Jones, our
designated Non-Executive Director responsible for employee engagement.
During the year, we also had our largest graduation event for all those
undertaking development programmes, and our apprenticeship programmes - both
front of house and through our Chefs' Guild - continue to deliver excellent
results with 200 apprentices trained last year across six different
programmes, making full use of our Apprenticeship Levy. There is more to come,
with an anticipated 220 apprenticeships in the coming year, and I am delighted
to see more of our General Managers choosing to take on the LEAP programme
degree level apprenticeship. This investment in development, and in particular
leadership, will secure our future success.
Enhance our estate
Operating both Managed and Tenanted pubs has always been a key tenet of our
strategy. It allows us to holistically curate our pub estate, so we can
operate individual sites under the business model that works best for the pub
and its customers, best for the Company, and delivers the best return for our
shareholders.
Over the years, we have always moved sites between the two businesses, but
moves normally happen on an individual basis. Following 12 months of trading
free of restrictions, and in light of the changing economics of running a pub,
we undertook a detailed review of the estate post year end - particularly
around profitability within our managed framework - and, as a result, decided
to move 23 pubs into our Tenanted Inns division. Four of these transfers have
already happened, with the remainder due to take place in the coming weeks.
In line with our values, we put our people first, and the majority of team
members in the impacted pubs could either remain in situ with the new Tenant,
apply to take on the Tenancy for themselves, or move to another Fuller's
managed site.
During the year we decided to exit a small number of leasehold sites,
including The Ship at Borough and The Inn of Court at Holborn, and earmarked
for disposal a handful of pubs which no longer satisfy our internal returns
criteria. We have also decided to accept an offer of £20 million in value for
The Mad Hatter in Southwark, representing a significant premium above its net
book value of £2.7 million. This transaction is due to complete in summer
2024.
Supporting all of this activity is our continued commitment to maintaining
high standards in our existing estate and developing sites for the future.
This is reflected with three new openings during the year - The Rising Sun in
the New Forest, The Willow in the idyllic Cotswolds village of
Bourton-on-the-Water, and The Queen's Arms at Heathrow Terminal 2.
In addition, we continue to invest to enhance the core pub estate. We were
delighted to reopen The Admiralty - the iconic and only pub on Trafalgar
Square - following a £3.3 million rebuild after a major fire last summer -
and we recently completed a £2.5 million investment at The Sanctuary House,
near Westminster Abbey, reopening in time to welcome customers for King
Charles III's coronation.
Evolve our business
While we have a long-term strategy - we never stop monitoring trends, societal
changes, and the behaviour of existing and potential customers. Reacting to
those changes is imperative in delivering continued growth and this has been
reflected in the investments we made through our digital transformation
project and that we will make as we continually review and hone our food
offering.
In November, I was delighted to welcome Sam Bourke to the Executive Team as
Marketing Director. Sam has a long history in the hospitality sector having
previously worked for ETM, The Restaurant Group and Wasabi. Sam is already
adding value across the business with her drive, enthusiasm, and clear focus
on the key trading opportunities that will deliver strong sales for our pubs
and hotels.
As well as building on the opportunities provided through enhancing our
premium sports packages, the marketing team is also reviewing our kids' menus
and ensuring our family proposition is best in class. In addition, we are
looking to capitalise on trading opportunities during all parts of the day,
for example with an elevated and indulgent brunch offer.
The new Business Central finance system which was implemented in 2021 is
delivering high quality information that aids the decision-making process and
with finance, marketing and operations working in perfect harmony, we can make
successful decisions based on our knowledge of consumer trends, supported by
hard data, excellent supplier relationships, and outstanding operational
capability.
Own our impact - because Life is too good to waste
Sustainability and decisions around our people, the planet and our
communities, are at the heart of everything we do - and while doing things the
right way has always been a Fuller's value, it is now absolutely part of
business as usual.
We have a long-standing declared commitment to reach Net Zero by 2030 for our
operational emissions and by 2040 for our supply chain. We have made good
progress on our target to increase recycling and reuse, while driving down
single use items, and we continue to send zero waste to landfill. In addition,
we are currently rolling out a programme of sustainability champions to help
us embed best practice across the estate.
There are, of course, added benefits to our sustainability programme with
reductions in energy usage of 14% for gas and 13% for electricity. New
equipment in our pubs continually moves us away from gas and both The Queen's
Arms at Heathrow and The Admiralty are fully electric. Combined with the fact
that all our electricity is from renewable sources, that means these two pubs
are exclusively powered by zero carbon energy.
As well as our commitment to the environment, we continue to invest in our
diversity and inclusion programme, with all senior leaders undertaking
diversity and inclusion training. In a great example of creating a virtuous
circle, we are recruiting more team members with intellectual disabilities
through a programme supported by our corporate charity partner, Special
Olympics Great Britain. It is joined up thinking that helps a company of our
size punch far above its weight in this area.
TENANTED INNS
One of the highlights of the year was seeing our excellent Tenanted Team,
under the leadership of Iain Rippon, pick up the award for Best Tenanted and
Leased Pub Company (up to 500 sites) at this year's Publican Awards. It was
great recognition for the excellent work Iain and the team have done
supporting our Tenants, especially in the current inflationary cost
environment.
We have always seen the benefit of operating both managed and tenanted models.
The latter allows pubs to remain within the Fuller's estate but with lower
capex, lower costs and shared risk and reward, enabling the innovative,
entrepreneurial Tenants, which our pubs attract, to benefit from Fuller's
operational expertise and vice versa. The flexibility it facilitates to move
pubs between the models constantly proves useful to all parties and as well as
the obvious benefits of the 23 houses that are moving into the Tenanted
division, we see the benefits of moving in the other direction through sites
such as The George & Dragon in Westerham and The Plough at East Sheen.
It has been particularly rewarding to see the success of those pubs on
turnover linked agreements, where we have added additional marketing resource
to help our Tenants build their business and access the benefits that come
from also having a Managed estate. From Shakespeare and opera to panto, we can
give our Tenanted pubs access to revenue building reasons to visit.
Finally, it is training that is the key to running successful tenancies. At no
cost to our Tenants, this currently includes a Fuller's induction day,
covering the basics and introductions to key support team members, social
media and marketing courses delivered locally, bespoke training for turnover
agreement pubs, personal licence courses, a business development day held by a
third-party trainer, and full access to the suite of FLOW online training. We
also run an excellent cellar course at the Fuller's Brewery through our
long-term supply agreement with Asahi.
FINANCIAL REVIEW
Income statement
Group revenue increased by 33% to £336.6 million (FY2022: £253.8 million).
Both financial years had periods when trade was disrupted, with train and tube
strikes in the current financial year and covid restrictions in the prior
year. The train and tube strikes were particularly detrimental in Central
London, where a significant proportion of our estate is situated, with
commuters choosing to work from home. We estimate that the strike action has
impacted sales by in excess of £5 million in the financial year.
The trading environment during the year was very challenging. The war in
Ukraine caused our energy costs to increase substantially. Even with hedging
arrangements in place, and reduced usage, our total energy costs increased to
£14.2 million, compared to £7.6 million in the prior year. We have had to
manage significant food and drink inflation and growing wage costs, as a
result of labour shortages at the start of the year, as well as the increase
in National Living Wage. This national inflationary environment has also led
to the Bank of England raising interest rates, with our finance costs rising
by nearly 10% from the prior year.
Despite the challenging backdrop, the Group has delivered an adjusted profit
of £12.7 million, up 76% on the prior year (FY2022: £7.2 million). The
financial year to 1 April 2023 comprised 53 weeks of trading, whereas the
prior year represented 52 weeks. The additional week of trade contributed
£5.7 million to the Group revenues and £0.3 million to Group adjusted
profit.
In our Managed Pubs and Hotels business, like for like sales have grown by
17.5% compared to the prior year, with total sales increasing by 34%. Like for
like sales in our Central London sites have risen by 40.1%, demonstrating both
workers and tourists are returning to London and continue to do so.
Adjusted EBITDA for the Managed Pubs and Hotels business was £53.4 million,
which represents an increase of 11% on the prior year (FY2022: £48.0
million). However, adjusted EBITDA margin declined from 21.0% to 17.4%,
reflecting the impact of increased energy and labour costs. Additionally, in
the prior year the UK Government was providing some support due to the
pandemic. VAT rates for food and accommodation were at 5%, and then 12.5%, but
increased back to 20% in the current year. We also received some support
grants in the prior year, which were not repeated in the current year.
Tenanted Inns revenue grew by 19% from £25.0 million to £29.8 million.
Adjusted EBITDA margin improved from 51.6% to 52.0%. The low cost base of the
Tenanted business means it is a highly profitable part of the Group and
continues to trade strongly despite the economic backdrop.
Total net finance costs (before separately disclosed items) have increased by
£1.1 million to £12.4 million. The increase is due to the rising Bank of
England base rate partially offset by the improved margins secured on the new
bank facilities as part of the refinancing in May 2022. This means that the
average cost of borrowing was 7.0% in the current financial year compared to
4.2% in the prior year.
The net position on separately disclosed items of £2.4 million expense
(FY2022: £4.3 million credit) includes £11.8 million of profits on the
disposal of nine predominately unlicensed properties, impairments of £14.3
million on 22 properties, costs of £0.5 million incurred as a result of
corporate reorganisation and refinancing, offset by a £0.8 million credit in
respect of a historical VAT provision.
The underlying effective tax rate was 22.8% (FY2022: 16.7%) as some movements
are at the current corporation tax rate of 19% and others are at the future
tax rate of 25%. Separately disclosed items have an effective tax rate of
20.8% (FY2022: 74.4%), resulting in an overall tax rate of 23.3% (FY2022:
38.3%).
Balance Sheet
During the year, the Group refinanced its banking facilities with new
unsecured facilities of £200 million, comprising a revolving credit facility
of £110 million and a term loan of £90 million. These facilities have been
agreed for a tenure of four years through to May 2026. The new facilities bear
interest at a margin dependent on the leverage covenant plus a base rate of
SONIA. In the year, interest rates have increased sharply with SONIA
increasing from 60bps to just under 420bps.
In order to mitigate the risk of high SONIA rates, on 2 September 2022, the
Group entered into a zero-premium cap and collar over £60 million of the term
facility. This instrument is in place for a three-year period to hedge some of
the variability in interest rates. The Group sold a floor of 310bps and bought
a cap of 500bps, which gives some protection should SONIA exceed 500bps.
Net debt (excluding leases) was at £132.8 million (FY2022: £131.9 million).
This is only a marginal increase from last year as the Group has delivered on
its capital allocation framework through investment in the estate and returns
to shareholders. A total of £30.7 million was invested in the estate in the
year, including three new acquisitions - The Rising Sun near Bashley in the
heart of the New Forest, The Willow in Bourton-on-the-Water in the Cotswolds
and The Queen's Arms at Heathrow Terminal 2. The improvement in EBITDA has
meant that net debt/EBITDA is now at 3x, which is in line with our capital
allocation framework.
The net defined benefit pension scheme accounting surplus has increased by
£0.3 million to £14.6 million (FY2022: £14.3 million surplus) as a result
of both a decrease in the present value of pension obligations as the discount
rate increased from 3.0% to 4.75%, and a similar quantum of decline in the
fair value of scheme assets. In April 2023, the 2022 triennial valuation was
concluded, and the Company has agreed to continue to pay contributions into
the plan in line with the existing recovery plan. Under this plan, deficit
reduction contributions started at £2.2 million per annum in July 2022. As of
January 2023, the deficit reduction contributions have increased to £2.4
million.
Shareholder returns
Total dividends paid to shareholders were £7.4 million (FY2022: £2.4
million) and the Board has announced a final dividend of 10.0p (FY2022:
7.41p), which will be paid in July. In addition, and in line with our capital
allocation framework, we have purchased 1 million 'A' shares at a total cost
of £4.8 million. Share buybacks are an important element of capital
allocation and will be evaluated on an ongoing basis.
CURRENT TRADING AND OUTLOOK
We are delighted that our sales momentum has continued into the new financial
year and like for like sales for the first 10 weeks are up 13.9%. Our recent
investments at The Willow, The Sanctuary House and The Admiralty are
outperforming our expectations, and we have exciting projects planned for this
financial year at The Counting House in the City, The Forester in Ealing, and
The Rising Sun near Bashley.
I am more optimistic about the future than I have been since before the
pandemic. While the well-documented inflationary environment has been a
challenge, there are positive signs on the horizon. In addition, we are ever
hopeful of a resolution to the ongoing train strikes to allow us to further
benefit from the increasing numbers of office workers and international
tourists returning to the Capital.
Fuller's is, and has always been, about the long term. We have an excellent
vision and strategy that signposts the direction in which the Company is
heading and what we will do to get there. We have a clear pathway to further
growth based on enhancing profitability from our underlying business,
proactively managing our property portfolio to ensure we are getting the best
returns and continuing to seek out appropriate acquisitions. We have a strong
set of values that guide us in how to get there, and we have an amazing team
of people who will deliver all of the above. Finally, we have a predominately
freehold estate, epitomised by iconic sites in outstanding locations.
I am excited by the opportunities ahead, optimistic about the future, and
confident in our ability to deliver excellent service to our customers,
careers for our people and returns for our shareholders.
Simon Emeny
Chief Executive
14 June 2023
Fuller, Smith & Turner P.L.C.
Condensed Group Income Statement
For the 53 weeks ended 1 April 2023
53 weeks ended 1 April 2023 52 weeks ended 26 March 2022
Note Before separately disclosed items Separately disclosed items Total Before separately disclosed items Separately disclosed items Total
£m £m £m £m £m £m
Revenue 2 336.6 - 336.6 253.8 - 253.8
Operating costs (311.5) (14.2) (325.7) (235.3) (2.0) (237.3)
Operating profit 25.1 (14.2) 10.9 18.5 (2.0) 16.5
Finance costs 3,4 (12.4) - (12.4) (11.3) - (11.3)
Profit on disposal of properties 3 - 11.8 11.8 - 6.3 6.3
Profit before tax 12.7 (2.4) 10.3 7.2 4.3 11.5
Tax 5 (2.9) 0.5 (2.4) (1.2) (3.2) (4.4)
Profit for the year 9.8 (1.9) 7.9 6.0 1.1 7.1
Group Note 53 weeks ended 52 weeks ended
1 April 2023 26 March 2022
Pence Pence
Earnings per share per 40p 'A' and 'C' ordinary share
Basic 6 12.98 11.59
Diluted 6 12.96 11.51
Adjusted 6 16.10 9.79
Diluted adjusted 6 16.07 9.73
Earnings per share per 4p 'B' ordinary share
Basic 6 1.30 1.16
Diluted 6 1.30 1.15
Adjusted 6 1.61 0.98
Diluted Adjusted 6 1.61 0.97
Fuller, Smith & Turner P.L.C.
Condensed Group Statement of Comprehensive Income
For the 53 weeks ended 1 April 2023
Note 53 weeks 52 weeks
ended ended
1 April 2023 26 March 2022
£m £m
Profit for the year 7.9 7.1
Items that may be reclassified to profit or loss in subsequent years (net of
tax)
Net gains on valuation of financial assets and liabilities 0.1 0.5
Tax related to items that may be reclassified to profit or loss 5 - (0.1)
Items that will not be reclassified to profit or loss in subsequent years (net
of tax)
Net actuarial (losses)/gains on pension schemes 12 (2.5) 15.5
Tax related to items that will not be reclassified to profit or loss 5 0.6 (3.8)
Other comprehensive (losses)/gains for the year, net of tax (1.8) 12.1
Total comprehensive income for the year, net of tax 6.1 19.2
Fuller, Smith & Turner P.L.C.
Condensed Group Balance Sheet
1 April 2023
Note At 1 April 2023 At 26 March 2022
£m £m
Non-current assets
Intangible assets 29.0 29.5
Property, plant and equipment 8 583.3 592.7
Investment properties 1.5 1.6
Retirement benefit obligations 12 16.1 16.2
Right-of-use assets 10 66.4 73.8
Other financial assets 0.1 -
Total non-current assets 696.4 713.8
Current assets
Inventories 4.2 3.6
Trade and other receivables 10.2 10.7
Current tax receivable 0.7 0.6
Cash and short-term deposits 11 14.1 15.6
Total current assets 29.2 30.5
Assets classified as held for sale 7.0 5.4
Total assets 732.6 749.7
Current liabilities
Trade and other payables (54.6) (57.1)
Provisions (0.5) (0.5)
Borrowings 11 (6.0) (120.0)
Lease liabilities 10 (4.8) (6.8)
Other financial liabilities - (0.1)
Total current liabilities (65.9) (184.5)
Non-current liabilities
Borrowings 11 (140.9) (27.5)
Lease liabilities 10 (67.0) (73.9)
Retirement benefit obligations 12 (1.5) (1.9)
Deferred tax liabilities (14.7) (12.7)
Total non-current liabilities (224.1) (116.0)
Net assets 442.6 449.2
At 1 April 2023 At 26 March 2022
£m £m
Capital and reserves
Share capital 25.4 25.4
Share premium account 53.2 53.2
Capital redemption reserve 3.7 3.7
Own shares (21.3) (16.6)
Hedging reserve - (0.1)
Retained earnings 381.6 383.6
Total equity 442.6 449.2
Fuller, Smith & Turner P.L.C.
Condensed Group Statement of Changes in Equity
For the 53 weeks ended 1 April 2023
Group Share Share Capital Own Hedging Retained Total
capital
premium
redemption
shares
reserve
earnings
£m
£m
account
reserve
£m
£m
£m
£m
£m
At 27 March 2021 22.8 4.2 3.7 (17.0) (0.5) 366.3 379.5
Profit for the year - - - - - 7.1 7.1
Other comprehensive income for the year - - - - 0.4 11.7 12.1
Total comprehensive income for the year - - - - 0.4 18.8 19.2
Issue of Share capital 2.6 49.0 - 0.2 - - 51.8
Shares released from ESOT and treasury - - - 0.2 - - 0.2
Dividends (note 7) - - - - - (2.4) (2.4)
Share-based payment charges - - - - - 0.8 0.8
Tax credited directly to equity - - - - - 0.1 0.1
At 26 March 2022 25.4 53.2 3.7 (16.6) (0.1) 383.6 449.2
Profit for the year - - - - - 7.9 7.9
Other comprehensive income for the year - - - - 0.1 (1.9) (1.8)
Total comprehensive income for the year - - - - 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 credited directly to equity - - - - - (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 53 weeks ended 1 April 2023
Note 53 weeks ended
1 April
2023
£m 52 weeks ended
26 March
2022
£m
Profit before tax for continuing operations 10.3 11.5
Net finance costs before separately disclosed items 4 12.4 11.3
Separately disclosed items 3 2.4 (4.3)
Depreciation and amortisation 26.7 25.8
51.8 44.3
Difference between pension charge and cash paid (2.3) (2.3)
Share-based payment (credit)/charges (0.4) 0.8
Change in trade and other receivables 2.5 0.5
Change in inventories (0.6) (1.5)
Change in trade and other payables (3.0) 28.8
Cash impact of operating separately disclosed items 3 (0.5) (1.9)
Cash generated from operations 47.5 68.7
Tax received - 2.5
Net Cash generated from operating activities 47.5 71.2
Cash flow from investing activities
Purchase of property, plant and equipment and intangibles (30.7) (25.8)
Sale of property, plant and equipment, right-of-use assets and assets held for 16.0 10.0
sale
Net Cash (outflow) from Investing activities (14.7) (15.8)
Cash flow from financing activities (4.8) -
Purchase of own shares
Receipts on release of own shares to option schemes 0.1 0.1
Interest paid (8.7) (7.2)
Preference dividends paid 7 (0.1) (0.1)
Equity dividends paid 7 (7.4) (2.4)
Net proceeds from equity placing - 51.8
Repayment of CCFF 11 - (100.0)
Drawdown of bank loans 11 - 12.6
Surrender of leases (2.1) (1.9)
Principal and interest elements of lease payments 11 (9.8) (8.6)
Payment of loan arrangement fees 11 (1.5) (1.2)
Net cash (outflow) from financing activities (34.3) (56.9)
Net movement in cash and cash equivalents (1.5) (1.5)
Cash and cash equivalents at the start of the year 11 15.6 17.1
Total cash and cash equivalents at the end of the year 11 14.1 15.6
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 53 weeks ended 1 April 2023
1. Preliminary statement
The consolidated financial statements of Fuller, Smith & Turner P.L.C. for the 53 weeks ended 1 April 2023 were authorised for issue by the Board of Directors on 14 June 2023.
The financial information presented does not constitute the Group's annual
report and accounts for either the 53 weeks ended 1 April 2023 or the 52 weeks
ended 26 March 2022 within the meaning of Section 435 of the Companies Act
2006, but is derived from those accounts. The Group's statutory accounts for
2022 have been delivered to the Registrar of Companies and those for 2023 will
be delivered following the Company's annual general meeting. The independent
auditor's reports on both the 2023 and 2022 accounts were not qualified or
modified. The independent auditor's reports for both 2023 and 2022 did not
contain any statements under Section 498 of the Companies Act 2006.
The Group financial statements are presented in Sterling and all values are shown in millions of pounds (£m) rounded to the nearest hundred thousand pounds, except when otherwise indicated. The accounting policies used have been applied consistently, except where set out below, and are described in full in the statutory financial statements for the 53 weeks ended 1 April 2023, which will be mailed to shareholders on or before 27 June 2023 and delivered to the Registrar of Companies. The financial statements will also be available from the Company's registered office: Pier House, 86-93 Strand-on-the-Green, London, England, W4 3NN, and on its website, from that date.
Going concern
At 1 April 2023, the Group's Balance Sheet comprises of 92% of the estate
being freehold properties and available headroom on facilities of £79.5
million and £14.1 million of cash and resulting net debt of £132.8 million.
During the year, the Group secured a new facility of £200 million, split
between a RCF of £110 million and a term loan of £90 million, for a tenure
of four years to May 2026. Under the new agreement, the minimum liquidity
covenant of £10 million tested monthly remained until November 2022. From
December 2022 (and tested quarterly thereafter) the covenant suite consists of
net debt to EBITDA (leverage) and EBITDA to net finance charges.
The Group has modelled financial projections for the going concern period,
which is the period to 29 June 2024, based upon two scenarios, the base case
and the downside case. The base case is the Board approved FY2024 budget as
well as the Q1 FY2025 plan, which forms part of the Board approved three year
plan. The base case assumes that sales will continue to recover, in particular
in Central London. However, the budget remains cautious about the inflationary
environment and also the impact on the consumer and therefore only assumes
moderate levels of volume growth as well as continued pressure on margins. The
base case scenario indicates that the Group will have sufficient resources to
continue to settle its debts as they fall due and operate well within its
covenants for the going concern assessment period.
The Group has also modelled a downside case which assumes that sales volume
reduces by 10% from the base case, and costs across food, staff and interest
continue to rise. This model also assumes that train strikes are more frequent
than experienced in FY2023. In this downside case, management would implement
mitigating actions such as overhead reduction and reduction of capital
expenditure and other property spend to essential maintenance. Under this
scenario, the Group would still have sufficient resources to settle
liabilities as they fall due and headroom on its covenants through the
duration of the period.
The Group has also performed a reverse stress case which shows that the Group
could withstand a 24% reduction in volumes throughout the going concern
period, as well as costs assumed to increase at a similar or higher rate than
the downside scenario, before the covenant levels would be exceeded on 31
March 2024. The Directors consider this scenario to be remote as other than
when the business was closed because of the pandemic have never seen volumes
decline at anywhere close to that rate.
Under both the base and downside scenarios modelled, the Group would have
sufficient headroom on its facilities throughout the going concern assessment
period. Additionally, under the downside scenario, there are further
mitigating actions which the Group has in its control to either improve EBITDA
or reduce net debt, such as further reduction in capex spend to only essential
maintenance and the decision
not to pay dividends and bonuses. Further mitigating actions would include
disposals of licensed and unlicensed properties.
The Directors have also determined that, over the period of the going concern
assessment, there is not expected to be a significant impact because of
climate change.
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, being the period to 29 June 2024, and have therefore
adopted the going concern basis in the preparation of these financial
statements.
2. Segmental Analysis
Operating Segments
For management purposes, the Group's operating segments are:
- Managed Pubs and Hotels, which comprises managed pubs, managed
hotels, Bel & The Dragon and Cotswold Inns & Hotels.
- Tenanted Inns, which comprises pubs operated by third parties
under tenancy or lease agreements.
The most important measure used to evaluate the performance of the business is
adjusted profit, which is the profit before tax, adjusted for separately
disclosed items. The operating segments are organised and managed separately
according to the nature of the products and services provided, with each
segment representing a strategic operating unit. The Managed Pubs and Hotels
operating segments have been aggregated to one reportable segment on the basis
they have similar economic characteristics. Economic indicators assessed in
determining that the aggregated operating segments share similar
characteristics include expected future financial performance, operating and
competitive risks, and return on capital. As such the operating segments meet
the aggregation criteria in paragraph 12 IFRS 8 Operating Segments (amended).
As segment assets and liabilities are not regularly provided to the Chief
Operating Decision Maker ("CODM"), the Group has elected, as provided under
IFRS 8 Operating Segments (amended), not to disclose a measure of segment
assets and liabilities.
53 weeks ended 1 April 2023 Managed Pubs and Hotels Tenanted Unallocated(1) Total continuing operations
£m Inns £m £m
£m
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 to property, plant & equipment and intangible assets 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 assets classified as held for 12.5 1.8 - 14.3
sale
52 weeks ended 26 March 2022 Tenanted Unallocated(1) Total continuing operations
Inns £m £m
Managed Pubs and Hotels £m
£m
Revenue
Sale of goods and services 205.1 17.9 - 223.0
Accommodation income 21.9 - - 21.9
Total revenue from contracts with customers 227.0 17.9 - 244.9
Rental income 1.8 7.1 - 8.9
Revenue 228.8 25.0 - 253.8
Segment Result 24.7 11.1 (17.3) 18.5
Operating separately disclosed items (2.0)
Operating Profit 16.5
Profit on disposal of properties 6.3
Net finance costs (11.3)
Profit before tax 11.5
Other segment information
Additions to property, plant & equipment and intangible assets 20.2 2.3 2.6 25.1
Depreciation and amortisation 23.3 1.8 0.7 25.8
Impairment of property 3.0 0.3 - 3.3
1 Unallocated expenses represent primarily the salaries and costs of
central management. Unallocated capital expenditure relates to additions to
the head office and in the prior year additions to IT development costs.
3. Separately Disclosed Items
The Group presents separately disclosed items on the face of the Income
Statement for those material items of income and expense which, because of the
nature or expected infrequency of the events giving rise to them, merit
separate presentation to allow shareholders to understand better the elements
of financial performance in the year.
Continuing operations 53 weeks ended 52 weeks ended
1 April 2023 26 March 2022
£m £m
Amounts included in operating profit:
Reorganisation costs (0.5) (0.8)
Impairment of properties, right-of-use assets and assets classified as held (14.3) (3.3)
for sale (note 9)
Insurance claim (0.2) -
Adjustment related to settlement of the beer business - 2.1
VAT provision release 0.8 -
Total separately disclosed items included in operating profit (14.2) (2.0)
Profit on disposal of properties 11.8 6.3
Separately disclosed finance credits:
Finance credit on net pension liabilities 0.5 -
Finance charge on the write down of arrangement fees (0.5) -
Total separately disclosed finance credits - -
Total separately disclosed items before tax (2.4) 4.3
Exceptional tax:
Profit on disposal of properties (1.0) (1.3)
Change in tax rate 0.5 (3.3)
Other items 1.0 1.4
Total separately disclosed tax 0.5 (3.2)
Total separately disclosed items (1.9) 1.1
The reorganisation costs compromise £0.5 million in relation to the corporate
restructure during the 53 weeks ended 1 April 2023 (26 March 2022: £0.8
million).
The impairment charge of £14.3 million (26 March 2022: £3.3 million) relates
to the write down of 22 properties to their recoverable value (26 March 2022:
six properties).
The insurance claim of £0.2 million is the write off of property, plant and
equipment and the cost of the rectification work (£2.7 million) net of
insurance monies claimed (£2.5 million).
The VAT provision release relates to a VAT adjustment of £0.8 million. In the
prior year, £2.1 million credit is the release of the provision, net of the
final settlement amount on the sale of the Fuller's Beer Business.
The profit on disposal of properties of £11.8 million during the 53 weeks
ended 1 April 2023 (26 March 2022: £6.3 million) relates to the disposal of
nine licensed and unlicensed properties (26 March 2022: 12 properties).
The cash impact of operating separately disclosed items before tax for the 53
weeks ended 1 April 2023 was £0.5 million cash outflow (26 March 2022: £1.9
million cash outflow).
4. Finance Costs
53 weeks ended 52 weeks ended
1 April 2023 26 March 2022
£m £m
0.2
Finance Income -
Interest income from financial assets
Finance Costs
Interest expense arising on:
Financial liabilities at amortised cost - loans and debentures (9.6) (8.1)
Financial liabilities at amortised cost - preference shares (0.1) (0.1)
Financial liabilities at amortised cost - lease liabilities (2.9) (3.1)
Net Finance costs before separately disclosed items (12.4) (11.3)
Finance credit on net pension liabilities (note 3) 0.5 -
Finance charge on the write down of arrangement fees (note 3) (0.5) -
Net finance costs after separately disclosed items (12.4) (11.3)
5. Taxation
Group
53 weeks ended 52 weeks ended
1 April 2023 26 March 2022
£m £m
Tax charged in the Income Statement
Current income tax:
Current tax on profit for the year - 0.2
Adjustments for current tax on prior periods - 0.6
Total current income tax expense - 0.8
Deferred income tax:
Origination and reversal of temporary differences 3.6 2.2
Change in corporation tax rate - 3.3
Adjustments for deferred tax on prior periods (1.2) (1.9)
Total deferred tax expense 2.4 3.6
Total tax charged in the Income Statement 2.4 4.4
Analysed as:
Before separately disclosed items 2.9 1.2
Separately disclosed items (0.5) 3.2
2.4 4.4
Reconciliation of the Total Tax Charge
The tax expense in the Income Statement for the year is higher (2022: higher) than the standard rate of corporation tax in the UK of 19% (2022: 19%). The differences are reconciled below:
53 weeks ended
1 April 2023
£m 52 weeks ended
26 March 2022
£m
Profit before income tax expense 10.3 11.5
Accounting profit multiplied by the UK standard rate of corporation tax of 19% 2.0 2.2
(2022: 19%)
Items not deductible/(taxable) for tax purposes 0.2 (0.3)
Current and deferred tax (over) provided in previous years (1.2) (1.3)
Net movements in respect of property 1.4 0.5
Change in corporation tax rate - 3.3
Total tax charged in the Income Statement 2.4 4.4
Deferred tax relating to items charged to the Income Statement 53 weeks ended 52 weeks ended
1 April 2023
26 March 2022
£m
£m
Deferred tax depreciation 1.5 (0.8)
Unrealised capital gains (on PP&E) 1.7 5.2
Retirement benefit obligations 1.8 1.6
Tax losses 0.7 (2.8)
Other (3.4) (0.7)
Corporate interest restriction 0.1 1.1
Deferred tax in the Income Statement 2.4 3.6
Tax relating to Items (credited)/charged to the Statement
of Comprehensive Income
Deferred tax:
Valuation gains on financial liabilities - 0.1
Net actuarial (losses)/gains on pension scheme (0.6) 3.8
Total tax (credited)/charged in the Statement of Comprehensive Income (0.6) 3.9
Tax relating to Items charged/(credited) directly to equity
Deferred tax:
Share based payments 0.2 (0.1)
Total tax charged/(credited) to equity 0.2 (0.1)
6. Earnings Per Share
Group
53 weeks ended 52 weeks ended
1 April 2023 26 March 2022
£m £m
Profit attributable to equity shareholders 7.9 7.1
Separately disclosed items net of tax 1.9 (1.1)
Adjusted earnings attributable to equity shareholders 9.8 6.0
Number Number
Weighted average share capital 60,875,000 61,264,000
Dilutive outstanding options and share awards 90,000 413,000
Diluted weighted average share capital 60,965,000 61,677,000
40p 'A' and 'C' ordinary share Pence Pence
Basic earnings per share 12.98 11.59
Diluted earnings per share 12.96 11.51
Adjusted earnings per share 16.10 9.79
Diluted adjusted earnings per share 16.07 9.73
4p 'B' ordinary share Pence Pence
Basic earnings per share 1.30 1.16
Diluted earnings per share 1.30 1.15
Adjusted earnings per share 1.61 0.98
Diluted adjusted earnings per share 1.61 0.97
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
2,134,152 (2022: 1,744,564).
Diluted earnings per share amounts are calculated using the same earnings
figure as for basic earnings per share, divided by the weighted average number
of ordinary shares outstanding during the year plus the weighted average
number of ordinary shares that would be issued on the conversion of all the
dilutive potential options into ordinary shares.
Adjusted earnings per share are calculated on profit after tax excluding
separately disclosed items and on the same weighted average ordinary share
capital as for the basic and diluted earnings per share. Adjusted earnings per
share measures have been included as the Directors consider that these
measures better reflect the underlying earnings of the Group.
7. Dividends
52 weeks ended
53 weeks ended 26 March 2022
1 April 2023 £m
£m
Declared and paid during the year
Equity dividends on ordinary shares:
Final dividend for 2022: 7.41p (2021: 0p) 4.6 -
Interim dividend for 2023: 4.68p (2022: 3.90p) 2.8 2.4
Equity dividends paid 7.4 2.4
Dividends on cumulative preference shares (note 4) 0.1 0.1
Proposed for approval at the Annual General Meeting
Final dividend for 2023: 10.0p (2022: 7.41p) 6.1 4.6
The pence figures above are for the 40p 'A' ordinary shares and 40p 'C' ordinary shares. The 4p 'B' ordinary shares carry dividend rights of one-tenth of those applicable to the 40p 'A' ordinary shares. Own shares held in the employee share trusts do not qualify for dividends as the Trustees have waived their rights. Dividends are also not paid on own shares held as treasury shares.
8. Property, Plant and Equipment
Group Land & buildings - owned & used Plant machinery Fixtures & fittings Total
£m Land & buildings - owned & lessor & vehicles £m £m
£m £m
Cost
At 27 March 2021 482.7 107.8 6.3 171.6 768.4
Additions 11.3 1.8 - 9.6 22.7
Disposals (1.3) - - (1.9) (3.2)
Transfer to assets held for sale (1.5) - - (0.4) (1.9)
Transfer from assets held for sale 2.4 - - 0.6 3.0
At 26 March 2022 493.6 109.6 6.3 179.5 789.0
Additions 12.0 2.3 - 15.7 30.0
Disposals (1.4) (0.3) - (6.6) (8.3)
Transfer to asset held for sale (7.8) - - (1.4) (9.2)
At 1 April 2023 496.4 111.6 6.3 187.2 801.5
Depreciation and impairment
At 27 March 2021 48.8 9.7 1.7 118.0 178.2
Provided during the year 4.2 0.6 - 13.1 17.9
Disposals (1.3) - - (1.9) (3.2)
Impairment loss (note 9) 3.3 - - - 3.3
Transfer to assets held for sale (0.1) - - (0.3) (0.4)
Transfer from assets held for sale - - - 0.5 0.5
At 26 March 2022 54.9 10.3 1.7 129.4 196.3
Provided during the year 4.8 1.0 - 13.3 19.1
Disposals (0.8) - - (6.3) (7.1)
Impairment loss (note 9) 13.4 - - - 13.4
Transfer to assets held for sale (2.3) - - (1.2) (3.5)
At 1 April 2023 70.0 11.3 1.7 135.2 218.2
Net book value at 1 April 2023 426.4 100.3 4.6 52.0 583.3
Net book value at 26 March 2022 438.7 99.3 4.6 50.1 592.7
Net book value at 27 March 2021 433.9 98.1 4.6 53.6 590.2
9. Impairment
Group 2023 2022
£m £m
Impairment losses
Property, plant and equipment 13.4 3.3
Right-of-use assets 0.5 -
Assets held for sale 0.4 -
Total net impairment charge 14.3 3.3
During the 53 weeks ended 1 April 2023, the Group recognised an impairment
loss of £13.4 million (2022: £3.3 million) on property, plant and equipment,
£0.5 million of impairment on right-of-use assets (2022: £nil) and £0.4m
on assets held for sale (2022: £nil) in respect of the write down of a number
of licensed properties where their asset values exceeded the higher of fair
value less costs to sell or their value in use. The impairment losses were
driven principally by changes in the local competitive environment in which
the pubs are situated.
10. Leases
Amounts recognised in the Balance Sheet
Group 2023 2022
£m £m
Right-of-use assets
Properties 66.2 73.1
Equipment 0.2 0.6
Vehicles - 0.1
66.4 73.8
Lease liabilities
Current 4.8 6.8
Non-current 67.0 73.9
71.8 80.7
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:
Group Property Equipment Vehicles Total
£m £m £m £m
Net carrying value as at 26 March 2022 73.1 0.6 0.1 73.8
Disposals (1.0) - - (1.0)
Lease amendments(1) 1.3 - (0.1) 1.2
Depreciation (6.7) (0.4) - (7.1)
Impairment (0.5) - - (0.5)
Net carrying value as at 1 April 2023 66.2 0.2 - 66.4
(1) Lease amendments include lease terminations, modifications, reassessments and extensions to existing lease agreements.
11. Analysis of Net Debt
53 weeks ended 1 April 2023 At 26 March Cash Non At 1 April
2022
flows
cash(1)
£m
£m
£m 2023
£m
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)
52 weeks ended 26 March 2022 At 27 March 2021 Cash Non At 26 March 2022
£m
£m
flows cash(1)
£m
£m
Cash and cash equivalents:
Cash and short-term deposits 17.1 (1.5) - 15.6
17.1 (1.5) - 15.6
Financial liabilities
Lease liabilities (89.9) 10.5 (1.3) (80.7)
(89.9) 10.5 (1.3) (80.7)
Debt:
Bank loans(2) (107.9) (11.4) (0.7) (120.0)
CCFF (99.8) 100.0 (0.2) -
Debenture stock (25.9) - - (25.9)
Preference shares (1.6) - - (1.6)
Total borrowings (235.2) 88.6 (0.9) (147.5)
Net debt (308.0) 97.6 (2.2) (212.6)
(1) Non-cash movements relate to the amortisation of arrangement fees,
arrangement fees accrued, and movements in lease liabilities.
(2) Bank loans are net of arrangement fees and cash flows include the payment
of arrangement fees.
12. Pensions
The amount included in the Balance Sheet arising from the Group's obligations
in respect of its defined benefit retirement plan are:
2023 2022
£m £m
Fair value of Scheme assets 113.4 143.9
Present value of Scheme liabilities (98.8) (129.6)
Surplus in the Scheme 14.6 14.3
Defined benefit obligation Fair value of Scheme assets Net defined surplus
2023 2022 2023 2022 2023 2022
£m £m £m £m £m £m
Balance at beginning of the year (129.6) (147.3) 143.9 143.8 14.3 (3.5)
Included in profit and loss
Net interest credit (3.9) (2.8) 4.4 2.8 0.5 -
(3.9) (2.8) 4.4 2.8 0.5 -
Included in Other Comprehensive Income
Actuarial (losses)/gain relating to:
Actual return less expected return on Scheme's assets - - (32.0) 0.6 (32.0) 0.6
Experience gains arising on Scheme liabilities 29.5 14.9 - - 29.5 14.9
29.5 14.9 (32.0) 0.6 (2.5) 15.5
Other
Employer contributions - - 2.3 2.3 2.3 2.3
Benefits paid 5.2 5.6 (5.2) (5.6) - -
5.2 5.6 (2.9) (3.3) 2.3 2.3
Balance at end of the year (98.8) (129.6) 113.4 143.9 14.6 14.3
Key assumptions
The key assumptions used in the valuation of the Scheme are set out below:
2023 2022
Years Years
Mortality assumptions
Current pensioners (at 65) - males 22.0 22.2
Current pensioners (at 65) - females 24.2 24.5
Future pensioners (at 65) - males 23.3 23.6
Future pensioners (at 65) - females 25.7 25.9
The scheme is now closed to future accrual. The average age of the members who
were active at closure is 58 for males and 55 for females. The average age of
all non-pensioners is 57.
Key financial assumptions used in the valuation 2023 2022
of the Scheme
Rate of increase in pensions in payment 3.20% 3.75%
Discount rate 4.75% 3.00%
Inflation assumption - RPI 3.20% 3.80%
Inflation assumption - CPI (pre 2030/post 2030) 2.3%/3.2% 2.9%/3.8%
Assets in the Scheme 2023 2022
£m £m
Corporate bonds 56.4 25.0
Index linked debt instruments 28.7 26.0
Overseas equities 6.6 31.5
Alternatives(1) 19.0 56.5
Cash 0.3 1.6
Annuities 2.4 3.3
Total market value of assets 113.4 143.9
(1) Alternatives is composed of holdings in diversified growth investment
funds.
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 (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR FIMRTMTABBBJRecent news on Fuller Smith & Turner
See all newsREG-Fuller, Smith & Turner PLC Fuller, Smith & Turner PLC: Transaction in own shares
AnnouncementREG-Fuller, Smith & Turner PLC Fuller, Smith & Turner PLC: Transaction in own shares
AnnouncementREG-Fuller, Smith & Turner PLC Fuller, Smith & Turner PLC: Transaction in own shares
AnnouncementREG-Fuller, Smith & Turner PLC Fuller, Smith & Turner PLC: Transaction in own shares
AnnouncementREG-Fuller, Smith & Turner PLC Fuller, Smith & Turner PLC: Transaction in own shares
Announcement