REG - Fuller,Smith &Turner - Half Yearly Report <Origin Href="QuoteRef">FSTA.L</Origin> - Part 2
21/11/2014 08:30
- Part 2: For the preceding part double click ID:nRSU6300Xa
27 September 28 September 29 March
2014 2013 2014
Note £m £m £m
Group profit before tax 18.3 16.8 33.5
Net finance costs before exceptional items 3.1 2.9 5.8
Exceptional items 3 1.3 1.3 0.6
Depreciation and amortisation 8.0 7.1 14.7
Gain on disposal of property, plant and equipment - - (0.1)
_______ _______ _______
30.7 28.1 54.5
Difference between pension charge and (0.3) (0.2) (0.5)
cash paid
Share-based payment charges 1.3 1.1 1.8
Change in trade and other receivables (1.6) (0.6) 1.0
Change in inventories (0.2) 0.8 (0.1)
Change in trade and other payables 5.0 1.7 2.8
Cash impact of operating exceptional items 3 (1.9) (0.4) (2.1)
_______ _______ _______
Cash generated from operations 33.0 30.5 57.4
Tax paid (3.8) (4.0) (8.0)
_______ _______ _______
Cash generated from operating activities 29.2 26.5 49.4
_______ _______ _______
Cash flow from investing activities
Business combinations (20.6) (4.7) (9.6)
Purchase of property, plant and equipment (13.8) (9.8) (28.5)
Overdraft acquired on acquisition (0.1) (0.1) (0.1)
Sale of property, plant and equipment 2.4 1.3 2.6
_______ _______ _______
Net cash outflow from investing activities (32.1) (13.3) (35.6)
_______ _______ _______
Cash flow from financing activities
Purchase of own shares (5.1) (1.9) (5.3)
Receipts on release of own shares to option schemes 0.7 1.1 1.4
Interest paid (2.7) (2.6) (5.2)
Preference dividends paid 7 (0.1) (0.1) (0.1)
Equity dividends paid 7 (5.2) (4.7) (7.9)
Drawdown of bank loans 19.0 - 3.4
Repayment of bank loans - (1.1) -
Repayment of other loans (0.5) (0.3) (0.3)
Cost of refinancing (1.1) - -
_______ _______ _______
Net cash outflow from financing activities 5.0 (9.6) (14.0)
_______ _______ _______
Net movement in cash and cash equivalents 9 2.1 3.6 (0.2)
_______ _______ _______
Cash and cash equivalents at the start of the period 4.1 4.3 4.3
_______ _______ _______
Cash and cash equivalents at the end of the period 9 6.2 7.9 4.1
_______ _______ _______
FULLER, SMITH & TURNER P.L.C.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
1. HALF YEAR REPORT
Basis of preparation
These half year financial statements for the 26 weeks ended 27 September 2014,
which are abridged and unaudited, have been reviewed by the auditor and
prepared in accordance with the Disclosure and Transparency Rules (DTRs) of
the Financial Conduct Authority and International Accounting Standard (IAS)
34, Interim Financial Reporting, as adopted by the European Union.
The half year financial statements were approved by the Directors on 20
November 2014.
This half year statement does not constitute full accounts as defined by
Section 434 of the Companies Act 2006. The figures for the 52 weeks ended 29
March 2014 are derived from the published statutory accounts. Full accounts
for the 52 weeks ended 29 March 2014, including an unqualified auditor's
report which did not make any statement under Section 498 of the Companies Act
2006, have been delivered to the Registrar of Companies.
On the basis of the strong cash flows generated by the business and the
significant headroom available on the bank facilities the Directors are
confident that the Group has adequate resources to continue in operational
existence for the foreseeable future and, accordingly, consider that it is
appropriate to continue to adopt the going concern basis of accounting in
preparing the financial statements.
Adoption of New Standards and Interpretations
Apart from those set out below the accounting policies adopted are consistent
with those applied in the 52 weeks ended 29 March 2014 which are published as
part of the accounts for that year and which are available from the Group's
website, www.fullers.co.uk.
IFRS 11 Joint Arrangements
IFRS 12 Disclosure of Interests in Other Entities
IAS 27 (revised) Separate Financial Statements
IAS 28 (revised) Investments in Associates and Joint Ventures
These new Standards have not had a significant impact on the accounting
policies, financial position or performance of the Group.
IFRS 10 Consolidated Financial Statements
IFRS 10 supersedes IAS 27 'Consolidated and Separate Financial Statements'
(IAS 27) and SIC 12 'Consolidation-Special Purpose Entities'. IFRS 10 revises
the definition of control and provides extensive new guidance on its
application. These new requirements have the potential to affect which of the
Group's investees are considered to be subsidiaries and therefore to change
the scope of consolidation. Management has reviewed the impact of this change
and has concluded that there is no effect on the classification of any of the
Group's investees held during the period or comparative periods covered by
these financial statements.
2. SEGMENTAL ANALYSIS
Unaudited - 26 weeks Managed Pubs and Hotels Tenanted The Fuller's Unallocated1 Total
ended 27 September 2014 Inns Beer Company
£m £m £m £m £m
Revenue:
Segment revenue 106.4 16.0 62.4 - 184.8
Inter-segment sales - - (23.2) - (23.2)
_______ _______ _______ _______ _______
Revenue from third parties 106.4 16.0 39.2 - 161.6
_______ _______ _______ _______ _______
Segment result 14.3 6.3 4.1 (2.0) 22.7
_______ _______ _______ _______ _______
Operating exceptional items (1.7)
_______
Operating profit 21.0
_______
Profit on disposal of properties 0.8
Net finance costs (3.5)
_______
Profit before tax 18.3
_______
1 Unallocated expenses represent primarily the salary and costs of central
management.
Unaudited - 26 weeks Managed Pubs and Hotels Tenanted The Fuller's Unallocated1 Total
ended 28 September 2013 Inns Beer Company
£m £m £m £m £m
Revenue:
Segment revenue 94.4 16.0 58.3 - 168.7
Inter-segment sales - - (22.4) - (22.4)
_______ _______ _______ _______ _______
Revenue from third parties 94.4 16.0 35.9 - 146.3
_______ _______ _______ _______ _______
Segment result 12.6 6.2 4.0 (1.8) 21.0
_______ _______ _______ _______ _______
Operating exceptional items (1.5)
_______
Operating profit 19.5
_______
Profit on disposal of properties 0.5
Net finance costs (3.2)
_______
Profit before tax 16.8
_______
1 Unallocated expenses represent primarily the salary and costs of central
management.
Audited - 52 weeks ended Managed Pubs and Hotels Tenanted The Fuller's Unallocated1 Total
29 March 2014 Inns Beer Company
£m £m £m £m £m
Revenue:
Segment revenue 186.0 31.3 115.8 - 333.1
Inter-segment sales - - (45.1) - (45.1)
_______ _______ _______ _______ _______
Revenue from third parties 186.0 31.3 70.7 - 288.0
_______ _______ _______ _______ _______
Segment result 22.5 12.3 8.5 (3.4) 39.9
_______ _______ _______ _______ _______
Operating exceptional items (1.9)
_______
Operating profit 38.0
Profit on disposal of properties 1.9
Net finance costs (6.4)
_______
Profit before tax 33.5
_______
1 Unallocated expenses represent primarily the salary and costs of central
management.
3. EXCEPTIONAL ITEMS
Unaudited Unaudited Audited
26 weeks ended 26 weeks ended 52 weeks ended
27 September 28 September 29 March
2014 2013 2014
£m £m £m
Amounts included in operating profit:
Acquisition costs (1.0) (0.3) (1.1)
Impairment of properties (0.5) (0.5) (1.8)
Reversal of impairment on property - - 1.3
Onerous lease provision (charge)/release (0.2) 0.6 0.9
Reorganisation costs - (1.3) (1.2)
_______ _______ _______
Total exceptional items included in (1.7) (1.5) (1.9)
operating profit
_______ _______ _______
Profit on disposal of properties 0.8 0.5 1.9
Exceptional finance costs:
Finance charge on net pension liabilities (note 10) (0.4) (0.3) (0.6)
_______ _______ _______
Total exceptional finance costs (0.4) (0.3) (0.6)
_______ _______ _______
Total exceptional items before tax (1.3) (1.3) (0.6)
_______ _______ _______
Exceptional tax:
Change in corporation tax rate (note 5) - 3.4 3.4
Profit on disposal of properties 0.1 (0.2) (0.3)
Other items (0.1) 0.3 0.4
_______ _______ _______
Total exceptional tax - 3.5 3.5
_______ _______ _______
Total exceptional items (1.3) 2.2 2.9
_______ _______ _______
2.9
_______
_______
_______
Acquisition costs of £1.0 million during the 26 weeks ended 27 September 2014
(28 September 2013: £0.3 million, 29 March 2014: £1.1 million) relate to
transaction costs on pub and business acquisitions which qualify as business
combinations.
The property impairment charge of £0.5 million during the 26 weeks ended 27
September 2014 (28 September 2013: £0.5 million, 29 March 2014: £1.8 million)
represents the write down of licensed properties to their recoverable value.
The reversal of impairment credit of £1.3 million during the 52 weeks ended 29
March 2014 relates to the write back of previously impaired licensed
properties to their recoverable value.
The onerous lease charge of £0.2 million during the 26 weeks ended 27
September 2014 (26 weeks ended 28 September 2013: credit of £0.6 million, 29
March 2014: credit of £0.9 million) relates to provisions made in respect of
leasehold properties which are currently trading at a loss and which the
Directors do not expect to become profitable in the future.
The reorganisation costs of £1.3 million during the 26 weeks ended 28
September 2013 (29 March 2014: £1.2m) were incurred within The Fuller's Beer
Company and relate principally to staff.
The cash impact of operating exceptional items before tax for the 26 weeks
ended 27 September 2014 was £1.9 million cash outflow (28 September 2013: £0.4
million cash outflow, 29 March 2014: £2.1 million cash outflow).
4. FINANCE COSTS
Unaudited Unaudited Audited
26 weeks ended 26 weeks ended 52 weeks ended
27 September 28 September 29 March
2014 2013 2014
£m £m £m
Interest expense arising on:
Financial liabilities at amortised cost - loans and debentures 2.9 2.7 5.4
Financial liabilities at amortised cost - preference shares 0.1 0.1 0.1
_______ _______ _______
Total interest expense for financial liabilities 3.0 2.8 5.5
Unwinding of discounts on provisions 0.1 0.1 0.3
_______ _______ _______
Finance costs before exceptional items 3.1 2.9 5.8
Finance charge on net pension liabilities (note 3) 0.4 0.3 0.6
_______ _______ _______
Finance costs 3.5 3.2 6.4
_______ _______ _______
5. TAXATION
Unaudited Unaudited Audited
26 weeks ended 26 weeks ended 52 weeks ended
27 September 28 September 29 March
2014 2013 2014
£m £m £m
Tax on profit on ordinary activities
Current income tax:
Corporation tax 4.6 4.8 8.8
Amounts overprovided in previous years - - (0.3)
_______ _______ _______
Total current income tax 4.6 4.8 8.5
Deferred tax:
Origination and reversal of temporary differences (0.4) (0.7) (0.8)
Change in corporation tax rate - (3.4) (3.4)
Amounts underprovided in previous periods - - 0.1
_______ _______ _______
Total deferred tax (0.4) (4.1) (4.1)
_______ _______ _______
Total tax charged in the Income Statement 4.2 0.7 4.4
_______ _______ _______
Tax relating to items charged/credited to Statement of Comprehensive Income
Deferred tax:
Change in corporation tax rate - 0.6 0.6
Net (losses)/gains on valuation of financial assets and liabilities (0.1) 0.4 0.4
Net actuarial (losses)/gains on pension scheme (0.6) 0.3 (0.8)
_______ _______ _______
Tax (credit)/charge included in the Statement of Comprehensive Income (0.7) 1.3 0.2
_______ _______ _______
Tax relating to items charged/credited directly to equity
Deferred tax:
Reduction in deferred tax liability due to indexation (0.2) (0.3) (0.3)
Share-based payments - (0.1) 0.1
Current tax:
Share-based payments (0.1) (0.3) (0.4)
_______ _______ _______
Tax credit included in the Statement of Changes in Equity (0.3) (0.7) (0.6)
_______ _______ _______
The taxation charge is calculated by applying the Directors' best estimate of
the annual effective tax rate to the profit for the period.
The Finance Act 2013 was enacted during the 52 weeks to 29 March 2014 and
reduced the rate of UK corporation tax from 23% to 21% on 1 April 2014 and
from 21% to 20% on 1 April 2015. The impact in the 52 weeks to 29 March 2014
was an exceptional credit to the Income Statement of £3.4 million, and a
charge to the Statement of Comprehensive Income of £0.6 million.
6. EARNINGS PER SHARE
Unaudited Unaudited Audited
26 weeks ended 26 weeks ended 52 weeks ended
27 September 28 September 29 March
2014 2013 2014
£m £m £m
Profit attributable to equity shareholders 14.1 16.1 29.1
Exceptional items net of tax 1.3 (2.2) (2.9)
_______ _______ _______
Adjusted earnings attributable to equity shareholders 15.4 13.9 26.2
_______ _______ _______
Number Number Number
Weighted average share capital 55,664,000 56,072,000 55,815,000
Dilutive outstanding options and share awards 771,000 556,000 812,000
___________ ___________ ___________
Diluted weighted average share capital 56,435,000 56,628,000 56,627,000
40p 'A' and 'C' ordinary share Pence Pence Pence
Basic earnings per share 25.33 28.71 52.14
Diluted earnings per share 24.98 28.43 51.39
Adjusted earnings per share 27.67 24.79 46.94
Diluted adjusted earnings per share 27.29 24.55 46.27
4p 'B' ordinary share
Basic earnings per share 2.53 2.87 5.21
Diluted earnings per share 2.50 2.84 5.14
Adjusted earnings per share 2.77 2.48 4.69
Diluted adjusted earnings per share 2.73 2.45 4.63
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
1,320,409 (28 September 2013: 911,821 and 29 March 2014: 1,170,610).
Diluted earnings per share 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 period plus the weighted average number
of ordinary shares that would be issued on the conversion of all the dilutive
potential ordinary shares into ordinary shares.
Adjusted earnings per share are calculated on profit before tax excluding
exceptional items and on the same weighted average ordinary share capital as
for the basic and diluted earnings per share. An adjusted earnings per share
measure has been included as the Directors consider that this measure better
reflects the underlying earnings of the Group.
7. DIVIDENDS
Unaudited Unaudited Audited
26 weeks ended 26 weeks ended 52 weeks ended
27 September 28 September 29 March
2014 2013 2014
£m £m £m
Declared and paid during the period
Final dividend paid in the period 5.2 4.7 4.7
Interim dividend paid in the period - - 3.2
_______ _______ _______
Equity dividends paid 5.2 4.7 7.9
_______ _______ _______
Dividends on cumulative preference 0.1 0.1 0.1
shares (note 4)
Dividends per 40p 'A' and 'C' ordinary share declared in respect of the period Pence Pence Pence
Interim 6.40 5.80 5.80
Final - - 9.30
_______ _______ _______
6.40 5.80 15.10
_______ _______ _______
The pence figures are for the 40p 'A' and 'C' ordinary shares. The 4p 'B'
ordinary shares carry dividend rights of one tenth of those applicable to the
40p 'A' ordinary shares. Own shares held in the employee share trusts do not
qualify for dividends as the trustees have waived their rights. Dividends are
also not paid on own shares held as treasury shares.
The directors have declared an interim dividend of 6.40p (2013: 5.80p) for the
40p 'A' and 'C' ordinary shares, and 0.640p (2013: 0.580p) for the 4p 'B'
ordinary shares, with a total estimated cost to the Company of £3.5 million
(2013: £3.2 million).
8. PROPERTY, PLANT AND EQUIPMENT
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
27 September 28 September 29 March
2014 2013 2014
£m £m £m
Net book value at start of period 434.8 414.8 414.8
Additions 16.3 10.4 29.9
Business combinations 18.7 3.7 7.0
Disposals (1.0) (0.2) (1.1)
Transfer to assets held for sale - (0.3) (1.2)
Impairment loss net of reversals (0.5) (0.5) (0.5)
Depreciation provided during the period (7.6) (6.9) (14.1)
_______ _______ _______
Net book value at end of period 460.7 421.0 434.8
_______ _______ _______
During the 26 weeks ended 27 September 2014, the Group recognised a charge of
£0.5 million (28 September 2013: £0.5 million, 29 March 2014: £1.8 million) in
respect of the write down of licenced properties purchased in recent years
where their asset values exceeded either fair value less costs to sell or
their value in use.
9. ANALYSIS OF NET DEBT
Unaudited - 26 weeks At At
29 March 27 September
ended 27 September 2014 2014 Cash flows Non cash1 2014
£m £m £m £m
Cash and cash equivalents:
Cash and short term deposits 4.1 2.1 - 6.2
________ ________ ________ ________
4.1 2.1 - 6.2
Debt:
Bank loans (116.2) (17.9) (0.3) (134.4)
Other loans (0.2) 0.5 (0.5) (0.2)
Debenture stock (25.9) - - (25.9)
Preference shares (1.6) - - (1.6)
________ ________ ________ ________
(143.9) (17.4) (0.8) (162.1)
________ ________ ________ ________
Net debt (139.8) (15.3) (0.8) (155.9)
________ ________ ________ ________
________
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