REG - Young & Co's Brew. - Half-year Report <Origin Href="QuoteRef">YNGa.L</Origin> - Part 2
10/11/2016 07:05
- Part 2: For the preceding part double click ID:nRSJ7947Oa
(1) The acquisition costs related to the purchase of the Woolpack
(Bermondsey) and the Blue Boar (Chipping Norton). They include legal and
professional fees and stamp duty land tax.
(2) The profit on sales of properties in the prior year related to the
difference between cash, less selling costs, received from the sale or lease
termination of the Seven Stars (Brighton), New Town (Sutton) and the Sekforde
Arms (Clerkenwell) and the carrying value of the assets at the date of sale.
(3) In the prior period, restructuring costs related to a
reorganisation of the group's head office functions. These were largely made
up of severance costs and consultancy fees.
(4) In the prior period, the goodwill impairment was a non-cash item
that related to the Lord Palmerston (Tufnell Park) which was transferred out
of the Geronimo group of cash generating units (which are the pubs trading
under the Geronimo concept) and fell within the Geronimo managed houses
segment.
(5) The upward movement on the revaluation of properties in the
previous period related to a reversal of previous downward valuations in the
income statement, and the downward movement on the revaluation of properties
related to an impairment charge.
(6) The tax attributable to exceptional items in the current period
relates to an adjustment in respect of the prior year on deferred tax on
properties.
Other financial measures
The table below shows how adjusted group EBITDA, operating profit and profit
before tax have been arrived at. These alternative performance measures have
been provided as the board believes that they give useful additional measures
of the group's underlying performance.
Restated Restated
26 weeks 26 weeks 52 weeks
to 26 Sep 2016 to 28 Sep 2015 to 28 Mar 2016
£m £m £m
Profit before tax 22.1 19.8 32.8
Operating exceptional items 0.3 0.8 2.8
Adjusted profit before tax 22.4 20.6 35.6
Net finance costs 2.7 2.6 5.3
Other finance charges 0.1 0.2 0.3
Adjusted operating profit 25.2 23.4 41.2
Depreciation and amortisation 9.9 8.3 17.2
Adjusted EBITDA 35.1 31.7 58.4
4. Taxation
The taxation charge for the 26 weeks ended 26 September 2016 has been
calculated by applying an estimate of the effective tax rate before
exceptional items for the 53 weeks ending 3 April 2017 at 21.0% (2016:
20.9%).
Restated Restated
26 weeks 26 weeks 52 weeks
to 26 Sep to 28 Sep to 28 Mar
2016 2015 2016
Tax charged in the group income statement £m £m £m
Current tax
Corporation tax expense 4.8 4.4 7.1
Adjustment in respect of current tax of prior periods - - (0.1)
4.8 4.4 7.0
Deferred tax
Origination and reversal of temporary differences (0.1) (0.5) 1.6
Change in corporation tax rate (1.0) - (1.7)
Adjustment in respect of deferred tax of prior periods (0.3) - (0.7)
(1.4) (0.5) (0.8)
Tax expense 3.4 3.9 6.2
Deferred tax in the group income statement
Property revaluation and disposals (1.2) (0.6) (0.5)
Fair value gains on acquisition of subsidiaries - - (0.1)
Retirement benefit schemes - 0.5 0.2
Capital allowances (0.1) (0.1) (0.1)
Share based payments (0.1) (0.3) (0.3)
Tax credit (1.4) (0.5) (0.8)
Deferred tax in the group statement of comprehensive income
Interest rate swaps (0.3) 0.2 -
Retirement benefit schemes (3.2) 0.4 0.9
Property revaluation and disposals (0.5) (0.2) 2.0
Change in corporation tax rate (1.6) - (3.2)
Tax (credit) / expense (5.6) 0.4 (0.3)
The reduction in the headline rate of corporation tax from 18% to 17%
applicable from 1 April 2020 was substantively enacted on 15 September 2016.
Accordingly, the deferred tax balances have been measured at 17% to reflect
the new rate.
5. Earnings per ordinary share
(a) Earnings Restated
26 weeks 26 weeks 52 weeks
to 26 Sep 2016 to 28 Sep 2015 to 28 Mar 2016
£m £m £m
Profit attributable to equity shareholders of the parent 18.7 15.9 26.6
Operating exceptional items 0.3 0.8 2.8
Tax attributable to above adjustments (0.3) (0.4) 0.7
Change in corporation tax rate (1.0) - (1.7)
Adjusted earnings after tax 17.7 16.3 28.4
Number Number Number
Basic weighted average number of ordinary shares in issue 48,757,952 48,532,089 48,598,203
Dilutive potential ordinary shares from outstanding employee share options 25,640 36,157 26,324
Diluted weighted average number of shares 48,783,592 48,568,246 48,624,527
(b) Basic earnings per share Restated
Pence Pence Pence
Basic 38.35 32.76 54.73
Effect of exceptional items and other adjustments listed above (2.05) 0.83 3.71
Adjusted basic 36.30 33.59 58.44
(c) Diluted earnings per share Restated
Pence Pence Pence
Diluted 38.33 32.74 54.70
Effect of exceptional items and other adjustments listed above (2.05) 0.82 3.71
Adjusted diluted 36.28 33.56 58.41
The basic earnings per share figure is calculated by dividing the net profit
for the period attributable to equity shareholders of the parent 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
25,640 (2015: 36,157) dilutive potential shares under the SAYE scheme.
Adjusted earnings per share are presented to eliminate the effect of the
exceptional items and the change in corporation tax rate on basic and diluted
earnings per share.
6. Dividends on equity shares
26 weeks 26 weeks 52 weeks
to 26 Sep 2016 to 28 Sep 2015 to 28 Mar 2016
Pence Pence Pence
Final dividend (previous period) 9.07 8.56 8.56
Interim dividend (current period) - - 8.38
9.07 8.56 16.94
The table above sets out dividends that have been paid. The interim dividend,
in respect of the period ended 26 September 2016, of 8.88 pence per share at a
cost of £4.3 million is expected to be paid on 9 December 2016 to shareholders
on the register at the close of business on 25 November 2016.
7. Net cash generated from operations and analysis of net debt
Restated Restated
26 weeks 26 weeks 52 weeks
to 26 Sep 2016 to 28 Sep 2015 to 28 Mar 2016
£m £m £m
Profit before tax 22.1 19.8 32.8
Net finance cost 2.7 2.6 5.3
Other finance charge 0.1 0.2 0.3
Operating profit 24.9 22.6 38.4
Depreciation and amortisation 9.9 8.3 17.2
Movement on the revaluation of property - - 1.2
Goodwill impairment - 0.3 0.3
Profit on sales of property and associated goodwill (0.1) (0.2) (0.1)
Difference between pension service cost and cash contributions paid (0.8) (2.4) (2.9)
Share based payments 0.2 0.3 0.5
Movements in working capital
- Inventories (0.2) (0.2) -
- Receivables 0.4 (0.7) (0.9)
- Payables (1.2) 3.3 6.7
Net cash generated from operations 33.1 31.3 60.4
Analysis of group net debt
At 26 Sep 2016 At 28 Sep 2015 At 28 Mar 2016
£m £m £m
Cash 2.3 5.8 13.2
Loan capital and finance leases (129.6) (131.8) (143.4)
Net debt (127.3) (126.0) (130.2)
8. Property and equipment
Restated
Restated Fixtures,
Land & fittings & Restated
buildings equipment Total
£m £m £m
Cost or valuation
At 30 March 2015 591.7 106.8 698.5
Additions 14.0 25.0 39.0
Business combinations 2.3 1.2 3.5
Disposals (4.2) (1.5) (5.7)
Fully depreciated assets - (12.7) (12.7)
Revaluation
- effect of upward movement in property valuation 25.5 - 25.5
- effect of downward movement in property valuation (5.5) - (5.5)
At 28 March 2016 623.8 118.8 742.6
Additions 3.3 11.6 14.9
Business combinations 4.7 0.7 5.4
Disposals (0.3) (0.1) (0.4)
Fully depreciated assets (0.9) (0.3) (1.2)
Revaluation
- effect of upward movement in property valuation - - -
- effect of downward movement in property valuation - - -
At 26 September 2016 630.6 130.7 761.3
Depreciation and impairment
At 30 March 2015 38.3 52.5 90.8
Depreciation charge 1.6 15.1 16.7
Disposals (0.9) (1.3) (2.2)
Fully depreciated assets - (12.7) (12.7)
Transfers (1.0) - (1.0)
Revaluation
- effect of downward movement in property valuation 3.7 0.3 4.0
- effect of upward movement in property valuation (2.8) - (2.8)
At 28 March 2016 38.9 53.9 92.8
Depreciation charge 1.0 8.6 9.6
Disposals - (0.1) (0.1)
Fully depreciated assets (0.9) (0.3) (1.2)
Revaluation
- effect of downward movement in property valuation - - -
- effect of upward movement in property valuation - - -
At 26 September 2016 39.0 62.1 101.1
Net book value
At 30 March 2015 553.4 54.3 607.7
At 28 March 2016 584.9 64.9 649.8
At 26 September 2016 591.6 68.6 660.2
8. Property and equipment (continued)
Revaluation of property and equipment
The values of the group's freehold and leasehold land, buildings and fixtures
and fittings were reviewed in light of current market factors (but have not
been updated as at 26 September 2016 from their year-end market values as
there has been no change in the current period) by Andrew Cox MRICS, the
group's director of property and tenancies and a Chartered Surveyor, pursuant
to the group's accounting policy. This review was carried out in accordance
with the provisions of the RICS Valuation - Professional Standards January
2014 ('the Red Book'), which takes account of each property's highest and best
use value.
Each individual pub is valued as a fully equipped operational entity after
taking into account its trading potential, location, tenure, size and
condition and other factors such as recent market transactions. Changes in
these variables and assumptions could materially impact the valuations.
These values and the assumptions used to derive these values were discussed
and reviewed with Andrew Cox, the board and the auditor. The highest and best
use of its properties does not differ materially from their current use.
These techniques are consistent with the principles in IFRS 13 Fair Value
Measurement and use significant unobservable inputs such that the fair value
measurement of each property within the portfolio has been classified as Level
3 in the fair value hierarchy.
The key inputs to valuation are consistent with those set out in the group's
audited accounts for the 52 weeks ended 28 March 2016.
9. Retirement benefit schemes
The table below summarises the movement in the retirement benefit schemes'
deficit in the period.
26 weeks 26 weeks 52 weeks
to 26 Sep 2016 to 28 Sep 2015 to 28 Mar 2016
£m £m £m
Changes in the present value of the retirement benefit schemes are as follows:
Opening deficit (6.3) (13.1) (13.1)
Current service cost (0.2) (0.3) (0.5)
Contributions 1.0 2.7 3.4
Other finance charge (0.1) (0.2) (0.3)
Remeasurement through other comprehensive income (17.8) 2.3 4.2
Closing deficit (23.4) (8.6) (6.3)
10. Share capital
Total share capital comprises the share capital issued and fully paid of £6.1
million (2016: £6.1 million) and the share premium account of £5.1 million
(2016: £4.1 million). Share capital issued in the period comprises the
nominal value of £nil (2016: £nil) and share premium of £1.0 million (2016:
£1.4 million).
The shares issued in the current period relate to directors' and senior
management's share awards and the exercise of share options under our SAYE
scheme.
This information is provided by RNS
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