Thwaites (Daniel) Plc Annual Financial Report

 
TIDMTHW 
 
CHAIRMAN'S STATEMENT 
 
The Company was having a good year until the last month of the financial year 
saw the world turned upside down by the impact of COVID-19 and forced closure 
notices. 
 
Our plan last year was to have a year of lower capital expenditure and run the 
business without interruption to understand the impact of our investments of 
the past few years and fine tune its performance. I am pleased to report that 
in the first 11 months, despite some challenging weather and trading 
conditions, the business was trading very well, with turnover up by 5% and 
operating profits running 12% ahead of the year before. 
 
Our hotel business had a good year, recovering well from the difficulties it 
faced last year and once again our Inns posted strong year on year growth. The 
tenanted pubs were broadly flat year on year. 
 
In early March we completed a refinancing of the business with our banks for a 
period of 3 years to 2023, which included facilities that gave us headroom and 
scope for investment in growth. All of this taken together meant that the 
Company was in good shape approaching its year end. 
 
Of course, the historic trading performance became irrelevant in March as the 
impact of the measures imposed by the government in response to COVID-19 tore 
into the business. Facing a total annihilation of sales our priority instantly 
switched to survival and the protection of the business in order to ride out 
the storm, conserve cash and protect the strength of the balance sheet. We were 
able to take advantage of the government schemes and position ourselves for a 
period of uncertainty. We have suffered several months of losses and are 
prepared for a slow recovery. 
 
We have used the time whilst not trading profitably to think about how we 
continue to improve our customer experience as we relaunch the business and 
start to recover. We have reviewed and revised how we will market to our 
customers and this has put us in a good place to reopen with an even stronger 
proposition. We have also considered our structures and cost base across all 
areas of the business, stripping out unnecessary expenditure and streamlining 
processes to make the business leaner. 
 
In relaunching we are fortunate to be able to take advantage of the investments 
that we have made over the past few years. Our properties across the business 
are in good order; well invested and tilted towards a more premium segment. At 
a time where cash conservation will continue to be important this is an 
advantage as there is a less immediate need to spend money on further 
development. 
 
FINANCIAL RESULTS 
 
Turnover for the year to 31 March 2020 grew by 1% to GBP98.1m (2019: GBP96.9m). 
The strongest growth once again came from the inns, although our hotels also 
posted good growth year on year, benefiting from the restructuring last year 
and renewed focus on room rate. 
 
Underlying operating profit (before GMP adjustment for past service in 2019) is 
lower than last year at GBP12.6m (2019: GBP13.0m). This reflects the impact of 
the downturn in trade from the second week of March and full closure of the 
business from 20 March, the impact of which was to create a reduction in profit 
in that month of GBP2.5m compared to prior year. 
 
Profit before tax was GBP3.6m (2019: GBP4.5m) and suffered from an adverse mark 
to market valuation on our swap contracts of GBP4.5m as a result of the 
emergency interest rate cut by the Bank of England on 19 March 2020 to 0.1%. 
 
Cash generation has been continued to be strong, with EBITDA of GBP19.5m (2019: 
GBP20.5m), a reduced capital investment programme of GBP10.8m (2019: GBP19.5m) 
and property disposals of GBP6.3m. Net debt decreased in the year by GBP4.3m 
from GBP69.7m at 31 March 2019 to GBP65.4m at 31 March 2020. 
 
ACQUISITIONS, DEVELOPMENTS AND DISPOSALS 
 
We have continued to invest in developing our properties however this year we 
have completed fewer large projects, the biggest being the redevelopment of the 
Flying Handbag in Blackpool, the refurbishment of The Judges Lodgings and 
bedrooms at Middletons, York. Our investments were performing well up to the 
date that our properties were shut. 
 
We acquired three pubs in the year for a total cost of GBP1.8m, The Pendle Inn 
in Barley, The Hare and Hounds in Foulridge and The Hart's Head in Giggleswick. 
All of these pubs have a number of bedrooms and will make good long-term 
additions to the estate. 
 
In November we sold Funny Girls, which we had acquired from the administrator 
in the previous year. This business was non-core and we were able to return it 
to its original owner. We continued to divest of pubs that no longer suit our 
requirements, and with ten properties sold in the year we received proceeds of 
GBP6.3m from disposals. 
 
DIVID 
 
An interim dividend of 1.10p (2019: 1.10p) was paid in January 2020 and further 
to the announcement made on 20 May 2020 the Board does not recommend payment of 
a final dividend this year (2019: 3.36p).  The preservation of cash is an 
absolute priority as the Company looks to reopen its properties and rebuild its 
profits, at which point future dividends will be reviewed. 
 
BOARD 
 
I am delighted that Mark Fisher join us as a non-executive director from 1 June 
2019. Mark is currently Chief Development Officer of Merlin Entertainments plc, 
where he has been a senior member of the management team for over 18 years. 
Since joining Mark has brought invaluable insight into how we continue to 
develop our customer offer. 
 
PEOPLE 
 
Our people are the beating heart of our business and it is only with their hard 
work and unwavering commitment to go the extra mile that we provide our 
customers with the high service levels that we deliver. 
 
We are a strong business with a long track record and excellent reputation as 
an employer of choice in our local markets. For the past few years, the labour 
market has been very tight and there has been no room for complacency. Now, 
employer reputations are being scrutinised in the current crisis, with the 
furlough scheme testing employee resilience and some team members on furlough 
losing self-confidence. 
 
We guard our family values preciously; they provide a strong framework for us 
to be able to respond to this challenge and to continue to support our teams 
and our reputation as an excellent employer. 
 
Our staff have been tremendously understanding and supportive of the Company 
over the past year and through the last few months and I would like to pass on 
my sincere thanks as we start to understand the speed at which the business 
will start to trade at more normal levels and bring them back to work. 
 
I would also like to thank our shareholders for their unquestioning support as 
we rebuild their business for the future. 
 
OUTLOOK 
 
The current COVID-19 crisis has burdened the business with more strain and 
uncertainty than I can remember at any time in the past two decades and much 
remains unclear about the speed and direction of any recovery. 
 
Indeed, it is likely that people's habits will be changed for good, with 
long-term societal drivers accelerated in areas such as online shopping and 
working from home dislocating behaviour and retail markets. 
 
Despite this, I remain positive that there is a place for Daniel Thwaites and 
our high quality and authentic hospitality in the new environment that we face. 
Lockdown has reinforced that humans are fundamentally sociable beings and they 
want to visit the pub, seek out rich experiences in their free time and spend 
time with their friends and families; we are extremely well placed to cater to 
this. 
 
The drive towards quality within our properties puts them in a good position to 
be the place of choice should customers choose to go out less frequently. We do 
not have properties in city centre locations and our larger hotels are located 
on the motorway network away from public transport. We have good representation 
in rural locations and national parks, places that people will seek out. The 
geographic diversity of our properties also provides some resilience should 
there be localised lockdowns as we continue to respond to the threat of 
COVID-19. 
 
It is therefore with optimism that we look to the next year and the future, 
even if the path for the moment is a bit uncertain. I am confident that we will 
navigate this coming year with dynamism and agility to rebuild our teams, our 
sales and our profitability in order to allow the company to thrive once more. 
 
R A J Bailey 
 
Chairman 
 
18 November 2020 
 
OPERATING REVIEW 
 
OVERVIEW 
 
The Company is seeing the benefits from several years of intensive capital 
investment and significant expenditure on acquiring and improving the Company's 
assets. The plan for the financial year to March 2020 was to drive sales, 
control costs and invest carefully, but at a lower level that previous years, 
in order to fully understand how the business trades without the disruption it 
has faced over recent years from its investment programme. The other key 
objective for the year was to reduce net debt in advance of a major investment 
project at Langdale Chase in 2020/21. 
 
The ongoing tightening of the labour market persisted throughout the year, and 
this challenging dynamic around attracting and recruiting talented team members 
has been an underlying theme for some time. We have responded by becoming the 
employer of choice in our local markets as a result of the strong culture of 
our family business and providing the opportunity for people to learn and 
progress within the Company. 
 
Another major theme of the past few years has been a rapid and material 
increase in the level of competition in the casual dining and accommodation 
markets, which has made it difficult to increase prices in response to 
increasing labour and overhead costs. Whilst we have tried to focus on the 
quality of our offer, discounting had become an endemic feature of the markets 
we operate in. 
 
In response to the increasing competitive pressures we have focused on the use 

of technology, and we have adopted a number of tools to help us to increase 
efficiency, reduce processes, manage data and enhance the customer journey. The 
approach we have taken to these during the past year has been to seek to 
differentiate ourselves, avoid discounting and use technology to help us to 
reduce both our fixed and variable costs. 
 
The arrival of COVID-19 in the winter of 2020 and the subsequent steps taken by 
the government to shut down the UK hospitality industry in order to seek to 
contain spread of the virus has had a dramatic effect on each of these themes, 
which is likely to persist for some time to come. 
 
The decision by the government to ask for the closure of every property the 
company operates on the 20 March 2020 had a material effect on the year end 
results, decimating our sales in the closing few weeks of the year and creating 
an immediate operating cost of closure in the last 10 days of the financial 
year cost of approximately GBP2.5m. The performance for the year should 
therefore be measured against this context. 
 
The first half of the year was challenging, characterised by a poor run of 
weather through the summer and political chaos ahead of the election in 
December 2019. This had the effect of decreasing consumer confidence as we 
entered the autumn. The previous year had seen a prolonged hot sunny summer and 
so the comparatives were challenging. 
 
Despite these factors the first half of the year was a success, with turnover 
ahead by 7% and operating profit up 9% at the half year. The pubs had a good 
run, increasing turnover and maintaining their profits, the inns had an 
excellent summer with strong increases in sales driven by room sales as people 
chose to stay in the UK, we benefited from the investment made in the previous 
year at The Beverley Arms. The hotels and spas also got off to a good start 
after a tricky previous year, posting a recovery in both sales and 
profitability. 
 
Despite all that was going on in the political arena this momentum was 
maintained into the autumn and spring, and by the end of February sales were up 
5% and operating profits were up 12%.  The underlying non-disrupted performance 
of the business was demonstrating the strength of the investment strategy that 
we have been pursuing and our plan to minimise disruption and focus on our core 
businesses. 
 
In March we suffered three weeks of disruption, which included ten days of no 
sales whatsoever and so we ended the year with sales having increased by 1%, on 
a like for like basis, EBITDA decreased by 5% to GBP19.5m (2019: GBP20.5m), 
whilst group operating profit increased to GBP12.6m (2019: GBP11.8m). Despite 
the disruption at the end of March, our net debt, which was a core focus for us 
during the year, ended the year at GBP65.4m (2019: GBP69.7m). 
 
Pubs and Inns 
 
Pubs 
 
Our freehold estate of tenanted pubs numbers approximately 230 properties. We 
continue to recycle capital into new, more attractive tenanted and managed pub 
opportunities, where there is the potential to invest and add value and so we 
continue to dispose of pubs that we do not believe have a long-term future with 
us. 
 
Our pub estate encompasses community locals to destination food led pubs in 
both rural and town centre locations, ranging geographically from Cumbria to 
the Midlands, and from North Wales to Yorkshire.  In the current environment 
the geographic diversity of the pub estate and the lack of exposure to major 
city centres should provide some resilience. 
 
We have been operating tenanted pubs for a long time, and we have a strong 
reputation for our well-established approach. We strongly value our reputation 
as a partner of choice, acting with integrity, and focusing on investing 
alongside proven operators to expand and improve the premises with a focus on 
establishing good quality food offerings. Where the property has the scope, and 
we believe the demand exists, we support the development of letting bedrooms. 
We have an estate of high quality, sustainable businesses with multiple income 
streams that have the ability to generate attractive cashflows. 
 
Our tenanted pubs have had a good year, and whilst they have not posted strong 
growth, this a mature business, delivering returns at least in line with 
inflation. They tend to be heavily influenced by weather and so are subject to 
the vagaries of the British summer. Despite a poor summer they held their own 
in the first half of the year, poor weather in the January and February 2020 
proved much more challenging and in March dropped significantly in the weeks up 
to lockdown. In a positive sign for the future the increasing move towards 
premium products by drinkers meant that our margins on beer sales, which 
comprise a significant element of income, has been growing ahead of trend.  The 
operating profit of the tenanted pub business decreased by 4% year on year, and 
average EBITDA per pub was level year on year. 
 
We acquired three new tenanted pubs in the second half of the year, The Pendle 
Inn, Barley, The Hare and Hounds, Foulridge and The Harts Head, Giggleswick, 
all of these pubs have accommodation and a strong food offering, two of them 
are in destination, honeypot walking locations and we expect they will all be 
good long-term additions to the Company. 
 
We sold the Odeon cinema, that we acquired as part of Funny Girls, back to the 
former owner in August 2019, and we also disposed of ten pubs during the year. 
 
The increased levels of tenant churn that we started to experience last year 
continued through the year, so that at the year-end we had 22 pubs (10% of the 
estate) which were looking for new tenants compared to 19 pubs last year. It is 
encouraging that since pubs re-opened on 4 July 2020 a number of tenants have 
withdrawn their notice, in addition to which we have seen strong pickup in 
interest from high quality candidates looking to take on a pub with us. 
 
During the year we completed 12 development projects at a cost of GBP1.9m. The 
major project in the year was the refurbishment of the Flying Handbag in 
Blackpool, which is one of the most well-known LGBT venues in the north of 
England. We invested GBP600k in a complete refurbishment and relaunched the 
property at the end of February 2020; prior to lockdown the pub was trading 
well ahead of expectations and we expect that it will trade very well once 
distancing measures are relaxed. Other major projects were completed at the 
Malt Shovel, Barkby, The Bluebell, Carlton-in-Lindrick and the Boot and Shoe, 
Elswick. 
 
Brewery 
 
Our new craft brewery was launched in July 2018 and has gone from strength to 
strength since. It has won awards for the quality of its ales and customer 
feedback on the beers has been fantastic. We continue to brew ales only for 
distribution in our own properties and this path is proving to be a successful 
one for us. 
 
In the summer of 2019, we launched a new core range of five beers to such 
resounding support that we quickly took the decision to increase capacity in 
the brewery. We installed three new fermenting vessels in October and are now 
able to keep up with increased demand. 
 
This coming year we will build on this success by re-introducing our popular 
range of guest ales, which was not possible whilst we were capacity 
constrained. 
 
Inns 
 
We own and manage a growing portfolio of inns and we will continue to look to 
expand this segment of our business in the future through the acquisition of 
high-quality properties in outstanding locations to develop this part of our 
business. 
 
Our Inns are positioned at the premium end of the market, they have a busy bar 
at their core, a home cooked food offering and high quality, comfortable 
accommodation - they focus on providing outstanding hospitality and offer an 
attractive and more personal alternative to the mid-market hotel chains. 
 
This segment of the market has performed strongly over the past few years and 
is positioned for continued growth as customers look for something special that 
is authentic and honest, delivered by operators who can provide a quality 
experience consistently. We have worked hard in this area and sales during the 
year increased by 8% and operating profits have increased by 13%. 
 
The Inns have all delivered strong performances, but in particular The Beverley 
Arms and The Crown, Pooley Bridge have posted exceptional performances which 
bodes well for the future. 
 
In York, the performance of The Judges Lodging had started to suffer due to a 
number of new entrants to the market since we opened five years ago, so in 
January 2020 we closed it for a refurbishment of the bedrooms, restaurants and 
bars. It is now well placed to make the most of its superb location and its 
strong offering as the market picks up again. 
 
Hotels & Spas 
 
We own and operate ten hotels which are spread across England. Our hotels are 
positioned towards the premium end of the market and most have leisure and spa 
facilities. In recent years we have invested in them to amplify the individual 
character of each hotel in its local area, supported by a great food and drink 
offering with local nuances. Our vision, similar to our Inns, is to create a 
collection of interesting, characterful contemporary hotels, that are the best 
in their local area. 
 
The operational plan for the year was to minimise disruption after a number of 
years of major capital projects and focus on quality and service. This has been 
successful and against a provincial hotel market that has been struggling and 
where revenue per available room decreased in value by 1%, our hotels sales 
were trending prior to lockdown at 7% growth, with operating profits at the end 
of February up 19%, a strong recovery from a difficult performance the previous 
year. With the impact of closure in March they ended the year with increased 
sales of 3%, with operating profit also up by 3% year on year, which was ahead 
of the UK regional market. 
 
We completed very few refurbishment schemes in the year, with the exception of 

some pool hall and gym refurbishments. We finalised our refurbishment plans for 
Langdale Chase, which is a major scheme designed to reposition the hotel into 
the luxury end of the market and the works planned will require closing the 
hotel for a full year. The project has been put on hold for the time being 
whilst we assess the speed of any recovery in the market post COVID-19. 
 
The performance of the hotels prior to lockdown was very encouraging and we 
were making progress to increase our rooms income both through increased 
occupancy and rate. The location of our hotels, outside city centres and 
positioned mainly on the motorway networks, with integrated spa and leisure 
facilities should stand them in good stead as the hotel market recovers. 
 
Summary and future developments 
 
The business was trading well as we entered March 2020 and was on track to post 
good year on year growth in all areas, performing in line with or ahead of the 
market. This momentum was significantly impacted by lockdown, but the factors 
that were driving the performance as we shut down provide reassurance that once 
the market starts to recover the positioning of our estate of pubs, inns and 
hotels is well placed to come out of the current crisis in a strong position. 
 
The common themes of the last few years regarding the labour market and 
increased competition, especially from the casual dining market, look likely to 
abate and even reverse as a consequence of COVID-19. Business failure and 
increased unemployment become clearer in the coming months. Supply of new 
hotels into the regional market looks as though it will be muted until hotels 
have fully reopened and recovery is embedded. 
 
We have accelerated in lockdown the use of new technology by implementing 
online ordering and payment and improving our EPoS and customer feedback 
systems, creating further efficiency gains. 
 
Forced lockdowns have required us to face into the abyss of survival. Our 
thoughts are about how we can maintain and build back the quality of our 
offering and our guest experience to reinforce the progress that we made in 
previous years. In this we have an opportunity to continue to stand out from 
the crowd and emerge as the best on the block. 
 
Opportunities will arise from the changed operating environment and we are 
ready to embrace them, be it through taking advantage of staycations, 
continuing to drive quality in our food and drink offering, taking advantage of 
the labour market to attract great quality candidates and in the fullness of 
time looking for more acquisitions. 
 
Our operational plan last year and focus on reducing our net debt meant that we 
ended the year in a strong position to confront the COVID-19 crisis. Whilst to 
some degree we are exposed to consumer confidence, the strength of the economy 
and the appetite of our corporate customers to visit our hotels, our relative 
position in the market is favourable and we are ready to make the most of the 
situation in which we find ourselves. 
 
Financial Review 
 
Results 
 
Turnover for the year ended 31 March 2020 increased by 1% to GBP98.1m (2019: 
GBP96.9m). Operating profit increased by 7% to GBP12.6m (2019: GBP11.8m). 
 
The measurement of the interest rate swaps at fair value resulted in a charge 
of GBP4.5m (2019: a charge of GBP2.5m). 
 
Profit before taxation for the year was GBP3.6m (2019: GBP4.5m). 
 
Business Review 
 
The key issues facing the Group are covered in the Chairman's Statement and 
Strategic Report. The KPIs used by the Group to monitor its overall financial 
position can be summarised as follows: 
 
                                                              2020        2019 
 
Group                                                        GBP'm       GBP'm 
 
Turnover                                                      98.1        96.9 
 
EBITDA                                                        19.5        20.5 
 
Depreciation                                                   7.7         7.6 
 
Operating profit (before highlighted item)                    12.6        11.8 
 
Profit before tax                                              3.6         4.5 
 
Net debt                                                      65.4        69.7 
 
Earnings per share (pence)                                     5.6         5.9 
 
Pubs and Inns 
 
                                                             GBP'm       GBP'm 
 
Turnover                                                      52.8        52.7 
 
EBITDA                                                        18.1        17.9 
 
Depreciation                                                   3.6         3.6 
 
Operating profit (before Group central charges)               14.5        14.3 
 
Average number 
Tenanted                                                       225         238 
Managed                                                         13          13 
 
Hotels & Spas 
 
                                                             GBP'm       GBP'm 
 
Turnover                                                      45.3        44.2 
 
EBITDA                                                        10.0         9.8 
 
Depreciation                                                   3.5         3.5 
 
Operating profit (before Group central charges)                6.5         6.3 
 
Average number                                                  10          10 
 
The principal non-financial indicators monitored by management are: 
 
Pubs and Inns 
 
Utility consumption, health and safety incidents, beer volumes, customer 
ratings and tenant recruitment. 
 
Hotels 
 
Room occupancy rates, customer ratings, health and safety incidents, spa 
memberships and wedding and event numbers. 
 
Interest rate swaps measured at fair value 
 
The Group has interest rate swaps for GBP55m which are recognised as a 
financial liability. During the year ended 31 March 2020, there was significant 
volatility in future interest rate expectations due to the political and 
economic uncertainty arising from Brexit, followed by a significant reduction 
in interest rates in March 2020 as a reaction to the COVID-19 pandemic, as a 
result the movement in the fair value of the interest rate swaps was a charge 
to the profit and loss account of GBP4.5m (2019: a charge of GBP2.5m). 
 
Interest payable 
 
Net interest payable was GBP3.9m (2019: GBP3.9m) as loan capital decreased from 
GBP73.5m at the start of the year to GBP65.5m at the end of the year. 
 
Taxation 
 
The tax charge on profit for the year was GBP0.3m, an effective rate of 8.3%, 
due to adjustments to deferred tax as the future tax rate was changed from 17% 
to 19% at the last budget. 
 
Earnings per share 
 
The earnings per share was 5.6p (2019: 5.9p). 
 
Dividends 
 
An interim dividend of 1.10p has been paid, but the Board did not recommend the 
payment of a final dividend due to the need to preserve cash due to the closure 
of the business in response to the COVID-19 pandemic, which will make a total 
of 1.10p for 2020 (2019: 4.46p). 
 
Cash flow and financing 
 
The Group's net borrowing reduced by GBP4.3m, from GBP69.7m at 31 March 2019 to 
GBP65.4m at 31 March 2020 due to proceeds from property disposals. 
 
The Group made deficit contributions to the defined benefit pension schemes of 
GBP0.8m (2019: GBP1.8m). Whilst these schemes were closed in August 2009, the 
Group is committed to funding the deficit on the schemes which was GBP32.3m, 
before tax, at 31 March 2020, an increase of GBP7.5m from GBP24.8m at 31 March 
2019. 
 
The Group renewed it bank facilities in March 2020, putting in place revolving 
credit facilities of GBP35m, of which GBP20.5m was drawn down at 31 March 2020. 
The Group also has GBP45m of long-term debt and cash balances of GBP0.1m at 31 
March 2020. 
 
The combined deficits of the defined benefit pension schemes, net of deferred 
tax, increased by GBP5.6m from GBP20.6m at 31 March 2019 to GBP26.2m at 31 
March 2020. 
 
The main reason for the increase in the deficit is due to a significant fall in 
the value of scheme assets at 31 March 2020 due to the impact of the COVID-19 
pandemic on equity values. This was partially offset by the adoption of revised 
mortality projections, and a fall in inflation expectations which placed a 
lower value on scheme liabilities. 
 
Property 
 
During the year we sold ten pubs, Funny Girls in Blackpool and three ancillary 
properties for a total of GBP6.3m generating a profit against book value, after 
disposal costs, of GBP0.8m. 
 
In line with our accounting policy, 20% of our properties were subject to a 
formal revaluation, and additionally an impairment review was carried out on 
the rest of our property estate. This resulted in a reduction in the total 
value of our property portfolio of GBP2.0m, of which GBP2.3m was added to the 
revaluation reserve and GBP0.3m deducted from cost and charged to the profit 
and loss account. 
 
Treasury policy and financial risk management 
 
Treasury policies are subject to Board approval. All borrowings are in sterling 
and comprise a mixture of fixed interest loans and facilities carrying LIBOR 
related floating rates. The Group has interest rate swaps for GBP55m where it 
is committed to pay the difference between LIBOR and fixed interest rates. At 
31 March 2020 a financial liability of GBP21.4m has been recognised in respect 
of these interest rate swap contracts. 
 
Going Concern 
 
At 31 March 2020 the Company had total borrowing facilities of GBP82m, which 
were made up of the long-term loan of GBP45m, revolving credit facilities of 
GBP35m and overdraft facilities of GBP2m. When compared to net debt of GBP65.4m 
at 31 March 2020, this gave head room of GBP16.6m. 
 
The Company has a strong balance sheet with just under GBP300m of high-quality 
freehold assets, and went into this crisis with a relatively low level of 
gearing. 
 
The decisive actions taken by the Company and the financial support that the 
hospitality industry has received from the UK government together mean that 

during the period from 1 April to 30 September 2020 net debt increased by only 
GBP1.2m. 
 
The Company carried out detailed financial forecasting to access the potential 
impact of the COVID-19 pandemic on the business over the period until March 
2023. These forecasts show that an operating loss and an increase in net debt 
are likely in the year ending 31 March 2021. 
 
The Company comfortably met all its bank covenants at 31 March 2020, but the 
forecasts showed that due to closure covenants would be breached during the 
year ending 31 March 2021 and potentially beyond. This depends on what 
restrictions continue to be imposed on the hospitality industry and the rate of 
business recovery once they are removed. The Company received covenant waivers 
or relaxed covenant tests from its lenders at 30 June 2020 and 30 September 
2020. 
 
The restrictions that have been imposed on the hospitality industry in terms of 
capacity reduction due to table spacing, the 10.00pm curfew, and the tier 
system followed by the second full lockdown starting on 5 November have created 
further uncertainty and make forecasting future performance very difficult. 
 
The Company is having ongoing covenant renegotiations with its lenders and will 
continue to do so throughout the duration of its recovery. Whilst the directors 
believe that the current facilities should be sufficient to see it through, it 
is looking to put additional revolving credit facilities in place as a prudent 
measure. The Company has very strong long-term relationships with its lenders, 
who are very supportive of the Company, and the Directors believe that these 
negotiations will be successful. 
 
Despite the material uncertainties described above, the financial statements 
have been prepared on a going concern basis as the Board believes that it will 
be able to take the appropriate actions during this ongoing period of 
uncertainty to ensure the long-term future of the business. 
 
Kevin Wood 
 
Finance Director 
 
18 November 2020 
 
EXTRACT FROM AUDITED FULL FINANCIAL STATEMENTS FOR THE YEARED 
 
31 MARCH 2020 
 
GROUP PROFIT AND LOSS ACCOUNT 
 
                                                                                  2020    2019 
                                                                                 GBP'm   GBP'm 
 
 
                                                                                 Total   Total 
 
Turnover                                                                          98.1    96.9 
 
Cost of sales                                                                   (74.1)  (72.8) 
 
Gross profit                                                                      24.0    24.1 
 
Distribution costs                                                               (3.8)   (3.7) 
 
Administrative expenses                                                          (8.4)   (7.5) 
 
Operating profit before                                                           11.8    12.9 
highlighted item and property 
disposals 
 
Highlighted item - GMP                                                               -   (1.2) 
adjustment for past service 
Property disposals                                                                 0.8     0.1 
 
Operating profit                                                                  12.6    11.8 
 
Net interest payable                                                             (3.9)   (3.9) 
Loss on interest rate swaps                                                      (4.5)   (2.5) 
measured at fair value 
 
Finance charge on pension                                                        (0.6)   (0.9) 
liability 
 
Profit on ordinary activities                                                      3.6     4.5 
before taxation 
 
Taxation on profit for the                                                       (0.3)   (1.0) 
year 
 
Profit on ordinary activities                                                      3.3     3.5 
after taxation 
 
Earnings per share                                                               5.6p     5.9p 
 
DANIEL THWAITES PLC 
 
GROUP BALANCE SHEET 
At 31 March 2020                                                                2020     2019 
                                                                               GBP'm    GBP'm 
 
___________________________________________________________________________  _______  _______ 
 
Fixed Assets 
 
Tangible assets                                                                297.5    298.0 
 
Investments                                                                      0.8      0.8 
___________________________________________________________________________  _______  _______ 
 
                                                                               298.3    298.8 
 
Current assets 
 
Stocks                                                                           0.5      0.7 
 
Trade and other debtors                                                         11.1      9.8 
 
Cash at bank and in hand                                                         0.5      3.8 
___________________________________________________________________________  _______  _______ 
 
Creditors due within one year                                                   12.1     14.3 
 
Trade and other creditors                                                     (13.3)   (15.2) 
 
Loan capital and bank overdraft 
___________________________________________________________________________    (0.4)   (28.5) 
                                                                             _______ 
                                                                                      _______ 
 
 
                                                                              (13.7)   (43.7) 
 
 
Net current liabilities                                                        (1.6)   (29.4) 
___________________________________________________________________________  _______  _______ 
 
Total assets less current liabilities                                          296.7    269.4 
 
Creditors due after one year                                                  (86.9)   (63.9) 
___________________________________________________________________________   ______  _______ 
 
 
Net assets excluding pension liability                                         209.8    205.5 
___________________________________________________________________________  _______  _______ 
 
 
Pension liability                                                             (32.3)   (24.8) 
___________________________________________________________________________  _______  _______ 
 
Net assets                                                                     177.5    180.7 
___________________________________________________________________________  _______  _______ 
 
Capital and reserves 
 
Called up share capital                                                         14.7     14.7 
 
Capital redemption reserve                                                       1.1      1.1 
 
Revaluation reserve                                                             75.8     74.1 
 
Profit and loss account                                                         85.9     90.8 
 
___________________________________________________________________________  _______ ________ 
 
 
Equity shareholders' funds                                                     177.5    180.7 
                                                                            ________ ________ 
___________________________________________________________________________ 
 
DANIEL THWAITES PLC 
 
GROUP CASH FLOW STATEMENT 
 
For the year ended 31 March 2020 
 
                                                                                2020      2019 
                                                                               GBP'm     GBP'm 
__________________________________________________________________________   _______   _______ 
 
 
Cash flow from operating activities                                             18.7      19.2 
 
Tax paid                                                                       (1.5)     (2.1) 
 
Cash flow from financing activities                                           (13.9)       1.2 
 
Cash flow from investing activities                                            (4.4)    (14.7) 
 
Equity dividends paid                                                          (2.6)     (2.6) 
__________________________________________________________________________   _______   _______ 
 
 
(Decrease) increase in cash and cash equivalents                               (3.7)       1.0 
Cash and cash equivalents at beginning of year                                   3.8       2.8 
__________________________________________________________________________   _______   _______ 
Cash and cash equivalents at end of year                                         0.1       3.8 
Loan capital                                                                  (65.5)    (73.5) 
__________________________________________________________________________   _______   _______ 
Net debt                                                                      (65.4)    (69.7) 
 
Reconciliation of net cash flow to movement in net debt 
 
(Decrease) increase in cash                                                    (3.7)       1.0 
 
Cash flow from decrease (increase) in debt                                       8.0     (7.0) 
___________________________________________________________________________  _______   _______ 
 
                                                                                 4.3     (6.0) 
 
Net debt at beginning of year                                                 (69.7)    (63.7) 
___________________________________________________________________________  _______   _______ 
 
 
Net debt at end of year                                                       (65.4)    (69.7) 

___________________________________________________________________________ ________  ________ 
 
 
 
END 
 

(END) Dow Jones Newswires

November 18, 2020 11:01 ET (16:01 GMT)