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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Fuller Smith & Turner Plc | LSE:FSTA | London | Ordinary Share | GB00B1YPC344 | 'A' ORD 40P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -2.00 | -0.33% | 604.00 | 600.00 | 604.00 | 610.00 | 604.00 | 606.00 | 49,453 | 15:07:42 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Malt Beverages | 336.6M | 7.9M | 0.1299 | 46.96 | 370.95M |
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Fuller, Smith & Turner PLC (FSTA)
Fuller, Smith & Turner PLC: Final Results
30-Jul-2020 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014
(MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
STRICTLY EMBARGOED
UNTIL 7AM THURSDAY 30 JULY 2020
FULLER, SMITH & TURNER P.L.C.
("Fuller's", the "Group" or the "Company")
Financial results for the 52 weeks ended 28 March 2020
A transformational year for a long-term business
Financial and Operational Indicators
· Revenue and other income from continuing operations up 3% to GBP333.0 million (2019: GBP324.7 million)
· Pre IFRS 16 profit before tax for total Group operations of GBP174.5 million (2019: GBP26.1 million). Statutory
profit before tax for total Group operations of GBP166.2 million
· Basic earnings per share pre IFRS 16 for total Group operations of 305.86p (2019: 35.12p)
· Good performance from Managed Pubs and Hotels pre coronavirus with like for like sales[1] growth of 2.3% for the
49 weeks to 7 March 2020 (2019: +4.9%) - ahead of the industry average
· Like for like growth in all areas of the business - drinks sales up 1.7%, food sales up 1.9% and accommodation
sales up 5.9% for the 49 weeks to 7 March 2020
· Steady performance from Tenanted Inns - like for like profits[2] declined 3% (2019: +1%) in a tough trading
environment
· Net debt pre IFRS 16 reduced by GBP66.3 million to GBP178.9 million at year end
· Strong returns to shareholders during the year, equating to GBP1.33 per 'A' ordinary share
· GBP162.4 million profit from the sale of the Fuller's Beer Business
· Impact of coronavirus on 2019/20 trading is estimated in excess of GBP10 million
· Entire pubs and hotels portfolio closed post government coronavirus directive from 20 March 2020 - phased
reopening started 4 July with 163 Managed Pubs and Hotels and almost all Tenanted Inns open as of today.
Strategy Update
· Completed the sale of the Fuller's Beer Business to Asahi Europe Ltd for the enterprise value of GBP250 million in
April 2019
· Acquired Cotswold Inns & Hotels for an enterprise value of GBP40 million - seven stunning freehold sites that are a
great addition to our portfolio
· Returned GBP69 million to shareholders
· Voluntary contribution of GBP24 million to the defined benefit pension scheme
· Completed the Transitional Services Agreement with Asahi in April 2020
· Purchased Pier House - a new freehold office for our support centre in our Chiswick heartland
· Opened The Windjammer at Royal Docks, a new build site, and The Bear of Burton near Christchurch, Dorset - an
outstanding pub with rooms
· Sold the freehold of The Castle, Acton for GBP10.3 million.
Current Trading and Outlook
· Over 75% of Managed Pubs and Hotels and almost all Tenanted Inns already reopened
· Too early to draw meaningful conclusions for the longer term, but comfortable with current levels of trade
· Issued GBP100 million of commercial paper through the Bank of England Covid Corporate Financing Facility
· Completed the integration of Cotswold Inns & Hotels and Bel & The Dragon
· Completed the sale of The Stable to Three Joes.
Commenting on the results, Chief Executive Simon Emeny said: "When we released our interim statement in December
2019, we were on track to finish the financial year in a good position having received the proceeds from the sale of
the Fuller's Beer Business and with a clear future path laid out before us. It had been a transformational year for
Fuller's - but we would never have anticipated that we would end it in March with the whole hospitality industry in a
state of closure and with no income stream.
"Against this backdrop, it is easy to forget that the financial year started in April 2019 with the sale of the
Fuller's Beer Business to Asahi Europe Ltd for an enterprise value of GBP250 million, followed in October 2019 by the
acquisition of Cotswold Inns & Hotels - seven stunning hotels in the heart of the Cotswolds - from existing bank
facilities. The decision to sell the Fuller's Beer Business at that time has proved fortuitous and ensured we were in
a strong position, with substantial liquidity headroom, when the coronavirus pandemic struck.
"While it is still early days, it is pleasing to see our teams welcoming guests back and we have taken a range of
actions and measures to ensure our pubs are safe and inviting. The first stage of our three stage plan saw 27 pubs
open on 4 July 2020 and another 136 since - meaning over 75% of our Managed Pubs and Hotels are now open. Almost all
our Tenanted Inns have also reopened. While it is too early to draw any meaningful conclusions, we are comfortable
with the level of trade and we continue to monitor footfall in those areas where our pubs are not yet open.
"While we are prepared for business, particularly in London, to take some time to return to normal, we are well
placed to satisfy the uptick in demand for staycations as many customers holiday closer to home - an opportunity we
are supporting with marketing activity for our Beautiful Bedrooms. We continue to focus on minimising cash burn and
returning to profitability. During August, we will gradually reintroduce rent for Tenants - but on a tapered basis to
help with their own return to sustainable trading levels.
"In these uncertain times, it is challenging to accurately predict the future. But having begun reopening our pubs
nearly four weeks ago, it is encouraging to see customers returning to our pubs and this steady growth in consumer
confidence will be the key to success - not just of our Company or our industry but the economy as a whole. We have a
well-balanced estate geographically and that, combined with a freehold asset base and the calibre of our people, puts
us in a stronger position than many to build towards sustained profitability in this full year and a strong start to
the FY2022 financial year.
"A freehold approach is a fundamental foundation of our long-term business. It is not always fashionable, but yet
again it underpins our ability to survive the toughest of times. We are proud to be 175 years old this year and with
our balanced and well-invested estate, prudent approach to finance and amazing team of dedicated people, we will
still be here for generations to come."
-Ends-
For further information, please contact:
Fuller, Smith & Turner P.LC.
Simon Emeny, Chief Executive 020 8996 2000
Adam Councell, 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.
Fuller's has 215 Managed Pubs, with 1,028 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 City of London heartland to
the Jurassic Coast via the New Forest. Our Managed Pubs and Hotels include 15 iconic Ale & Pie pubs, seven stunning
hotels in the Cotswolds and Bel & The Dragon - six exquisite country 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 by email at pr@fullers.co.uk.
Copies of this statement, the Annual Report and results presentation will be available on the Company's website,
www.fullers.co.uk [1]. The presentation will be available from 12 noon on 30 July 2020.
FULLER, SMITH & TURNER P.L.C.
FINANCIAL RESULTS FOR THE 52 WEEKSED 28 MARCH 2020
CHAIRMAN'S STATEMENT
The last financial year has been truly transformational for Fuller's - in more ways than we could have imagined. It
started with the sale of the Fuller's Beer Business to Asahi Europe Limited for the enterprise value of GBP250 million
and culminated with the entire estate temporarily closed to our customers and the whole country in a state of
lockdown. Against this backdrop, your Company delivered a solid performance and is well-prepared as we start to
reopen our premium pubs and hotels.
As a focused pubs and hotels business, we have had a good year delivering GBP333 million in revenue and other income
and GBP19.7 million of adjusted profit before tax[3]. This includes the detrimental impact of the closure of the
business during the last month of trading. Prior to the closure of the business, the year to date financial
performance was in line with the Board's expectations and the final quarter was delivering positive results and
strong progress. Profit before tax[4] was GBP174.5 million including the profit on the sale of the Fuller's Beer
Business.
On a like for like basis, our pubs again outperformed the industry with sales rising by 2.3% to 7 March 2020, when we
started to see significant financial impact as our customers stayed at home due to the coronavirus outbreak.
Our Balance Sheet remains strong at the reporting date, supported by a predominately freehold estate and significant
levels of liquidity. This has been achieved by successive generations of management, who have stuck to their
long-term focus and have built the foundations of the business patiently and carefully to withstand financial shocks,
however they are caused. This position has been enhanced by the Company being assessed as Investment Grade by our
lenders, which has enabled us to access the Bank of England's Covid Corporate Financing Facility, under which we have
issued GBP100 million of commercial paper to free up capacity in the Company's revolving credit facilities. We have
also agreed amendments to our lending covenants in light of the coronavirus pandemic.
The acquisition of Cotswold Inns & Hotels in October 2019 added 201 bedrooms to our estate, taking us above the 1,000
mark for the first time. These seven stunning country sites are a wonderful fit with our existing pubs and hotels,
and we will be able to learn from their expertise in large scale weddings and corporate events.
Our Tenanted Inns have not had an easy year, trading against a very strong prior year that was bolstered by the World
Cup and amazing summer weather. We have a new leader in this part of the business, Iain Rippon, and the expertise he
brings from his previous roles in the leased and tenanted sector are already making a real difference.
During the year, Richard Fuller - who has been a member of the Fuller's team for over 35 years - stepped down from
his role as Corporate Affairs Director but remains on the Main Board in a Non-Executive capacity. I would like to
thank him for his contribution, in particular his extremely successful 17 years as Sales Director, and I look forward
to continuing to work closely with Richard in the future. We were also delighted to welcome Robin Rowland to our
Board. Robin is a hospitality industry legend and I cannot think of a time when his experience, energy and vision
will be more appropriate and appreciated. As reported at the half year, Jonathon Swaine and Peter Swinburn stepped
down and we welcomed Fred Turner to the Main Board as Retail Director. We were very pleased when Adam Councell joined
us as Finance Director in August.
Throughout the recent crisis, Simon Emeny and his Executive Team have shown incredible leadership - not just for
Fuller's, but in promoting the case for government support across the industry. I would also like to pay tribute to
the 5,000 team members across the business, and to all our Tenants, who have shown great understanding in these
difficult times. I am proud to be your Chairman and I thank you all for your support.
Fuller's celebrates 175 years this year. While it may not feel like a time for celebrations today, we have survived
global recessions, world wars, the devastating Spanish Flu epidemic and all manner of unexpected events during our
history. Fuller's is a company with time on its side and our long-term vision has never been more relevant. Your
Company is in a position of strength as we exit lockdown.
DIVID
As previously disclosed, we have taken the decision not to propose a final dividend in light of the temporary closure
of the estate. However, during the year the Company has returned GBP69 million to shareholders - the equivalent of
GBP1.25 per 'A' ordinary share - in relation to the sale of the Fuller's Beer Business as well as paying an interim
dividend of 7.80p per 'A' and 'C' ordinary share and 0.78p per 'B' ordinary share.
This is the first time in over 70 years that there has been a reduction in total dividend - although the monies
returned to shareholders during the year are the highest they have ever been. These are extraordinary and
unprecedented times and the Board felt it was prudent not to propose a final dividend. I thank all our shareholders
for their understanding in these difficult circumstances and look forward to our normal progressive dividend policy
returning in due course.
Michael Turner
Chairman
30 July 2020
CHIEF EXECUTIVE'S REVIEW
When we released our interim statement in December 2019, we were on track to finish the financial year in a good
position having received the proceeds from the sale of the Fuller's Beer Business and with a clear future path laid
out before us. It had been a transformational year for Fuller's - but we would never have anticipated that we would
end it in March with the whole hospitality industry in a state of closure and with no income stream.
We have to deal with the spectre of coronavirus before we can move on to review the rest of the year. The impact on
our pubs was severe and started in the second week of March. There was a marked shift in consumer behaviour, and we
took the decision to close the most affected pubs during the week commencing 16 March 2020, guaranteeing all wages
for at least the ensuing fortnight. On Friday 20 March 2020 we, along with the rest of the hospitality industry, were
instructed to close our estate completely by the Prime Minister - which we duly did.
I would like to thank the Government for the speed with which it provided support for furloughed employees and the
subsequent additional measures such as the VAT reduction. We took an early decision to cancel commercial rent for our
Tenants and we implemented a strategy that focused on being fair to all, be they team members, Tenants, customers or
suppliers, and we engaged with all our stakeholders.
Among our initial actions, we furloughed 99% of our eligible team members, our Main Board and Executive Team
volunteered to take temporary pay cuts of 25% and 20% respectively, and we engaged with our banks to ensure their
continued support in maintaining our high level of liquidity should the enforced closure be in place for several
months. We also took the decision not to propose a full year dividend, to further preserve our cash reserves. Since
then, we have renegotiated our financial arrangements and worked on a plan that ensured we started to reopen in the
strongest possible position, with our teams ready and raring to go.
Against this backdrop, it is easy to forget that the financial year started in April 2019 with the sale of the
Fuller's Beer Business to Asahi Europe Ltd for an enterprise value of GBP250 million, followed in October 2019 by the
acquisition of Cotswold Inns & Hotels - seven stunning hotels in the heart of the Cotswolds - from existing bank
facilities. The decision to sell the Fuller's Beer Business at this time has proved fortuitous and ensured we were in
a strong position, with substantial liquidity headroom, when the coronavirus pandemic struck. We also made a
voluntary GBP24 million contribution to the defined benefit pension scheme in the second half of the year, reducing our
pension deficit to just GBP4.7 million at the year end.
The sale gave us an opportunity to build on the most profitable elements of our business - our premium pubs and
hotels. With this focus, we restructured our Executive Team, honed our vision and strategy, and invested in Pier
House, an outstanding new home for our support team in our Chiswick heartland on the banks of the River Thames at
Strand-on-the-Green. We also took the decision to impair the goodwill recognised on the acquisition of The Stable
Pizza & Cider business, which we subsequently sold to Three Joes.
Both Bel & The Dragon and Cotswold Inns & Hotels have now been fully integrated, reducing head office costs across
the business, and in April 2020 we completed the Transitional Services Agreement ("TSA") with Asahi. The Enterprise
Resource Planning ("ERP") system was bedded in, we had replaced some old legacy IT systems with a cloud-based
solution and all pub General Managers and support centre team workers had been migrated to Office 365. We also
started the process of identifying a new finance system, suitable for a focused premium pubs and hotels business.
At the beginning of March 2020, we were trading in line with expectations and had just opened two fantastic new
freehold sites. In Christchurch, Dorset, we completed the GBP2 million transformational refurbishment of The Bear of
Burton, and we opened The Windjammer - a stunning new site over two floors with views across the river, overlooking
the Thames Barrier in Royal Docks.
Our capital refurbishment programme was on track, with new schemes at a number of pubs including The Mayfly on the
River Test near Stockbridge, and we were on site at The White Horse in Wembley, where we were due to open in June for
the Euro 2020 championships. We were about to go on site at The Coach & Horses in Soho and The Trinity in Borough.
Finally, we had also just sold the freehold of The Castle in North Acton for GBP10.3 million to the company
redeveloping this whole area, but with a licence to continue to operate it for the next 12 months.
In summary, the business was in great shape and perfectly poised to start the new financial year with all elements
primed and ready to go.
While our long-term goals remain the same, our objectives in the short and medium term have had to adjust to the
current trading environment. Our immediate priority is to minimise our cash burn, while steadily building trade, as
we reopen our estate. In the medium term, we are learning from the earlier openings and monitoring footfall in those
areas where pubs are still closed - especially Central London and the City. In addition, we have accelerated a number
of digital initiatives such as order and pay at table and using wifi logins as a way of capturing data in support of
the NHS Test & Trace scheme.
Looking to the future, we are in a strong position. Fuller's has always taken decisions for the long term and our
predominately freehold estate, coupled with low levels of debt, ensure we can withstand the impact of coronavirus.
The sale of the Fuller's Beer Business gives us the financial resources to continue to invest in the estate and take
advantage of any suitable opportunities that may arise. This hiatus in trading as a result of coronavirus presented a
unique opportunity to review the whole business and ensure we are in the best possible position to take advantage of
future growth opportunities.
But that is the future - and as we head into that future, we do so on the back of solid trading for the full year to
mid-March 2020 and some great initiatives that we have been delivering across the business. We kept our pubs and our
people match fit during lockdown and we have already started the journey to fully reopen our pub estate.
MANAGED PUBS AND HOTELS
Our Managed Pubs and Hotels have had a solid year with revenue rising 2% (5.8% to week 49) to GBP299.6 million (2019: GBP293.8 million). Pre coronavirus like for like sales grew by 2.3% (2019: 4.9%) for the 49 weeks to 7 March 2020 and, for another year, we have outperformed the industry[5]. We have also continued our rolling investment programme to ensure our pubs maintain their premium position. These results are delivered against the continual pressure of rising costs - through further increases in the National Living Wage, pension costs and the excessive cost of business rates. We hope that, in light of the impact of the coronavirus pandemic on the hospitality sector, the Government will take the economic cost of the crisis into account when setting wage rates and will press ahead with its reforms of the outdated business rates system. Putting our people at the heart During the year, we took a holistic view of the way we recruit, develop and retain our people, which resulted in a new Designed for Life career pathway. This aims to put a stronger focus on in-role leadership. Through a combination of online learning workshops and bespoke training programmes for all levels, the training journey for any Fuller's employee is tailored to the individual - from a new core induction right through to a degree level apprenticeship in operational leadership. We were delighted to see our commitment to apprenticeships at all levels recognised when we took the award for Best Apprenticeship Programme at the BII's National Innovation in Training Awards. We also took the silver award in the same category at the Training Journal Awards - where we were up against apprenticeship programmes in all sectors of industry and commerce. As well as more formal learning, our digital learning and communications platform, Fuse, allows us to promote a high number of short, online courses for personal development covering topics such as business English, presentation skills and managing emotions. Many of our team members have undertaken such courses of their own volition during lockdown. We recognise that not everybody who joins as a kitchen porter or member of part-time bar staff wants a long-term career in our sector - but we still want to help them fulfil their potential and play a role in their personal journey. They may begin with us - and many will become our managers of the future - but we also want to ensure that we deliver a nurturing environment if their aspirations take them beyond Fuller's. Offering tailored development programmes allows us to achieve that and will build our employer brand and our status as the industry employer of choice. In total, during the year over 3,300 formal training days took place, with an additional 5,300 online courses undertaken. The results speak for themselves with our promotion ladder working well and 64 of the 71 General Managers appointed this year having come via this internal career path. A pub estate to be proud of During the period, we completed the major acquisition of Cotswold Inns & Hotels for an enterprise value of GBP40 million, adding seven outstanding freehold country inns and two vibrant bars in Birmingham to our portfolio. These sites bring a new dimension to our business, with the addition of 201 bedrooms, a focus on traditional Cotswolds hospitality, and expertise in weddings and corporate functions that provides shared learning across the Fuller's estate. We have completed a number of major refurbishments including a new build site overlooking the Thames Barrier at Royal Dock called The Windjammer, and transformational refurbishments at The Mason's Arms in Battersea, The Chamberlain Hotel in Minories and The Old Bank on Northcote Road in Clapham. Outside London, we have also delivered a major investment at The Bear of Burton, just outside Christchurch in Dorset, a refurbishment at The Bishop on the Bridge in Winchester, an outstanding scheme at The Mayfly overlooking the River Test near Stockbridge, and the addition of 10 new bedrooms at The White Hart, also in Stockbridge. We are on site at The White Horse - a new build site in the heart of an extensive residential development in the shadow of the iconic Wembley Stadium - which should now benefit from the delay of the European Football Championship to June 2021. In addition, we will imminently complete work at The Coach & Horses, a truly iconic pub in Soho, and are close to finishing a major scheme at The Trinity in Borough - an impressive site we acquired in August last year. We have also taken advantage of lockdown to undertake a further 11 projects in Bel & The Dragon and Cotswolds Inns & Hotels sites. We have disposed of two sites during the period - The Red, White & Blue, a tenanted pub in Portsmouth, and The Castle in Acton. The latter of these is located in an area that is undergoing substantial redevelopment and the site has been sold as part of this scheme for GBP10.3 million. Finally, we acquired new offices for our support team at Pier House. This site, which has been fitted out and is ready for full occupation as business returns to normal, retains the Fuller's head office within the London W4 postcode that has been our home for 175 years. The right offer on the bar and on the menu The sale of the Fuller's Beer Business has opened up new opportunities to work with suppliers and provide our customers with an increasingly premium, exciting and varied drinks range. Our commitment to Fuller's beers, through the long-term supply agreement we have with Asahi, remains and we will always hero classic Fuller's brands like London Pride. Across the board, the range changes we have implemented already have driven further premiumisation with strong growth in sales of Asahi Superdry, Meantime Anytime and Beavertown Neck Oil. Camden Brewery has also proved popular with Camden's Off Menu IPA, which was exclusive to Fuller's, driving sales of over 15,000 pints every week. An exclusive on-trade launch for Beavertown's new Nanobot - a 2.8% pale ale - was planned for the spring but will now take place later this summer. Spirits sales also continue to grow, with a like for like rise of 8.3%, driven by sales of cocktails and gins, which were up by 17.3% and 16.5% respectively on a like for like basis. We work closely with our suppliers and leverage these relationships to provide interesting and bespoke events and experiences for our customers. This programme has included a Victorian hot gin bar with Sipsmiths at The Conductor in Farringdon, an après ski bar at the same venue with Alpine fruit beer Jubel, and a series of garden takeovers with Fever-Tree at 25 sites across the estate. As we adjust to life as a focused premium pubs and hotels business, our relentless focus on fantastic food continues. In a move that further inspires our chefs to new heights, we were delighted to appoint Simon Rogan, the holder of five Michelin stars, as the Honorary President of the Fuller's Chefs' Guild. The move was aligned with Fuller's sponsorship of the Bocuse d'Or - the legendary international chefs' competition - and aims to elevate the way food is regarded by our kitchen teams, the wider business and our customers. The year has also seen further focus on vegetarian and vegan dishes, which continue to grow in popularity, as well as the much-loved Sunday roast - now the most important dining occasion in the pub week. Sales of Sunday roasts have risen by 4.8% and an outstanding Sunday roast offer is, more than ever, the benchmark of a fantastic pub. Underpinning our food agenda are two key constituents - well-trained and passionate chefs and wonderful ingredients. While the former continue to be inspired by their journey through the Chefs' Guild, the latter are equally key. We always look to develop long-term partnerships with our suppliers, which has led to actions that range from delivering financial gains from forward buying meat, to acquiring a whole field of asparagus to ensure supply, to accessing the apprenticeship levy of our suppliers to further develop our own apprenticeship programme. As we rebuild our business in the coming months, these supplier relationships will be more important than ever. Targeted marketing for discerning customers Much of the work undertaken by our marketing team during the year will reap rewards as we continue to open our pubs for business again. The focus for the year has been around improving our digital customer journey and building on the single customer view database that allows us to deliver the right message to the right customer at the right time. Today, that database has in excess of 1.1 million contactable customers with year on year growth of 94%. Through targeted, relevant and eye-catching digital marketing, this database delivers an exceptionally high click rate of 24% and these targeted mailings contributed GBP1.9 million in sales revenue, after discount, during the year. This is a growth of 12% against the prior year. This ability to communicate with our customer base is paramount as we continue to come out of lockdown. We need to understand who our existing customers are and who could be potential customers as we progress. Our recent move to Wireless Social as our main wifi provider will help with this process. In the second half of the last financial year we concluded a project with CBRE Research that identified four statistically significant customer groups. While all have a degree of affluence, they occupy different age categories and have different booking, eating, drinking and lifestyle behaviours. By identifying these groups and their propensity to frequent Fuller's pubs, we can further refine our messaging and targeting. We can then apply this beyond the digital space to broader marketing and wider business planning as we rebuild trade. This digital activity is supported by multi-channel campaigns that encompass social media and improved websites. This
is combined with improved search engine optimisation ("SEO") - particularly around our hotels and pubs with rooms.
Having researched and identified the way customers chose locations for weekend breaks and staycations, we invested in
improving our hotel websites and SEO to ensure they appeal to customers seeking particular experiences or types of
holiday - for example dog friendly or coastal breaks. This new approach has generated great results, improved our
search ranking, increased the number of visitors to our web pages by 76% and driven direct bookings - all of which
will help us to further capitalise on the staycation opportunity.
As the doors open again to our customers, we will also be ready to build on the experiential activity that has worked
so well for us during the year. From Shakespeare in the Garden to Your Home of Rugby, we have delivered excitement
and memories to thousands. A record 6,258 tickets were sold for 50 performances of Romeo & Juliet and The Merry Wives
of Windsor and the large gardens at some of the new Cotswold Inns & Hotels sites will allow us to extend this popular
activity to a whole new audience in the future.
The pub experience has had to change, but we have a talent for innovating to deliver a premium experience, and we
will be using that talent to ensure our pubs remain at the heart of their communities and enjoyed by our customers
from the moment they step back through the door. From order and pay at table options and QR codes for easy menu
access to Test & Trace data collection, the combination of great interpersonal skills supported by digital
initiatives will be crucial as we rebuild our business.
TENANTED INNS
It was always going to be a tough year for our Tenanted Inns with trading in the first half measured against the hot
weather and World Cup of 2018. As a result, like for like profit was down by 3% and total revenue was down by 4%.
This includes the two weeks at the end of the year when our pubs were closed, hence revenue for the 11 months to the
end of February was only down 2%. During the year we transferred two sites from Tenanted to Managed - The Coach &
Horses in Soho and The Swan at Ship Tavern Passage, London EC3.
In September, we appointed a new leader for the Tenanted Division with Iain Rippon taking charge. Iain has a wealth
of tenanted and leased experience and he was heavily involved in our decision to cancel rents at the start of the
coronavirus pandemic - a move that was widely applauded and gave our Tenants some breathing space. He and his team
have been working with our Tenants to encourage them to use government support to ensure they are in the best
position to trade successfully as they open again, while having manageable levels of historical debt.
The ingenuity and generosity of our Tenants was outstanding during lockdown with many offering take-away meals,
opening as community stores, and even providing hot meals daily for local rough sleepers. It was fantastic to see the
way they rose to the challenges lockdown created, at the very heart of the communities that they serve, and we look
forward to building on that creativity in the future.
Among the changes Iain has made are a reduction of ingoing cost for new Tenants and regular meet and greet events
advertised on social media. This has led to an increase in the number of applicants for Tenanted vacancies and we
have created a new position in the team to focus on providing induction support and in-pub training for new Tenants.
We are also conducting a full review of the agreements we offer Tenants. While the turnover agreement is working well
in some pubs, we feel it underperforms in others and our ambition is to better understand this so we can make any
changes necessary to optimise the agreement before we roll it out further.
Finally, we are improving the speed and effectiveness of our online ordering which has resulted in over 90% of
Tenants' orders now being taken online - making the process more efficient and giving our Tenants more time with
their customers.
FINANCIAL POSITION
The adoption of IFRS 16 Leases has been reflected in the 52 weeks ended 28 March 2020 and, as permitted by the
standard, transitional provisions have been adopted which allow for no restatement of prior period figures.
Therefore, for better comparison, the figures discussed below are on a pre IFRS 16 basis and are for the continuing
operations of the Group.
Due to the one-off nature of separately disclosed items the Directors believe that an adjusted measure of profit
before tax and earnings per share provides shareholders with a more appropriate representation of the underlying
earnings derived from the Group.
We have grown revenue and other income by 3% on the prior year despite the significant impact of coronavirus on the
final month of trading. Growth was helped by the contribution from our acquisition of Cotswold Inns & Hotels on 31
October 2019. On a like for like basis, our Managed Pubs and Hotels Division outperformed the industry with sales
rising by 2.3% to 7 March 2020 (2019: +4.9%).
Our adjusted profits decreased by 40% to GBP19.7 million (2019: GBP33.1 million), reflecting the severe impact of the
full closure of the business in the final month of the year. We estimate that the negative impact in the final month
of the year was in excess of GBP10 million. In our Managed Pubs and Hotels this consisted of the direct impact of the
closure of the business and the severely impaired trading in the period leading up to the point of closure. In
addition, our Managed Pubs and Hotels business suffered from the negative impact of the write down of stock values
and certain capitalised development projects. Our Tenanted pubs suffered from reduced rent revenue and reduced orders
from tenants in the final month, combined with an increase in the levels of provisions required against outstanding
debts. As reported previously, the sale of the Fuller's Beer Business and the subsequent complex separation has
resulted in significant restructuring costs. With the TSA completing in April 2020, we are now in a position to
transition to a simplified structure and reduce central overheads.
Pre IFRS 16 profit before tax has increased by GBP148.4 million to GBP174.5 million (2019: GBP26.1 million) predominately
as a result of the sale of the Fuller's Beer Business. The sale enabled Fuller's to return GBP69 million to
shareholders via 'D' shares issuance and repurchase, make a voluntary contribution to the defined benefit pension
scheme of GBP24 million - helping to reduce the defined benefit pension scheme deficit to GBP4.7 million at year end -
and acquire Cotswold Inns & Hotels for an enterprise value of GBP40 million.
During the year we also sold two of our freehold pubs for GBP11.4 million, resulting in a profit of GBP9.6 million as
disclosed in separately disclosed items. These events meant we were in a strong financial position with substantial
liquidity headroom when the coronavirus pandemic started to have a direct impact on the business. As the pandemic
continues, we are continually monitoring the situation and post year end we have issued GBP100 million of commercial
paper through the Bank of England Covid Corporate Financing Facility and taken advantage of the government support
offered through the Coronavirus Job Retention Scheme and the business rates holiday for the hospitality sector.
Overall net debt at 28 March 2020 has decreased by GBP66.3 million to GBP178.9 million pre IFRS 16, largely due to the
sale of the Fuller's Beer Business. Post IFRS 16, net debt has increased to GBP291.8 million due to the inclusion of
GBP112.9 million of lease liabilities.
The Group has GBP225 million of bank facilities and GBP26 million long-term debentures, GBP191.7 million of which are
available until August 2021 and GBP33.3 million of which is available until August 2020. As a result of coronavirus,
the Directors have assessed that there was a technical breach of the covenants at the Balance Sheet date and hence
classified all debt as current. Subsequent to year end the covenants were formally revised to a liquidity test and
GBP145.6 million was reclassified to non-current liabilities. Our undrawn facilities at 28 March 2020 were GBP53.0
million, with a further GBP20.3 million of cash held on the?Balance Sheet.
The Group generated cash available for discretionary spend of GBP25.5 million (2019: GBP35.1 million) with the reduction
compared to prior year due to lower EBITDA mainly resulting from the disruption to trading in March. In line with our
long-term investment strategy, we invested GBP47.6 million in capital expenditure (2019: GBP32.7 million). The investment
of GBP47.6 million in our existing estate included 14 major refurbishments such as The Bear of Burton and the creation
of a new build site, The Windjammer, as well as acquiring new offices for our support team at Pier House. We also
invested GBP37.5 million on the acquisition of Cotswold Inns & Hotels and GBP3.7 million on the acquisition of The
Trinity at Borough. Asset disposals from the sale of two pubs raised GBP11.4 million and generated a separately
disclosed profit of GBP9.6 million.
Separately disclosed items of GBP8.2 million comprises, principally, GBP12.3 million of impairments, GBP2.1 million of
reorganisation costs as a direct result of the sale of the Fuller's Beer Business, GBP1.4 million of acquisition costs,
GBP1.5 million of costs incurred finishing the implementation of our ERP system and a net finance charge on our pension
deficit of GBP0.6 million. The impairment charge includes GBP8.6 million reduction of carrying values against a number of
properties and the write down of previously acquired goodwill on the acquisition of The Stable Pizza & Cider Limited
of GBP3.7 million. Acquisition costs primarily related to the purchase of Cotswold Inns & Hotels, The Trinity at
Borough and the acquisition of our new head offices at Pier House. The total separately disclosed costs were offset
by GBP9.6 million of profits on the disposal of two pubs including The Castle in North Acton which was sold for GBP10.3
million.
The effective tax rate is 33.0% (2019: 19.6%) on adjusted profits from continuing operations, following a GBP1.6
million deferred tax charge relating to the change to the future corporation tax rate. The overall effective tax rate
of 50.4% is due to the separately disclosed items being taxed at an effective tax rate of 8.5%.
The defined benefit pension scheme deficit has decreased by GBP31.7 million to GBP4.7 million (2019: GBP36.4 million)
primarily due to the voluntary GBP24 million contribution made in the financial year. The present value of pension
obligations decreased by GBP19.8 million to GBP128.5 million and the fair value of scheme assets increased by GBP11.9
million from GBP111.9 million to GBP123.8 million primarily as a result of the voluntary contribution. Standard deficit
recovery payments of GBP2.4 million were also made during the financial year.
During the period 48,700 'A' ordinary 40p shares were purchased into treasury for a total of GBP0.4 million (2019:
313,983 'A' ordinary 40p shares for GBP3.1 million). In addition, 90,641 'B' ordinary 4p shares were purchased for GBP0.1
million by or on behalf of the Trustees of the Long-Term Incentive Plan to cover future issuance (2019: 121,031 'B'
ordinary 4p shares for GBP0.1 million).
REOPENING OUR ESTATE
Since the outbreak of coronavirus, and the subsequent temporary closure, we have made a number of key decisions to
protect the business and reduce our costs. At the heart of our activity is a robust three stage plan that started
with a gradual and measured reopening of our pubs and hotels.
During lockdown we conducted two key pieces of research. The first was a survey of our team members, to identify
issues that might affect their desire or ability to return to work, and the second was a survey of our most engaged
customers to ascertain the key elements that would give them the confidence to return to our pubs. The results of
these surveys have helped to formulate our plans and any changes to our operation on top of the protocols required by
the Government.
Risk assessments were carried out across the estate and we identified and mapped detailed plans including seating,
access to loos, service operation, movement flow and additional changes such as barriers, sanitiser points and clear
communication. We are rolling out an order and pay at table web solution to reduce the need for menus and cash
payments, as well as using QR codes for both access to online menus and, in combination with our wifi service login,
to collect customers' details in support of the NHS Test & Trace programme.
In mid-June we opened seven sites operating a take-away only service, which allowed us to see how the back of house
operation functioned under social distancing. We opened 27 sites on 4 July 2020, with another 136 since, and have
taken the opportunity to learn from these earlier openings by monitoring and evaluating consumer behaviour, making
changes accordingly as we continued to open further pubs. We will continue to use the flexible furlough scheme and we
will be reintroducing rent for our Tenants from August, but on a tapered basis.
As you would expect from Fuller's, we are going above and beyond with an intensive cleaning regime and our team
members complete health screening questionnaires at the start of each shift to protect them, their colleagues and our
customers. We also rolled out additional online training prior to reopening and we are constantly learning, reviewing
and looking at new, often digital, ways to improve our processes.
CURRENT TRADING AND PROSPECTS
While it is still early days, it is pleasing to see our teams welcoming guests back and we have taken a range of
actions and measures to ensure our pubs are safe and inviting. The first stage of our three stage plan saw 27 pubs
open on 4 July 2020 and another 136 since - meaning over 75% of our Managed Pubs and Hotels are now open. Almost all
our Tenanted Inns have also reopened. While it is too early to draw any meaningful conclusions, we are comfortable
with the level of trade and we continue to monitor footfall in those areas where our pubs are not yet open.
While we are prepared for business, particularly in London, to take some time to return to normal, we are well placed
to satisfy the uptick in demand for staycations as many customers holiday closer to home - an opportunity we are
supporting with marketing activity for our Beautiful Bedrooms. We continue to focus on minimising cash burn and
returning to profitability. During August, we will gradually reintroduce rent for Tenants - but on a tapered basis to
help with their own return to sustainable trading levels.
In line with our focus on pubs and hotels, we decided to sell our pizza and cider business, The Stable, to Three Joes
- a sourdough pizza company. We have retained the freehold interest in five of the sites and we wish the team at
Three Joes, and our former colleagues, every success in the future.
The decisions we have taken during these difficult months have, as always, an emphasis on the long term. We will
complete our current investment programme prior to stopping refurbishments until Christmas to focus on cash
generation. We will recommence the investment programme in Q4 and, in the second half of the financial year, we will
begin refinancing discussions with our lenders.
In these uncertain times, it is challenging to accurately predict the future. But having begun reopening our pubs
nearly four weeks ago, it is encouraging to see customers returning to our pubs and this steady growth in consumer
confidence will be the key to success - not just of our Company or our industry but the economy as a whole. We have a
well-balanced estate geographically and that, combined with a freehold asset base and the calibre of our people, puts
us in a stronger position than many to build towards sustained profitability in this full year and a strong start to
the FY2022 financial year.
A freehold approach is a fundamental foundation of our long-term business. It is not always fashionable, but yet
again it underpins our ability to survive the toughest of times. We are proud to be 175 years old this year and with
our balanced and well-invested estate, prudent approach to finance and amazing team of dedicated people, we will
still be here for generations to come.
Simon Emeny
Chief Executive
30 July 2020
Fuller, Smith & Turner P.L.C.
Financial Highlights
For the 52 weeks ended 28 March 2020
*********************************************************
Post IFRS 16 Pre IFRS 16 Change
52 weeks Pre IFRS
ended 30 16
March 2019 2020/2019
52 weeks 52 weeks
ended 28 ended 28
March 2020 March 2020
GBPm GBPm GBPm
Revenue and 333.0 333.0 324.7 +3%
other income
Profit after 161.9 168.6 19.5 +765%
income tax
Net debt1 291.8 178.9 245.2 n/a
EBITDA2 54.4 44.0 59.5 -26%
Adjusted profit 18.0 19.7 33.1 -40%
before income
tax3
Separately (14.8) (8.2) (10.1) n/a
disclosed items
before income
tax
Profit before 166.2 174.5 26.1 +569%
income tax
Adjusted 21.41p 23.95p 48.40p -51%
earnings per
share4
Basic earnings 293.70p 305.86p 35.12p +771%
per share5
All figures above are from continuing operations except where stated and change percentages are on a comparable basis
to prior periods, excluding IFRS 16 adjustments.
1 Net debt comprises cash and short-term deposits, bank overdraft, bank loans, debenture stock and preference shares
and lease liabilities under IFRS 16.
2 Earnings before separately disclosed items, interest, tax, depreciation and amortisation from continuing
operations.
3 Adjusted profit is the profit before tax excluding separately disclosed items from continuing operations.
4 Calculated using adjusted profits after tax and the same weighted average number of shares as for the basic
earnings per share and using a 40p 'A' or 'C' ordinary share.
5 Per 40p 'A' or 'C' ordinary share.
Fuller, Smith & Turner P.L.C.
Condensed Group Income Statement
For the 52 weeks ended 28 March 2020
*********************************************************************
Continuing Note Post IFRS Pre IFRS
operations 16 161 Restated2
52 weeks 52 weeks
ended ended
28 March 28 March
52 weeks ended
30 March
2019
2020 2020 GBPm
GBPm GBPm
Revenue 2 329.3 329.3 324.7
Operating costs (307.1) (308.0) (284.7)
before separately
disclosed items
Other income 2 3.7 3.7 -
Adjusted operating 2 25.9 25.0 40.0
profit
Operating separately 3 (23.9) (17.3) (11.2)
disclosed items
Operating profit 2.0 7.7 28.8
Finance costs before 4 (7.9) (5.3) (6.9)
separately disclosed
items
Financing separately 3,4 (0.5) (0.5) (0.8)
disclosed items
Profit on disposal 3 9.6 9.6 1.9
of properties
Profit before income 3.2 11.5 23.0
tax
Adjusted profit 18.0 19.7 33.1
before income tax
Total separately 3 (14.8) (8.2) (10.1)
disclosed items
Profit before income 3.2 11.5 23.0
tax
Tax (4.2) (5.8) (5.2)
Analysed as:
Underlying trading 5 (6.2) (6.5) (6.5)
Separately disclosed 5 2.0 0.7 1.3
items
(Loss)/profit from (1.0) 5.7 17.8
continuing
operations
Net profit from 14 162.9 162.9 1.7
discontinued
operations
Profit for the year 161.9 168.6 19.5
Attributable to:
Equity shareholders 161.9 168.6 19.3
of the Parent
Company
Non-controlling - - 0.2
interest
1 Pre IFRS 16 results have been prepared under IAS 17 for comparison purposes only.
2 Central overheads have not been recharged for the 52 weeks ended 28 March 2020. Prior year overheads have also not
been recharged to allow comparison. For the 52 weeks ended 30 March 2019, GBP3.3 million of central overheads have been
reclassified from discontinued operations to continuing operations to reflect this change.
Fuller, Smith & Turner P.L.C
Condensed Group Income Statement
For the 52 weeks ended 28 March 2020
Note Post IFRS 16 Pre IFRS 161
52 weeks 52 weeks Restated
ended ended
28 March 28 March
52 weeks
ended
2020 2020
Group Pence Pence
30 March
2019
Pence
Earnings per
share per 40p 'A'
and 'C' ordinary
share
Basic 6 293.70 305.86 35.12
Diluted 6 293.02 305.15 34.87
Earnings per
share per 4p 'B'
ordinary share
Basic 6 29.37 30.59 3.51
Diluted 6 29.30 30.51 3.49
Continuing
operations
Earnings per
share per 40p 'A'
and 'C' ordinary
share
Basic 6 (1.81) 10.34 32.39
Diluted 6 (1.81) 10.32 32.16
Earnings per
share per 4p 'B'
ordinary share
Basic 6 (0.18) 1.03 3.24
Diluted 6 (0.18) 1.03 3.22
1 Pre IFRS 16 results have been prepared under IAS 17 for comparison purposes only.
Fuller, Smith & Turner P.L.C.
Condensed Group Statement of Comprehensive Income
For the 52 weeks ended 28 March 2020
*********************************************************************************************************************
Note Post IFRS 16 Pre IFRS
52 weeks 161
ended 52 weeks
28 March ended
28 March
52 weeks
ended
2020 30 March
GBPm 2020 2019
GBPm GBPm
Profit for the year 161.9 168.6 19.5
Items that may be
reclassified to
profit or loss
Net gains on 0.2 0.2 0.3
valuation of
financial assets and
liabilities
Tax related to items 5 (0.1) (0.1) -
that may be
reclassified to
profit or loss
Items that will not
be reclassified to
profit or loss
Net actuarial 12 5.9 5.9 (5.0)
gain/(losses) on
pension schemes
Tax related to items 5 (1.1) (1.1) 0.8
that will not be
reclassified to
profit or loss
Other comprehensive 4.9 4.9 (3.9)
gain/(losses) for the
year, net of tax
Total comprehensive 166.8 173.5 15.6
income for the year,
net of tax
Total comprehensive
income attributable
to:
Equity shareholders 166.8 173.5 15.4
of the Parent Company
Non-controlling - - 0.2
interest
1 Pre IFRS 16 results have been prepared under IAS 17 for comparison purposes only.
Fuller, Smith & Turner P.L.C.
******************************
Condensed Group Balance Sheet
28 March 2020
*******************************************
Note Post IFRS 16 Pre IFRS 161 2019
2020 2020 GBPm
GBPm GBPm
Non-current assets
Intangible assets 28.3 35.5 37.7
Property, plant and 8 617.7 617.7 552.7
equipment
Investment properties 4.8 4.8 4.6
Other non-current assets 0.1 0.1 0.3
Right-of-use assets 10 107.0 - -
Total non-current assets 757.9 658.1 595.3
Current assets
Inventories 4.0 4.0 5.0
Trade and other 12.6 9.7 8.3
receivables
Other financial assets - - 0.1
Cash and cash equivalents 11 20.3 20.3 11.0
Assets classified as held 2.6 2.6 87.0
for sale
Current tax receivable 6.2 4.5 -
Total current assets 45.7 41.1 111.4
Current liabilities
Trade and other payables (37.7) (37.5) (29.6)
Current tax payable - - (2.8)
Borrowings 11 (171.7) (171.7) (50.0)
Lease liabilities 10 (8.9) - -
Liabilities classified as - - (30.0)
held for sale
Provisions (4.1) (4.5) (0.5)
Total current liabilities (222.4) (213.7) (112.9)
Non-current liabilities
Borrowings 11 (27.5) (27.5) (206.2)
Lease liabilities 10 (104.0) - -
Other financial (1.1) (1.1) (1.4)
liabilities
Retirement benefit 12 (4.7) (4.7) (36.4)
obligations
Deferred tax liabilities (17.1) (17.1) (9.2)
Provisions - (1.6) (2.1)
Total non-current (154.4) (52.0) (255.3)
liabilities
Net assets 426.8 433.5 338.5
Fuller, Smith & Turner P.L.C.
*****************************
Condensed Group Balance Sheet
28 March 2020
*******************************************
Note Post IFRS 16 Pre IFRS 161 2019
2020 2020 GBPm
GBPm GBPm
Capital and reserves
Share capital 22.8 22.8 22.8
Share premium account 4.2 4.2 4.8
Capital redemption reserve 3.7 3.7 3.1
Own shares (17.1) (17.1) (19.8)
Hedging reserve (0.9) (0.9) (0.8)
Retained earnings 414.1 420.8 328.4
Total equity 426.8 433.5 338.5
1 Pre IFRS 16 results have been prepared under IAS 17 for comparison purposes only.
Fuller, Smith & Turner P.L.C.
*****************************
Condensed Group Statement of Changes in Equity
For the 52 weeks ended 28 March 2020
***********************************************************************************
Share Share Capital Own Hedging Retained Total Non-controlling Total
capital premium redemption shares reserve earnings GBPm interest equity
GBPm account reserve GBPm GBPm GBPm GBPm
GBPm GBPm
Deferred
shares GBPm
GBPm
At 31 March 2018 22.8 4.8 - 3.1 (19.2) (1.1) 328.4 338.8 (3.9) 334.9
Profit for the - - - - - - 19.3 19.3 0.2 19.5
year
Other - - - - - 0.3 (4.2) (3.9) - (3.9)
comprehensive
loss for the
year
Total - - - - - 0.3 15.1 15.4 0.2 15.6
comprehensive
income for the
year
Shares purchased - - - - (3.2) - - (3.2) - (3.2)
to be held in
ESOT or as
treasury
Shares released - - - - 2.6 - (1.5) 1.1 - 1.1
from ESOT and
treasury
Dividends (note - - - - - - (10.9) (10.9) - (10.9)
7)
Share-based - - - - - - 1.0 1.0 - 1.0
payment charges
Adjustments - - - - - - (3.7) (3.7) 3.7 -
arising from
change in
non-controlling
interest
At 30 March 2019 22.8 4.8 - 3.1 (19.8) (0.8) 328.4 338.5 - 338.5
Profit for the - - - - - - 161.9 161.9 - 161.9
year
Other - - - - - 0.1 4.8 4.9 - 4.9
comprehensive
income for the
year
Total - - - - - 0.1 166.7 166.8 - 166.8
comprehensive
income for the
year
Issue of share 0.6 (0.6) - - - - - - - -
capital
Reclassification (0.6) - 0.6 - - - - - - -
of deferred
shares
Cancellation of - - (0.6) 0.6 - - - - - -
deferred shares
Shares purchased - - - - (0.5) - - (0.5) - (0.5)
to be held in
ESOT or as
treasury
Shares released - - - - 3.2 - (1.1) 2.1 - 2.1
from ESOT and
treasury
Dividends (note - - - - - - (80.5) (80.5) - (80.5)
7)
Share-based - - - - - - 0.5 0.5 - 0.5
payment charges
Transfer to - - - - - (0.2) 0.2 - - -
retained
earnings
Tax debited - - - - - - (0.1) (0.1) - (0.1)
directly to
equity (note 5)
At 28 March 2020 22.8 4.2 - 3.7 (17.1) (0.9) 414.1 426.8 - 426.8
Fuller, Smith & Turner P.L.C.
Condensed Group Cash Flow Statement
For the 52 weeks ended 28 March 2020
Note Post Pre IFRS 52 weeks ended
IFRS 161
16
30 March
52 weeks
52 ended
weeks
ended 2019
28 March
28 GBPm
March
2020
2020
GBPm
GBPm
Profit before tax for 3.2 11.5 23.0
continuing operations
Net finance costs 4 7.9 5.3 6.9
before separately
disclosed items
Separately disclosed 3 14.8 8.2 10.1
items
Depreciation and 2 28.5 19.0 19.5
amortisation
54.4 44.0 59.5
Difference between (2.3) (2.3) (2.2)
pension charge and
cash paid
Contribution to (24.0) (24.0) -
pension fund
Share-based payment 0.5 0.5 1.0
charges
Change in trade and (1.1) (1.1) 3.0
other receivables
Change in inventories 1.1 1.1 (0.9)
Change in trade and (1.1) (1.9) (11.6)
other payables
Cash impact of 3 (5.0) (5.0) (7.5)
operating separately
disclosed items
Cash generated from 22.5 11.3 41.3
operations
Tax paid (10.1) (10.1) (8.6)
Cash generated from 12.4 1.2 32.7
operating activities
- continuing
operations
Cash generated from 0.6 0.6 0.3
operating activities
- discontinued
operations
Net cash generated 13.0 1.8 33.0
from operating
activities
Cash flow from
investing activities
Business combinations 13 (32.8) (32.8) (20.1)
Purchase of property, (47.6) (47.6) (28.5)
plant and equipment
Sale of property, 11.4 11.4 7.3
plant and equipment
Cash absorbed by (69.0) (69.0) (41.3)
investing activities
- continuing
operations
Cash 225.4 225.4 (4.2)
generated/(absorbed
by) investing
activities
-discontinued
operations
Net cash 156.4 156.4 (45.5)
inflow/(outflow) from
investing activities
Cash flow from
financing activities
Purchase of own (0.5) (0.5) (3.2)
shares
Receipts on release 2.3 2.3 1.1
of own shares to
option schemes
Interest paid (4.7) (4.7) (6.2)
Preference dividends (0.1) (0.1) (0.1)
paid
Equity dividends paid 7 (80.5) (80.5) (10.9)
Drawdown of bank - - 42.3
loans
Repayment of bank (65.4) (65.4) (6.0)
loans
Cost of refinancing - - (0.2)
Principal elements of (11.2) - -
lease payments
Fuller,
Smith &
Turner
P.L.C.
Condensed
Group Cash
Flow
Statement
For the 52
weeks ended
28 March
2020
Post IFRS 16 Pre IFRS 52
161 weeks
52 weeks
52 weeks ended
ended
ended 30
March
28 March
28 March
2019
2020
2020
GBPm
GBPm
GBPm
Cash (160.1) (148.9) 16.8
(absorbed
by)/generate
d from
financing
activities -
continuing
operations
Net cash (160.1) (148.9) 16.8
(outflow)/in
flow from
financing
activities
Net movement 9.3 9.3 4.3
in cash and
cash
equivalents
Cash - - 0.3
acquired on
acquisition
Cash and 11.0 11.0 11.7
cash
equivalents
at the start
of the year
Cash and 20.3 20.3 16.3
cash
equivalents
at the end
of the year
Included in - - (5.3)
the assets
of the
disposal
group
Total cash 20.3 20.3 11.0
and cash
equivalents
at the end
of the year
1 Pre IFRS 16 results have been prepared under IAS 17 for comparison purposes only. IFRS 16 does not impact actual
cash, the impact is only presentational.
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 28 March 2020
********************************************************************************
1. Preliminary statement
************************
The consolidated financial statements of Fuller, Smith & Turner P.L.C. for the 52 weeks ended 28 March 2020 were
authorised for issue by the Board of Directors on 30 July 2020.
The financial information presented does not constitute the Group's annual report and accounts for either the 52
weeks ended 28 March 2020 or the 52 weeks ended 30 March 2019 within the meaning of Section 435 of the Companies Act
2006, but is derived from those accounts. The Group's statutory accounts for 2019 have been delivered to the
Registrar of Companies and those for 2020 will be delivered following the Company's annual general meeting. The
independent auditor's reports on both the 2019 and 2020 accounts were not qualified or modified, however the 2020
accounts drew attention to material uncertainties in respect of going concern. The independent auditor's reports for
both 2019 and 2020 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 (GBPm) 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 52 weeks ended 28 March 2020, which will be mailed to shareholders on or before 14 August 2020 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
The Group has prepared the 2020 financial statements on a going concern basis. The Board is confident that the Group
has sufficient liquidity and the ability to access resources when the Group needs to refinance to withstand a
prolonged period of closure as a result of the coronavirus pandemic. At 28 March 2020, the Group had a strong Balance
Sheet with 91% of the estate being freehold properties and, as at the signing date, headroom on facilities of GBP186.5
million.
The coronavirus pandemic is an ever-evolving situation with the possible outcomes continually being re-assessed.
Management have therefore modelled a range of scenarios from full closure for several months to operating at reduced
capacity for the remainder of the financial year. The base model assumes that the estate will not open until August
2020 and there will be significant impact on sales for the rest of the financial year as a result of the social
distancing restrictions that will need to be implemented and the risk that customer behaviour will change.
Since the closure of the pubs at the end of March the Group took a number of initial actions to reduce the cash
expenditure each month including furloughing the majority of staff, pay cuts for the Main Board and Executive Team of
25% and 20% respectively, taking advantage of business rates holidays as agreed by the Government and the
cancellation of the final dividend.
At 28 March 2020, the Group had existing facilities of GBP225 million; GBP33 million is due to expire in August 2020 with
the rest expiring in August 2021. The facilities are subject to two main covenants, which are tested quarterly: net
debt to EBITDA (leverage) and EBITDA to net finance charges. Post year end, in recognition of the current
macroeconomic uncertainty, the Group's banks have revised the covenant tests to a liquidity test for the quarters
ending March, June and September 2020. As the previous covenant tests were still in place at the year end the Group
has reclassified all loans to current as the Group assessed the covenants were breached. Subsequent to year end
GBP145.6 million has been reclassified to non-current when the March covenant was formally revised. From September
2020, under the base and downside forecast model the Group would fail the covenant tests if not revised. Management
are in discussion with the lenders to revise the covenants beyond this date and have informally received their
confirmation that this will be agreed.
Since the year end the Group has increased its available facilities by accessing the Bank of England Covid Corporate
Financing Facility ("CCFF") programme which has already issued GBP100 million of commercial paper with further access
to a further GBP50 million. The CCFF provides short-term unsecured debt and is repayable in May 2021.
In August 2021, the Group will need to refinance and obtain facilities at a similar level to the facilities at 28
March 2020. There are mitigating actions that the Group could take in addition to the ones discussed above which
haven't
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 28 March 2020
********************************************************************************
1. Preliminary statement (continued)
been factored into the model, including reducing central overheads, a complete halt in all capital expenditure and
the sale of freehold properties.
The Board has considered a downside scenario that reflects the current unprecedented uncertainty in the UK economy
and which management consider to be severe but plausible. The scenario considered full closure of the estate for four
months to the end of July and then operating at 40% of the original budget for 2020/21. The results of this scenario
show the potential for a covenant breach during the going concern assessment period. Subject to further covenant
amends being agreed with the lenders in the period up to the refinance in August 2021, the Group would have
sufficient liquidity in the going concern assessment period under this scenario.
The Board is confident in securing both the revision of the covenant beyond September 2020 and obtaining facilities
beyond August 2021 but given that these are not in place at the date of approving these financial statements a
material uncertainty exists that may cast significant doubt on the Group and the Parent Company's ability to continue
as a going concern. Accepting these represent a material uncertainty that may cast significant doubt about the
Group's ability to continue as a going concern, the Board has a reasonable expectation that the Company has adequate
resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt
the going concern basis in preparing the Annual Report and Accounts.
2. Segmental Analysis
*********************
For management purposes, the Group's operating segments are:
· Managed Pubs and Hotels, which comprises managed pubs, managed hotels, The Stable Pizza & Cider Limited, 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 income tax, adjusted for separately disclosed items. The Managed Pubs and Hotels operating segments have been
aggregated to one reportable segment on the basis they have similar economic characteristics as the pubs and hotels
are in the same geographical location. 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 invested 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.
Change in information presented to the CODM
Central overheads were previously recharged to each of the segments and that was how information was presented to the
CODM. However, in the current year, the costs have not been recharged to reflect how information is now reported to
the CODM and the prior year numbers have been adjusted to allow comparison.
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
For the 52 weeks ended 28 March 2020
********************************************************************************
2. Segmental Analysis (continued)
*********************************
Post IFRS 16
52 weeks ended Managed Pubs Tenanted Unallocated1 Total
28 March 2020 continuing
operations
and Hotels Inns GBPm
GBPm
GBPm GBPm
Revenue and 299.6 29.7 3.7 333.0
other income
Segment result 29.5 11.8 (15.4) 25.9
Operating (23.9)
separately
disclosed items
Operating profit 2.0
Profit on 9.6
disposal of
properties
Net finance (8.4)
costs
Profit before 3.2
income tax
Other segment
information
Additions to 24.5 3.6 23.6 51.7
property, plant
& equipment
Business 32.8 - - 32.8
combinations
(note 13)
Depreciation 26.4 2.0 0.1 28.5
Impairment of 18.2 0.7 - 18.9
property,
right-of-use
assets and
goodwill
1 Unallocated expenses represent primarily the salaries and costs of central management. Unallocated revenue
represents Transitional Services Agreement ("TSA") income while unallocated capital expenditure relates to the
purchase of a new head office
Pre IFRS 16
52 weeks ended 28 Managed Tenanted Unallocated1 Total
March 2020 Pubs continuing
operations
Inns GBPm
and Hotels
GBPm
GBPm
GBPm
Revenue and other 299.6 29.7 3.7 333.0
income
Segment result 28.7 11.7 (15.4) 25.0
Operating (17.3)
separately
disclosed items
Operating profit 7.7
Profit on 9.6
disposal of
properties
Net finance costs (5.8)
Profit before 11.5
income tax
Other segment
information
Additions to 24.5 3.6 23.6 51.7
property, plant &
equipment
Business 32.8 - - 32.8
combinations
(note 13)
Depreciation and 17.0 1.9 0.1 19.0
amortisation
Impairment of 11.6 0.7 - 12.3
property and
goodwill
1 Unallocated expenses represent primarily the salaries and costs of central management. Unallocated revenue
represents Transitional Services Agreement ("TSA") income while unallocated capital expenditure relates to the
purchase of a new head office
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
For the 52 weeks ended 28 March 2020
******************************************************************************
**
2. Segmental Analysis (continued)
*********************************
52 weeks ended 30 March 2019 Managed Tenanted Unallocated1 Total
Pubs contin
uing
operat
Inns GBPm ions
and
Hotels
GBPm GBPm
GBPm
Revenue and other income 293.8 30.9 - 324.7
Segment result 42.7 13.8 (16.5) 40.0
Operating separately disclosed items (11.2)
Operating profit 28.8
Profit on disposal of properties 1.9
Net finance costs (7.7)
Profit before income tax 23.0
Other segment information
Additions to property, plant & equipment 25.5 3.0 - 28.5
Business combinations (note 13) 18.1 - - 18.1
Depreciation and amortisation 17.2 1.8 0.5 19.5
Impairment of property 3.0 - - 3.0
Reversal of impairment on property (1.3) (0.5) - (1.8)
1) Unallocated expenses represent primarily the salaries and costs of central management
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
For the 52 weeks ended 28 March 2020
********************************************************************************
3. Separately Disclosed Items
******************************
The Group presents separately disclosed items on the face of the Income Statement 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.
Post IFRS 16 Pre IFRS 16 52 weeks ended
30 March
52 weeks 52 weeks
2019
ended ended
28 March 2020 28 March 2020 GBPm
GBPm
GBPm
Amounts included in
operating profit:
Acquisition costs (1.4) (1.4) (0.6)
Reorganisation costs (2.1) (2.1) (0.5)
Impairment and (18.9) (12.3) (1.2)
reversal of
impairment of
intangible assets,
properties and
right-of-use assets
IT maintenance, (1.5) (1.5) (6.7)
support and
rectification costs
Onerous lease - - (1.9)
provision charge
Guaranteed Minimum - - (0.3)
Pension ("GMP")
charge
Total separately (23.9) (17.3) (11.2)
disclosed items
included in operating
profit
Profit on disposal of 9.6 9.6 1.9
properties
Separately disclosed
finance costs:
Finance charge on net (0.6) (0.6) (0.8)
pension liabilities
(note 12)
Finance credit on the 0.1 0.1 -
cancellation of
interest rate swaps
Total separately (0.5) (0.5) (0.8)
disclosed finance
costs
Total separately (14.8) (8.2) (10.1)
disclosed items
before tax
Separately disclosed
tax:
Profit on disposal of (1.9) (1.9) (0.3)
properties
Other items 3.9 2.6 1.6
Total separately 2.0 0.7 1.3
disclosed tax
Total separately (12.8) (7.5) (8.8)
disclosed items
Acquisition costs of GBP1.4 million during the 52 weeks ended 28 March 2020 (30 March 2019: GBP0.6 million) relate to
transaction costs on property and business acquisitions.
The reorganisation costs of GBP2.1 million during the 52 weeks ended 28 March 2020 (30 March 2019: GBP0.5 million) were
principally incurred as a result of the reorganisation of the Group due to the disposal of the Fuller's Beer
Business, in order for the Group to transition to a simplified structure and reduce central overheads.
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
For the 52 weeks ended 28 March 2020
********************************************************************************
3. Separately Disclosed Items (continued)
The total impairment charge of GBP18.9 million during the 52 weeks ended 28 March 2020 relates to the write down of a
number of licensed properties to their recoverable value as well as the write down in value of previously acquired
goodwill recognised on acquisition of The Stable Pizza & Cider Limited (30 March 2019: GBP1.2 million). Post IFRS 16
includes impairment of right-of-use assets of GBP6.6 million in relation to five properties (30 March 2019: GBPnil).
The expenditure of GBP1.5 million (30 March 2019: GBP6.7 million) relates to ongoing maintenance, support and
rectification costs in respect of core IT systems. The costs incurred primarily relate to consultancy and incremental
staff costs.
The profit on disposal of properties of GBP9.6 million during the 52 weeks ended 28 March 2020 (30 March 2019: GBP1.9
million) relates to the disposal of three licensed and unlicensed properties including two pubs (2019: seven
properties).
The cash impact of operating separately disclosed items before tax for the 52 weeks ended 28 March 2020 was GBP5.0
million cash outflow (30 March 2019: GBP7.5 million cash outflow).
4. Finance Costs
****************
Post IFRS 16 Pre IFRS 16 52 weeks ended
30 March
52 weeks 52 weeks
2019
ended ended
28 March 2020 28 March 2020 GBPm
GBPm
GBPm
Finance Income
Interest income from 0.2 0.2 -
financial assets
Finance Costs
Interest expense
arising on:
Financial liabilities (5.3) (5.3) (6.7)
at amortised cost -
loans and debentures
Financial liabilities (0.1) (0.1) (0.1)
at amortised cost -
preference shares
Financial liabilities (2.7) (0.1) -
at amortised cost -
lease liabilities
Total interest (8.1) (5.5) (6.8)
expense for financial
liabilities
Unwinding of - - (0.1)
discounts on
provisions
Net finance costs (7.9) (5.3) (6.9)
before separately
disclosed items
Finance charge on net (0.6) (0.6) (0.8)
pension liabilities
(note 12)
Finance credit on the 0.1 0.1 -
cancellation of
interest rate swaps
Total finance costs (8.4) (5.8) (7.7)
after separately
disclosed items
Fuller, Smith & Turner P.L.C.
******************************
Notes to the Condensed Financial Statements
For the 52 weeks ended 28 March 2020
********************************************************************************
5. Taxation
***********
Tax on Profit on Ordinary Activities
Group Post IFRS 16 Pre IFRS 16 52 weeks ended
30 March
52 weeks ended 52 weeks ended
28 March 28 March 2019
GBPm
2020 2020
GBPm GBPm
Tax charged in the
Income Statement
Current income tax:
Current tax on 0.8 2.4 5.6
profits for the
year
Adjustments for 0.1 0.1 0.1
current tax on
prior period
Total current 0.9 2.5 5.7
income tax expense
Deferred income
tax:
Origination and 1.4 1.4 (0.7)
reversal of
temporary
differences
Change in 1.6 1.6 -
corporation tax
rate
Adjustments for 0.3 0.3 0.2
current tax on
prior periods
Total deferred tax 3.3 3.3 (0.5)
expense/(benefit)
Total tax charged 4.2 5.8 5.2
in the Income
Statement
Analysed as:
Before separately 6.2 6.5 6.5
disclosed items
Separately (2.0) (0.7) (1.3)
disclosed items
4.2 5.8 5.2
Reconciliation of the Total Tax Charge
The tax expense in the Income Statement for the year is higher (2019: higher) than the standard rate of corporation
tax in the UK of 19% (2019: 19%). The differences are reconciled below:
Post IFRS 16 Pre IFRS 16 52 weeks ended
30 March
52 weeks ended 52 weeks ended
28 March 28 March 2019
GBPm
2020 2020
GBPm GBPm
Profit from 3.2 11.5 23.0
continuing
operations before
income tax expense
Accounting profit 0.6 2.2 4.4
multiplied by the
UK standard rate of
corporation tax of
19% (2019: 19%)
Items not 1.6 1.6 0.6
deductible for tax
purposes
Current and 2.0 2.0 0.3
deferred tax under
provided in
previous years
Other - - (0.1)
Total tax charged 4.2 5.8 5.2
in the Income
Statement
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
For the 52 weeks ended 28 March 2020
********************************************************************************
5. Taxation (continued)
***********************
Post Pre 52
IFRS IFRS weeks
16 16 ended
Deferred tax relating to items Charged/(Credited) to the Income Statement 30
************************************************************************* March
52 52
week week
s s 2019
ende ende GBPm
d d
28 28
Marc Marc
h h
2020 2020
GBPm GBPm
Deferred tax depreciation - - (1.0)
Rolled over capital gains 2.6 2.6 0.3
Retirement benefit obligations 0.6 0.6 0.2
Employee share schemes 0.1 0.1 0.1
Pub acquisition costs - - (0.1)
Deferred tax in the Income Statement 3.3 3.3 (0.5)
Tax Relating to Items Charged/(Credited) to the
Statement of Comprehensive Income
**********************************************************************************
Deferred tax:
Valuation gains on financial assets and 0.1 0.1 -
liabilities
Net actuarial gains/(losses) on pension scheme 1.1 1.1 (0.8)
Total tax charged/(credited) in the Statement of 1.2 1.2 (0.8)
Comprehensive Income
Tax Relating to Items Charged/(Credited) Directly to Equity
***********************************************************
Deferred tax:
Increase in deferred tax liability due to - - 0.1
indexation
Share-based payments 0.1 0.1 (0.1)
Total tax charged to equity 0.1 0.1 -
6. Earnings Per Share
*********************
Group Post IFRS 16 Pre IFRS 16
52 weeks 52 weeks 52 weeks
ended ended ended
28 March 2020 28 March 2020 30 March
GBPm GBPm
2019
GBPm
Profit attributable to 161.9 168.6 19.3
equity shareholders
Separately disclosed items (149.6) (154.9) 15.2
net of tax
Adjusted earnings 12.3 13.7 34.5
attributable to equity
shareholders
Number Number Number
Weighted average share capital 55,124,000 55,124,000 54,957,000
Dilutive outstanding options 128,000 128,000 389,000
and share awards
Diluted weighted average share 55,252,000 55,252,000 55,346,000
capital
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
For the 52 weeks ended 28 March 2020
********************************************************************************
6. Earnings Per Share (continued)
*********************************
Pence Pence Pence
40p 'A' and 'C' ordinary share
Basic earnings per share 293.70 305.86 35.12
Diluted earnings per share 293.02 305.15 34.87
Adjusted earnings per share 22.31 24.85 62.78
Diluted adjusted earnings per share 22.26 24.80 62.33
4p 'B' Pence Pence Pence
ordinary
share
Basic 29.37 30.59 3.51
earnings
per share
Diluted 29.30 30.51 3.49
earnings
per share
Adjusted 2.23 2.49 6.28
earnings
per share
Diluted 2.23 2.48 6.23
adjusted
earnings
per share
Continuing Post IFRS 16 Pre IFRS 16
operations 52 weeks 52 weeks 52 weeks
ended ended ended
28 March 2020 28 March 2020 30 March
GBPm GBPm 2019
GBPm
Profit (1.0) 5.7 17.8
attributab
le to
equity
shareholde
rs
Separately 12.8 7.5 8.8
disclosed
items net
of tax
Adjusted 11.8 13.2 26.6
earnings
attributab
le to
equity
shareholde
rs
Number Number Number
Weighted average share capital 55,124,000 55,124,000 54,957,000
Dilutive outstanding options 128,000 128,000 389,000
and share awards
Diluted weighted average share 55,252,000 55,252,000 55,346,000
capital
40p 'A' and 'C' ordinary share Pence Pence Pence
Basic earnings per share (1.81) 10.34 32.39
Diluted earnings per share (1.81) 10.32 32.16
Adjusted earnings per share 21.41 23.95 48.40
Diluted adjusted earnings per share 21.36 23.89 48.06
4p 'B' ordinary share Pence Pence Pence
Basic earnings per share (0.18) 1.03 3.24
Diluted earnings per share (0.18) 1.03 3.22
Adjusted earnings per share 2.14 2.39 4.84
Diluted adjusted earnings per share 2.14 2.39 4.81
The Directors have determined the profit or loss and the weighted average number of shares that is attributable to
each class of ordinary share to calculate the earnings per share for the 40p 'A' and 'C' ordinary shares and the 4p
'B' ordinary shares. 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 1,860,777 (2019: 2,027,034).
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
For the 52 weeks ended 28 March 2020
********************************************************************************
6. Earnings Per Share (continued)
*********************************
Diluted earnings per share is 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 ordinary shares into ordinary
shares.
Adjusted earnings per share is calculated on profit before tax excluding separately disclosed 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
************
52 weeks ended 52 weeks ended
28 March 30 March
2020 2019
GBPm GBPm
Declared and paid during the year
Equity dividends on ordinary
shares:
Final dividend for 2019: 4.35p 2.4 6.6
(2018:12.00p)
Second interim dividend for 2019: 4.4 -
8.00p (2018: 0p)
First interim dividend for 2020: 4.3 4.3
7.80p (2019: 7.80p)
'D' Share single dividend for 69.4 -
2020: 125p (2019: 0p)
Equity dividends paid 80.5 10.9
Dividends on cumulative preference 0.1 0.1
shares
Declared and paid after the year
Second interim dividend for 2020: - 4.4
0p (2019: 8.00p)
Proposed for approval at the
Annual General Meeting:
Final dividend for 2020: 0p (2019: - 2.4
4.35p)
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.
As indicated in the circular published on 28 March 2019 relating to the disposal of the Fuller's Beer Business, the
Board made an additional cash return of GBP1.25 per 'A' and 'C' ordinary share and 12.5p per 'B' ordinary share through
a 'D' share scheme. Each ordinary shareholder as at the record date was issued with ten 'D' shares for every existing
'A' and 'C' ordinary share and one 'D' share for every one 'B' ordinary share held at the time. Numis (acting as
principal, and not as agent, nominee or trustee for the Company) made an offer to purchase the 'D' shares for an
amount of 12.5p per 'D' share (free of all expenses and commissions). The Company accepted the offer on behalf of
shareholders and paid a single dividend to Numis as holder of all the 'D' shares of GBP69.4 million representing the
sum of 12.5p per 'D' share plus the stamp duty payable by Numis in connection with the purchase of all the 'D' shares
in issue.
Following the approval of all the resolutions presented to the Company's Extraordinary General Meeting on 1 October
2019, 552,318,406 'D' shares of 0.1p each were allotted and issued to shareholders on 2 October 2019 on the basis of
ten 'D' shares for every existing 'A' and 'C' ordinary share of 40p each and one 'D' share for every existing 'B'
ordinary share of 4p each held at the record date. Following the purchase by Numis of all of the 'D' shares, and
payment by the Company of a single dividend to Numis of GBP69.4 million as holder of all of the 'D' shares on 7 October
2019, the 'D' shares were reclassified as deferred shares of 0.1p and were immediately repurchased and cancelled by
the Company on 8 October 2019.
No final dividend for 2020 has been proposed for approval at the Annual General Meeting due to the temporary closure
of the business as a result of the coronavirus pandemic.
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
For the 52 weeks ended 28 March 2020
********************************************************************************
8. Property, Plant and Equipment
********************************
Group Land & Plant, Fixtures & Total
buildings machinery fittings
GBPm
GBPm & vehicles GBPm
GBPm
Cost
At 31 March 2018 528.4 43.0 160.7 732.1
Additions 12.5 4.1 17.3 33.9
Acquisitions 20.6 - - 20.6
Disposals (2.5) (0.2) (3.6) (6.3)
Derecognition of - - (1.9) (1.9)
assets
Transfer to assets (25.0) (40.7) (15.9) (81.6)
held for sale
At 30 March 2019 534.0 6.2 156.6 696.8
Additions 36.0 0.3 15.4 51.7
Acquisitions (note 42.2 - 2.1 44.3
13)
Disposals (2.2) - (5.0) (7.2)
Transfer to (0.2) - - (0.2)
investment
property
Transfer to assets (2.2) - (0.2) (2.4)
held for sale
At 28 March 2020 607.6 6.5 168.9 783.0
Depreciation and
impairment
At 31 March 2018 40.4 26.7 100.9 168.0
Provided during 3.6 0.5 14.4 18.5
the year -
continuing
operations
Provided during 0.4 1.9 1.0 3.3
the year -
discontinued
operations
Disposals (0.1) (0.1) (3.1) (3.3)
Impairment loss (0.7) - 1.9 1.2
net of reversals
Derecognition of - - (0.9) (0.9)
assets
Transfer to assets (3.9) (27.7) (11.1) (42.7)
held for sale
At 30 March 2019 39.7 1.3 103.1 144.1
Provided during 3.8 0.5 13.6 17.9
the year
Disposals (0.7) - (4.4) (5.1)
Impairment loss 8.5 - 0.1 8.6
net of reversals
Transfer to assets (0.1) - (0.1) (0.2)
held for sale
At 28 March 2020 51.2 1.8 112.3 165.3
Net book value at 556.4 4.7 56.6 617.7
28 March 2020
Net book value at 494.3 4.9 53.5 552.7
30 March 2019
Net book value at 488.0 16.3 59.8 564.1
31 March 2018
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
For the 52 weeks ended 28 March 2020
********************************************************************************
9. Impairment
*************
Group 2020 2019
GBPm GBPm
Impairment losses net of reversals
Intangible assets 3.7 -
Property, plant and equipment 8.6 1.2
Right-of-use assets 6.6 -
18.9 1.2
During the 52 weeks ended 28 March 2020, the Group recognised an impairment loss of GBP8.6 million (2019: GBP1.2 million)
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. Post IFRS 16 also includes impairment of right-of-use assets of GBP6.6
million in relation to five properties where asset values exceeded the higher of the fair value less costs to sell or
their value in use (30 March 2019: GBPnil). The impairment losses were driven principally by changes in the local
competitive environment in which the pubs are situated as well as the significant impact coronavirus will have on
these pubs.
During the 52 weeks ended 28 March 2020, the Group recognised an impairment loss of GBP3.7 million in relation to
previously acquired goodwill recognised on acquisition of The Stable Pizza & Cider Limited. The impairment loss was
principally driven by poor performance during the year and the sale of the Company post year end, refer to note 15.
10. Leases
**********
Amounts recognised in the Balance Sheet
***************************************
Group 2020 31 March 20191
GBPm GBPm
Right-of-use assets
Properties 105.1 101.0
Equipment 0.8 1.2
Vehicles 1.1 0.7
107.0 102.9
Lease liabilities
Current 8.9 7.7
Non-current 104.0 92.7
112.9 100.4
1 In the previous year, the Group accounted for operating leases under IAS 17, Leases.
**************************************************************************************
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
For the 52 weeks ended 28 March 2020
********************************************************************************
10. Leases (continued)
**********************
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:
**************************************************************************************************************
Group Property Vehicles Equipment Total
GBPm GBPm GBPm GBPm
Net carrying value as at 31 101.0 0.7 1.2 102.9
March 2019
Additions 2.8 - 0.2 3.0
Lease amendments1 14.7 0.6 - 15.3
Business combinations 3.0 - - 3.0
Depreciation (9.8) (0.2) (0.6) (10.6)
Impairment (6.6) - - (6.6)
Net carrying value as at 28 105.1 1.1 0.8 107.0
March 2020
1 Lease amendments include lease terminations, modifications, reassessments and extensions to existing lease
agreements.
As at 28 March 2020, the Group was committed to leases with future cash outflows totalling GBP3.3 million which had not
yet commenced and as such are not accounted for as a liability. A liability and corresponding right-of-use asset will
be recognised for these leases at the lease commencement date.
11. Analysis of Net Debt
************************
Post IFRS 16
52 weeks At 30 Transition Cash flows Non cash1 At
ended 28 March to IFRS 16 GBPm GBPm 28 March
March 2020 2019 GBPm 2020
GBPm GBPm
Cash and
cash
equivalents
:
Cash and 11.0 - 9.3 - 20.3
short-term
deposits
11.0 - 9.3 - 20.3
Financial
liabilities
Lease - (100.4) 11.2 (23.7) (112.9)
liabilities
- (100.4) 11.2 (23.7) (112.9)
Debt:
Bank loans2 (228.5) - 57.0 (0.2) (171.7)
Other loans (0.2) - - 0.2 -
Debenture (25.9) - - - (25.9)
stock
Preference (1.6) - - - (1.6)
shares
Total (256.2) - 57.0 - (199.2)
borrowings
Net debt (245.2) (100.4) 77.5 (23.7) (291.8)
1 Non-cash movements relate to the amortisation of arrangement fees, arrangement fees accrued, movements in lease
liabilities and corporate disposals.
2 Bank loans net of arrangement fees.
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
For the 52 weeks ended 28 March 2020
********************************************************************************
11. Analysis of Net Debt (continued)
************************************
Pre IFRS 16
52 weeks ended 28 March At Cash flows Non At
2020 30 March GBPm cash1 28 March
2019 GBPm 2020
GBPm GBPm
Cash and cash equivalents:
Cash and short-term 11.0 9.3 - 20.3
deposits
11.0 9.3 - 20.3
Debt:
Bank loans2 (228.5) 57.0 (0.2) (171.7)
Other loans (0.2) 0.2 -
Debenture stock (25.9) - - (25.9)
Preference shares (1.6) - - (1.6)
Total borrowings (256.2) 57.0 - (199.2)
Net debt (245.2) 66.3 - (178.9)
52 weeks ended 30 March At Cash flows Non At
2019 31 March GBPm cash1 30 March
2018 GBPm 2019
GBPm GBPm
Cash and cash equivalents:
Cash and short-term 11.7 (0.7) - 11.0
deposits
11.7 (0.7) - 11.0
Debt:
Bank loans2 (185.9) (42.3) (0.3) (228.5)
Other loans (0.2) - - (0.2)
Debenture stock (25.9) - - (25.9)
Preference shares (1.6) - - (1.6)
Total borrowings (213.6) (42.3) (0.3) (256.2)
Net debt (201.9) (43.0) (0.3) (245.2)
1 Non-cash movements relate to the amortisation of arrangement fees, arrangement fees accrued and corporate
disposals.
2 Bank loans net of arrangement fees.
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
For the 52 weeks ended 28 March 2020
********************************************************************************
12. Retirement Benefit Obligations
**********************************
The amount included in the Balance Sheet arising from the Group's obligations in respect of its defined benefit
retirement plan are:
2020 2019
GBPm GBPm
Fair 123.8 111.9
value of
Scheme
assets
Present (128.5) (148.3)
value of
Scheme
liabiliti
es
Deficit (4.7) (36.4)
in the
Scheme
Defined Fair value Net defined
benefit of Scheme deficit
obligation assets
2020 2019 2020 2019 2020 2019
GBPm GBPm GBPm GBPm GBPm GBPm
Balance at (148.3) (142.0) 111.9 109.5 (36.4) (32.5)
beginning of
the year
Included in
profit and loss
Current service - - - - - -
cost
Net interest (3.7) (3.6) 3.1 2.8 (0.6) (0.8)
cost
(3.7) (3.6) 3.1 2.8 (0.6) (0.8)
Included in
Other
Comprehensive
Income
Actuarial
gains/(losses)
relating to:
Return on - - (13.2) 2.6 (13.2) 2.6
scheme's assets
(less amounts
included in the
net interest
expense)
Experience 19.1 (7.6) - - 19.1 (7.6)
gains/(losses)
arising on
Scheme
liabilities
19.1 (7.6) (13.2) 2.6 5.9 (5.0)
Other
Employer - - 24.0 - 24.0 -
special
contribution
Employer - - 2.4 2.2 2.4 2.2
contributions
Benefits paid 4.4 5.2 (4.4) (5.2) - -
GMP - (0.3) - - - (0.3)
Equalisation
4.4 4.9 22.0 (3.0) 26.4 1.9
Balance at end (128.5) (148.3) 123.8 111.9 (4.7) (36.4)
of the year
Key assumptions
The key assumptions used in the 2020 valuation of the Scheme are set out below:
Key financial assumptions used in the valuation of 2020 2019
the Scheme
Rate of increase in pensions in payment 2.85% 3.30%
Discount rate 2.40% 2.40%
Inflation assumption - RPI 2.85% 3.35%
Inflation assumption - CPI 1.95% 2.35%
Mortality assumptions 2020 2019
Years Years
Current pensioners (at 65) - males 22.1 22.0
Current pensioners (at 65) - females 24.3 23.9
Future pensioners (at 65) - males 23.4 23.4
Future pensioners (at 65) - females 25.8 25.5
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
For the 52 weeks ended 28 March 2020
********************************************************************************
12. Retirement Benefit Obligations (continued)
**********************************************
Assets in the Scheme 2020 2019
GBPm GBPm
Corporate bonds 26.9 27.4
Gilts 24.0 -
UK equities 17.0 21.3
Overseas equities 20.9 22.3
Alternatives 30.5 36.5
Cash 0.9 0.8
Annuities 3.6 3.6
Total market value of assets 123.8 111.9
13. Business combinations
*************************
During the 52 weeks ended 28 March 2020, the Company acquired 100% of the shares of Cotswold Inns & Hotels Limited, a
business incorporated in the UK and consisting of seven premium hotels and two bars. A further pub was bought and
treated as a business combination as it was operating as a business at the point the Company acquired it. Both these
transactions have been accounted for by the purchase method of accounting.
Cotswold Inns & Pubs and
Hotels Restaurant
2020 2020
Number of pubs/hotels/ 9 1
restaurants purchased
Fair value Cotswold Inns & Pubs and
Hotels Restaurant
2020 2020
GBPm GBPm
Property, plant and 40.6 3.7
equipment
Right-of-use assets 3.0
Current assets 1.2 -
Lease liabilities (3.0)
Current liabilities (3.7) -
Deferred tax (3.2) -
Borrowings (8.4) -
Cash and cash equivalents 1.3 -
Net assets acquired 27.8 3.7
Goodwill 2.6 -
Total consideration 30.4 3.7
Net outflow of cash
Cash consideration paid 30.4 3.7
Repayment of third party 8.4 -
loans on acquisition
Cash and cash equivalents (1.3) -
acquired
Net cash outflow in 37.5 3.7
respect of purchase of
businesses
From the date of acquisition, Cotswolds Inns & Hotels contributed GBP5.2 million of revenue and a GBP0.5 million loss to
profit before tax to continuing operations of the Group. The impact of coronavirus was an estimated loss of GBP0.3
million.
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
For the 52 weeks ended 28 March 2020
13. Business combinations (continued)
*************************************
If the combination had taken place at the start of the financial year, Cotswolds Inns & Hotels would have expected to
contribute GBP17.0 million of revenue and GBP2.3 million of profit before tax.
The consideration paid is the enterprise of GBP40 million less any working capital adjustments.
14. Discontinued operations
***************************
On 27 April 2019, the Group sold its entire beer business to Asahi Europe Ltd ("AEL"), a wholly owned subsidiary of
Asahi Group Holdings Ltd ("Asahi"), for an enterprise value of GBP250.0 million on a debt free basis including any cash
left in the business.
The business sold comprised the entirety of Fuller's beer, cider and soft drinks brewing and production, wine
wholesaling, as well as the distribution thereof, and also includes the Griffin Brewery, Cornish Orchards, Dark Star
Brewing and Nectar Imports (referred to as the "Fuller's Beer Business"). Accordingly, they have been reported as
discontinued operations in the Annual Report for the 52 weeks ended 28 March 2020.
(a) Financial performance and cash flow
The financial performance and cash flow information presented reflects the operations for the one month ended 27
April 2019.
52 weeks ended 52 weeks ended
30 March
28 March
2019
2020
GBPm
GBPm
Revenue
Segment revenue 13.1 161.4
Inter-segment sales (4.1) (55.0)
Revenue from third parties 9.0 106.4
Segment result 0.6 10.1
Operating separately disclosed - (1.6)
items
Operating profit 0.6 8.5
Net finance costs - -
Profit from operating activities - 0.6 8.5
discontinued operations
Net gain/(loss) on sale of discontinued operations 162.4 (5.4)
Profit before tax - discontinued operations 163.0 3.1
Taxation (0.1) (1.4)
Analysed as:
Underlying trading (0.1) (2.0)
Separately disclosed items - 0.6
Profit from discontinued operations 162.9 1.7
Attributable to:
Equity shareholders of the Parent Company 162.9 1.5
Non-controlling interest - 0.2
Net cash inflow from operating activities 0.6 0.3
Net cash inflow/(outflow) from investing 225.4 (4.2)
activities
Net increase/(decrease) in cash generated by the 226.0 (3.9)
Fuller's Beer Business
Other segment information
Additions to property, plant & equipment - 4.2
Business combinations - 2.0
Depreciation and amortisation - 3.6
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
For the 52 weeks ended 28 March 2020
********************************************************************************
14. Discontinued operations (continued)
***************************************
52 weeks ended
52 weeks ended 30 March
28 March
2019
2020
Earnings per share - discontinued Pence Pence
operations
40p 'A' and 'C' ordinary share
Basic earnings per share 295.52 2.73
Diluted earnings per share 294.83 2.71
Adjusted earnings per share 0.91 14.37
Diluted adjusted earnings per 0.90 14.27
share
4p 'B' ordinary share Pence Pence
Basic earnings per share 29.55 0.27
Diluted earnings per share 29.48 0.27
Adjusted earnings per share 0.09 1.44
Diluted adjusted earnings per share 0.09 1.43
(b) Details of the sale of the subsidiary
52 weeks ended
28 March
2020
GBPm
Provisional consideration received
Cash 230.5
Carrying amount of net assets sold (47.0)
Goodwill (11.7)
Gain on sale before income tax 171.8
Transaction costs (9.4)
Gain net of transaction costs 162.4
Income tax expense on gain -
Gain on sale after income tax 162.4
The consideration received is the enterprise value of GBP250.0 million less working capital adjustments and provision.
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
For the 52 weeks ended 28 March 2020
********************************************************************************
15. Post Balance Sheet Events
*****************************
In response to the coronavirus pandemic and the temporary closure of the entire estate at the end of March,
management have taken a number of steps to mitigate the financial impact of the pandemic. The Group has strengthened
the Balance Sheet by accessing the Bank of England Covid Corporate Financing Facility ("CCFF") programme which have
issued GBP100 million of Commercial Paper with access to a further GBP50 million. The CCFF provides short-term unsecured
debt and is repayable in May 2021. Management have also agreed with their lenders that the existing quarterly
covenant tests (through to and including September 2020) are revised to be based primarily on liquidity headroom
metrics, deemed to be a more appropriate measure while the Group's pubs and hotels remain closed. The above measures
are on top of the existing and ongoing cost reducing initiatives, which include minimising the Group's outgoings
across the business and accessing some of the Governments support packages (such as Coronavirus Job Retention Scheme)
in order to safeguard employment.
On 15 March 2020, the Group made the decision to cancel tenant's rent due to the closure of all pubs. In April and
May 2020, this resulted in a total of GBP1.2 million loss of earnings.
The Stable Pizza and Cider Limited and its subsidiary The Stable Bar and Restaurant Limited was disposed of on 7 June
2020. The Group disposed of non-current assets of GBP12.1 million, current assets of GBP0.4 million, current liabilities
of GBP2.1 million and non-current liabilities of GBP10 million. The consideration received was equal to the Group's net
assets.
=--------------------------------------------------------------------------------------------------------------------
[1] Managed Pubs and Hotels like for like sales excludes The Stable
[2] Operating profit before separately disclosed items and head office costs
[3] Profit before tax before separately disclosed items and IFRS 16 for continuing operations
[4] Profit before tax for total Group, pre IFRS 16
[5] Source: Peach Tracker Index
ISIN: GB00B1YPC344
Category Code: FR
TIDM: FSTA
LEI Code: 213800C7ACOFMRCQQW76
OAM Categories: 1.1. Annual financial and audit reports
Sequence No.: 78857
EQS News ID: 1105743
End of Announcement EQS News Service
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(END) Dow Jones Newswires
July 30, 2020 02:00 ET (06:00 GMT)
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