Final Results
Fuller,Smith&Turner PLC
1 June 2001
STRICTLY EMBARGOED
UNTIL 7AM FRIDAY 1st JUNE 2001
PRESS RELEASE
FULLER SMITH & TURNER P.L.C.
Financial results for the year ended 31st March 2001
Financial Highlights
+ Profit before tax £19.3m (2000: £13.7m) up 41%
+ EBITDA on continuing activities of £25.0m (2000: £23.6m) up 6%
+ * Normalised profit before tax £15.6m (2000: £14.8m) up 6%
+ ** Basic E.P.S 56.80p (2000: 37.62p) up 51%
+ ** Normalised E.P.S 43.91p (2000: 40.73p) up 8%
+ Own beer volumes up 7%
+ Annual dividend 14.38p (2000: 13.41p) up 7%
+ Intention to buy back shares
* Profits after interest before exceptional operating costs/ profits
** Calculated on the £1 'A' Ordinary Share
Corporate Progress
+ Growth of managed pubs and bars with 7 new openings and 8 major
refurbishments
+ 4 managed houses transferred to tenanted with 6 more planned in
Summer 2001
+ Launch of new 10 year leases for tenancies
+ Strong prospects for niche hotels with 237 additional bedrooms to be
added in 2001/2
+ Recent hotel investments to enhance earnings in current financial
year
+ Excellent progress in the Beer Company - profits up 16%
Commenting on the results, Anthony Fuller, Chairman, said:
'I am delighted to be reporting preliminary results which demonstrate further
evidence of our continued growth and profitability. Our businesses remain
highly cash generative. We have continued to expand our estate of managed and
tenanted pubs and bars which deliver consistently good performance.
'We are extremely pleased with progress in English Inns Hotels, capitalising
on our experience of over thirty years in that business. Our strategy therein
is to build on our portfolio of niche, high quality, character bedroom hotels
in prime locations.
'Fuller's Beer Company has yet again outperformed its rivals and, in what is a
declining market for ales elsewhere, has shown both volume and profits growth.
We intend to continue to invest in our brands which, led by London Pride, are
stronger than ever before. This has resulted in our total beer volume reaching
a quarter of a million barrels for the first time and a further increase in
Fuller's ale market share.
'Current trading is satisfactory and the Board is confident of Fuller's growth
prospects. In light of this and our belief that the shares are presently
significantly undervalued, we intend to ask our shareholders for their
approval of a share buy back programme.'
- Ends -
For further information, please contact:
Fuller Smith & Turner
P.L.C.
Press Office 020 8996 2175/2198/2048
Mobile 07748 657854
Website: www.fullers.co.uk
Michael Turner - Press 020 8996 2048
Paul Clarke - Analysts 020 8996 2048
Merlin Financial 020 7606 1244
Paul Downes 07900 244 888 (mobile)
Vanessa Maydon 07802 961 902 (mobile)
Notes to Editors Photographs for the media are available at
NewsCast
Online - www.newscast.co.uk
Tel. 020 7608 1000
Attached: Chairman's Statement
Financial Highlights
Group Profit and Loss Account
Group Balance Sheet
Group Cash Flow Statement
Notes to the Accounts
FULLER SMITH & TURNER P.L.C.
FINANCIAL RESULTS FOR THE YEAR
ENDED 31 MARCH 2001
CHAIRMAN'S STATEMENT
Whatever You Do, Take Pride
I am pleased to report that our normalised profits before tax are up 6% to £
15.6 million (2000: £14.8 million). Turnover on continuing operations is up 8%
to £128.1 million. Normalised earnings per share are up 8% to 43.91p (2000:
40.73p). In addition Fuller's made exceptional profits of £3.7 million,
taking total profit before tax to £19.3 million (2000: £13.7 million) up 41%.
The tax charge on trading profits is 28.8% (2000: 30.4%). We anticipate that
the forthcoming changes arising out of FRS19 Deferred Tax will not increase
this charge significantly.
Our cash generation continues to be significant with EBITDA at £25.0 million,
up 6% on continuing operations from £23.6m, with organic growth more than
compensating for the sale of the wine shops in February 2000. Gearing fell
to 6.7% (2000: 9.5%) following the sale last summer of the Master Robert Hotel
and other properties, realising a net £11.5 million. Capital expenditure for
the year was £30.2 million (2000: £23.3 million), of which nearly half relates
to three major hotel projects opening during the current year.
The Directors are recommending an increase in the final dividend of 7% to
10.00p per 'A' and 'C' £1 Ordinary Share, and 1.00p per 'B' 10p Ordinary Share
which will make a total for the year of 14.38p per 'A' and 'C' £1 Ordinary
Share and 1.438p per 'B' 10p Ordinary Share. The final dividend will be paid
on Tuesday 24 July 2001 to shareholders on the Share Register at Friday 22
June 2001.
Fuller's Inns
The turnover of our combined retail operations increased by 9% to £92.6
million, with pre-exceptional operating profits at £16.1 million, up 5% after
an increase in repairs of £0.5 million.
Managed Pubs and Bars
Managed Pubs and Bars turnover has increased by 9%, but on a like for like
basis sales fell 1%. This is due to a number of factors, not least amongst
which was the poor weather last summer which affected food sales in
particular. The weight of new legislative requirements means that the
increasing cost of running managed pubs has an impact on the minimum turnover
required to achieve an adequate return. Consequently, four Managed Pubs were
transferred over to the Tenanted estate in the year and a further six will
have transferred by the end of this quarter. In addition, we continue to look
for further opportunities to expand our Managed Pub business to spread the
necessary fixed costs over a greater number of outlets.
Investment in the Managed estate has continued, with eight major refurbishment
projects and seven new outlets opened in the year. The new openings comprise
four traditional Pubs and three Bars, including Katabatic, Fuller's first late
night bar in Shoreditch which opened in December 2000. At present seven
outlets of the 117 in our Managed estate have late licences, and, whilst we do
not intend to reposition our pubs and bars as nightclubs, we believe that a
further 10 sites would benefit from midnight or 1 a.m. licences and we have
submitted the necessary applications.
We intend to continue to expand our Bars Division and are seeking suitable
outlets that meet our site criteria and which have opportunities to trade with
late licences. The Fine Line continues to perform well and we are actively
searching for new sites. In addition the more food orientated One of Two Bars
are performing well and a third site is in the pipeline for this year.
Following the transfer into the Bars Division, the Broadwalks have developed
and two new sites in Swindon and Chelmsford were opened in the year with
another in Sevenoaks which opened in April 2001.
As in all other parts of our business Quality, Service and Pride continue to
underpin the activities of the retail estate. Last year, we launched our
Retail Staff Development Programme designed to induct and train retail staff.
This has had noticeable benefits in improving customer service and reducing
staff turnover dramatically. In addition, we successfully tested a new cask
ale dispensing system. Following the improved cask ale sales and customer
reaction in the pilot houses, it will now be rolled out to the rest of the
Managed estate at a total cost of £0.4 million. Fuller's remains a committed
founder member of the Cask Marque scheme.
Finally, we were delighted that Fuller's Inns was awarded the prestigious
Managed Pub Company of the Year trophy at the recent Publican awards. The
panel of judges comments reflect Fuller's own philosophy, 'Quality, Service
and Pride', admirably:
' ... a unanimous choice for the panel (Fuller's) has yet again consistently
delivered well managed traditional and modern pubs with fantastic ales and
excellent food ... remaining committed to quality and delivering the highest
levels of service.'
Tenanted Pubs
Turnover from the Tenanted estate has increased by 11%, representing a
combination of like for like growth of 4% and an increase in the number of
pubs within this Division. With four new acquisitions and four transfers from
the Managed estate, the number of Tenanted Pubs stood at 108 at March 2001
with another four pubs acquired since. The profitability of the estate has
also been maintained with a 3% increase in like for like profits. We launched
a new ten-year lease in the year, which has been well received by our tenants.
Six pubs had signed up to the new lease by the year end and, by the end of
the first quarter of this year, we expect this will have risen to 14.
Hotels Division
In June 2000 we completed the sale of the Master Robert Hotel for a net £6.5
million on which we realised a profit of £1.8m. The money raised has been
reinvested in the newly completed White Hart at Kingston Bridge (which opened
in April 2001), together with major projects in Bristol (the Brigstow Hotel,
opening August 2001), the City of London (the Chamberlain Hotel, opening
October 2001) and an extension to the existing Fox & Goose Hotel in Ealing.
These projects will almost double the total number of rooms to just under five
hundred at a total budgeted cost of £24 million, of which £16 million has been
spent to date. Furthermore, we will spend £5 million building a 52 bedroom
hotel attached to a well-located successful freehold pub excellently situated
between Uxbridge and Heathrow business centres. This will increase our hotel
estate to 546 bedrooms, of which over 400 will have been built within the last
5 years.
The continuing excellent performance of the existing Hotel estate gives us
confidence that we have identified a profitable niche between the larger four
star hotels and the limited facility lodge market. Early indications for the
new hotels are very promising. Like for like RevPar (yield) in the Hotels
Division was up 16% in the year, with like for like occupancy at 79% (2000:
70%). The Board is confident that the enlarged estate will continue to
produce substantial returns in the years ahead.
The Fuller's Beer Company
It has been a hugely successful year for the Beer Company with turnover up 6%,
profit up 16% and own beer barrelage up 7%. Total beer volumes broke the
quarter of a million barrels point for the first time ever - a significant
achievement in what is generally thought to be a declining market.
Free on-trade volumes, the largest segment in the Beer Company, were up 6% to
105,000 barrels representing 61% of our own beer business. Although sales of
Fuller's beers to our Tied Estate were level, our off-trade own beer volumes
have grown by 27% in a market down 6%.
We take great pride in the strength of our brands. London Pride, our flagship
brand, has continued to perform well in all markets. Cask volumes of London
Pride have increased by 5%, maintaining its position as the third largest
premium cask ale in the United Kingdom and closing the gap on the leaders.
Bottled and canned London Pride volumes have grown by 41% and 20%
respectively, moving their way up the national rankings, where, in particular,
bottled London Pride has risen to 4th place. Canned London Pride was awarded
the Gold medal in the Premium Canned Ale category at the International Beer &
Cider Competition 2001. London Pride is supported by significant television
and cinema advertising campaigns and other innovative promotional activities.
In addition, Organic Honey Dew, which has just celebrated its first birthday,
has picked up several industry awards and is the fastest growing premium ale
in the organic sector.
The strong and consistent growth of the Beer Company is being accompanied by
the largest capital investment programme the brewery has ever seen with in
excess of £4.5 million budgeted over an 18 month period. This started with the
new cask racking line, which was completed in February 2001 and a new bottling
line which is currently underway. There are also plans for a further tank
storage development in the current financial year which will substantially
increase our capacity.
Balance Sheet Strength
Fuller's balance sheet remains strong with assets at £6.10 per share (2000: £
5.69) up 7%. Gearing is at 6.7% as mentioned previously. The Company
continues to apply prudent accounting policies for the long-term benefit of
shareholders. With a strong cash flow and low gearing the Company is well
placed to take advantage of any opportunities that may arise in the market
place to expand its business activities.
Share Buy-back
We intend to ask shareholders at our A.G.M. to pass a resolution authorising
us to buy back shares within normal Stock Exchange rules. Most public
companies now have this power to repurchase shares at times when the price is
advantageous. We feel that the Company's shares represent excellent value at
present.
Prospects
Current trading is satisfactory and the Board is confident of Fuller's growth
prospects. The new Hotels opening this year will see the beginning of what
will be a substantial contribution to the Company in future. In addition, the
strength of our brands, increasing market share and capital investment
programme in the retail estate and brewery continue to yield benefits for
staff, customers and shareholders alike. We believe that Fuller's is ideally
positioned to capitalise on the opportunities presented by a changing
environment.
A.G.F. Fuller CBE
Chairman
DOI: 1st June 2001
FULLER SMITH & TURNER P.L.C.
FINANCIAL HIGHLIGHTS
FOR THE 53 WEEKS ENDED 31 MARCH 2001
53 weeks to 52 weeks to
31 March 25 March Increase
2001 2000 2001/2000
£000 £000
Continuing activities
Turnover 128,054 118,416 8%
Operating profit before exceptional 16,821 15,674 7%
items
EBITDA* 24,961 23,578 6%
Normalised profits** 15,624 14,803 6%
Profit before tax 19,331 13,692 41%
Normalised earnings per share*** 43.91p 40.73p 8%
Basic earnings per share*** 56.80p 37.62p 51%
Dividend per share*** 14.38p 13.41p 7%
Assets per share*** £6.10 £5.69 7%
Gearing ratio 6.7% 9.5% N/A
* Earnings before interest, tax, depreciation and amortisation.
** Profits after interest before exceptional operating costs/profits.
*** Calculated on the £1 'A' Ordinary Share
FULLER SMITH & TURNER P.L.C.
UNAUDITED GROUP PROFIT AND LOSS ACCOUNT
FOR THE 53 WEEKS ENDED 31 MARCH 2001
53 weeks to 52 weeks to
31 March 25 March
2001 2000
£000 £000
TURNOVER
Continuing operations 128,054 118,416
Discontinued operation - 23,940
------------- ------------
128,054 142,356
Operating costs (111,202) (128,835)
OPERATING PROFIT
Continuing operations
Before operating exceptional 16,821 15,674
profits/(costs)
Operating exceptional profits/ 31 (2,655)
(costs) ------------- ------------
Total continuing operations 16,852 13,019
Discontinued operation - 502
------------- ------------
TOTAL OPERATING PROFIT 16,852 13,521
Non-operating exceptional profits 3,676 1,544
Interest payable (net) (1,197) (1,373)
------------- ------------
PROFIT ON ORDINARY ACTIVITIES BEFORE 19,331 13,692
TAXATION
Taxation (4,973) (4,166)
------------- ------------
PROFIT ON ORDINARY ACTIVITIES AFTER 14,358 9,526
TAXATION
Preference dividends (120) (120)
------------- ------------
ATTRIBUTABLE TO EQUITY SHAREHOLDERS 14,238 9,406
Ordinary dividends (3,610) (3,364)
------------- ------------
RETAINED PROFIT FOR THE FINANCIAL PERIOD 10,628 6,042
------------- ------------
EARNINGS PER SHARE*
Basic 56.80p 37.62p
Diluted 56.69p 37.27p
Normalised basis 43.91p 40.73p
*Calculated on the £1 'A' ordinary share.
FULLER SMITH & TURNER P.L.C.
UNAUDITED GROUP BALANCE SHEET
31 MARCH 2001
At At
31 March 25 March
2001 2000
£000 £000
FIXED ASSETS
Freehold and leasehold properties 133,342 127,675
Plant, machinery and vehicles 6,136 6,199
Containers, fixtures and equipment 28,872 28,184
Capital work in progress 10,900 3,998
------------- ------------
179,250 166,056
FIXED ASSET INVESTMENTS 243 54
------------- ------------
179,493 166,110
------------- ------------
CURRENT ASSETS
Stocks 4,029 4,329
Debtors 10,633 12,955
Investments 13,441 8,977
Cash at bank and in hand 3,071 4,237
------------- ------------
31,174 30,498
CREDITORS: amounts falling due within one 27,566 23,455
year
------------- ------------
NET CURRENT ASSETS 3,608 7,043
------------- ------------
TOTAL ASSETS LESS CURRENT LIABILITIES 183,101 173,153
CREDITORS: amounts falling due after more
than one year
Debenture stock 26,963 26,952
PROVISION FOR LIABILITIES AND CHARGES 596 1,680
------------- ------------
155,542 144,521
------------- ------------
CAPITAL AND RESERVES
Called up share capital
Equity 25,239 25,118
Non equity 1,600 1,600
Share premium account 2,609 2,337
Revaluation reserve 28,613 31,925
Profit and loss account 97,481 83,541
------------- ------------
TOTAL SHAREHOLDERS' FUNDS 155,542 144,521
------------- ------------
FULLER SMITH & TURNER P.L.C.
UNAUDITED GROUP CASH FLOW STATEMENT
FOR THE 53 WEEKS ENDED 31 MARCH 2001
53 weeks 52 weeks to
to
31 March 25 March
2001 2000
£000 £000
NET CASH INFLOW FROM OPERATING ACTIVITIES 25,988 22,633
RETURNS ON INVESTMENT AND SERVICING OF FINANCE
Preference dividends paid (120) (120)
Interest received 983 1,247
Interest paid (2,181) (2,188)
------------ ------------
(1,318) (1,061)
TAXATION
Corporation tax paid (4,699) (5,313)
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Payments to acquire tangible fixed assets (28,773) (23,316)
Payments to acquire fixed asset investments (344) (212)
Receipts from sales of tangible fixed assets 11,638 1,541
Receipts from sale of retail wine shops 3,860 4,285
------------ ------------
(13,619) (17,702)
EQUITY DIVIDENDS PAID (3,447) (3,168)
------------ ------------
TOTAL NET CASH INFLOW/(OUTFLOW) BEFORE THE USE OF
LIQUID RESOURCES AND FINANCING 2,905 (4,611)
MANAGEMENT OF LIQUID RESOURCES* (4,464) 6,520
FINANCING
Issue of equity shares 393 349
------------ ------------
MOVEMENT IN CASH IN THE PERIOD (1,166) 2,258
------------ ------------
Operating profit 16,852 13,521
Depreciation 8,121 8,351
Loss/(profit) on disposal of tangible fixed assets 19 (33)
Impairment of fixed assets 877 1,571
Provision for onerous leases (908) 1,084
------------ ------------
EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND
AMORTISATION 24,961 24,494
(INCREASE)/DECREASE IN WORKING CAPITAL
Stocks 300 3,214
Debtors (1,518) (4,258)
Creditors 2,245 (817)
------------ ------------
NET CASH INFLOW FROM OPERATING ACTIVITIES 25,988 22,633
------------ ------------
* Management of liquid resources is the movement in current asset investments,
namely cash on short term deposit at financial institutions and listed
securities.
FULLER SMITH & TURNER P.L.C.
NOTES TO THE ACCOUNTS
FOR THE 53 WEEKS ENDED 31 MARCH 2001
1. PRELIMINARY STATEMENT
This statement does not constitute full accounts as defined by S.240 of the
Companies Act 1985. Full accounts for the year ended 25 March 2000, including
an unqualified auditors' report, have been delivered to the Registrar of
Companies. The statutory accounts for the year ended 31 March 2001 will be
mailed to shareholders on or before Friday 22 June 2001 and delivered to the
Registrar of Companies. They will also be available from the Company's
registered office: Griffin Brewery, Chiswick, London W4 2QB from Monday 25
June 2001.
2. SEGMENTAL ANALYSIS
Continuing Continuing Discontinued
operation operation operation
53 weeks to March 2001 Fuller's Beer Company Retail Wine
Inns Shops
Total
£000 £000 £000 £000
TOTAL SALES 92,552 59,113 - 151,665
Inter-segment sales - (23,611) - (23,611)
----------- ----------- ----------- -------
Sales to third parties 92,552 35,502 - 128,054
----------- ----------- ----------- -------
Segmental profit before FRS 11/ 16,143 4,758 - 20,901
12
FRS11/12 31 - - 31
----------- ----------- ----------- -------
SEGMENTAL PROFIT 16,174 4,758 - 20,932
----------- ----------- -----------
Net central costs (4,080)
-------
Operating profit 16,852
Interest payable net (1,197)
-------Profit on ordinary activities
before exceptional profits 15,655
Non-operating exceptional 3,676
profits -------
Profit on ordinary activities 19,331
before taxation -------
----------- ----------- ----------- -------
ASSETS EMPLOYED
Segmental assets 152,491 16,044 - 168,535
----------- ----------- -----------
Unallocated net liabilities (12,993)
-------
Total net assets 155,542
-------
FULLER SMITH & TURNER P.L.C.
NOTES TO THE ACCOUNTS
FOR THE 53 WEEKS ENDED 31 MARCH 2001
Continuing Continuing Discontinued
operation operation operation
52 weeks to March 2000 Fuller's Beer Company Retail Wine
Inns Shops Total
£000 £000 £000 £000
TOTAL SALES 84,892 55,881 23,940 164,713
Inter-segment sales - (22,357) - (22,357)
----------- ----------- ----------- -------
Sales to third parties 84,892 33,524 23,940 142,356
----------- ----------- ----------- -------
Segmental profit before FRS 11/ 15,435 4,088 502 20,025
12
FRS11/12 (2,655) - - (2,655)
----------- ----------- ----------- -------
SEGMENTAL PROFIT 12,780 4,088 502 17,370
----------- ----------- -----------
Net central costs (3,849)
-------
Operating profit 13,521
Interest payable net (1,373)
-------Profit on ordinary activities
before exceptional profits 12,148
Non-operating exceptional 1,544
profits -------
Profit on ordinary activities 13,692
before taxation -------
----------- ----------- -----------
--------ASSETS EMPLOYED
Segmental assets 138,708 18,332 - 157,040
----------- ----------- -----------
Unallocated net liabilities (12,519)
-------
Total net assets 144,521
-------
3. TAXATION
Corporation tax has been provided at an effective rate of 28.8% (2000: 30.4%)
on the profits after interest before exceptional operating costs and profit on
disposal of fixed assets for the year to 31 March 2001. Tax has been provided
at an effective rate of 12.8% (2000: 27.7%) on the operating and non-operating
exceptional profits. This is reduced because of the availability of rollover
relief for the exceptional profit on the sale of properties.
4. ORDINARY DIVIDENDS 31 March 25 March
2001 2000
pence pence
Interim 4.38 4.05
Final 10.00 9.36
---------- -----------
14.38 13.41
---------- -----------
The pence figures above are for the £1 'A' ordinary shares. The unquoted 10p
'B' shares carry dividend rights of 1/10 of those applicable to the £1 'A'
ordinary shares. Dividends on the unquoted £1 'C' ordinary shares are the
same as the listed £1 'A' ordinary shares.
FULLER SMITH & TURNER P.L.C.
NOTES TO THE ACCOUNTS
FOR THE 53 WEEKS ENDED 31 MARCH 2001
5. EARNINGS PER SHARE 31 March 25 March
2001 2000
£000 £000
Profit attributable to equity shareholders 14,238 9,406
Non-operating exceptional profits net of tax (3,488) (1,544)
FRS 11 impairment of fixed assets 877 1,571
FRS 12 provision for onerous leases net of tax (618) 750
------------ -----------
Normalised earnings attributable to equity 11,009 10,183
shareholders
------------ -----------
Weighted average share capital 25,069,000 25,003,000
Dilutive outstanding options 46,000 236,000
----------------
---------------Adjusted weighted average share capital 25,115,000
25,239,000
---------------- ---------------
Basic earnings per share* 56.80p 37.62p
Diluted earnings per share* 56.69p 37.27p
Normalised earnings per share * 43.91p 40.73p
*Calculated on the £1 'A' ordinary share. Earnings on the unquoted 'B' 10p
ordinary shares are 1/10 of the figures for the £1 'A' ordinary shares,
earnings on the unquoted £1 'C ' ordinary shares are the same as the listed £1
'A' ordinary shares.
The calculation is based on earnings (after deducting preference dividends)
and on the average weighted ordinary share capital. Normalised earnings
exclude all exceptional profits, FRS11 impairment of fixed assets and FRS12
provision for onerous leases.
6. RECONCILIATION OF NET CASH FLOW TO 31 March 25 March
MOVEMENT IN NET DEBT 2001 2000
£000 £000
Movement in cash in the period (1,166) 2,258
Cash outflow/(inflow) from movement in liquid 4,464 (6,520)
resources
Amortisation of issue costs (11) (11)
----------- ------------
Movement in net debt in the period 3,287 (4,273)
Net debt at the beginning of the period (13,738) (9,465)
----------- ------------
Net debt at the end of the period (10,451) (13,738)
----------- ------------
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