Final Results

Fuller,Smith&Turner PLC 10 June 2005 STRICTLY EMBARGOED UNTIL 7AM FRIDAY 10 JUNE 2005 PRESS RELEASE FULLER SMITH & TURNER P.L.C. Preliminary results for the 53 weeks ended 2 April 2005 Financial Highlights â€¢ Turnover up 5% to Â£147.5m (2004: Â£140.3m) â€¢ Normalised profit1 before tax up 6% to Â£17.8m (2004: Â£16.9m) â€¢ Exceptional profit on disposals Â£0.2m (2004: Â£2.4m) â€¢ Profit before tax down 6% to Â£18.0m (2004: Â£19.2m) â€¢ Normalised EPS2 up 7% to 53.13p (2004: 49.84p) â€¢ Basic EPS3 down 11% to 54.16p (2004: 60.63p) â€¢ Final dividend up 7% to 13.10p (2004: 12.21p) Corporate Progress â€¢ Beer Company profits up 5% with volumes up 2% â€¢ Good performance from Managed Pubs and Bars due to stronger second half trading â€¢ City trading like-for-like (LFL) sales up 5% â€¢ Tenanted Inns profits up 5% â€¢ Strong trading in Hotels with profits up 17% 1 Pre-tax profits after interest before exceptional profit on disposals. 2 Calculated using pre-exceptional earnings of Â£11.9 million (2004: Â£11.3 million) and the same weighted average number of shares as for the basic earnings per share. 3 Calculated on the Â£1 'A' ordinary share. Commenting on the results, Anthony Fuller, Chairman, said: "It has been another good year of progress for Fuller's with normalised earnings per share up by 7%. The Directors will be recommending that the final dividend be increased by 7% which, coupled with the share price growth over the past year, delivers an outstanding return to our shareholders. Our investment and marketing programmes are continuing to deliver good growth. This is evidenced by the returns now being seen in the managed estate, especially in our target areas of cask ale, food and wine. The eight pubs bought during the year are excellent additions to the Fuller's estate and we are confident they will increase shareholder value. We are currently in negotiations for further sites. In the meantime, all areas of the retail estate are performing well and current trading is on target. We have built a strong platform from which to advance the business. The Beer Company continues to perform well in an increasingly competitive market. The quality and depth of the product portfolio distinguishes Fuller's and is proving a key driver for growth this year. We are very excited about our new brand, Discovery Blonde Beer, and current volumes support our optimism. The prospects for our beer brands are good and our key brand, London Pride, will continue to be supported by extensive marketing and promotional activity, including television advertising. Ultimately, however, it is the quality of the product that drives sales and with all our beers this remains second-to-none. The core strength of our business continues to be the breadth and balance of our portfolio. In these more challenging times, Fuller's is delivering consistent year-on-year growth and excellent returns for shareholders. I have confidence this will be maintained in the current year". - Ends - For further information, please contact: Fuller Smith & Turner P.L.C. Press Office 020 8996 2175/2198/2048 Mobile 07831 299801/ 07748 657854 E-mail: pr@fullers.co.uk Michael Turner, Chief Executive: Press 020 8996 2048 Paul Clarke, Finance Director: Analysts 020 8996 2048 Merlin 020 7653 6620 Paul Downes 07900 244 888 (mobile) Vanessa Maydon 07802 961 902 (mobile) Rebecca Penney 07795 108 178 (mobile) Notes to Editors Photographs for the media are available at NewsCast Online - www.newscast.co.uk 020 7608 1000 Copies of this statement, the Annual Report and results presentation will be available on the Company's web site, www.fullers.co.uk Attached: Chairman's Statement Financial Highlights Unaudited Group Profit and Loss Account Unaudited Group Balance Sheet Unaudited Group Cash Flow Statement Other Unaudited Group Primary Statements Notes to the Financial Statements FULLER SMITH & TURNER P.L.C. PRELIMINARY RESULTS FOR THE 53 WEEKS ENDED 2 APRIL 2005 CHAIRMAN'S STATEMENT Whatever You Do, Take Pride It has been another good year of progress for Fuller's with normalised earnings per share up by 7% to 53.13p (2004: 49.84p). Normalised profits, which represent the underlying progress of the business, are up 6% to Â£17.8 million (2004: Â£16.9 million) on a 5% increase in turnover to Â£147.5 million (2004: Â£140.3 million). Property disposals generated a net exceptional profit of Â£0.2 million compared to Â£2.4 million last year. Taking this into account, pre-tax profits were down 6% to Â£18.0 million (2004: Â£19.2 million) and basic earnings per share down 11% to 54.16p (2004: 60.63p). Tax has been provided for at an effective rate for the year of 32.5% (2004: 32.5%) on normalised profits. The majority of the exceptional profit on disposals in both years did not carry a tax charge owing to the availability of rollover relief. Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 2% to Â£28.3 million compared to Â£27.7 million last year. We acquired eight new pubs during the year, the majority in the second half of the year, together with a ninth site for development due to open in September 2005. The total cost of these acquisitions was Â£6.9 million. This capital expenditure has not been at the expense of our existing estate, however, and we have continued our extensive investment programme across the business, in particular in Managed Pubs and Bars. Total Group capital expenditure for the year was Â£17.5 million compared to the Â£18.3 million we spent in the previous year which included a significant investment in the Red Lion Hotel in Hillingdon Village. The ongoing investment programme and acquisitions are funded by cash generated by the business, with gearing increasing slightly from 10.7% to 13.5% at the year-end. Since March 2004, we have bought back a further 330,000 Â£1 'A' ordinary shares. The average price paid was Â£7.06 (per Â£1 share equivalent). These shares have not been cancelled but have been retained as treasury shares with a number being used to satisfy an employee share scheme. At 2 April 2005 there were 295,745 treasury shares remaining. Following a change in accounting standards, all ordinary shares held as treasury shares or by various employee share ownership trusts are now shown as a deduction from shareholders' funds rather than as an investment. The balance sheet as at March 2004 has been restated accordingly. The Directors will be recommending that the final dividend be increased by 7% to 13.10p per 'A' and 'C' Â£1 ordinary share and 1.310p per 'B' 10p ordinary share. This brings the total dividend for the year to 18.46p per 'A' and 'C' Â£1 ordinary share and 1.846p per 'B' 10p ordinary share, up 7%. This increase, coupled with the share price growth over the past year, delivers an outstanding return to our shareholders. The final dividend will be paid on Monday 29 July 2005 to shareholders on the Share Register as at Friday 1 July 2005. Fuller's Inns After a first half disrupted by a number of refurbishments, the second half saw improvements across the business and we ended the year with profits up 4% to Â£15.9 million (2004: Â£15.3 million) on a 5% increase in turnover to Â£101.4 million (2004: Â£97.0 million). This profit growth is in spite of the extensive refurbishment programme in Managed Pubs and Bars, which resulted in an additional Â£0.8 million repair costs in the division. EBITDA increased to Â£22.5 million from Â£22.3 million last year. Managed Pubs and Bars Following better trading in the second half and with the benefits of the investments beginning to show, Managed Pubs and Bars ended the year with turnover up 4%. On an uninvested like for like basis, sales across the managed estate were up 0.4%, with a 1.4% increase in the second half offsetting the decline in the first half. Our strategy remains focused on a premium retail offer, with a unique product range, supported by a tailored investment programme and carefully selected acquisitions. Our emphasis is on providing great cask ales, excellent freshly prepared food, interesting and varied wines and outstanding service. We are delighted that this clear strategy is paying dividends with cask ale sales up 4% and food and wine sales both up 9%. We believe this focus on quality will leave us less exposed to the impact of a future smoking ban. The extensive investment programme in our estate, which started two years ago, continued with 23 major refurbishments compared to 13 in the previous year. This has resulted in a Â£0.8 million increase in repairs and maintenance costs to Â£3.7 million. A third of the managed estate has been refurbished in the last two years. This investment is designed to maintain high standards and preserve the longevity of our assets. The improvement in the performance of our City pubs and bars, seen in the first half, has been sustained with like for like sales up 5% for the year. Following our refurbishments in the City, including five Fine Lines and three of the more traditional Ale & Pie houses, the Company is in an excellent position from which to capitalise on the improvement in general confidence in this key area. Towards the end of the financial year we acquired four new managed pubs, two of which are freehold and two leasehold. These are in excellent locations and provide good opportunities for growing cask ale, food and wine sales. In addition, we acquired a development site on the Grand Union Canal in Apsley, Hertfordshire, where we expect to open a new food-led managed house in September 2005. During the year we also disposed of four under-performing leaseholds and transferred one managed pub to tenancy. There are 116 pubs currently under management. Tenanted Inns It has been another good year for the tenanted estate. The average turnover per house was up 3%, with average profit per house up 5%. Towards the end of the year we acquired a further two freehold sites making a total of four for the year. As with the managed pubs, we plan our acquisitions carefully to ensure that overall returns from the estate and quality standards are maintained. In addition to acquiring new pubs, we have continued to invest, with our tenants and lessees, in the existing estate. During the year we completed 17 internal and 26 external redecorations and three pubs had major capital redevelopments. With the acquisitions and one transfer from the managed estate, the total number of tenanted pubs now stands at 118. This includes 55 houses on the 10-year lease. Fuller's Hotels Fuller's Hotels had a good year with turnover up 10% and profits up 17%. Average room rates were Â£68.35, only slightly lower than last year and occupancy increased by 2%. Overall this gave us a 1% increase in RevPar to Â£42.50 (2004: Â£42.09). The three hotels opened in 2001, The White Hart, The Brigstow and The Chamberlain, have performed particularly well, achieving record weekly sales and occupancy. The 55-bedroom Red Lion Hotel in Hillingdon Village opened in May 2004 and, after a slower than expected build up of trade, is now performing well. We also completed room refurbishments at two of the other hotels, which has allowed us to advance room rates and maintain our premium position in this niche market. The Fuller's Beer Company It was a challenging year for the Fuller's Beer Company with increasingly tough competition and the continued decline in the ale market. In spite of this, however, the Beer Company has made good progress with profits up 5% to Â£8.2 million (2004: Â£7.8 million), turnover up 5% to Â£68.9 million (2004: Â£65.5 million) and EBITDA up 6% to Â£9.7 million (2004: Â£9.2 million). This success reflects the strength of our brands, our ability to innovate, and the quality and consistency of our products. Own beer sales were up 2% to 198,000 barrels and total beer sales were also up 2% to 275,000 barrels. Export sales continued the good progress seen at the half-year with volumes up 12% to over 12,000 barrels. Domestic sales growth continues to be driven by the free trade, with on trade and off trade volumes showing increases of 3% and 4% respectively. Although domestic sales have not grown as rapidly as in previous years, this is a very good performance considering the increasingly competitive nature of the market. In addition, this volume growth has not been at the expense of margins. We are also starting to see growth again in the tied trade, driven by the managed estate. This growth has been due in part to a number of key initiatives such as the Spring and Autumn Beer Festivals, Head Brewer's Roadshows and Beer & Food promotions. The aim for the current year is to extend this success into the tenanted estate. Fuller's is estimated to have increased its share to around 7% of the cask ale market. We have seen excellent growth in a number of key brands, such as the award winning "Champion Ale" ESB, with volumes up 6% (up 15% since the re-launch in the UK in October 2004), and Organic Honey Dew, with volumes up 26%. The growth in these brands, together with the wide range of seasonal and other ales produced this year, has been complementary to our flagship London Pride, which continues to be the UK's top selling premium cask ale by a wide margin and has again grown market share. Fuller's already has an enviable portfolio of brands, a number of which are multiple award-winners. In May this year we added to this with the introduction of what we hope will become our fourth core cask ale brand - Discovery Blonde Beer. This zesty new blonde beer is designed in part to attract new drinkers to Fuller's and provide a refreshing, tasty alternative to lager. Since its launch, sales have exceeded our ambitious targets. The Fuller's Wine Division continues to make a valuable and increasing contribution to the Group with profits up 24%. This includes an emerging wine agency business which we are confident will be the springboard for further growth. The quality and range of our wines, and depth of knowledge of our buyers, provides a unique point of differentiation for our retail estate and selected free trade accounts. As we reported last May, we acquired further land adjacent to the Brewery in the year which, combined with an acquisition last year, will increase the overall area of the site by 11%. Towards the end of the year we commenced work on a Â£2.1 million replacement of our existing kegging line, which we expect to be operational by August 2005. We are continuing to invest heavily in the Brewery to enhance quality and operating efficiencies. International Financial Reporting Standards From April 2006 Fuller's will be reporting its consolidated results in accordance with International Financial Reporting Standards ("IFRS"). In the Interim Statement for the six months ended 1 October 2005, the results for the six months ended 25 September 2004 and 53 weeks ended 2 April 2005 will be restated in accordance with expected IFRS accounting policies for comparative purposes. The conversion is progressing well with the detailed impact assessment completed and new accounting policies drafted. The Company is in the process of finalising the opening balance sheet as at April 2004 together with the restated comparatives. We anticipate that the main areas that will affect the published results are pensions and deferred tax. There is no impact on the net cash generated by the business and many of the IFRS changes will also be reflected in new UK Financial Reporting Standards. Changes expected to arise from the introduction of IFRS are explained further in the Notes to the Financial Statements attached. Prospects We are managing our business for the long term and, therefore, fundamentally believe in maintaining high standards and investing for the future to preserve and enhance the quality of our assets. Our investment and marketing programmes continue to deliver good growth. This is evidenced by the returns now being seen in the managed estate, especially in our target areas of cask ale, food and wine. We expect to complete a further 17 major refurbishment projects in Managed Pubs and Bars during the current year with costs broadly similar to the year just completed. The eight pubs bought during the year are excellent additions to the Fuller's estate and we are confident they will increase shareholder value. We are currently in negotiations for further sites. In the meantime, all areas of the retail estate are performing well and current trading is on target. We have built a strong platform from which to advance the business. The Beer Company continues to perform well in an increasingly competitive market. The quality and depth of the product portfolio distinguishes Fuller's and is proving a key driver for growth this year. We are very excited about our new brand, Discovery Blonde Beer, and current volumes support our optimism. The prospects for our beer brands are good and our key brand, London Pride, will continue to be supported by extensive marketing and promotional activity, including television advertising. Ultimately, however, it is the quality of the product that drives sales and with all our beers this remains second-to-none. The core strength of our business continues to be the breadth and balance of our portfolio. In these more challenging times, Fuller's is delivering consistent year-on-year growth and excellent returns for shareholders. I have confidence this will be maintained in the current year. A.G.F. Fuller, CBE Chairman 10 June 2005 FULLER SMITH & TURNER P.L.C. FINANCIAL HIGHLIGHTS FOR THE 53 WEEKS ENDED 2 APRIL 2005 53 weeks to 52 weeks to 2 April 27 March Change 2005 2004 2005/2004 Â£000 Â£000 ____________________________________________ ____________ ____________ ____________ Turnover 147,483 140,322 5.1 % Profit before tax 18,046 19,227 (6.1)% Normalised profits1 17,814 16,858 5.7 % EBITDA2 28,295 27,744 2.0 % Basic earnings per share3 54.16p 60.63p (10.7)% Normalised earnings per share4 53.13p 49.84p 6.6 % Dividend per share3 18.46p 17.31p 6.6 % Net assets per share3 Â£7.34 Â£7.02 4.6 % Gearing ratio 13.5% 10.7% N/A ____________________________________________ ____________ ____________ ____________ 1 Pre-tax profits after interest before non-operating exceptional profits on disposals of Â£0.2 million (2004: Â£2.4 million). 2 Earnings before interest, tax, depreciation and amortisation. 3 Calculated on the Â£1 'A' ordinary share. 4 Calculated using pre-exceptional earnings of Â£11.9 million (2004: Â£11.3 million) and the same weighted average number of shares as for the basic earnings per share. Net assets per share as at 27 March 2004 have been restated following a change in accounting policy, as set out in Note 1 to the Financial Statements. FULLER SMITH & TURNER P.L.C. UNAUDITED GROUP PROFIT AND LOSS ACCOUNT FOR THE 53 WEEKS ENDED 2 APRIL 2005 53 weeks to 52 weeks to 2 April 27 March 2005 2004 Â£000 Â£000 TURNOVER 147,483 140,322 Operating costs (127,806) (121,524) -------------------- -------------------- OPERATING PROFIT 19,677 18,798 Non-operating exceptional profits 232 2,369 Interest payable (net) (1,863) (1,940) -------------------- -------------------- PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 18,046 19,227 Taxation (5,788) (5,408) -------------------- -------------------- PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 12,258 13,819 Preference dividends (120) (120) -------------------- -------------------- ATTRIBUTABLE TO EQUITY SHAREHOLDERS 12,138 13,699 Ordinary dividends (4,142) (3,904) -------------------- -------------------- RETAINED PROFIT FOR THE FINANCIAL YEAR 7,996 9,795 ============ ============ EARNINGS PER SHARE Per Â£1 'A' ordinary share or unquoted Â£1 'C' ordinary share Basic 54.16p 60.63p Diluted 53.68p 60.35p Normalised 53.13p 49.84p Per unquoted 10p 'B' ordinary share Basic 5.42p 6.06p Diluted 5.37p 6.04p Normalised 5.31p 4.98p The results above are all in respect of continuing operations of the Company. FULLER SMITH & TURNER P.L.C. UNAUDITED GROUP BALANCE SHEET 2 APRIL 2005 At At 2 April 27 March 2005 2004 Â£000 Â£000 Restated TANGIBLE FIXED ASSETS 203,285 196,511 CURRENT ASSETS Stocks 4,426 4,269 Debtors 15,260 11,462 Investments - 6,064 Cash, at bank and in hand 4,610 3,909 -------------------- -------------------- 24,296 25,704 CREDITORS: amounts falling due within one year 28,722 30,713 -------------------- -------------------- NET CURRENT LIABILITIES (4,426) (5,009) -------------------- -------------------- TOTAL ASSETS LESS CURRENT LIABILITIES 198,859 191,502 CREDITORS: amounts falling due after more than one year Debenture stock 27,006 26,995 PROVISIONS FOR LIABILITIES AND CHARGES 5,527 4,734 -------------------- -------------------- NET ASSETS 166,326 159,773 ============ ============ CAPITAL AND RESERVES Called up share capital: Equity 22,831 22,748 Non equity 1,600 1,600 Share premium account 4,150 3,820 Revaluation reserve 28,937 28,993 Capital redemption reserve 2,902 2,902 Own shares (3,530) (1,222) Profit and loss account 109,436 100,932 -------------------- -------------------- TOTAL SHAREHOLDERS' FUNDS 166,326 159,773 ============ ============ The balance sheet as at 27 March 2004 has been restated following a change in accounting policy, as set out in Note 1 to the Financial Statements. FULLER SMITH & TURNER P.L.C. UNAUDITED GROUP CASH FLOW STATEMENT FOR THE 53 WEEKS ENDED 2 APRIL 2005 53 weeks to 52 weeks to 2 April 27 March 2005 2004 Â£000 Â£000 Restated NET CASH INFLOW FROM OPERATING ACTIVITIES 26,004 29,564 ------------------- ------------------- RETURNS ON INVESTMENT AND SERVICING OF FINANCE Preference dividends paid (120) (120) Interest received 336 233 Interest paid (2,188) (2,164) ------------------- ------------------- (1,972) (2,051) TAXATION Corporation tax paid (5,413) (4,953) CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Payments to acquire tangible fixed assets (18,503) (17,235) Receipts from sales of tangible fixed assets 674 5,866 ------------------- ------------------- (17,829) (11,369) EQUITY DIVIDENDS PAID (3,956) (3,736) ------------------- ------------------- TOTAL NET CASH (OUTFLOW)/INFLOW BEFORE THE USE OF LIQUID RESOURCES (3,166) 7,455 AND FINANCING MANAGEMENT OF LIQUID RESOURCES* 6,064 (5,429) FINANCING Issue of equity shares 413 625 Purchase of own shares including treasury shares (2,751) (3,145) Sale of treasury shares 141 - ------------------- ------------------- (2,197) (2,520) ------------------- ------------------- MOVEMENT IN CASH IN THE YEAR 701 (494) =========== =========== * Management of liquid resources is the movement in cash on short-term deposit at financial institutions. The cash flow statement for the 52 weeks ending 27 March 2004 has been restated following a change in accounting policy, as set out in Note 1 to the Financial Statements. FULLER SMITH & TURNER P.L.C. OTHER UNAUDITED GROUP PRIMARY STATEMENTS FOR THE 53 WEEKS ENDED 2 APRIL 2005 GROUP STATEMENT OF RECOGNISED GAINS AND LOSSES There are no gains or losses in the current or prior year other than those reported in the profit and loss account on page 7. 53 weeks to 52 weeks to 2 April 27 March 2005 2004 GROUP HISTORICAL COST PROFITS AND LOSSES Â£000 Â£000 Reported profit on ordinary activities before taxation 18,046 19,227 Realisation of property revaluation movements of previous years 56 (690) -------------------- --------------------- Historical cost profit on ordinary activities before taxation 18,102 18,537 -------------------- --------------------- Historical cost profit for the year retained after taxation 8,052 9,105 ============ ============ RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS Shareholders' funds at the beginning of the year as previously 159,766 151,155 reported Accounting policy change (see note 1) 7 (118) -------------------- --------------------- Restated shareholders' funds at the beginning of the year 159,773 151,037 Profit on ordinary activities after taxation 12,258 13,819 Dividends - preference (120) (120) - ordinary (4,142) (3,904) New share capital subscribed 413 625 Own shares repurchased and cancelled - (1,809) Other own shares purchased including treasury shares (2,751) (473) Sale of treasury shares 141 - Accrued share based payments 754 598 -------------------- --------------------- Net movement in shareholders' funds 6,553 8,736 -------------------- --------------------- -------------------- --------------------- Shareholders' funds at the end of the year 166,326 159,773 ============ ============ Shareholders' funds comprise: Equity interests 164,726 158,173 Non-equity interests* 1,600 1,600 -------------------- --------------------- 166,326 159,773 ============ ============ * Non-equity interests reflect the cost of non-redeemable cumulative preference shares. FULLER SMITH & TURNER P.L.C. NOTES TO THE FINANCIAL STATEMENTS FOR THE 53 WEEKS ENDED 2 APRIL 2005 1. PRELIMINARY STATEMENT This statement does not constitute full financial statements as defined by S.240 of the Companies Act 1985. Full financial statements for the year ended 27 March 2004, including an unqualified auditors' report, have been delivered to the Registrar of Companies. The unaudited financial information in this statement has been prepared in accordance with applicable accounting standards. The accounting policies used have been applied consistently and are described in full in the statutory financial statements for the year ended 2 April 2005, which will be mailed to shareholders on or before Monday 27 June 2005 and delivered to the Registrar of Companies. The financial statements will also be available from the Company's registered office: Griffin Brewery, Chiswick, London W4 2QB from that date. Change in accounting policy During the year the Company adopted UITF Abstract 37 'Purchases and sales of own shares' and UITF Abstract 38, 'Accounting for ESOP trusts', together with the consequent amendments to UITF Abstract 17 'Employee Share Schemes'. As a result, the investment in own shares, previously held in fixed assets, is now shown as a deduction from shareholders' funds. Charges to the profit and loss account for share-based schemes are added back to reserves and hence do not affect net assets until such time as the shares are purchased. The new accounting policy has not had a material impact on the current year profit and loss charge nor has it been necessary to adjust prior year charges. The combined effect of this change in accounting policy has been to increase net assets as at 27 March 2004 by Â£7,000. This comprised a reduction in fixed asset investments of Â£244,000 offset by a net reduction in creditors of Â£251,000. The total investment in own shares of Â£1,222,000 was reclassified as a deduction from shareholders' funds and offset by an adjustment to the profit and loss account reserve of Â£1,229,000. 2. SEGMENTAL ANALYSIS 53 weeks to 2 April 2005 Fuller's Inns Beer Company Total Â£000 Â£000 Â£000 TOTAL SALES 101,426 68,863 170,289 Inter-segment sales - (22,806) (22,806) ----------- ----------- ----------- Sales to third parties 101,426 46,057 147,483 ----------- ----------- ----------- SEGMENTAL PROFIT 15,877 8,194 24,071 ----------- ----------- Net central costs (4,394) ----------- Operating profit 19,677 Non-operating exceptional profits 232 Interest payable (net) (1,863) ----------- Profit on ordinary activities before taxation 18,046 ----------- ASSETS EMPLOYED (restated) ----------- ----------- ----------- Segmental assets 174,894 21,996 196,890 ----------- ----------- Unallocated net liabilities* (30,564) ----------- Total net assets 166,326 ----------- 52 weeks to 27 March 2004 Fuller's Inns Beer Company Total Â£000 Â£000 Â£000 TOTAL SALES 97,047 65,462 162,509 Inter-segment sales - (22,187) (22,187) ----------- ----------- ----------- Sales to third parties 97,047 43,275 140,322 ----------- ----------- ----------- SEGMENTAL PROFIT 15,300 7,773 23,073 ----------- ----------- Net central costs (4,275) ----------- Operating profit 18,798 Non-operating exceptional profits 2,369 Interest payable (net) (1,940) ----------- Profit on ordinary activities before taxation 19,227 ----------- ASSETS EMPLOYED (restated) ----------- ----------- ----------- Segmental assets 167,029 19,212 186,241 ----------- ----------- Unallocated net liabilities* (26,468) ----------- Total net assets 159,773 ----------- * Unallocated net liabilities represent the net of dividends, debentures, corporation tax, cash at bank and assets held under central management. Assets employed as at 27 March 2004 have been restated due to a change in accounting policy, as set out in Note 1 above. 3. TAXATION Corporation tax and deferred tax has been provided as follows: 2005 2004 Tax on normalised profits Â£000 Â£000 Current tax 4,927 5,018 Deferred tax 861 458 ------------------ ------------------ Total tax on normalised profits 5,788 5,476 ------------------ ------------------ Tax on exceptional items Current tax charge 68 78 Deferred tax credit (68) (146) ------------------ ------------------ Total tax on exceptional profits - (68) ------------------ ------------------ ------------------ ------------------ Total tax charge 5,788 5,408 ------------------ ------------------ Effective tax rate 32.1% 28.1% Effective rate on normalised profits 32.5% 32.5% Normalised profits are profits after interest before exceptional non-operating profits. The deferred tax provision has not been discounted to its present value. The majority of exceptional items do not carry a tax charge owing to the availability of rollover relief. 4. ORDINARY DIVIDENDS 2005 2004 pence pence Interim - paid 5.36 5.10 Final - proposed 13.10 12.21 ------------------- ------------------- 18.46 17.31 ------------------- ------------------- The pence figures above are for the Â£1 'A' ordinary shares and unquoted Â£1 'C' ordinary shares. The unquoted 10p 'B' shares carry dividend rights of 1/10 of those applicable to the Â£1 'A' ordinary shares. 5. EARNINGS PER SHARE 2005 2004 Â£000 Â£000 Profit attributable to equity shareholders 12,138 13,699 Non-operating exceptional items net of tax (232) (2,437) ------------------- ------------------- Normalised earnings attributable to equity shareholders 11,906 11,262 ------------------- ------------------- Number Number Weighted average share capital 22,411,000 22,595,000 Dilutive outstanding options 202,000 106,000 ------------------- ------------------- Adjusted weighted average share capital 22,613,000 22,701,000 ------------------- ------------------- Â£1 'A' ordinary shares or unquoted Â£1 'C' ordinary shares Pence Pence Basic earnings per share 54.16 60.63 Diluted earnings per share 53.68 60.35 Normalised earnings per share 53.13 49.84 Unquoted 10p 'B' ordinary shares Pence Pence Basic earnings per share 5.42 6.06 Diluted earnings per share 5.37 6.04 Normalised earnings per share 5.31 4.98 The calculation is based on earnings (after deducting preference dividends) and on the weighted average ordinary share capital. Normalised earnings exclude all post-tax exceptional non-operating profits. A normalised basis earnings per share is given to show the underlying performance of the Company. The movement in the exceptional items can often distort the basic number. 6. CASH FLOW STATEMENT 53 weeks to 52 weeks to 2 April 27 March 2005 2004 Â£000 Â£000 Restated RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES Operating profit 19,677 18,798 Depreciation 8,556 8,886 Loss on disposal of tangible fixed assets 62 60 ------------------- ------------------- EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION 28,295 27,744 WORKING CAPITAL AND NON CASH MOVEMENTS Increase in stocks (157) (429) Increase in debtors (2,211) (904) (Decrease)/increase in creditors (677) 2,555 Accrued share based payments 754 598 ------------------- ------------------- NET CASH INFLOW FROM OPERATING ACTIVITIES 26,004 29,564 =========== =========== RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT Movement in cash in the year 701 (494) Cash (inflow)/outflow from movement in liquid resources (6,064) 5,429 Amortisation of issue costs and unwinding of issue discount (11) (10) ------------------- ------------------- Movement in net debt in the year (5,374) 4,925 Net debt at the beginning of the year (17,022) (21,947) ------------------- ------------------- Net debt at the end of the year (22,396) (17,022) =========== =========== The net cash inflow from operating activities for the year ending 27 March 2004 has been restated following a change in accounting policy, as set out in Note 1 above. NON-STATUTORY INFORMATION FINANCIAL REPORTING CHANGES From April 2006 Fuller's will be reporting its consolidated results in accordance with International Financial Reporting Standards ("IFRS"). The Company is not yet in a position to publish full restated accounts for the 53 weeks ended 2 April 2005, however a number of the differences can be determined from existing disclosures: Pensions Under IAS19, the Company will be required to recognise the net deficit in the final salary pension schemes in the balance sheet. In addition, the basis of calculation of the annual charge to the profit and loss account will change. It is anticipated that the IAS19 numbers will be the same as the FRS17 disclosures given in the Annual Report. By way of a summary, as at 2 April 2005 the deficit on the pension schemes was Â£9.3 million, net of deferred tax, and the potential profit and loss account charge under FRS17 was Â£0.3 million higher than currently shown in the accounts. Deferred tax Under IAS12, the Company will be required to account for deferred tax on past property revaluations, irrespective of the availability of rollover relief. In addition, the Company will be required to make provision for deferred tax on rolled over gains. There is an unprovided deferred tax liability of Â£7.3 million in respect of these items. Furthermore, a Â£0.5 million deferred tax asset relating to brought forward capital losses will be recognised. There could be further tax (deferred and/or current) implications that arise from the completion of the conversion process. Preference shares The Company will be required to reclassify the Â£1.6 million preference shares from equity to debt, which will reduce net assets. As a result the Â£0.1 million annual dividends will be shown as an interest expense. Share-based payments The Company will be required to show a charge in the profit and loss account for share options, based on their fair value rather than their intrinsic value (that is the difference between the market value at the grant date and the consideration payable). It is not anticipated that this will have a material impact on profit. There will be other presentational differences as well, not least of which the requirement to account for the final dividend on a declared basis (thus adding back the Â£2.9 million provided at 2 April 2005 to net assets) and exclude Excise Duty from turnover and cost of sales with no impact on profit. Full reconciliations between IFRS and current UK standards, together with all the new accounting policies, will be given in the Interim Statement in November 2005. This information is provided by RNS The company news service from the London Stock Exchange

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