Interim Results

Fuller,Smith&Turner PLC 23 November 2007 STRICTLY EMBARGOED UNTIL 7AM FRIDAY 23 NOVEMBER 2007 FULLER SMITH & TURNER P.L.C. Financial results for the 26 weeks ended 29 September 2007 Financial Highlights â€¢ Revenue up 3% to Â£93.3 million (2006: Â£91.1 million) â€¢ Profit before tax up 16% to Â£12.7 million (2006: Â£10.9 million) â€¢ Adjusted profits (1) up 11% to Â£12.1 million (2006: Â£10.9 million) â€¢ EBITDA (2) up 3% to Â£21.0 million (2006: Â£20.4 million) â€¢ Basic earnings per share (3) up 52% to 20.34p (2006: 13.42p) â€¢ Adjusted earnings per share (4) up 13% to 15.18p (2006: 13.42p) â€¢ Interim dividend (3) up 8% to 2.80p (2006: 2.59p) Corporate Progress â€¢ Managed invested like for like sales (5) up 5.3% â€¢ Fuller's Inns operating profits up 4% â€¢ Fuller's Beer Company operating profits up 2% â€¢ Interest cover up to 4.6 times â€¢ Five for two share split completed in August 2007 â€¢ Successor to Finance Director already on the Board 1 Adjusted profit is the profit before tax excluding exceptional items. 2 Pre-exceptional earnings before interest, tax, depreciation and amortisation. 3 Calculated on a 40p ordinary share. 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 ordinary share. 5 Invested like for like sales comprise all pubs in the managed estate, excepting acquisitions, transfers or disposals and with comparatives adjusted for refurbishment closures. Commenting on the results, Michael Turner, Chairman of Fuller's, said: 'We have had a very pleasing start to the year across all parts of the business and I am delighted to report another record-breaking set of results. Our adjusted profits increased by 11% to Â£12.1 million (2006: Â£10.9 million) and, following an exceptional gain of Â£0.6 million on property disposals, our statutory profit before tax increased by 16% to Â£12.7 million (2006: Â£10.9 million). Our adjusted earnings per share increased by 13% to 15.18p (2006: 13.42p). 'The profit after tax increased by 52% to Â£11.4 million from Â£7.5 million, benefiting substantially from a Â£2.5 million non-recurring tax credit relating to the changes in future Corporation Tax rates. This one-off tax credit also helped boost basic earnings per share by 52% to 20.34p (2006: 13.42p). 'We have a strong geographical balance across London and the South of England and we continue to seek to acquire additional sites and to manage our portfolio between the Managed and Tenanted divisions. Our investment in outside areas, marketing and focus on creating the best pub in any area ensure that we are well positioned to deal with the winter impact of the smoking ban. 'The money raised from the sale of two hotels last year has enabled us to reduce our net debt and our gearing, reinforcing our strong position to access funds for further acquisitions. 'The strong increase in the interim dividend reflects our confidence in our financial strength and the potential for future growth. 'We will continue to use the skills of our people to implement our long-term strategy, maintain our profits growth and deliver good returns for our shareholders.' - Ends - For further information, please contact: Fuller Smith & Turner P.L.C. Press Office 020 8996 2175 / 2048 / 2198 07831 299801 / 07748 657 854 (mobile) E-mail: pr@fullers.co.uk Michael Turner, Chairman: Press 020 8996 2048 Paul Clarke, Finance Director: Analysts 020 8996 2048 Merlin 020 7653 6620 Paul Downes 07900 244888 (mobile) Vanessa Maydon 07802 961902 (mobile) Anja Kharlamova 07887 884788 (mobile) Notes to Editors For an official photograph, please e-mail photo@fullers.co.uk and one will automatically be sent by return on receipt of your e-mail. Copies of this statement, the Half Year Statement and results presentation will be available on the Company's website, www.fullers.co.uk. Attached: Chairman's Statement Financial Highlights Unaudited Condensed Group Income Statement Unaudited Condensed Group Balance Sheet Unaudited Condensed Group Cash Flow Statement Unaudited Condensed Statement of Recognised Income and Expenditure Notes to the Financial Statements FULLER SMITH & TURNER P.L.C. HALF YEAR RESULTS FOR THE 26 WEEKS ENDED 29 SEPTEMBER 2007 CHAIRMAN'S STATEMENT Whatever You Do, Take Pride We have had a very pleasing start to the year across all parts of the business and I am delighted to report another record-breaking set of results. Our adjusted profits increased by 11% to Â£12.1 million (2006: Â£10.9 million) and, following an exceptional gain of Â£0.6 million on property disposals, our statutory profit before tax increased by 16% to Â£12.7 million (2006: Â£10.9 million). Our adjusted earnings per share increased by 13% to 15.18p (2006: 13.42p). On an increase in revenue of 3% to Â£93.3 million (2006: Â£91.1 million), EBITDA was up 3% to Â£21.0 million (2006: Â£20.4 million). The profit after tax increased by 52% to Â£11.4 million from Â£7.5 million, benefiting substantially from a Â£2.5 million non-recurring tax credit relating to the changes in future Corporation Tax rates. This one-off tax credit also helped boost basic earnings per share by 52% to 20.34p (2006: 13.42p). Strong trading and the sale of the Master Brewer and Brigstow hotels in the prior financial year has had a positive effect on our net debt, which has been reduced to Â£103.7 million (2006: Â£127.4 million), lowering our gearing from 80.7% to 54.1%. In consequence, our interest cover has risen to 4.6 times (2006: 3.6 times). Fuller's Inns has performed well, with operating profits rising by 4% to Â£13.3 million (2006: Â£12.7 million) and revenue increasing by 1% to Â£73.5 million (2006: Â£72.3 million). Total growth was moderated by the disposal of the two hotels in the second half of last year, which raised Â£35.6 million. Our invested like for like sales in the managed estate have increased by 5.3%, one of the best growth rates in the industry. This figure is particularly satisfying in the context of the unusual summer we have experienced this year. The Fuller's Beer Company has also shown a solid half year performance, with operating profits rising by 2% to Â£3.5 million (2006: Â£3.4 million) and revenue increasing by 4% to Â£30.3 million (2006: Â£29.1 million). London Pride again grew its market share and volumes in all markets, and we were delighted with the success of our recent sponsorships in golf and the London Marathon. As previously announced, we made a cash injection of Â£8.0 million into the Group's pension fund in April 2007 to reduce the scheme deficit, which is now down to Â£3.3 million (2006: Â£21.9 million). In addition, we spent Â£2.1 million buying back 288,000 40p 'A' ordinary shares. We completed the five for two share split for all classes of ordinary shares on 6 August 2007. We continue to focus on providing good returns for our shareholders. Reflecting its confidence in the Company's financial strength and outlook for continuing growth, the Board has increased the interim dividend by 8% to 2.80p per 40p 'A' and 'C' ordinary share and 0.28p per 4p 'B' ordinary share. This will be paid on Friday 4 January 2008, to shareholders on the share register as at Friday 14 December 2007. FULLER'S INNS Fuller's Inns has had a good first half despite the arrival of the smoking ban and unusual summer weather. Operating profits are up by 4% to Â£13.3 million (2006: Â£12.7 million) and revenue has increased by 1% to Â£73.5 million (2006: Â£72.3 million). Revenue has increased by 5% when adjusted for the effect of the sale of the two hotels. We have spent the last few years refining our business and we are now reaping the benefits. We continually improve the decor and facilities in our estate and we start every major refurbishment by running a series of customer focus groups, which creates a feeling of community involvement. The money already invested in developing and promoting our outside areas put us in a strong position when the smoking ban was implemented. All our customers have clearly appreciated the efforts made outside our pubs and Fuller's took all three top places in the pub and restaurant category at the London in Bloom awards. Although it is still too early to definitively discern the true impact of the smoking ban, we approach the winter with cautious optimism and 90% of our pubs have a specific provision for smokers. At the end of September, our estate stood at 363 premises, comprising 150 managed pubs, six hotels and 207 tenanted or leased pubs. Managed Pubs Our Managed Pubs continue to perform well, with operating profits up by 4% and revenue up by 5%. This growth has come from a number of income streams including increased food sales and a rise in occupancy for pubs with accommodation. The input from our Hotels team has had a positive impact in our pub bedrooms and we anticipate further growth in this area. We have continued to build on our key differentiators of outstanding cask conditioned ales, delicious food, great wines and exemplary service. In particular, we are reaping the benefits of our chef training programme, which has helped us to develop kitchen personnel through the ranks into great chefs. The increasing focus on using local produce to make freshly cooked dishes has had a positive effect on food sales, which have risen by 11%, with food now accounting for 29% of the total sales mix (2006: 27%). As well as developing our chefs, we invest heavily in all our pub staff and run structured training programmes that are constantly improved and developed. Our Retail Sales Development Programme, aimed at bar staff, has helped to identify the managers of the future and many former bar members are now running their own pubs. This helps breed a culture of exemplary service and the results of our Mystery Customer initiative, which has been running for around six years, show that our service gets even better every year. We acquired two new managed pubs during the period, namely the Ivy House at Chalfont St Giles and the Pilgrims Inn near Southampton, transferred seven sites to tenancy, and completed nine major projects (2006: 11). We are constantly trying to reduce our carbon footprint with a number of initiatives including energy monitoring and glass crushers in many of our pubs. We have also introduced fairtrade tea and coffee across the estate and we actively try to use local food suppliers where possible. Our retail marketing team have excelled in creating interesting and innovative events and ideas to attract new customers and encourage our existing customers to stay longer. Exciting events, organic growth and the constant development of our people, combined with maintaining our high standards and focusing on our four key differentiators, will help us to grow our managed business in the future. Tenanted Pubs Our Tenanted Pubs division has delivered continued good performance with revenue up 6% and operating profits rising by 9%. Our average turnover per pub has increased by 4.5%, reflecting a positive underlying trend and the benefits of continuous improvement in the quality of our tenanted sites. The biggest challenge facing any tenanted pub operator is recruiting the right licensees and, during the first half, we employed additional in-house resource to support this process. We have also improved the range of training available to tenants and lessees, and implemented a food development programme to help combat any impact from the smoking ban. Fuller's Hotels Following the disposal of two hotels in the second half of last year, we now have an estate of six quality hotels within the M25 area. These have produced a strong performance and, on a like for like basis, revenue is up by 7%, operating profits are up by 10%, and RevPar has increased by 8%. THE FULLER'S BEER COMPANY The Fuller's Beer Company has had a steady first half with operating profits up by 2% to Â£3.5 million (2006: Â£3.4 million) and revenue up by 4% to Â£30.3 million (2006: Â£29.1 million). We have now installed three new bright beer tanks, which will substantially increase our capacity to produce packaged and keg beers for our growing export and off trade business. Own beer volumes rose by 4%, with growth in all sectors. Foreign beer volumes, however, fell by 2% in what was a poor summer for lager sales. Overall, total beer volumes have increased by 2%, which is particularly pleasing as the UK market has fallen by 4%. Own beer volumes in the off trade grew by 3% and exports grew by 20%. London Pride has again grown its market share and volumes in all sectors and has benefited from continued marketing investment. Our support of the London Marathon resulted in excellent exposure on television and we have continued to strengthen our involvement with golf, building on our position as the Official Beer of the English Golf Union. In addition, in October 2007 we were the official beer sponsor of the HSBC World Match Play at Wentworth, which again provided significant television exposure for the brand. Our other brands have also performed well and we were delighted that four of our beers were featured in the International Beer Challenge World's 50 Best Beers - London Pride, ESB, London Porter and Discovery Blonde Beer. In addition, London Porter took the title of World's Best Porter at the World Beer Awards 2007. Our Wine Division also delivered a strong performance with profits up 12%. Much of this growth came from the success of our agency wines and through new free trade accounts attracted by our extensive portfolio of interesting wines. TRADING UPDATE In the 33 weeks to 17 November 2007, Fuller's Inns saw invested like for like sales in its managed pubs increase by 5.0%. Tenanted Pubs and Hotels continue to make further progress, in line with expectations. Fuller's Beer Company volumes also continued to show pleasing growth in a competitive market place. Since the half year end we have disposed of two tenanted pubs and two unlicensed properties, raising Â£5 million on which there will be an exceptional gain of Â£4 million. The next interim management statement will be issued on 1 February 2008. PROSPECTS We are pleased with the start to the financial year, with good results achieved across the Company, although we are now in a more uncertain environment. The summer provided interesting challenges but, thanks to good planning, preparation and investment, we minimised any negative impact. We have a strong geographical balance across London and the South of England and we continue to seek to acquire additional sites and to manage our portfolio between the Managed and Tenanted divisions. Our investment in outside areas, marketing and focus on creating the best pub in any area ensure that we are well positioned to deal with the winter impact of the smoking ban. The money raised from the sale of two hotels last year has enabled us to reduce our net debt and our gearing, reinforcing our strong position to access funds for further acquisitions. The strong increase in the interim dividend reflects our confidence in our financial strength and the potential for future growth. Fuller's has a strong management team and a new Finance Director, James Douglas, has joined the Board to take over when Paul Clarke retires next year. We will continue to use the skills of our people to implement our long-term strategy, maintain our profits growth and deliver good returns for our shareholders. Michael Turner Chairman 23 November 2007 FULLER SMITH & TURNER P.L.C. FINANCIAL HIGHLIGHTS FOR THE 26 WEEKS ENDED 29 SEPTEMBER 2007 Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September Change 31 March 2007 2006 2007/2006 2007 Â£m Â£m Â£m ____________ ____________ ____________ _____________ Revenue 93.3 91.1 3% 178.2 Profit before tax 12.7 10.9 16% 42.2 Adjusted profits 1 12.1 10.9 11% 22.1 EBITDA 2 21.0 20.4 3% 40.7 Basic earnings per share 3 20.34p 13.42p 52% 52.14p Adjusted earnings per share 4 15.18p 13.42p 13% 27.58p Dividend per share 3 2.80p 2.59p 8% 9.09p Gearing ratio 54.1% 80.7% N/A 52.8% ____________ ____________ ____________ _____________ 1 Adjusted profit is the profit before tax excluding exceptional items. 2 Pre-exceptional earnings before interest, tax, depreciation and amortisation. 3 Calculated on a 40p ordinary share. 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 ordinary share. FULLER SMITH & TURNER P.L.C. CONDENSED GROUP INCOME STATEMENT Unaudited 26 weeks to 29 September 2007 Before exceptional Exceptional items items Total Note Â£m Â£m Â£m Revenue 93.3 - 93.3 Operating costs (77.8) - (77.8) ------------- ------------- ------------- Operating profit 15.5 - 15.5 Profit on disposal of properties 3 - 0.6 0.6 Finance revenue 0.1 - 0.1 Finance costs 4 (3.5) - (3.5) ------------- ------------- ------------- Profit before tax 12.1 0.6 12.7 Taxation 5 (3.6) 2.3 (1.3) ------------- ------------- ------------- Profit for the period attributable to equity shareholders of the Parent Company 8.5 2.9 11.4 ======== ======== ======== Unaudited 26 weeks to 30 September 2006 Before exceptional Exceptional items items Total Â£m Â£m Â£m Revenue 91.1 - 91.1 Operating costs (76.0) - (76.0) ------------- ------------- ------------- Operating profit 15.1 - 15.1 Profit on disposal of properties 3 - - - Finance revenue 0.1 - 0.1 Finance costs 4 (4.3) - (4.3) ------------- ------------- ------------- Profit before tax 10.9 - 10.9 Taxation 5 (3.4) - (3.4) ------------- ------------- ------------- Profit for the period attributable to equity shareholders of the Parent Company 7.5 - 7.5 ======== ======== ======== Audited 52 weeks to 31 March 2007 Before exceptional Exceptional items items Total Note Â£m Â£m Â£m Revenue 178.2 - 178.2 Operating costs (148.4) (0.4) (148.8) ------------- ------------- ------------- Operating profit 29.8 (0.4) 29.4 Profit on disposal of properties 3 - 20.5 20.5 Finance revenue 0.4 - 0.4 Finance costs 4 (8.1) - (8.1) ------------- ------------- ------------- Profit before tax 22.1 20.1 42.2 Taxation 5 (6.7) (6.4) (13.1) ------------- ------------- ------------- Profit for the year attributable to equity shareholders of the Parent Company 15.4 13.7 29.1 ======== ======== ======== EARNINGS PER SHARE 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007 Per 40p 'A' ordinary share or unquoted 40p 'C' ordinary share Basic 6 20.34p 13.42p 52.14p Diluted 6 20.07p 13.26p 51.52p Adjusted basis 6 15.18p 13.42p 27.58p Diluted adjusted basis 6 14.98p 13.26p 27.25p Per unquoted 4p 'B' ordinary share Basic 6 2.03p 1.34p 5.21p Diluted 6 2.01p 1.33p 5.15p Adjusted basis 6 1.52p 1.34p 2.76p Diluted adjusted basis 6 1.50p 1.33p 2.73p The results and EPS measures above are all in respect of continuing operations of the Group. Earnings per share measures for the 26 weeks to 30 September 2006 and the 52 weeks to 31 March 2007 have been restated for the effects of the five for two share split (note 6) as if the share split had occurred on the first day of these periods. FULLER SMITH & TURNER P.L.C. CONDENSED GROUP BALANCE SHEET 29 SEPTEMBER 2007 Unaudited Unaudited Audited At At At 29 September 30 September 31 March 2007 2006 2007 Note Â£m Â£m Â£m Non-current assets Goodwill 24.5 24.5 24.5 Property, plant and equipment 8 311.2 306.8 307.1 Investment properties 4.0 8.3 4.0 Financial assets 1.0 - 1.2 Other non-current assets 0.9 0.9 1.0 Deferred tax assets 4.0 7.7 8.1 ------------- ------------- ------------- Total non-current assets 345.6 348.2 345.9 Current assets Inventories 5.8 5.9 5.4 Trade and other receivables 16.5 14.9 15.0 Cash and short term deposits 1.3 1.3 8.9 ------------- ------------- ------------- Total current assets 23.6 22.1 29.3 Assets classified as held for sale 6.9 9.3 6.5 Current liabilities Bank overdraft 2.5 0.1 - Bank loans 5.0 5.0 5.0 Loan notes 2.4 - 2.8 Trade and other payables 35.8 34.5 33.9 Current tax payable 2.3 2.8 2.7 ------------- ------------- ------------- Total current liabilities 48.0 42.4 44.4 Non-current liabilities Bank loans 66.5 92.0 69.0 Debenture stock 27.0 27.0 27.0 Loan notes - 3.0 - Preference shares 1.6 1.6 1.6 Retirement benefit obligations 11 3.3 21.9 16.0 Deferred tax liabilities 38.0 33.9 41.0 ------------- ------------- ------------- Total non-current liabilities 136.4 179.4 154.6 ------------- ------------- ------------- Net assets 191.7 157.8 182.7 ======== ======== ======== Capital and reserves Share capital 22.8 22.8 22.8 Share premium account 4.8 4.6 4.7 Capital redemption reserve 3.1 3.1 3.1 Own shares (6.7) (4.9) (5.2) Retained earnings 167.7 132.2 157.3 ------------- ------------- ------------- Total shareholders' equity 9 191.7 157.8 182.7 ======== ======== ======== FULLER SMITH & TURNER P.L.C. CONDENSED GROUP CASH FLOW STATEMENT FOR THE 26 WEEKS ENDED 29 SEPTEMBER 2007 Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007 Note Â£m Â£m Â£m Group operating profit before exceptional items 15.5 15.1 29.8 Depreciation 5.5 5.3 10.8 Loss on disposal of property, plant and equipment - - 0.1 Difference between pension charge and cash paid (8.4) (1.0) (3.1) Share-based payment charges 0.8 0.7 1.4 Change in trade and other receivables (1.4) (0.3) (0.3) Change in inventories (0.4) (0.4) 0.1 Change in trade and other payables 1.8 (0.4) (0.9) ------------- ------------- ------------- Cash generated from operations 13.4 19.0 37.9 Tax paid (2.2) (1.8) (5.1) ------------- ------------- ------------- Cash generated from operating activities 11.2 17.2 32.8 ------------- ------------- ------------- Cash flow from investing activities Purchase of property, plant and equipment (11.2) (6.6) (21.7) Sale of property, plant and equipment 1.9 1.3 37.7 Interest received 0.1 0.1 0.4 ------------- ------------- ------------- Net cash (outflow)/inflow from investing activities (9.2) (5.2) 16.4 ------------- ------------- ------------- Cash flow from financing activities Proceeds from issue of share capital 0.1 0.4 0.5 Purchase of own shares (2.5) (2.8) (3.6) Sale of own shares to option schemes 0.2 0.3 0.3 Interest paid (3.3) (4.0) (8.1) Preference dividends paid (0.1) (0.1) (0.1) Equity dividends paid (3.6) (3.2) (4.7) Repayment of loan notes (0.4) - (0.2) Repayment of bank loans (2.5) (2.5) (25.5) ------------- ------------- ------------- Net cash outflow from financing activities (12.1) (11.9) (41.4) ------------- ------------- ------------- Net movement in cash and cash equivalents 10 (10.1) 0.1 7.8 Cash and cash equivalents at the start of the period 8.9 1.1 1.1 ------------- ------------- ------------- Cash and cash equivalents at period end (1.2) 1.2 8.9 ======== ======== ======== Cash and cash equivalents comprise cash and other short term highly liquid investments with a maturity of three months or less. There were no significant non-cash transactions during any period. FULLER SMITH & TURNER P.L.C. CONDENSED STATEMENT OF RECOGNISED INCOME AND EXPENSE FOR THE 26 WEEKS ENDED 29 SEPTEMBER 2007 Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007 Note Â£m Â£m Â£m Reduction in deferred tax liability due to 0.1 0.2 0.4 indexation Net (losses)/gains on valuation of financial assets (0.1) - 0.8 Deferred tax on share-based payments (0.1) - 1.0 Deferred tax adjustment for change in corporation tax rate (0.3) - - Net actuarial gains/(losses) on pension schemes 4.3 (1.1) 2.5 Deferred tax on actuarial gains and losses on (1.3) 0.3 (0.7) pension schemes ------------- ------------- ------------- Income and expense recognised directly in equity 2.6 (0.6) 4.0 Profit for the period 11.4 7.5 29.1 ------------- ------------- ------------- Total recognised income and expense for the period 9 14.0 6.9 33.1 ======== ======== ======== FULLER SMITH & TURNER P.L.C. NOTES TO THE FINANCIAL STATEMENTS 1. HALF YEAR REPORT Basis of preparation These half year financial statements for the 26 weeks to 29 September 2007, which are abridged and unaudited, have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and International Accounting Standard (IAS) 34, Interim Financial Reporting. IFRS 7, Financial Instruments: Disclosures, and IAS 1, Presentation of Financial Statements, will be applied for the first time for the 52 weeks to 29 March 2008, however these standards do not impact the financial statements for the 26 weeks to 29 September 2007. Otherwise, the accounting policies adopted are consistent with those applied in the 52 weeks to 31 March 2007, which are published as part of the accounts for that year and which are available from the Group's website, www.fullers.co.uk. The taxation charge is calculated by applying the Directors' best estimate of the annual effective tax rate to the profit for the period. The half year financial statements were approved by the Directors on 23 November 2007. This half year statement does not constitute full accounts as defined by Section 240 of the Companies Act 1985. The figures for the 52 weeks to 31 March 2007 are derived from the published statutory accounts. Full accounts for the 52 weeks to 31 March 2007, including an unqualified auditors' report which did not make any statement under Section 237 of the Companies Act 1985, have been delivered to the Registrar of Companies. 2. SEGMENTAL ANALYSIS Fuller's Beer Unaudited - 26 weeks to 29 September 2007 Fuller's Inns Company Unallocated Total Â£m Â£m Â£m Â£m Revenue Segment revenue 73.5 30.3 - 103.8 Inter-segment sales - (10.5) - (10.5) ------------- ------------- ------------- ------------- Revenue from third parties 73.5 19.8 - 93.3 ------------- ------------- ------------- ------------- Operating profit 13.3 3.5 (1.3) 15.5 Profit on disposal of properties 0.4 0.2 - 0.6 Net finance costs - - (3.4) (3.4) ------------- ------------- ------------- ------------- Profit before tax 13.7 3.7 (4.7) 12.7 ======== ======== ======== ======== Fuller's Beer Unaudited - 26 weeks to 30 September 2006* Fuller's Inns Company Unallocated Total Â£m Â£m Â£m Â£m Revenue Segment revenue 72.3 29.1 - 101.4 Inter-segment sales - (10.3) - (10.3) ------------- ------------- ------------- ------------- Revenue from third parties 72.3 18.8 - 91.1 ------------- ------------- ------------- ------------- Operating profit 12.7 3.4 (1.0) 15.1 Profit on disposal of properties - - - - Net finance costs - - (4.2) (4.2) ------------- ------------- ------------- ------------- Profit before tax 12.7 3.4 (5.2) 10.9 ======== ======== ======== ======== In line with the presentation in the accounts to 31 March 2007, unallocated amounts in the analysis for the 26 weeks to 30 September 2006 have been revised to better reflect the extent to which these costs are attributable to the operations. Fuller's Beer Audited - 52 weeks to 31 March 2007 Fuller's Inns Company Unallocated Total Â£m Â£m Â£m Â£m Revenue Segment revenue 140.9 58.4 - 199.3 Inter-segment sales - (21.1) - (21.1) ------------- ------------- ------------- ------------- Revenue from third parties 140.9 37.3 - 178.2 ------------- ------------- ------------- ------------- Operating profit pre-exceptionals 24.0 7.9 (2.1) 29.8 Operating exceptional items (0.4) - - (0.4) ------------- ------------- ------------- ------------- Operating profit 23.6 7.9 (2.1) 29.4 Profit on disposal of properties 20.5 - - 20.5 Net finance costs - - (7.7) (7.7) ------------- ------------- ------------- ------------- Profit before tax 44.1 7.9 (9.8) 42.2 ======== ======== ======== ======== 3. EXCEPTIONAL ITEMS Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007 Â£m Â£m Â£m Property Profit on disposal of properties 0.6 - 20.5 Write down of assets held for sale - - (0.4) ------------- ------------- ------------- Total exceptional items before tax 0.6 - 20.1 ======== ======== ======== The profit on disposal of properties during the 52 weeks to 31 March 2007 relates in the main to the disposal of the Brigstow and Master Brewer Hotels. 4. FINANCE COSTS Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007 Â£m Â£m Â£m Preference dividends 0.1 0.1 0.1 Finance charge on net pension liabilities - 0.1 0.2 Interest payable on bank loans, loan notes and overdraft 2.3 3.0 5.6 Interest payable on debentures 1.1 1.1 2.2 ------------- ------------- ------------- 3.5 4.3 8.1 ======== ======== ======== 5. TAXATION Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007 Â£m Â£m Â£m Tax on profit on ordinary activities Current income tax: Corporation tax 1.7 3.2 6.5 Amounts overprovided in previous periods - - (0.2) ------------- ------------- ------------- Total current income tax 1.7 3.2 6.3 ------------- ------------- ------------- Deferred tax: Origination and reversal of temporary differences 2.3 0.2 6.6 Credit in relation to change in corporation tax rate (2.7) - - Amounts underprovided in previous periods - - 0.2 ------------- ------------- ------------- Total deferred tax (0.4) 0.2 6.8 ------------- ------------- ------------- Total tax charged in the income statement 1.3 3.4 13.1 ======== ======== ======== Tax relating to items charged/(credited) to equity Deferred tax: Reduction in deferred tax liability due to indexation (0.1) (0.2) (0.4) Actuarial gains/(losses) on pension schemes 1.3 (0.3) 0.7 Financial assets (0.1) - 0.4 Share-based payments 0.1 - (1.0) Charge in relation to change in corporation tax rate 0.3 - - ------------- ------------- ------------- Tax charge/(credit) included in the statement of recognised income and expense 1.5 (0.5) (0.3) ======== ======== ======== During the period Finance Act 2007 has been 'substantively enacted'. The main impact is that the rate of UK corporation tax will reduce from 30% to 28% from 1 April 2008. To the extent that this rate change will affect the amount of future cash tax payments to be made by the Group, this will reduce the size of both the Group's balance sheet deferred tax liability and deferred tax asset. The impact in the 26 weeks to 29 September 2007 is a credit to the Income Statement of Â£2.7 million, of which Â£2.5 million has been recognised as an exceptional item, and a further charge to equity of Â£0.3 million. 6. EARNINGS PER SHARE Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007 Â£m Â£m Â£m Profit attributable to equity shareholders 11.4 7.5 29.1 Exceptional items net of tax (2.9) - (13.7) ------------- ------------- ------------- Adjusted earnings attributable to equity shareholders 8.5 7.5 15.4 ======== ======== ======== Number Number Number Weighted average share capital 55,834,000 55,775,000 55,838,000 Dilutive outstanding options 749,000 660,000 665,000 ------------- ------------- ------------- Diluted weighted average share capital 56,583,000 56,435,000 56,503,000 ======== ======== ======== 40p 'A' ordinary shares or unquoted 40p 'C' ordinary Pence Pence Pence shares Basic earnings per share 20.34 13.42 52.14 Diluted earnings per share 20.07 13.26 51.52 Adjusted earnings per share 15.18 13.42 27.58 Diluted adjusted earnings per share 14.98 13.26 27.25 Unquoted 4p 'B' ordinary shares Pence Pence Pence Basic earnings per share 2.03 1.34 5.21 Diluted earnings per share 2.01 1.33 5.15 Adjusted earnings per share 1.52 1.34 2.76 Diluted adjusted earnings per share 1.50 1.33 2.73 During the period the shareholders of the Company agreed a sub-division of each of the three classes of ordinary shares 'the share split'. Every two Â£1 'A' ordinary or Â£1 'C' ordinary shares became five new 40p 'A' ordinary or 40p 'C' ordinary shares and every two 10p 'B' shares became five 4p 'B' shares. This was completed on 6 August 2007. The earnings per share calculation is based on earnings from continuing and total operations (after deducting preference dividends) and on the weighted average ordinary share capital which excludes shares held by trusts relating to employee share options and shares held in treasury. Comparative information for the 26 weeks to 30 September 2006 and the 52 weeks to 31 March 2007 have been restated for the effects of the share split. Diluted earnings per share are calculated on the same earnings figure as for basic earnings per share, divided by the weighted average number of ordinary shares outstanding during the period 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 are calculated on earnings excluding exceptional items and on the same weighted average ordinary share capital as for the basic earnings per share. 7. DIVIDENDS Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007 Â£m Â£m Â£m Declared and paid during the period Equity dividends on ordinary shares: Final dividend paid in the period 3.6 3.2 3.2 Interim dividend paid in the period - - 1.5 ------------- ------------- ------------- Equity dividends paid (note 9) 3.6 3.2 4.7 ======== ======== ======== ------------- ------------- ------------- Dividends on cumulative preference shares (note 4) 0.1 0.1 0.1 ======== ======== ======== Dividends per 40p 'A' ordinary share or unquoted 40p 'C' ordinary share declared in respect of the period Pence Pence Pence Interim 2.80 2.59 2.59 Final - - 6.50 ------------- ------------- ------------- 2.80 2.59 9.09 ======== ======== ======== The pence figures are for the 40p 'A' ordinary shares and unquoted 40p 'C' ordinary shares. The unquoted 4p 'B' ordinary shares carry dividend rights of 1/ 10 of those applicable to the 40p 'A' ordinary shares. Own shares held in the Fuller Smith & Turner P.L.C. Employee Share Trust 1998 do not qualify for dividends as the trustees have waived their rights. Dividends are also not paid on own shares held as treasury shares. Comparative information for the 26 weeks to 30 September 2006 and the 52 weeks to 31 March 2007 have been restated for the effects of the share split. The directors have declared an interim dividend of 2.80p (2006: 2.59p restated for the share split) for the 40p 'A' ordinary shares and unquoted 40p 'C' ordinary shares, and 0.280p (2006: 0.259p restated for the share split) for the unquoted 4p 'B' ordinary shares, with a total estimated cost to the Company of Â£1.6 million (2006: Â£1.4 million). 8. PROPERTY, PLANT AND EQUIPMENT Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007 Â£m Â£m Â£m Net book value at start of period 307.1 316.0 316.0 Additions 11.2 6.5 21.7 Disposals (0.3) (1.2) (17.2) Transfer to assets held for sale (1.4) (9.2) (2.7) Depreciation provided during the period (5.4) (5.3) (10.7) ------------- ------------- ------------- Net book value at end of period 311.2 306.8 307.1 ======== ======== ======== 9. RECONCILIATION OF MOVEMENTS IN TOTAL EQUITY Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007 Â£m Â£m Â£m Opening total equity 182.7 155.7 155.7 Total recognised income and expense for the period 14.0 6.9 33.1 Issues of new shares 0.1 0.3 0.5 Shares purchased including treasury shares (2.5) (2.8) (3.6) Shares released including treasury shares 0.2 0.3 0.3 Dividends paid (3.6) (3.2) (4.7) Cost of share-based payments 0.8 0.6 1.4 ------------- ------------- ------------- Closing total equity 191.7 157.8 182.7 ======== ======== ======== 10. ANALYSIS OF NET DEBT Opening Cash flow Non cash Closing Unaudited - 26 weeks to 29 September 2007 Â£m Â£m Â£m Â£m Cash and cash equivalents Cash and short term deposits 8.9 (7.6) - 1.3 Bank overdraft - (2.5) - (2.5) ------------- ------------- ------------- ------------- 8.9 (10.1) - (1.2) ------------- ------------- ------------- ------------- Debt due within one year Bank loans (5.0) - - (5.0) Loan notes (2.8) 0.4 - (2.4) ------------- ------------- ------------- ------------- Debt due after one year Bank loans (69.0) 2.5 - (66.5) Debenture stock (27.0) - - (27.0) Preference shares (1.6) - - (1.6) ------------- ------------- ------------- ------------- Net debt (96.5) (7.2) - (103.7) ======== ======== ======== ======== Opening Cash flow Non cash Closing Unaudited - 26 weeks to 30 September 2006 Â£m Â£m Â£m Â£m Cash and cash equivalents Cash and short term deposits 1.4 (0.1) - 1.3 Bank overdraft (0.3) 0.2 - (0.1) ------------- ------------- ------------- ------------- 1.1 0.1 - 1.2 ------------- ------------- ------------- ------------- Debt due within one year Bank loans (2.5) (2.5) - (5.0) ------------- ------------- ------------- ------------- Debt due after one year Bank loans (97.0) 5.0 - (92.0) Debenture stock (27.0) - - (27.0) Loan notes (3.0) - - (3.0) Preference shares (1.6) - - (1.6) ------------- ------------- ------------- ------------- Net debt (130.0) 2.6 - (127.4) ======== ======== ======== ======== Opening Cash flow Non cash Closing Audited - 52 weeks to 31 March 2007 Â£m Â£m Â£m Â£m Cash and cash equivalents Cash and short term deposits 1.4 7.5 - 8.9 Bank overdraft (0.3) 0.3 - - ------------- ------------- ------------- ------------- 1.1 7.8 - 8.9 ------------- ------------- ------------- ------------- Debt due within one year Bank loans (2.5) (2.5) - (5.0) Loan notes - - (2.8) (2.8) ------------- ------------- ------------- ------------- Debt due after one year Bank loans (97.0) 28.0 - (69.0) Debenture stock (27.0) - - (27.0) Loan notes (3.0) 0.2 2.8 - Preference shares (1.6) - - (1.6) ------------- ------------- ------------- ------------- Net debt (130.0) 33.5 - (96.5) ======== ======== ======== ======== 11. RETIREMENT BENEFIT OBLIGATIONS Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007 Â£m Â£m Â£m Movement in deficit during period Deficit in scheme at beginning of the period (16.0) (21.6) (21.6) Movement in period: Current service cost (0.9) (0.9) (1.8) Past service cost - (0.1) (0.2) Gain on curtailment - 0.1 0.1 Contributions 9.2 1.8 5.2 Other finance income/(expense) 0.1 (0.1) (0.2) Actuarial gains/(losses) 4.3 (1.1) 2.5 ------------- ------------- ------------- Deficit in scheme at end of the period (3.3) (21.9) (16.0) ======== ======== ======== 12. POST BALANCE SHEET EVENT Since 29 September 2007, the Group has sold 4 properties, including 2 tenanted pubs, for Â£5 million resulting in an exceptional profit on disposal of Â£4 million. As required by IFRS5, Non Current Assets Held for Sale and Discontinued Operations, these properties are included within the balance sheet at 29 September 2007 under 'Assets classified as held for sale'. 13. PRINCIPAL RISKS AND UNCERTAINTIES The Company faces a number of risks and uncertainties which may affect performance in the next six months. Principal among these are the impact of new Government regulation, notably the Smoking Ban introduced in July 2007, together with the risk that alcohol duties might increase. We remain exposed to the overall strength of the UK economy and its influence on consumer spending within the leisure industry. We continue to have an ongoing exposure to incidents which may damage the reputation of the Company or its brands, or our ability to supply our customers. 14. SHAREHOLDERS' INFORMATION Shareholders holding 40p 'C' ordinary shares are reminded that they have 30 days from 23 November 2007 should they wish to convert those 'C' shares to 'A' shares. The next available opportunity after that will be June 2008. For further details please contact the Company's registrars, Computershare on 0870 702 0003. 15. HALF YEAR REPORT Copies of the half year report are being sent to shareholders and will be available from the Company's registered office: Griffin Brewery, Chiswick, London W4 2QB and the Company's website www.fullers.co.uk. 16. STATEMENT OF DIRECTORS' RESPONSIBILITIES The Directors confirm, to the best of their knowledge, that this condensed set of financial statements has been prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by the European Union, and that the interim management report herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8. By order of the Board Michael Turner Chairman Paul Clarke Finance Director 23 November 2007 This information is provided by RNS The company news service from the London Stock Exchange

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