Interim Results

Fuller,Smith&Turner PLC 26 November 2004 STRICTLY EMBARGOED UNTIL 7AM FRIDAY 26 NOVEMBER 2004 PRESS RELEASE FULLER SMITH & TURNER P.L.C. Financial results for the six months ended 25 September 2004 Financial Highlights • Turnover up 2% to £73.0 million (2003: £71.3 million) • Profit before tax up 7% to £8.7 million (2003: £8.1 million) • Normalised profit before tax1 up 2% to £8.2 million (2003: £8.0 million) • Basic earnings per share2 up 11% to 26.53p (2003: 23.82p) • Normalised earnings per share3 up 3% to 24.39p (2003: 23.63p) • Interim dividend per share2 increased 5.1% to 5.36p (2003: 5.10p) • Net assets per share2 up 7% to £7.23 (2003: £6.78) Corporate Progress • Beer Company performed well in a difficult market with profits up 8% on volumes up 1%. • A strong first half for Hotels with turnover up 6% and profits up 14%. • Significant investment and a poor summer held back profits in Managed Pubs & Bars. • City trading stronger with like for like sales up 3%. • Tenanted Inns profits up 3%. 1 Pre-tax profits after interest before exceptional profits of £0.5 million (2003: £0.1 million). 2 Calculated on the £1 'A' ordinary share. 3 Calculated using pre-exceptional earnings of £5.5 million (2003: £5.4 million) and the same weighted average number of shares as for the basic earnings per share. Commenting on the results, Anthony Fuller, Chairman, said: "It has been a satisfactory first half with pre-tax profits up 7%. On a normalised basis, profits were up 2% to £8.2 million. The Beer Company and Tenanted Inns continued to perform well and the improvement in the City and Hotels seen at the start of the year has been sustained. However, profits have been held back significantly in Managed Pubs and Bars by a combination of higher planned refurbishment costs and disappointing summer weather compared to last year. "Our refurbishment programme in the City continues; following the regeneration of the Fine Line concept, we are now focusing our attention on the Ale & Pie houses, ensuring we highlight the quality and character of each pub. These refurbishments will leave us in a good position to capitalise on the steady and consistent improvement in trading conditions in the City. We expect overall repair costs in the second half of the year to be broadly similar to the comparable period last year. "The strong performance from our hotels reflects our investment and pricing decisions over the past five years, as well as a general upturn in the market. We are confident that the improvement seen across our hotels will be sustained for the rest of the financial year. "The Tenanted Division has continued to deliver good profit growth, in spite of a fairly static estate, and we are confident this will be sustained. "In line with our corporate strategy, we have been actively seeking suitable acquisitions for both the tenanted and managed estates. We expect to have completed on eight sites by the end of the financial year. "The Beer Company continues to thrive in an increasingly competitive market. The quality of our brands and our ability to adapt and innovate will ensure that Fuller's continues to set the standard for others to follow. "In conclusion, I expect the Group to continue to make steady progress in the year under review." - 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 Vanessa Maydon 07802 961 902 (mobile) Rebecca Penney 07950 419 408 (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 Interim Statement and press 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 Accounts FULLER SMITH & TURNER P.L.C. INTERIM RESULTS FOR THE SIX MONTHS TO 25 SEPTEMBER 2004 CHAIRMAN'S STATEMENT Whatever You Do, Take Pride It has been a satisfactory first half with pre-tax profits up 7% to £8.7 million (2003: £8.1 million) on a 2% increase in turnover to £73.0 million (2003: £71.3 million). On a normalised basis, before exceptional profits on the disposal of properties, profits were up 2% to £8.2 million (2003: £8.0 million). The Beer Company and Tenanted Inns continued to perform well and the improvement in the City and Hotels seen at the start of the year has been sustained. However, profits have been held back significantly in Managed Pubs and Bars by a combination of higher planned refurbishment costs and disappointing summer weather compared to last year. Basic earnings per share increased 11% to 26.53p (2003: 23.82p), with the weighted average number of shares 1% lower than last year following the purchase of 'A' ordinary shares over the summer. On a normalised basis, earnings per share increased 3% to 24.39p (2003: 23.63p). Tax has been provided for at the expected effective rate for the full year of 32.5% on normalised profits (2003: 32.5%). The exceptional profits did not carry a tax charge owing to the availability of rollover relief. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell slightly to £13.2 million compared to £13.4 million last year, mainly as a result of £0.7 million higher repair costs. Total capital expenditure for the half-year was £6.5 million (2003: £9.2 million), most of which related to enhancing the existing business and extending the Brewery site, with one freehold pub acquisition in the first half. Since March 2004, we have bought back a further 230,000 £1 'A' ordinary shares. The average price paid was £6.84 (per £1 share equivalent). These shares have not been cancelled but have been retained as treasury shares. A number have been used to satisfy an employee share scheme, with 195,745 treasury shares remaining at September 2004. Following a recent 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 sheets as at September 2003 and March 2004 have been restated accordingly. This is explained further in the Notes to the Accounts attached. Shareholders will see many other accounting changes next year when the Company adopts International Accounting Standards. The conversion process is already well underway and the Company is on course to present its first results under International Accounting Standards next year. We shall be increasing the interim dividend by 5.1% to 5.36p per £1 'A' and 'C' ordinary share and 0.536p per 10p 'B' ordinary share, which will be paid on Friday 7 January 2005 to shareholders on the Share Register as at Friday 10 December 2004. Fuller's Inns It has been a mixed first half for Fuller's Inns, although there are some encouraging signs. Turnover increased by 1% to £50.1 million, but with the extensive refurbishment programme in Managed Pubs and Bars resulting in a £0.8 million increase in repair costs in that division, EBITDA was down 5% to £10.8 million from £11.5 million this time last year. Profit was also down 5% to £7.7 million compared to £8.1 million. Managed Pubs and Bars This has been a period of extensive investment in our estate with an unprecedented 16 major refurbishments completed in the first half. Over 25% of the estate has received significant investment in the past 18 months. This investment is vital to maintain high standards and preserve the longevity of our assets, in line with our corporate strategy of being a long-term premium operator. In the first half of this year we spent £2.2 million in repairs and maintenance compared to £1.4 million last year. Following last year's excellent summer weather it was inevitable that we would find it hard to achieve the same levels of performance across the estate this year, especially in the food-led garden pubs. First half like for like sales across the managed estate were down 1%. Our like for like numbers are calculated on an uninvested basis - properties that have had over £50,000 invested in either period are excluded. Lager sales were hit the hardest by the weather with a 3% decline in volume, but this was offset by an increase in food and wine sales of 5% and 10% respectively. We have been pleased to see a sustained improvement in the performance of our City pubs and bars, with like for like sales up 3% in the first half, a trend which is improving further into the second half. We have completed refurbishments at five of the Fine Lines and two of the more traditional Ale & Pie houses. In line with our strategy, we have continued to seek out suitable acquisitions for the managed estate - high quality, predominantly freehold sites that present excellent opportunities for cask ale, food and wine. Since the period end, we have exchanged contracts on a development site on the Grand Union Canal in Apsley and are in advanced negotiations for a number of other pubs. There are currently 115 managed pubs in the estate. Tenanted Inns The tenanted estate continues to make progress. The average turnover per house was up 1%, with average profit per house up 4%. In August 2004 we acquired a new freehold site, the White Horse in Harrow and since the period end we have completed on another freehold, the Weyhill Fair in Hampshire. With one transfer from managed and the completed acquisitions the total number of tenanted pubs now stands at 116. The number of pubs on the fully repairing 10-year lease increased to 53. We have continued to invest in the estate with 16 internal and external redecorations in the first half. Fuller's Hotels Fuller's Hotels has made an excellent start to the year with turnover up 6% and profits up 14%. Our policy of maintaining room rates has left us in a good position to benefit from the improving market. RevPar increased by 4% to £42.27 (2003: £40.72). Occupancy rose by 5% across the estate, with weekend business also showing consistent growth. The three hotels opened in 2001 have performed particularly well, achieving record weekly sales and occupancy. The 55-bedroom Red Lion Hotel in Hillingdon Village opened in May 2004 and has made a steady start. We are also undertaking a programme of targeted refurbishment at some of our other hotels. The Fuller's Beer Company The Fuller's Beer Company profits increased 8% to £3.5 million (2003: £3.3 million), on turnover up 4% to £34.0 million (2003: £32.9 million). EBITDA increased 8% to £4.3 million from £4.0 million last year. The consistent year on year increase in profitability of the Beer Company demonstrates the strength of our brands and quality of the product, especially considering the continuing decline in the ale market. It is also a reflection of our consistent pricing policy and enhanced operating efficiencies. Overall own beer sales were up 1% to 96,000 barrels and total beer sales were also up 1% to 135,000 barrels. Export sales were particularly strong with an increase of 27% to over 6,000 barrels. The success of our export business is a measure of the increasing reputation of Fuller's overseas, as is the number of international awards and accolades won, including two golds and a silver medal at the Stockholm Beer Festival. Sales to the free trade continue to hold up well, with the on trade and off trade showing strong growth of 2% and 3% respectively. The Fuller's Wine Division continues to make a valuable and increasing contribution to the Group with profits up 24%. London Pride has consolidated its position as the UK's top selling premium cask ale. This is supported by an extensive advertising campaign, including a new TV commercial, airing nationally from September. We have also increased promotional activity for our other brands, including a major rebranding of the award winning "Champion Ale" ESB. As we reported in May, we acquired further land adjacent to the Brewery in the period which, combined with an acquisition last year will increase the overall area of the site by 11%. Our long-term investment programme in the Brewery continues, ensuring that quality remains second to none, operating efficiencies are maximised and we can meet the ever-increasing demand for our beers. Prospects We manage our business for the long term and believe in maintaining high standards and investing for the future to preserve and enhance the quality of our assets. Our refurbishment programme in the City continues; following the regeneration of the Fine Line concept, we are now focusing our attention on the Ale & Pie houses, ensuring we highlight the quality and character of each pub. These refurbishments will leave us in a good position to capitalise on the steady and consistent improvement in trading conditions in the City. We expect overall repair costs in the second half of the year to be broadly similar to the comparable period last year. The Government's recent White Paper proposals to ban smoking in the workplace clearly have implications for our industry. However, Fuller's has always maintained a broad portfolio of outlets and we feel that as a premium operator with a focus on quality cask ale, food and wine, we will be able to maximise the opportunities and minimise the threats posed. In addition, any new laws will not come into effect for another four years, by which time smokers' expectations will have changed considerably. With regards to the Government's Alcohol Harm Reduction Strategy, our business is focused on quality not price and we believe that well run pubs are the home of responsible drinking. The strong performance from our hotels reflects our investment and pricing decisions over the past five years, as well as a general upturn in the market. We are confident that the improvement seen across our hotels will be sustained for the rest of the year. The Tenanted Division has continued to deliver good profit growth, in spite of a fairly static estate, and we are confident this will be sustained. In line with our corporate strategy, we have been actively seeking suitable acquisitions for both the tenanted and managed estates. We expect to have completed on eight sites by the end of the financial year. The Beer Company continues to do well in an increasingly competitive market. The quality of our brands and our ability to adapt and innovate will ensure that Fuller's continues to set the standard for others to follow. In conclusion, I expect the Group to continue to make steady progress in the year under review. A.G.F. Fuller CBE Chairman 26 November 2004 FULLER SMITH & TURNER P.L.C. FINANCIAL HIGHLIGHTS FOR THE 26 WEEKS ENDED 25 SEPTEMBER 2004 26 weeks to 26 weeks to 52 weeks to 25 September 27 September Increase 27 March 2004 2003 2004/2003 2004 £000 £000 £000 _______________________________________ ___________ ___________ ___________ ___________ Turnover 72,961 71,302 2.3% 140,322 Profit before tax 8,686 8,123 6.9% 19,227 Normalised profits1 8,205 8,019 2.3% 16,858 EBITDA2 13,217 13,437 (1.6)% 27,744 Basic earnings per share3 26.53p 23.82p 11.4% 60.63p Normalised earnings per share4 24.39p 23.63p 3.2% 49.84p Dividend per share3 5.36p 5.10p 5.1% 17.31p Net assets per share3 £7.23 £6.78 6.6% £7.02 Gearing ratio 12.3% 14.0% N/A 10.7% _______________________________________ ___________ ___________ ___________ ___________ 1 Pre-tax profits after interest before non-operating exceptional profits of £0.5 million (2003: £0.1 million). 2 Earnings before interest, tax, depreciation and amortisation. 3 Calculated on the £1 'A' ordinary share. 4 Calculated using pre-exceptional earnings of £5.5 million (2003: £5.4 million) and the same weighted average number of shares as for the basic earnings per share. Net assets per share as at 27 September 2003 and 27 March 2004 have been restated following a change in accounting policy, as set out in Note 1 to the Accounts. FULLER SMITH & TURNER P.L.C. UNAUDITED GROUP PROFIT AND LOSS ACCOUNT FOR THE 26 WEEKS ENDED 25 SEPTEMBER 2004 26 weeks to 26 weeks to 52 weeks to 25 September 27 September 27 March 2004 2003 2004 £000 £000 £000 TURNOVER 72,961 71,302 140,322 Operating costs (63,887) (62,258) (121,524) ------------------ ------------------ ------------------ OPERATING PROFIT 9,074 9,044 18,798 Non-operating exceptional profits 481 104 2,369 Interest payable (net) (869) (1,025) (1,940) ------------------ ------------------ ------------------ PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 8,686 8,123 19,227 Taxation (2,665) (2,667) (5,408) ------------------ ------------------ ------------------ PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 6,021 5,456 13,819 Preference dividends (60) (60) (120) ------------------ ------------------ ------------------ ATTRIBUTABLE TO EQUITY SHAREHOLDERS 5,961 5,396 13,699 Ordinary dividends (1,202) (1,149) (3,904) ------------------ ------------------ ------------------ RETAINED PROFIT FOR THE FINANCIAL PERIOD 4,759 4,247 9,795 ------------------ ------------------ ------------------ EARNINGS PER SHARE Per £1 'A' ordinary share or unquoted £1 'C' ordinary share Basic 26.53p 23.82p 60.63p Diluted 26.38p 23.73p 60.35p Normalised 24.39p 23.63p 49.84p Per unquoted 10p 'B' ordinary share Basic 2.65p 2.38p 6.06p Diluted 2.64p 2.37p 6.04p Normalised 2.44p 2.36p 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 25 SEPTEMBER 2004 At At At 25 September 27 September 27 March 2004 2003 2004 £000 £000 £000 Restated Restated FIXED ASSETS 198,741 192,470 196,511 CURRENT ASSETS Stocks 4,064 4,012 4,269 Debtors 13,903 11,010 11,462 Investments 5,188 - 6,064 Cash, at bank and in hand 1,693 5,427 3,909 ------------------ ------------------ ------------------ 24,848 20,449 25,704 CREDITORS: amounts falling due within one year 28,351 27,112 30,713 ------------------ ------------------ ------------------ NET CURRENT LIABILITIES (3,503) (6,663) (5,009) ------------------ ------------------ ------------------ TOTAL ASSETS LESS CURRENT LIABILITIES 195,238 185,807 191,502 CREDITORS: amounts falling due after more than one year Debenture stock 27,001 26,990 26,995 PROVISIONS FOR LIABILITIES AND CHARGES 4,955 4,619 4,734 ------------------ ------------------ ------------------ NET ASSETS 163,282 154,198 159,773 ========= ========= ========= CAPITAL AND RESERVES Called up share capital: Equity 22,792 22,725 22,748 Non equity 1,600 1,600 1,600 Share premium account 3,991 3,741 3,820 Revaluation reserve 28,886 28,993 28,993 Capital redemption reserve 2,902 2,902 2,902 Investment in own shares (2,860) (888) (1,222) Profit and loss account 105,971 95,125 100,932 ------------------ ------------------ ------------------ TOTAL SHAREHOLDERS' FUNDS 163,282 154,198 159,773 ========= ========= ========= The balance sheets as at 27 September 2003 and 27 March 2004 have been restated following a change in accounting policy, as set out in Note 1 to the Accounts. FULLER SMITH & TURNER P.L.C. UNAUDITED GROUP CASH FLOW STATEMENT FOR THE 26 WEEKS ENDED 25 SEPTEMBER 2004 26 weeks to 26 weeks to 52 weeks to 25 September 27 September 27 March 2004 2003 2004 £000 £000 £000 Restated Restated NET CASH INFLOW FROM OPERATING ACTIVITIES 12,141 14,716 29,564 ----------------- ----------------- ----------------- RETURNS ON INVESTMENT AND SERVICING OF FINANCE Preference dividends paid (60) (60) (120) Interest received 229 68 233 Interest paid (1,092) (1,087) (2,164) ----------------- ----------------- ----------------- (923) (1,079) (2,051) TAXATION Corporation tax paid (2,712) (2,441) (4,953) CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Payments to acquire tangible fixed assets (7,526) (9,247) (17,235) Receipts from sales of tangible fixed assets 321 3,169 5,866 ----------------- ----------------- ----------------- (7,205) (6,078) (11,369) EQUITY DIVIDENDS PAID (2,753) (2,588) (3,736) ----------------- ----------------- ----------------- TOTAL NET CASH INFLOW BEFORE THE USE OF LIQUID RESOURCES AND FINANCING (1,452) 2,530 7,455 MANAGEMENT OF LIQUID RESOURCES* 876 635 (5,429) FINANCING Issue of equity shares 215 523 625 Purchase of own shares (2,001) (2,664) (3,145) Sale of treasury shares 146 - - ----------------- ----------------- ----------------- (1,640) (2,141) (2,520) ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- MOVEMENT IN CASH IN THE PERIOD (2,216) 1,024 (494) ======== ======== ======== * Management of liquid resources is the movement in current asset investments, namely cash on short-term deposit at financial institutions. The cash flow statements for the periods ending 27 September 2003 and 27 March 2004 have been restated following a change in accounting policy, as set out in Note 1 to the Accounts. FULLER SMITH & TURNER P.L.C. OTHER UNAUDITED GROUP PRIMARY STATEMENTS FOR THE 26 WEEKS ENDED 25 SEPTEMBER 2004 GROUP STATEMENT OF RECOGNISED GAINS AND LOSSES There are no gains or losses in the current or prior period other than those reported in the profit and loss account on page 8. 26 weeks to 26 weeks to 52 weeks to 25 September 27 September 27 March 2004 2003 2004 GROUP HISTORICAL COST PROFITS AND LOSSES £000 £000 £000 Reported profit on ordinary activities before taxation 8,686 8,123 19,227 Realisation of property revaluation movements of previous 107 (690) (690) years ----------------- ----------------- ----------------- Historical cost profit on ordinary activities before 8,793 7,433 18,537 taxation ----------------- ----------------- ----------------- Historical cost profit for the period retained after 4,866 3,557 9,105 taxation ======== ======== ======== RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS Shareholders' funds at the beginning of the period as 159,766 151,155 151,155 previously reported Accounting policy change (see note 1) 7 (118) (118) ----------------- ----------------- ----------------- Restated shareholders' funds at the beginning of the 159,773 151,037 151,037 period Profit on ordinary activities after taxation 6,021 5,456 13,819 Dividends - preference (60) (60) (120) - ordinary (1,202) (1,149) (3,904) New share capital subscribed 215 523 625 Own shares repurchased and cancelled - (1,804) (1,809) Other own shares purchased including treasury shares (2,001) (137) (473) Sale of treasury shares 146 - - Accrued share based payments 390 332 598 ----------------- ----------------- ----------------- Net movement in shareholders' funds 3,509 3,161 8,736 ----------------- ----------------- ----------------- Shareholders' funds at the end of the period 163,282 154,198 159,773 ======== ======== ======== Shareholders' funds comprise: Equity interests 161,682 152,598 158,173 Non-equity interests* 1,600 1,600 1,600 ----------------- ----------------- ----------------- 163,282 154,198 159,773 ======== ======== ======== * Non-equity interests reflect the cost of the non-redeemable cumulative preference shares. FULLER SMITH & TURNER P.L.C. NOTES TO THE ACCOUNTS FOR THE 26 WEEKS ENDED 25 SEPTEMBER 2004 1. INTERIM STATEMENT The interim statement does not constitute full accounts as defined by S.240 of the Companies Act 1985. Full accounts for the year ended 27 March 2004, including an unqualified auditors' report, have been delivered to the Registrar of Companies. The interim accounts, which are unaudited, have been prepared on the basis of accounting policies consistent with those set out in the Company's March 2004 Annual Report and Accounts, apart from as noted below. Change in accounting policy During the period 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 period profit and loss charge nor has it been necessary to adjust prior period charges. The combined effect of this change in accounting policy has been to increase net assets as at September 2003 and March 2004 by £77,000 and £7,000 respectively. 2. SEGMENTAL ANALYSIS 26 weeks to 25 September 2004 Fuller's Inns Beer Company Total £000 £000 £000 TOTAL SALES 50,050 34,018 84,068 Inter-segment sales - (11,107) (11,107) ----------- ----------- ----------- Sales to third parties 50,050 22,911 72,961 ----------- ----------- ----------- SEGMENTAL PROFIT 7,666 3,540 11,206 ----------- ----------- Net central costs (2,132) ----------- Operating profit 9,074 Non-operating exceptional profits 481 Interest payable (net) (869) ----------- Profit on ordinary activities before taxation 8,686 ----------- ASSETS EMPLOYED ----------- ----------- ----------- Segmental assets 168,664 21,160 189,824 ----------- ----------- Unallocated net liabilities* (26,542) ----------- Total net assets 163,282 ----------- * Unallocated net liabilities represent the net of dividends, debentures, corporation tax, cash at bank and assets held under central management. 2. SEGMENTAL ANALYSIS (continued) 26 weeks to 27 September 2003 Fuller's Inns Beer Company Total £000 £000 £000 TOTAL SALES 49,695 32,851 82,546 Inter-segment sales - (11,244) (11,244) ----------- ----------- ----------- Sales to third parties 49,695 21,607 71,302 ----------- ----------- ----------- SEGMENTAL PROFIT 8,063 3,288 11,351 ----------- ----------- Net central costs (2,307) ----------- Operating profit 9,044 Non-operating exceptional profits 104 Interest payable (net) (1,025) ----------- Profit on ordinary activities before taxation 8,123 ----------- ASSETS EMPLOYED (restated) ----------- ----------- ----------- Segmental assets 163,770 18,688 182,458 ----------- ----------- Unallocated net liabilities* (28,260) ----------- Total net assets 154,198 ----------- 52 weeks to 27 March 2004 Fuller's Inns Beer Company Total £000 £000 £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 ----------- Assets employed as at September 2003 and 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: 26 weeks to 26 weeks to 52 weeks to 25 September 27 September 27 March 2004 2003 2004 Tax on normalised profits £000 £000 £000 Current tax 2,444 2,381 5,018 Deferred tax 221 225 458 ----------------- ----------------- ----------------- Total tax on normalised profits 2,665 2,606 5,476 ----------------- ----------------- ----------------- Tax on exceptional items Current tax - 89 78 Deferred tax credit - (28) (146) ----------------- ----------------- ----------------- Total tax on exceptional items - 61 (68) ----------------- ----------------- ----------------- Total tax charge 2,665 2,667 5,408 ======== ======== ======== Effective rate on normalised profits 32.5% 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. 4. ORDINARY DIVIDENDS 26 weeks to 26 weeks to 52 weeks to 25 September 27 September 27 March 2004 2003 2004 pence pence pence Interim 5.36 5.10 5.10 Final - - 12.21 ----------------- ----------------- ----------------- 5.36 5.10 17.31 ======== ======== ======== The pence figures above are for the £1 'A' ordinary shares and unquoted £1 'C' ordinary shares. The unquoted 10p 'B' shares carry dividend rights of 1/10 of those applicable to the £1 '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 shares held as treasury shares. 5. EARNINGS PER SHARE 26 weeks to 26 weeks to 52 weeks to 25 September 27 September 27 March 2004 2003 2004 £000 £000 £000 Profit attributable to equity shareholders 5,961 5,396 13,699 Non-operating exceptional items net of tax (481) (43) (2,437) ----------------- ----------------- ----------------- Normalised earnings attributable to equity shareholders 5,480 5,353 11,262 ======== ======== ======== 5. EARNINGS PER SHARE (continued) 26 weeks to 26 weeks to 52 weeks to 25 September 27 September 27 March 2004 2003 2004 Number Number Number Weighted average share capital 22,469,000 22,653,000 22,595,000 Dilutive outstanding options 127,000 82,000 106,000 ----------------- ----------------- ----------------- Adjusted weighted average share capital 22,596,000 22,735,000 22,701,000 ======== ======== ======== £1 'A' ordinary shares or unquoted £1 'C' ordinary shares Pence Pence Pence Basic earnings per share 26.53 23.82 60.63 Diluted earnings per share 26.38 23.73 60.35 Normalised earnings per share 24.39 23.63 49.84 Unquoted 10p 'B' ordinary shares Pence Pence Pence Basic earnings per share 2.65 2.38 6.06 Diluted earnings per share 2.64 2.37 6.04 Normalised earnings per share 2.44 2.36 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 26 weeks to 26 weeks to 52 weeks to 25 September 27 September 27 March 2004 2003 2004 £000 £000 £000 Restated Restated RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES Operating profit 9,074 9,044 18,798 Depreciation 4,134 4,386 8,886 Loss on disposal of tangible fixed assets 9 7 60 ----------------- ----------------- ----------------- EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND 13,217 13,437 27,744 AMORTISATION WORKING CAPITAL AND NON CASH MOVEMENTS Decrease/(increase) in stocks 205 (172) (429) Increase in debtors (2,159) (454) (904) Increase in creditors 488 1,573 2,555 Accrued share based payments 390 332 598 ----------------- ----------------- ----------------- NET CASH INFLOW FROM OPERATING ACTIVITIES 12,141 14,716 29,564 ======== ======== ======== The net cash inflows from operating activities for the periods ending 27 September 2003 and 27 March 2004 have been restated following a change in accounting policy, as set out in Note 1 above. 6. CASH FLOW STATEMENT (continued) 26 weeks to 26 weeks to 52 weeks to 25 September 27 September 27 March 2004 2003 2004 £000 £000 £000 Restated Restated RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT Movement in cash in the period (2,216) 1,024 (494) Cash (inflow)/outflow from movement in liquid resources (876) (635) 5,429 Amortisation of issue costs (5) (5) (10) ----------------- ----------------- ----------------- Movement in net debt in the period (3,097) 384 4,925 Net debt at the beginning of the period (17,022) (21,947) (21,947) ----------------- ----------------- ----------------- Net debt at the end of the period (20,119) (21,563) (17,022) ======== ======== ======== 7. SHAREHOLDERS' INFORMATION Shareholders who converted their £1 'A' ordinary shares to £1 'C' ordinary shares are reminded that they have 30 days from 26 November 2004 should they wish to reconvert those 'C' shares back to 'A' shares. The next available opportunity after that will be June 2005. Appropriate forms are available from the Company Secretary. 8. INTERIM REPORT Copies of the interim 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. This information is provided by RNS The company news service from the London Stock Exchange

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