DJ Fuller, Smith & Turner PLC: Half-Year Results
Fuller, Smith & Turner PLC (FSTA)
Fuller, Smith & Turner PLC: Half-Year Results
26-Nov-2020 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information according
to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
STRICTLY EMBARGOED
UNTIL 7AM THURSDAY 26 NOVEMBER 2020
FULLER, SMITH & TURNER P.L.C.
("Fuller's", the "Company", or the "Group")
Financial results for the 26 weeks to 26 September 2020
Financial and Operational Indicators
· Mandated closure of the estate for 14 weeks of the 26 week trading period. Phased
reopening from 4 July 2020 but 66% trading weeks lost in Managed business due to
ongoing restrictions on consumer behaviour
· During the final two months, with the majority of the estate open, the Group made
an operating profit of GBP2.0 million despite severe restrictions in place
· Managed like for like sales outside of London were 92% of prior year. Overall like
for like sales were 75% including transport hubs and Central London pubs
· Tight management of cash burn and recovery of working capital contributed to net
debt only increasing by GBP9 million to GBP187 million
· Accessed GBP100 million of commercial paper through the Covid Corporate Financing
Facility
· Financing and liquidity position underpinned by strength of freehold portfolio
· Interim dividend suspended due to current economic situation.
H1 2021 H1 2020 FY 2020
GBPm GBPm GBPm
Revenue and other income 45.6 167.1 319.7
Adjusted (loss)/profit before tax1 (22.2) 17.9 19.4
Net debt excluding lease liabilities2 187.4 23.0 178.9
All figures above are from continuing operations
1) Adjusted (loss)/profit before tax is the (loss)/profit before tax excluding
separately disclosed items.
2 Net debt comprises cash and short-term deposits, bank overdraft, bank loans, CCFF,
debenture stock and preference shares.
Strategy Update
· Successful trading from staycations in our hotels and pubs with rooms -
particularly in popular tourist destinations - with occupancy levels of 79%,
demonstrating the benefits of our balanced estate
· Utilised closure period to continue capex programme - ensuring our pubs and hotels
are always in prime condition
· Completed the integration of Cotswold Inns & Hotels, which has delivered immediate
benefits
· Concluded the Transitional Services Agreement with Asahi
· Opened The White Horse, Wembley - giving us a foothold in an iconic area that is
currently being redeveloped, and where we were underrepresented
· Accelerated planned implementation of new digital initiatives driven by early
identification of changes in consumer behaviour
· Streamlined central support and Managed Pubs and Hotels teams across the business
· Long term strategy remains focused on providing outstanding food, drink and
hospitality in well-invested, iconic locations.
Current Trading & Outlook
· All pubs temporarily closed due to second national lockdown from 5 November 2020 -
with swift management action taken to achieve minimal stock losses
· 98% of team members on furlough or flexi-furlough
· Like for likes sales in our Managed Pubs and Hotels for the 34 weeks to 21 November
2020 at 69% of prior year
· Strong engagement with, and retention of, Tenants with commercial rent for our
Tenanted Inns again suspended while pubs are under enforced temporary closure
· Well-motivated and prepared teams throughout the business primed to deliver
exceptional customer service on reopening in COVID-secure pubs and hotels
· Structured reopening planned from 2 December 2020
· High consumer confidence in our premium pubs and hotels expected to lead to strong
demand as we reopen the estate in a safe and steady manner.
Commenting on the results, Chief Executive Simon Emeny said: "The imminent roll out of
a vaccine is excellent news for the future. The tightening of the tier system will
present further challenges over the winter months, but we welcome the Prime Minister's
comments that we will see the need for restrictions fall away in the spring. Without
doubt, a return to normality is in sight.
"When the current lockdown was announced, we acted swiftly to implement the lessons
learned last time round and this latest closure has been made with minimal stock
losses. We also immediately placed 98% of our team members - across our pubs, hotels
and in our support functions - on furlough or flexi-furlough, thereby minimising our
cash burn. The extension of the Coronavirus Job Retention Scheme until March 2021
provides a degree of breathing space and will allow us to apply a sensible and measured
approach to costs as we reopen our estate, particularly at the most affected sites in
our city centres.
"We entered this crisis in a position of strength, buoyed by the sale of the Fuller's
Beer Business. We have used the time and space created by the pandemic wisely -
completing targeted investments in our estate, rightsizing our teams and utilising the
support available to manage our cash reserves where possible. It has not been easy, but
prudent financial management, an estate that is 92% freehold, and a strong Balance
Sheet mean that we will be in the best possible position to get back on a growth
trajectory.
"We know our customers want to come back, we know they trust us to look after them and
provide a safe and sensible environment to enjoy a great Fuller's experience and, over
and above this, we have a dedicated and passionate team of people with the ability and
desire to delight, surprise and welcome back those customers.
"We are optimistic about the future in the medium term and beyond, but there is no
doubt that this will be a tough winter and a very different looking Christmas. We will
start to reopen our estate in a measured way, navigating the tier system and the
restrictions that come with it. However, it is important that we see beyond these
obstacles and look at the bigger picture. The excellent news of successful vaccines
gives us confidence where previously there was uncertainty, and with the sensible
decisions we have taken during the pandemic, Fuller's is well-placed for future
success.
"This business is armed with a well-invested and well-balanced, freehold estate,
excellent people, robust financial foundations, a clear and consistent strategy, and
the drive and desire to lead the way out of this crisis. The long-term future for
Fuller's looks positive."
-Ends-
For further information, please contact:
Fuller, Smith & Turner P.L.C.
Simon Emeny, Chief Executive 020 8996 2000
Adam Councell, Finance Director 020 8996 2000
Georgina Wald, Corporate Comms Manager 020 8996 2198
Instinctif Partners
Justine Warren 020 7457 2010
Notes to Editors:
Fuller, Smith & Turner PLC is the premium pubs and hotels business that is famous for
beautiful and inviting pubs with delicious fresh food, a vibrant and interesting range
of drinks, and engaging service from passionate people. Fuller's has 212 managed pubs,
with 1,028 boutique bedrooms, and 176 Tenanted Inns. The estate is predominately
located in the South of England (44% of sites are within the M25) and stretches from
our City of London heartland to the Jurassic Coast via the New Forest. Our Managed Pubs
and Hotels include 15 iconic Ale & Pie pubs, seven stunning hotels in the Cotswolds,
and Bel & The Dragon - six exquisite country inns located in the Home Counties. In
summary, Fuller's is the home of great pubs, outstanding hospitality and passionate
people, where everyone is welcome and leaves that little bit happier than they arrived.
Photography is available from the Fuller's Press Office on 020 8996 2198 or by email at
pr@fullers.co.uk.
This statement will be available on the Company's website, www.fullers.co.uk [1]. An
accompanying presentation will also be available from 11.00 on 26 November 2020.
FULLER, SMITH & TURNER P.L.C.
FINANCIAL RESULTS FOR THE 26 WEEKS ENDED 26 SEPTEMBER 2020
CHAIRMAN'S STATEMENT
It has been an incredibly challenging six months for the country, for the hospitality
industry and for Fuller's. The impact of coronavirus has touched every part of the
physical and economic landscape and once again we find ourselves in a state of national
lockdown.
The rollercoaster of emotions from closure, to reopening, through the well-designed and
inspired Eat Out to Help Out scheme and then back down into a quagmire of increasingly
onerous restrictions, tier alert levels and finally back to temporary closure, has been
tough on our business and even tougher on our people.
The Government has been supportive and destructive in almost equal measure - but we are
grateful for the recent extension of the furlough scheme. We urge the Chancellor to
follow this with extensions to the business rates holiday and the VAT reduction. We
know that our sector can lead the economic recovery - however we will need this
longer-term support to rebuild our businesses and return to growth.
In the short term, we need clarity of message and a clear roadmap out of the
coronavirus crisis. We know we can play a major role and we relish the challenge of
doing so. Should the Chancellor need any further encouragement, the net tax deficit
from Fuller's alone for the first six months of the year is over GBP70 million. The
country needs pubs, restaurants and hotels fully open - and soon - for the financial
contribution they make, the jobs they create, and the significant role they play in the
emotional wellbeing of our customers and our teams.
Unfortunately, we again find ourselves in a position where we have had to take the
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decision not to propose a dividend in light of the current economic situation. I would
like to thank our shareholders for their patience and understanding in these difficult
times and it's fair to say that the sale of the Fuller's Beer Business in April 2019,
and the subsequent return of capital - which exceeded the total of the previous seven
years' dividends - has proved to be excellent timing.
I have one Board change to announce - the appointment of Rachel Spencer, who joins us
on 7 December 2020 to take over the role of Company Secretary from 1 January 2021.
Rachel is an experienced Company Secretary having held positions at a number of other
listed companies including Invensys, Aldermore Group and, most recently, Clarkson PLC -
the world's leading provider of integrated shipping services. Rachel takes over from
Séverine Béquin who has held the role for the past six years. Séverine leaves us to
move to Madrid with her husband and, on behalf of the Board, I would like to thank her
for all her hard work - particularly through the immense complications caused by the
sale of the Fuller's Beer Business. She has made a very valuable contribution to
Fuller's and we wish her every happiness in the Spanish sun.
Finally, I would like to pay tribute to the amazing team of people at Fuller's. Simon
and his Executive Board have risen to the challenge and navigated a course through the
most turbulent of times. But it is the teams in our pubs who are the real heroes. Armed
with masks, social distancing and sanitiser by the lorryload, they have delivered an
amazing Fuller's experience in extremely unusual conditions and I am in awe of the
upbeat and positive manner that they maintain.
We should have been commemorating 175 years of this wonderful company during November
with a major consumer promotion and in a loud and celebratory manner. That may not have
happened, but with our predominately freehold estate, strong Balance Sheet, and single
minded focus to exit this crisis in the best possible position, I know that we will
have many milestones to celebrate in the future.
As lockdown comes to its scheduled end, it is important to note that there have been
incredibly low levels of infection recorded across pubs, restaurants and hotels. It is
vital now for the mental wellbeing of the nation that people are allowed to meet and
socialise in a responsible manner, in the safe environment that pubs, restaurants and
hotels have proved they can provide.
We need our industry to reopen without onerous restrictions that deter our customers
and hamper our ability to trade profitably, and in a way that reflects the commitment
we have made to ensuring our venues are safe and coronavirus secure. The notion that
closing the hospitality industry reduces infection rates is a fallacy, as doing so
forces people to socialise in the home in a completely unregulated environment where
recorded infection rates are infinitely higher.
With a vaccine on the visible horizon, we look forward to welcoming our customers back
to our wonderful pubs and hotels, returning to profitability and getting on with
business as usual.
Michael Turner
Chairman
25 November 2020
CHIEF EXECUTIVE'S REVIEW
At the time of drafting this review of the last six months, all 388 of our pubs and
hotels are closed, 98% of our people are on furlough or flexi-furlough, and we are a
week away from hopefully reopening the estate. It feels like Groundhog Day, and we are
awaiting the details regarding which areas will be in which tier, but we look forward
to welcoming back our customers to our wonderful pubs and hotels, that are the epitome
of great British hospitality.
Our reported figures for the first six months of the year reflect the total, temporary
closure of the business for more than half of the reporting period - resulting in total
sales of GBP45.6 million (H1 2020: GBP167.1 million). Our like for like sales for the 26
weeks stand at 75% of the previous year (H1 2020: +2.7%). However, we were encouraged
by the like for like run rate, which illustrated how quickly consumer confidence built
as we reopened the estate from 4 July 2020. By the end of July, sales were at 68% of
prior year levels on a like for like basis, and at the end of August - following the
success of the Government's inspired Eat Out to Help Out scheme - 79% of our pubs were
open and we were trading at 78% of prior year levels.
Sales momentum had been steadily building but the introduction of ever-tightening
restrictions, despite hospitality accounting for a tiny percentage of infections,
knocked consumer confidence and impacted trading. The rule of six came into force in
mid-September, causing like for like sales for that week to fall to 68% of prior year.
This was followed on 24 September 2020 by the introduction of the 10pm curfew and the
news that all customers must be seated to order food or drink in a pub. This further
impacted consumer confidence and sales dropped to 58% of prior year levels on a like
for like basis for the following week.
The introduction of the tier system had the largest impact of all. On 17 October 2020,
when London was moved into Tier 2 and people were once again encouraged to work from
home, leaving the City like a ghost town, like for like sales in 37 of our largest
Central London sites fell to less than 30% of the previous year. This has led to our
like for like sales, across the estate, finishing at 57% for the final week of October.
Despite the obstacles that we have had to overcome, we have used the time well to
innovate, particularly on the digital front, invest in our estate, and complete the
process of ensuring we have the right people in place to hit the ground running when we
reopen again to welcome our customers.
Rightsizing for the future
At the start of the financial year, we completed the delivery of the Transitional
Services Agreement ("TSA") with Asahi and the integration of the support functions for
both Bel & The Dragon and Cotswold Inns & Hotels. The sale of The Stable Pizza and
Cider Limited ("The Stable"), a leasehold business, to Three Joes was also completed
during the period.
Following the sale of the Fuller's Beer Business, we had identified a number of changes
that could be made in our central functions, leading to a leaner, more efficient,
support centre team. This exercise has been completed during the period, and the
business is perfectly poised, with the right team in place, to deliver sustainable,
profitable growth in the future both organically and through acquisitions and
developments.
It is clear trading will take time to return to pre-coronavirus levels and we have
streamlined the teams across our pubs and hotels accordingly. The result of this
exercise, combined with the fact that 300 team members moved under TUPE with sale of
The Stable, means our total employee numbers are already 20% below where they were at
the beginning of the financial year. I am pleased to report that, due to a structured
redeployment programme, we have reassigned as many team members as we have made
redundant.
Accelerating and investing in innovation
Crisis often accelerates change in businesses - and Fuller's has been no exception. The
current situation has altered consumer behaviour and made us think differently about
the way we operate, resulting in a number of planned initiatives being rolled out
earlier than intended.
We launched Order & Pay - a web-based solution that asks customers to scan a QR code
displayed on the table, allowing them to browse the menu, choose items, and order and
pay their bill without the need for interaction with a team member. We started in a
handful of sites when we reopened in July, where it proved popular and successful. It
is now operational in around 75% of our Managed Pubs and Hotels, with the rest of our
Managed sites due to come online over the coming months.
It has led to some interesting insights into consumer behaviour, with customers
choosing dishes and drinks they have not tried before, now they have the luxury of
carefree browsing time, and our team members have more quality time to spend with
customers as they serve the customers' tables.
The work that has been carried out in recent years on our single customer view database
has also paid dividends - as communication has become key due to the ever-changing
regulations. We have used clear targeting with offers for those sites that are
struggling the most and been able to tactically drive bookings by communicating to
specific sectors of the database according to geography and demographics.
A perfectly balanced and well-invested estate
Strategically, Fuller's has always understood the importance for a long-term business
to invest in and operate a balanced estate in terms of both style and geography - and
the difference in trading across the estate has been more marked than ever during the
coronavirus pandemic. Throughout the summer, alfresco dining and staycations were the
order of the day - while those sites in city centres that depend on office workers and
international tourists, were naturally harder hit.
Typically, our top performing pubs by revenue and EBITDA, are those in Central London
and transport hub sites. For the first six months of this financial year, those are the
sites that have suffered most, particularly due to the stay at home message - so the
natural balance of our estate has come into play. The purchase of the Cotswold Inns &
Hotels business could not have been more timely and during August and September, five
of our highest turnover sites (and three of our most profitable) came from this part of
the business.
When we acquired the Cotswold business just over a year ago, we believed that we could
add value to an already successful business by building more local trade and increasing
the revenue from food and beverage sales to those who lived locally or within driving
distance. The venues were famous for their wedding trade and this was one of the key
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sources of revenue.
The possible outcome of so many weddings being cancelled could have been a problem -
but a successful, targeted, digital staycation campaign and the widespread growth in
domestic tourism have resulted in the Cotswold business outperforming its sales from
the prior year. We will, in future, use the data we have captured and creative and
innovative marketing to build on this staycation trend. In addition, the restaurants
have outperformed our expectations and provided a welcome reminder that this delightful
business is a perfect fit for Fuller's and our customers.
During the period, we continued with committed capex projects and this included opening
a new pub, The White Horse in Wembley. The pub is located in the shadow of the iconic
Wembley Arch and in an area that is benefiting from a large mixed-use redevelopment and
the addition of over 6,000 new homes. The pub looks amazing and opened strongly, with
local residents giving it the seal of approval. We look forward to the return of the
large events close by that will generate high earning days for the pub, but even now
The White Horse has become a firm favourite in Wembley.
Early on in the coronavirus pandemic, we took the decision to use the short-term
opportunity created by the enforced closure at the start of the financial year to
complete a number of schemes that were already started or scheduled - in line with our
long-term strategy. Highlights have included The Trinity at Borough, which we acquired
in August 2019, The Windmill at Waterloo and The Coach & Horses - the iconic Soho pub
that is the backdrop for Keith Waterhouse's cult play, Jeffrey Bernard is Unwell.
Outside of the Capital, we have invested in major schemes at The Grove Lock near
Leighton Buzzard and The Fox & Pelican in Grayshott, near Hindhead.
We have been investing heavily in our external spaces and pub gardens for some years
now - and this has reaped rewards over recent months. Much of the work had also
involved adding gazebos, awnings and covered areas and we have continued to build on
this activity to ensure the outside area of our pubs and hotels provides desirable and
comfortable additional trading space throughout the colder months too. The success and
scale of our outside areas was particularly visible during September when we hosted our
ever-popular Shakespeare in the Garden, with The Tempest being profitably delivered to
a socially distanced audience in 15 venues across our Managed and Tenanted estate.
The property team also used the first part of the financial year to good effect by
undertaking a number of smaller, decorative schemes across the Bel & The Dragon and
Cotswold Inns & Hotels sites, again using the period of temporary closure well. This
helped to ensure we realised the benefit of the rise in staycations. One of these
schemes has seen a complete reimagining of the restaurant at The Bear of Rodborough in
Stroud - creating a stunning and imposing dining space with breathtaking views, which
is already proving popular with hotel residents and local diners alike.
Tenanted Inns
During lockdown, our Tenants have consistently shown innovation and commitment to their
local communities, providing meals for the homeless and opening as local stores. I am
consistently delighted by their entrepreneurial nature and creativity, and it was great
to see them reopening so quickly and strongly.
Our like for like profits in this part of the business are down 19% for the period.
Fuller's led the way in the industry with the suspension of all commercial rent during
both the initial lockdown and the current closure. This has been widely welcomed by our
Tenants and given them the breathing space they need to ensure their businesses
survive, flourish and were in a position to reopen strongly when the time came.
Suspending all commercial rent was a bold move - but there have been knock-on benefits
for the Company too. Combined with the grants available to small businesses, our
Tenants exited the first lockdown in a position of strength and without the shadow of
debt to hold them back. We reintroduced rent on a tapered basis in August and this had
been slowly increasing until the start of the current lockdown, when we once again took
the decision to suspend it.
FINANCIAL POSITION
Group revenue and other income fell by 72.7% to GBP45.6 million (H1 2020: GBP167.1
million). Adjusted loss[1] was GBP22.2 million (H1 2020: profit GBP17.9 million) showing
the severe impact the coronavirus pandemic and the resulting government regulations
have had on the Group. The results for the period reflect 14 weeks of zero trade where
the Group incurred an operating loss of GBP16.3 million[2], a period of transition which
saw a phased reopening of the estate from 4 July 2020 (loss of GBP3.6 million2) and the
final two months where the majority of the estate was open albeit trading with severe
restrictions (profit of GBP2.0 million2). The final two months show that the Group was
able to rapidly return to profitability once the estate had reopened despite the
ongoing restrictions and reduced capacity in the pubs.
The sales performance across the Group during the two months of trading reflected the
balanced nature of our estate with rural pubs outperforming the prior year with like
for like sales of 103% while pubs located in the City naturally saw like for like sales
fall to just 45% in comparison with the prior year as people continued to work from
home. Cotswold Inns & Hotels, which was acquired in October 2019, outperformed prior
year for the two months and included five of our highest turnover sites despite the
restrictions on weddings.
On 7 June 2020, the Group sold The Stable to Three Joes for an enterprise value of GBP0.5
million, which resulted in a loss on disposal of GBP0.5 million. As The Stable was sold
during the period the results have been reported within discontinued operations. The
amounts shown as discontinued operations within the financial statements are an
operating loss of GBP0.5 million as well as the loss on disposal. As part of the
transaction, Fuller's retained ownership of the five freehold properties associated
with The Stable business.
The Group generated cash from continuing operating activities of GBP5.7 million in the
period (H1 2020: GBP20.5 million). The significant decrease is a direct result of being
closed for three months within the period and trading under restrictions for the
remaining months due to the government regulations in place. As expected, the working
capital outflow the Group experienced during lockdown started to recover on reopening.
During the period, GBP33 million of our bank facilities expired. At 26 September 2020,
the Group had GBP192 million of facilities until August 2021. In May 2020, the Group
issued GBP100 million of commercial paper through the Bank of England Covid Corporate
Financing Facility ("CCFF") taking our total facilities to GBP292 million. The CCFF
provides short-term unsecured debt and is repayable in May 2021. Our undrawn facilities
at 26 September 2020 were GBP113.0 million, with a further GBP18.0 million of cash held on
the Balance Sheet.
Separately disclosed items before tax from continuing operations was a charge of GBP0.8
million (H1 2020: GBP3.7 million), which principally consists of GBP0.8 million
reorganisation costs of which GBP0.6 million related to the corporate restructure of the
business where the trade and assets of Bel & The Dragon and Cotswold Inns & Hotels were
hived up into the Company. Restructuring costs also included GBP0.2 million of redundancy
costs. Other costs included in separately disclosed items are acquisition costs of GBP0.1
million and GBP0.1 million of payroll costs for the initial scoping of the new finance
system.
Tax has been provided for at an effective rate before separately disclosed items of
17.1% (H1 2020: 19.6%). Deferred tax liabilities have decreased from GBP17.1 million at
28 March 2020 to GBP13.7 million due to the recognition of a deferred tax asset for
losses incurred in the period. A full analysis of the tax charge is set out in note 5.
The net impact of these items results in basic earnings per share on continuing
operations decreasing by 261% to -34.60p (H1 2020: 21.45p), with adjusted earnings per
share[3] on continuing operations down 227% at -33.33p (H1 2020: 26.17p).
The deficit on the defined benefit pension scheme has increased by GBP6.1 million from
the year end to GBP10.8 million (28 March 2020: GBP4.7 million, 28 September 2019: GBP34.4
million). The increase was due to the fall in discount rate and is only marginally
offset by the improvement in asset returns.
CURRENT TRADING AND PROSPECTS
While our pubs are temporarily closed again, the imminent roll out of a vaccine is
excellent news for the future. The tightening of the tier system will present further
challenges over the winter months, but we welcome the Prime Minister's comments that we
will see the need for restrictions fall away in the spring. Without doubt, a return to
normality is in sight.
When the current lockdown was announced, we acted swiftly to implement the lessons
learned last time round and this latest closure has been made with minimal stock
losses. We also immediately placed 98% of our team members - across our pubs, hotels
and in our support functions - on furlough or flexi-furlough, thereby minimising our
cash burn. The extension of the Coronavirus Job Retention Scheme until March 2021
provides a degree of breathing space and will allow us to apply a sensible and measured
approach to costs as we reopen our estate, particularly at the most affected sites in
our city centres.
We entered this crisis in a position of strength, buoyed by the sale of the Fuller's
Beer Business. We have used the time and space created by the pandemic wisely -
completing targeted investments in our estate, rightsizing our teams and utilising the
support available to manage our cash reserves where possible. It has not been easy, but
(MORE TO FOLLOW) Dow Jones Newswires
November 26, 2020 02:00 ET (07:00 GMT)
DJ Fuller, Smith & Turner PLC: Half-Year Results -4-
prudent financial management, an estate that is 92% freehold, and a strong Balance
Sheet mean that we will be in the best possible position to get back on a growth
trajectory.
We know our customers want to come back, we know they trust us to look after them and
provide a safe and sensible environment to enjoy a great Fuller's experience and, over
and above this, we have a dedicated and passionate team of people with the ability and
desire to delight, surprise and welcome back those customers.
We are optimistic about the future in the medium term and beyond, but there is no doubt
that this will be a tough winter and a very different looking Christmas. We will start
to reopen our estate in a measured way, navigating the tier system and the restrictions
that come with it. However, it is important that we see beyond these obstacles and look
at the bigger picture. The excellent news of successful vaccines gives us confidence
where previously there was uncertainty, and with the sensible decisions we have taken
during the pandemic, Fuller's is well-placed for future success.
This business is armed with a well-invested and well-balanced, freehold estate,
excellent people, robust financial foundations, a clear and consistent strategy, and
the drive and desire to lead the way out of this crisis. The long-term future for
Fuller's looks positive.
Simon Emeny
Chief Executive
25 November 2020
Fuller, Smith & Turner P.L.C.
*****************************
Financial Highlights
********************
For the 26 weeks ended 26 September 2020
Unaudited Unaudited Audited
26 weeks ended 26 weeks ended 52
26 September 28 September weeks
ended
28
March
2020 2019 2020
GBPm GBPm GBPm
Revenue and other 45.6 167.1 319.7
income
EBITDA1 (3.7) 34.9 53.9
Adjusted (22.2) 17.9 19.4
(loss)/profit before
tax2
Statutory (23.0) 14.2 8.4
(loss)/profit before
tax
(24.0) 176.2 166.2
Group statutory
(loss)/profit before
tax
Basic earnings per (34.60p) 21.45p 7.62p
share3
Dividend per share3 - 7.80p 132.80p
Net debt excluding 187.4 23.0 178.9
lease liabilities4
All figures above are from continuing operations except where stated.
1) Pre-separately disclosed earnings before interest, tax, depreciation, loss on
disposal of plant and equipment and amortisation.
2) Adjusted (loss)/profit before tax is the (loss)/profit before tax excluding
separately disclosed items.
3) Calculated on a 40p ordinary share for continuing operations.
4) Net debt comprises cash and short term deposits, bank overdraft, bank loans, CCFF,
debenture stock and preference shares.
Fuller, Smith & Turner P.L.C.
*****************************
Condensed Group Income Statement
********************************
For the 26 weeks ended 26 September 2020
Continuing Note Unaudited Unaudited Audited
operations
26 weeks 26 weeks 52 weeks
ended 26 ended 28 ended 28
September September March 2020
2020 2019
GBPm
GBPm GBPm
Revenue 2 45.4 165.1 316.0
Operating costs (63.5) (145.7) (292.7)
before separately
disclosed items
Other income 2 0.2 2.0 3.7
Adjusted operating 2 (17.9) 21.4 27.0
(loss)/profit
Operating 3 (1.0) (3.0) (20.1)
separately
disclosed items
Operating (18.9) 18.4 6.9
(loss)/profit
Finance costs 4 (4.3) (3.5) (7.6)
before separately
disclosed items
Financing 3,4 0.2 (0.3) (0.5)
separately
disclosed items
(Loss)/profit on 3 - (0.4) 9.6
disposal of
properties
(Loss)/profit (23.0) 14.2 8.4
before tax
Adjusted (22.2) 17.9 19.4
(loss)/profit
before tax
Total separately 3 (0.8) (3.7) (11.0)
disclosed items
(Loss)/profit (23.0) 14.2 8.4
before tax
Income tax expense 5 3.9 (2.4) (4.2)
Analysed as:
Underlying trading 3.8 (3.5) (6.2)
Separately 3 0.1 1.1 2.0
disclosed items
(Loss)/profit for (19.1) 11.8 4.2
the year from
continuing
operations
Net (loss)/profit 11 (1.2) 161.9 157.7
after tax from
discontinued
operations
(Loss)/profit for (20.3) 173.7 161.9
the year
Fuller, Smith & Turner P.L.C.
*****************************
Condensed Group Income Statement (continued)
********************************************
For the 26 weeks ended 26 September 2020
Group Note Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended 26 ended 28 ended 28
September September March
2020 2019
2020
Pence Pence
Pence
(Loss)/earnings per
share per 40p 'A'
and 'C' ordinary
share
Basic 6,11 (36.77) 315.73 293.70
Diluted 6,11 (36.58) 311.87 293.02
(Loss)/earnings per
share per 4p 'B'
ordinary share
Basic 6,11 (3.68) 31.57 29.37
Diluted 6,11 (3.66) 31.19 29.30
Continuing
operations
(Loss)/earnings per
share per 40p 'A'
and 'C' ordinary
share
Basic 6 (34.60) 21.45 7.62
Diluted 6 (34.42) 21.19 7.60
(Loss)/earnings per
share per 4p 'B'
ordinary share
Basic 6 (3.46) 2.14 0.76
Diluted 6 (3.44) 2.12 0.76
Fuller, Smith & Turner P.L.C.
******************************
Condensed Group Statement of Comprehensive Income
*************************************************
For the 26 weeks ended 26 September 2020
Unaudited Unaudited
26 weeks 26 weeks
ended 26 ended 28
September September
2020 2019
Audited
GBPm GBPm
52 weeks
ended 28
March
2020
GBPm
Note
(Loss)/profit for (20.3) 173.7 161.9
the period
Items that may be
reclassified to
profit or loss
Net gains/(losses) 0.2
on valuation of
financial assets
and liabilities
0.2 (0.1)
Tax related to 5
items that may be
reclassified to
profit or loss
- - (0.1)
Items that will
not be
reclassified to
profit or loss
Net actuarial 10
(losses)/gains on
pension schemes
(7.1) 1.3 5.9
Tax related to 5
items that will
not be
reclassified to
profit or loss 1.3 (0.2) (1.1)
Other
comprehensive
(loss)/income for
the period, net of
tax (5.6) 1.0 4.9
Total
comprehensive
(loss)/income for
the period, net of
tax (25.9) 174.7 166.8
Fuller, Smith & Turner P.L.C.
*****************************
Condensed Group Balance Sheet
*****************************
26 September 2020
Note Unaudited Unaudited
At 26 At 28
September 2020 September 2019
Audited
GBPm GBPm
At 28 March
2020
GBPm
Non-current
assets
Intangible assets 28.1 37.9 28.3
Property, plant 8 607.5 559.7 617.7
and equipment
Investment 3.9 4.6 4.8
properties
Other non-current 0.1 0.1 0.1
assets
Right-of-use 88.9 86.7 107.0
assets
Total non-current 728.5 689.0 757.9
assets
Current assets
(MORE TO FOLLOW) Dow Jones Newswires
November 26, 2020 02:00 ET (07:00 GMT)
DJ Fuller, Smith & Turner PLC: Half-Year Results -5-
Inventories 3.1 5.2 4.0
Trade and other 11.5 14.0 12.6
receivables
Cash and cash 9 18.0 44.2 20.3
equivalents
Assets classified 8.3 - 2.6
as held for sale
Current tax 3.8 2.4 6.2
receivable
Total current 44.7 65.8 45.7
assets
Current
liabilities
Trade and other (43.2) (37.4) (37.7)
payables
Borrowings 9 (177.9) - (171.7)
Financial 9 (8.0) (8.4) (8.9)
liabilities -
lease liabilities
Provisions (4.1) (0.2) (4.1)
Total current (233.2) (46.0) (222.4)
liabilities
Non-current
liabilities
Borrowings 9 (27.5) (67.2) (27.5)
Financial 9 (86.1) (87.4) (104.0)
liabilities -
lease liabilities
Other financial (0.8) (1.4) (1.1)
liabilities
Retirement 10 (10.8) (34.4) (4.7)
benefit
obligations
Deferred tax (13.7) (10.0) (17.1)
liabilities
Total non-current (138.9) (200.4) (154.4)
liabilities
Net assets 401.1 508.4 426.8
Fuller, Smith & Turner P.L.C.
*****************************
Condensed Group Balance Sheet (continued)
*****************************************
26 September 2020
Note Unaudited Unaudited
At 26 September At 28 September
2020 2019
Audited
GBPm GBPm
At 28 March
2020
GBPm
Capital and
reserves
Share capital 22.8 22.8 22.8
Share premium 4.2 4.8 4.2
account
Capital 3.7 3.1 3.7
redemption
reserve
Own shares (17.0) (17.2) (17.1)
Hedging reserve (0.7) (1.1) (0.9)
Retained 388.1 496.0 414.1
earnings
Total equity 401.1 508.4 426.8
Fuller, Smith & Turner P.L.C.
*****************************
Condensed Group Statement of Changes in Equity
**********************************************
For the 26 weeks ended 26 September 2020
Unaudited - Share Share Capital Own Hedging Retained Total
26 weeks capital premium redemption shares reserve earnings GBPm
ended 26 GBPm account reserve GBPm GBPm GBPm
September GBPm GBPm
2020
Deferred
shares
GBPm
At 28 March 22.8 4.2 - 3.7 (17.1) (0.9) 414.1 426.8
2020
Loss for - - - - - - (20.3) (20.3)
the period
Other - - - - - 0.2 (5.8) (5.6)
comprehensi
ve
income/(los
s)for the
period
Total - - - - - 0.2 (26.1) (25.9)
comprehensi
ve
income/(los
s) for the
period
Shares - - - - - - - -
purchased
to be held
in ESOT or
as treasury
Shares - - - - 0.1 - (0.1) -
released
from ESOT
and
treasury
Dividends - - - - - - - -
(note 7)
Share-based - - - - - - 0.1 0.1
payment
charges
Tax charged - - - - - - 0.1 0.1
directly to
equity
(note 5)
At 26 22.8 4.2 - 3.7 (17.0) (0.7) 388.1 401.1
September
2020
Unaudited -
26 weeks
ended 28
September
2019
At 30 March 22.8 4.8 - 3.1 (19.8) (0.8) 328.4 338.5
2019
Profit for - - - - - - 173.7 173.7
the period
Other - - - - - (0.1) 1.1 1.0
comprehensi
ve
(loss)/inco
me for the
period
Total - - - - - (0.1) 174.8 174.7
comprehensi
ve
(loss)/inco
me for the
period
Shares - - - - (0.1) - - (0.1)
purchased
to be held
in ESOT or
as treasury
Shares - - - - 2.7 - (0.9) 1.8
released
from ESOT
and
treasury
Dividends - - - - - - (6.8) (6.8)
(note 7)
Share-based - - - - - - 0.4 0.4
payment
charges
Transfer to - - - - - (0.2) 0.2 -
retained
earnings
Tax - - - - - - (0.1) (0.1)
credited
directly to
equity
(note 5)
At 28 22.8 4.8 - 3.1 (17.2) (1.1) 496.0 508.4
September
2019
Fuller, Smith & Turner P.L.C.
*****************************
Condensed Group Statement of Changes in Equity (continued)
**********************************************************
For the 26 weeks ended 26 September 2020
Share Share Capital Own Hedging Retained Total
capital premium redemption shares reserve earnings GBPm
GBPm account reserve GBPm GBPm GBPm
GBPm GBPm
Deferred
Share
GBPm
Audited - 52
weeks ended 28
March 2020
At 30 March 2019 22.8 4.8 - 3.1 (19.8) (0.8) 328.4 338.5
Profit for the - - - - - - 161.9 161.9
year
Other - - - - - 0.1 4.8 4.9
comprehensive
income for the
year
Total - - - - - 0.1 166.7 166.8
comprehensive
income for the
year
Issue of share 0.6 (0.6) - - - - - -
capital
Reclassification (0.6) - 0.6 - - - - -
of deferred
shares
Cancellation of - - (0.6) 0.6 - - - -
deferred shares
Shares purchased - - - - (0.5) - - (0.5)
to be held in
ESOT or as
treasury
Shares released - - - - 3.2 - (1.1) 2.1
from ESOT and
treasury
Dividends (note - - - - - - (80.5) (80.5)
7)
Share-based - - - - - - 0.5 0.5
payment charges
Transfer to - - - - - (0.2) 0.2 -
retained
earnings
Tax debited - - - - - - (0.1) (0.1)
directly to
equity
Total - - - - 2.7 (0.2) (81.0) (78.5)
transactions
with owners
At 28 March 2020 22.8 4.2 - 3.7 (17.1) (0.9) 414.1 426.8
Fuller, Smith & Turner P.L.C.
*****************************
Condensed Group Cash Flow Statement
***********************************
For the 26 weeks ended 26 September 20120
Note Unaudited Unaudited
26 weeks 26 weeks
ended 26 ended 28
September September
2020 2019
Audited
GBPm GBPm
52 weeks
ended 28
March
2020
GBPm
(Loss)/profit (23.0) 14.2 8.4
before tax for
continuing
operations
Net finance costs 4 4.3 3.5 7.6
before separately
disclosed items
Separately 3 0.8 3.7 11.0
disclosed items
Depreciation and 2 14.2 13.5 26.9
amortisation
(3.7) 34.9 53.9
Difference between (1.1) (0.7) (2.3)
pension charge and
cash paid
Share-based 0.1 0.5 0.5
payment charges
Contribution to - - (24.0)
pension fund
Change in trade 0.7 (2.1) (1.1)
and other
receivables
Change in 0.6 (0.3) 1.1
inventories
Change in trade 6.3 (2.3) (1.5)
and other payables
Cash impact of 3 (0.8) (2.2) (5.0)
operating
separately
disclosed items
Cash generated 2.1 27.8 21.6
from operations
Tax 3.6 (7.3) (10.1)
received/(paid)
Cash generated 5.7 20.5 11.5
from operating
activities -
continuing
operations
Cash 11 (0.5) 1.5 1.5
(MORE TO FOLLOW) Dow Jones Newswires
November 26, 2020 02:00 ET (07:00 GMT)
DJ Fuller, Smith & Turner PLC: Half-Year Results -6-
(absorbed)/generat
ed from operating
activities -
discontinued
operations
Cash generated 5.2 22.0 13.0
from operating
activities
Cash flow from
investing
activities
Business - (3.7) (32.8)
combinations
Purchase of (7.3) (13.4) (46.7)
property, plant
and equipment and
intangible assets
Sale of property, - - 11.4
plant and
equipment
Cash absorbed by (7.3) (17.1) (68.1)
investing
activities -
continuing
operations
Cash generated 11 0.3 230.6 224.5
investing
activities -
discontinued
operations
Net cash (7.0) 213.5 156.4
(outflow)/inflow
from investing
activities
Cash flow from
financing
activities
Purchase of own - (0.1) (0.5)
shares
Receipts on - 1.8 2.3
release of own
shares to option
schemes
Interest paid (2.4) (2.7) (4.7)
Preference (0.1) (0.1) (0.1)
dividends paid
Equity dividends 7 - (6.8) (80.5)
paid
Issue of 99.4 - -
commercial paper
Repayment of bank (93.0) (188.9) (65.4)
loans
Principal elements (4.3) (5.1) (10.3)
of lease payments
Fuller, Smith & Turner P.L.C.
*****************************
Condensed Group Cash Flow Statement (continued)
***********************************************
For the 26 weeks ended 26 September 2020
****************************************
Note Unaudited Unaudited
26 weeks ended 26 weeks ended
26 September 28 September
2020 2019
Audited
GBPm GBPm
52 weeks
ended 28
March 2020
GBPm
Cash (0.4) (201.9) (159.2)
absorbed by
financing
activities
continued
Cash (0.1) (0.4) (0.9)
absorbed by
financing
activities
discontinue
d
Net cash (0.5) (202.3) (160.1)
(outflow)
from
financing
activities
Net 9 (2.3) 33.2 9.3
movement in
cash and
cash
equivalents
Cash and 20.3 11.0 11.0
cash
equivalents
at the
start of
the period
Cash and 9 18.0 44.2 20.3
cash
equivalents
at the end
of the
period
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
*******************************************
For the 26 weeks ended 26 September 2020
1. Half Year Report
Basis of Preparation
The half year financial statements for the 26 weeks ended 26 September 2020 have been
prepared in accordance with the Disclosure and Transparency Rules ("DTRs") of the
Financial Conduct Authority and with International Accounting Standard ("IAS") 34,
Interim Financial Reporting, as adopted by the European Union and should be read in
conjunction with the Annual Report and Financial Statements for the 52 weeks ended 28
March 2020, which have been prepared in accordance with International Financial
Reporting Standards ("IFRS") as adopted by the European Union.
The half year financial statements do not constitute full accounts as defined by
Section 434 of the Companies Act 2006. The figures for the 52 weeks ended 28 March 2020
are derived from the published statutory accounts. Full accounts for the 52 weeks ended
28 March 2020, including an unqualified auditor's report which did not make any
statement under Section 498 of the Companies Act 2006, have been delivered to the
Registrar of Companies.
The Board has adopted the going concern basis in preparing these accounts after
assessing the Group's principal risks including the risks arising from the coronavirus
pandemic. The Board is confident that the Group has sufficient liquidity and the
ability to access resources when the Group needs to refinance to withstand another
prolonged period of closure as a result of the coronavirus pandemic.
The outbreak of coronavirus, and its continuing impact on the economy, casts
uncertainty as to the future financial performance and cash flows of the Group. When
assessing the ability of the Group to continue as a going concern, the Board has
considered the Group's financing arrangements, the pattern of trading since reopening
on 4 July 2020, the second lockdown on 5 November and future trading risks, including a
protracted lockdown or the possibility that when the pubs reopen there will be tight
restrictions akin to those of Tier 3.
At 26 September 2020, the Group had existing facilities of GBP192 million, all of which
expiring in August 2021. The Group has also accessed the Bank of England Covid
Corporate Financing Facility ("CCFF") programme which have already issued GBP100 million
of commercial paper. The CCFF provides short-term unsecured debt and is repayable in
May 2021.
The bank facilities are subject to two main covenants, which are tested quarterly: net
debt to EBITDA (leverage) and EBITDA to net finance charges. In recognition of the
current macroeconomic uncertainty, the Group's banks have revised the covenant tests to
a liquidity test for the quarters ending March, June, September and December 2020.
In undertaking a going concern review, the Board has considered two main scenarios
prepared by management:
· Management have prepared the Group's base case forecast, which is based on current
trading trends and takes into account the Government's recent decision to have
another national lockdown and to extend the furlough scheme until end of March 2021.
It also assumes steady improvement in trading, with pre-coronavirus sales level not
returning until FY23.
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
*******************************************
For the 26 weeks ended 26 September 2020
1. Half Year Report (continued)
In the base case forecast, the Group would need to refinance all its facilities when
they expire in August 2021 to the same level of facilities the Group currently has
(excluding the CCFF). Under this scenario the Group would also need to seek waivers
from its lending banks until the end of the period of assessment for going concern.
· Management have also prepared a stress case, which reflects a severe but plausible
scenario and assumes the national lockdown lasts for three months, with no additional
government support over that already announced and with the extension of the furlough
scheme until the end of March 2021. Again, it assumes steady improvement in trading,
with pre-coronavirus sales level not returning until FY23.
In this scenario, again it shows that in August 2021 the Group would need to refinance
its loans to a similar level of debt the Group currently has (excluding the CCFF).
Under this scenario the Group would also need to seek waivers from its lending banks
until the end of the period of assessment for going concern.
The Board has concluded that in both scenarios, the Group has sufficient debt
facilities to finance operations for at least the next 12 months, subject to the
ability to refinance in August 2021 to a similar level of the facilities it currently
has and the revision of the covenants attached to those facilities beyond December
2020.
The Board is confident in securing both the revision of the covenant beyond December
2020 and obtaining facilities beyond August 2021 but given that these are not in place
at the date of approving these financial statements a material uncertainty exists that
may cast significant doubt on the Group's ability to continue as a going concern.
Accepting the two material uncertainties that may cast significant doubt about the
Group's ability to continue as a going concern, the Board has a reasonable expectation
that the Company has adequate resources to continue in operational existence for the
foreseeable future. For these reasons, it continues to adopt the going concern basis in
preparing the half year financial statements.
The half year financial statements were approved by the Directors on 25 November 2020.
New accounting standards
The accounting policies adopted in the preparation of the half year financial
statements are consistent with those followed in the preparation of the Group's annual
consolidated financial statements for the year ended 28 March 2020. The Group has not
early adopted any standard, interpretation or amendment that has been issued but is not
yet effective.
Other amendments to accounting standards applied from 28 March 2020 were as follows:
* Definition of Material - amendments to IAS 1 and IAS 8
* Definition of a Business - amendments to IFRS 3
* Revised Conceptual Framework for Financial Reporting
* Interest Rate Benchmark Reform - amendments to IFRS 9, IAS 39 and IFRS 7
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
*******************************************
For the 26 weeks ended 26 September 2020
1. Half Year Report (continued)
The application of these did not have a material impact on the Group's accounting
treatment and has therefore not resulted in any material changes.
Taxation
Taxes on income in the interim periods are accrued using the tax rate that is expected
(MORE TO FOLLOW) Dow Jones Newswires
November 26, 2020 02:00 ET (07:00 GMT)
DJ Fuller, Smith & Turner PLC: Half-Year Results -7-
to be applicable to total annual earnings for the full year in each tax jurisdiction
based on substantively enacted or enacted tax rates at the interim date.
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
*******************************************
For the 26 weeks ended 26 September 2020
2. Segmental Analysis
Unaudited - Managed Tenanted Unallocated1 Total
26 weeks Pubs continuing
ended operations
26 September
2020 Inns GBPm
and
Hotels GBPm
GBPm
GBPm
Revenue and 39.4 6.0 0.2 45.6
other income
Segment (10.6) 1.3 (8.6) (17.9)
result
Operating (1.0)
separately
disclosed
items
Operating (18.9)
loss
Profit on -
disposal of
properties
Net finance (4.1)
costs
Loss before (23.0)
tax
Other
segment
information
Additions: 6.5 0.3 0.5 7.3
property,
plant and
equipment
Business - - - -
combinations
Depreciation 12.6 0.9 0.7 14.2
and
amortisation
Impairment - - - -
of property
and
right-of-use
assets
Unaudited - Managed Tenanted Unallocated1 Total
26 weeks Pubs continuing
ended operations
28 September
2019 Inns GBPm
and
Hotels GBPm
GBPm
GBPm
Revenue and 149.1 16.0 2.0 167.1
other income
Segment 23.2 6.6 (8.4) 21.4
result
Operating (3.0)
separately
disclosed
items
Operating 18.4
profit
Loss on (0.4)
disposal of
properties
Net finance (3.8)
costs
Profit 14.2
before tax
Other
segment
information
Additions: 11.8 0.7 0.2 12.7
property,
plant and
equipment
Business - 3.7 - 3.7
combinations
Depreciation 12.3 1.0 0.2 13.5
and
amortisation
Impairment 0.9 - - 0.9
of property
and
right-of-use
assets
1 Unallocated expenses represent primarily the salary and costs of central management.
Unallocated revenue represents Transitional Services Agreement income.
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
*******************************************
For the 26 weeks ended 26 September 2020
2. Segmental Analysis (continued)
Audited - 52 Managed Pubs Tenanted Unallocated1 Total
weeks ended continuing
28 March 2020 operations
and Hotels Inns GBPm
GBPm
GBPm GBPm
Revenue and other 286.3 29.7 3.7 319.7
income
Segment result 30.6 11.8 (15.4) 27.0
Operating (20.1)
separately
disclosed items
Operating profit 6.9
Profit on 9.6
disposal of
properties
Net finance costs (8.1)
Profit before tax 8.4
Other segment
information
Additions: 23.6 3.6 23.6 50.8
property, plant
and equipment
Business 32.8 - - 32.8
combinations
Depreciation and 24.8 2.0 0.1 26.9
amortisation
Impairment of 14.4 0.7 - 15.1
property,
right-of-use
assets and
goodwill
1 Unallocated expenses represent primarily the salary and costs of central management.
Unallocated revenue represents Transitional Services Agreement income.
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
*******************************************
For the 26 weeks ended 26 September 2020
3. Separately Disclosed Items
Continuing Unaudited Unaudited
operations
26 weeks ended 26 weeks ended Audited
26 September 28 September
2020 2019
52 weeks
ended 28
GBPm GBPm March
2020
GBPm
Amounts included in
operating
(loss)/profit:
Acquisition costs (0.1) (0.2) (1.4)
Reorganisation costs (0.8) (0.5) (2.1)
Impairment of - (0.9) (15.1)
properties,
right-of-use assets
and intangible
assets
IT maintenance, - (1.4) (1.5)
support and
rectification costs
Replacement of (0.1) - -
central finance
system
Total separately (1.0) (3.0) (20.1)
disclosed items
included in
operating
(loss)/profit
(Loss)/profit on - (0.4) 9.6
disposal of
properties
Separately disclosed
finance costs:
Finance charge on - (0.4) (0.6)
net pension
liabilities (note
10)
Finance credit on 0.2 0.1 0.1
the
expiry/cancellation
of interest rate
swaps
Total separately 0.2 (0.3) (0.5)
disclosed finance
costs
Total separately (0.8) (3.7) (11.0)
disclosed items
before tax
Separately disclosed
tax:
Profit on disposal - - (1.9)
of properties
Other items 0.1 1.1 3.9
Total separately 0.1 1.1 2.0
disclosed tax
Total separately (0.7) (2.6) (9.0)
disclosed items
Acquisition costs of GBP0.1 million during the 26 weeks ended 26 September 2020 (28
September 2019: GBP0.2 million, 28 March 2020: GBP1.4 million) relates to transaction costs
on property acquisitions.
The reorganisation costs of GBP0.8 million during the 26 weeks ended 26 September 2020
were incurred as a result of the corporate restructure, where the trade and assets of
the Bel & The Dragon and Cotswolds Inns & Hotels were hived up into the Company, Also,
this includes redundancy costs as a result of the restructuring because of coronavirus
pandemic (28 September 2019: GBP0.5million, 28 March 2020: GBP2.1 million).
Replacement of central finance system costs of GBP0.1 million were incurred in the period
for project costs for the initial scoping to implement a new finance system.
The cash impact of operating separately disclosed items before tax for the 26 weeks
ended 26 September 2020 was GBP0.8 million cash outflow (28 September 2019: GBP2.2 million
cash outflow, 28 March 2020: GBP5.0 million cash outflow).
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
*******************************************
For the 26 weeks ended 26 September 2020
4. Finance Costs
Unaudited Unaudited
26 weeks ended 26 weeks ended
26 September 28 September
2020 2019
Audited
GBPm GBPm
52 weeks
ended 28
March
2020
GBPm
Finance income
Interest income - - 0.2
from financial
assets
Finance costs
Interest expense
arising on:
Financial (2.7) (2.3) (5.3)
liabilities at
amortised cost -
loans and
debentures
Financial (0.1) (0.1) (0.1)
liabilities at
amortised cost -
preference
shares
Financial (1.5) (1.1) (2.4)
liabilities at
amortised cost -
lease
liabilities
Total interest (4.3) (3.5) (7.8)
expense for
financial
liabilities
Total finance (4.3) (3.5) (7.6)
costs before
separately
disclosed items
Finance charge - (0.4) (0.6)
on net pension
liabilities
(note 10)
Finance credit 0.2 0.1 0.1
on the
expiry/cancellat
ion of interest
rate swaps
Total finance (4.1) (3.8) (8.1)
costs
During the period, the Group accessed Covid Corporate Financing Facility ('CCFF')
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DJ Fuller, Smith & Turner PLC: Half-Year Results -8-
whereby commercial paper was issued to the Bank of England at a favourable rate and
therefore deemed to constitute a government grant. The debt has been recognised within
current borrowings on the Balance Sheet date at fair value, with the grant element,
reflecting the favourable rate, recognised as deferred income within trade and other
payables. Finance costs are net of grant income recognised on the amortisation of the
deferred income.
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
*******************************************
For the 26 weeks ended 28 September 2019
5. Taxation
Continuing Unaudited Unaudited
operations
26 weeks ended 26 weeks
26 September ended 28
2020 September
2019
Audited
GBPm
GBPm
52 weeks
ended 28
March
2020
GBPm
Tax on
(loss)/profi
t on
ordinary
activities
Current
income tax:
Corporation - 2.3 0.8
tax
Amounts over - - 0.1
provided in
previous
years
Total - 2.3 0.9
current
income tax
Deferred
tax:
Origination (3.9) 0.1 1.4
and reversal
of temporary
differences
Change in - - 1.6
corporation
tax rate
Amounts over - - 0.3
provided in
previous
years
Total (3.9) 0.1 3.3
deferred tax
Total tax (3.9) 2.4 4.2
(credited)/c
harged in
the Income
Statement
Tax relating to items
charged to the
Statement of
Comprehensive Income
Deferred tax:
Tax charge on - - 0.1
valuation gains on
financial assets and
liabilities
Tax (credit)/charge (1.3) 1.1
on actuarial gains on
pension scheme
0.2
Tax (credit)/charge (1.3) 0.2 1.2
included in the
Statement of
Comprehensive Income
Tax relating to items
(credited)/charged
directly to equity
Deferred tax:
Increase in deferred - - -
tax liability due to
indexation
Share-based payments (0.1) 0.1 0.1
Tax (credit)/charge (0.1) 0.1 0.1
included in the
Statement of Changes
in Equity
The taxation charge is calculated by applying the Directors' best estimate of the
annual effective tax rate to the profit for the period.
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
*******************************************
For the 26 weeks ended 26 September 2020
6. (Loss)/Earnings Per Share
Continuing Unaudited Unaudited
operations
26 weeks ended 26 weeks ended
26 September 28 September
2020 2019
Audited
GBPm GBPm
52 weeks
ended 28
March
2020
GBPm
(Loss)/profit (19.1) 11.8 4.2
attributable to
equity shareholders
Separately 0.7 2.6 9.0
disclosed items net
of tax
Adjusted (18.4) 14.4 13.2
(loss)/earnings
attributable to
equity shareholders
Number Number Number
Weighted average share capital 55,205,000 55,015,000 55,124,000
Dilutive outstanding options 287,000 681,000 128,000
and share awards
Diluted weighted average share 55,492,000 55,696,000 55,252,000
capital
40p 'A' and 'C' ordinary share Pence Pence Pence
Basic (loss)/earnings per share (34.60) 21.45 7.62
Diluted (loss)/earnings per share (34.42) 21.19 7.60
Adjusted (loss)/earnings per share (33.33) 26.17 23.95
Diluted adjusted (loss)/earnings per share (33.16) 25.85 23.89
4p 'B' ordinary share Pence Pence Pence
Basic (loss)/earnings per share (3.46) 2.14 0.76
Diluted (loss)/earnings per share (3.44) 2.12 0.76
Adjusted (loss)/earnings per share (3.33) 2.62 2.39
Diluted adjusted (loss)/earnings per share (3.32) 2.59 2.39
For the purposes of calculating the number of shares to be used above, 'B' shares have
been treated as one tenth of an 'A' or 'C' share. The earnings per share calculation is
based on earnings from continuing operations and on the weighted average ordinary share
capital which excludes shares held by trusts relating to employee share options and
shares held in treasury of 1,779,745
(28 September 2019: 1,969,717, 28 March 2020: 1,860,777).
Diluted earnings per share is calculated using the same earnings figure as for basic
earnings per share, divided by the weighted average number of ordinary shares
outstanding during the 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.
Fuller, Smith & Turner P.L.C.
Notes to the Condensed Financial Statements
*******************************************
For the 26 weeks ended 26 September 2020
6. (Loss)/Earnings Per Share (continued)
Adjusted earnings per share is calculated on profit before tax excluding separately
disclosed items and on the same weighted average ordinary share capital as for the
basic and diluted earnings per share. An adjusted earnings per share measure has been
included as the Directors consider that this measure better reflects the underlying
earnings of the Group.
7. Dividends
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
26 September 28 September 28 March
2020 2019 2020
GBPm GBPm GBPm
Declared
and paid
during the
period
Second - 4.4 4.4
interim in
the period
for 2019
First - 2.4 2.4
dividend
paid in
period for
2019
First - - 4.3
interim
paid in
period for
2020
'D' Share - - 69.4
single
dividend
for 2020
Equity - 6.8 80.5
dividends
paid
Dividends 0.1 0.1 0.1
on
cumulative
preference
shares
(note 4)
Pence Pence Pence
Dividends
per 40p
'A' and
'C'
ordinary
share
declared
in respect
of the
period
Interim - 7.80 7.80
- 7.80 7.80
The pence figures above are for the 40p 'A' and 'C' ordinary shares. The 4p 'B'
ordinary shares carry dividend rights of one tenth of those applicable to the 40p 'A'
ordinary shares. Own shares held in the employee share ownership trusts do not qualify
for dividends as the Trustees have waived their rights. Dividends are also not paid on
own shares held as treasury shares.
As indicated in the circular published on 28 March 2019 relating to the disposal of the
Fuller's Beer Business, the Board made an additional cash return of GBP1.25 per 'A' and
'C' ordinary share and 12.5p per 'B' ordinary share through a 'D' share scheme. Each
ordinary shareholder as at the record date was issued with ten 'D' shares for every
existing 'A' and 'C' ordinary share and one 'D' share for every one 'B' ordinary share
held at the time. Numis (acting as principal, and not as agent, nominee or trustee for
the Company) made an offer to purchase the 'D' shares for an amount of 12.5p per 'D'
share (free of all expenses and commissions). The Company accepted the offer on behalf
of shareholders and paid a single dividend to Numis as holder of all the 'D' shares of
GBP69.4 million representing the sum of 12.5p per 'D' share plus the stamp duty payable
by Numis in connection with the purchase of all the 'D' shares in issue.
Fuller, Smith & Turner P.L.C.
*****************************
Notes to the Condensed Financial Statements
*******************************************
For the 26 weeks ended 26 September 2020
7. Dividends (continued)
Following the approval of all the resolutions presented to the Company's Extraordinary
General Meeting on 1 October 2019, 552,030,154 'D' shares of 0.1p each were allotted
and issued to shareholders on 2 October 2019 on the basis of ten 'D' shares for every
existing 'A' and 'C' ordinary share of 40p each and one 'D' share for every existing
'B' ordinary share of 4p each held at the record date. Following the purchase by Numis
of all of the 'D' shares, and payment by the Company of a single dividend to Numis of
GBP69.4 million as holder of all of the 'D' shares on 7 October 2019, the 'D' shares were
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