21 September 2016
ANNOUNCEMENT OF FULL YEAR RESULTS
Financial performance1:
- Record set of results and impressive progress against strategic objectives
- Turnover increased by +1.2% to
- Underlying operating profit2 up +3.5% at
- Underlying profit before tax3 up +10.7% to £10.3m (2015:
- Statutory profit before tax up +4.7% to
- Basic earnings per ordinary share up +13.1% to 84.0p (2015: 74.3p) and underlying basic earnings per share up +12.3% to 54.7p (2015: 48.7p)
- Proposed final dividend per share up +3.0% to 22.05p (2015: 21.40p) making total dividends for the year of 27.50p (2015: 26.70p)
Operational highlights:
- Strong performance across our pub estate
- Like-for-like managed pub and hotel sales up +4.4%, with liquor up +3.1%, food up +4.2% and accommodation up +11.7%
- Like-for-like tenanted EBITDAR4 up +2.7%
- Core own and licensed beer volumes (excluding contract brewing) up +0.3%: with excellent growth from the Whitstable Bay Collection
- Increased investment in our pubs to
Current trading:
- In the 10 weeks to
- Core own and licensed beer volumes (excluding contract brewing) to 3 September up +1.2%
- Acquisition of eight pubs from Enterprise Inns plc since the year end
"I am delighted to report a record set of results, with managed pubs our key driver of growth, and an impressive performance against our strategic objectives.
In recent years, we have worked hard to improve the quality of our pub estate and modernise our brand portfolio. We have created a much stronger business with sustainable cashflows and the skills and ambition for further growth.
We have made a good start to the new financial year, with a particularly strong performance from our coastal pubs."
1First set of results prepared under new accounting standard Financial Reporting Standard 102(FRS102)
2Profit before net finance costs, any profit or loss on the disposal of properties, investment property fair value movements and exceptional items
3Profit before any profit or loss on the disposal of properties, investment property fair value movements and exceptional items
4Earnings before interest, tax, depreciation, amortisation and rent payable
For further information, please contact:
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Tel: 01795 532206
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Kreab |
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Tel: 020 7074 1800 / 07776 171 210 |
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Regional and Trade Media Contact: |
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Tel: 01795 542051 / 07793 294 469 |
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Note: The Directors of
NOTES FOR EDITORS
The Company retails its own beers, on draught and in bottles, under a range of highly successful brand names, including:
- Spitfire: One of the leading premium bottled ales in the
-
- Bishops Finger: Connoisseur premium ale (5.4% abv).
-
The Company also brews lagers under license, including:
-
-
In the 26 weeks ended
At the year end, the Company operated 328 pubs, of which 267 were tenanted or leased, 7 were held as investment properties under commercial free of tie leases, and 54 managed. The pub estate ranges from inns and hotels to destination dining, great traditional and local community pubs.
For further information on the Company, see www.shepherdneame.co.uk.
CHAIRMAN'S STATEMENT
Overview
I am pleased to report another excellent year for the Company for the 52 weeks to
The performance was characterised by good trading in our pub business and impressive growth in managed pubs' profits. This has driven strong operating cash flows which, together with exceptional proceeds from property disposals has created additional headroom to enable the business to grow further through pub acquisitions.
A key part of the strategy in recent years has been to modernise various aspects of the business, to drive operational excellence and update our brand and pub portfolio. I am delighted therefore to be able to introduce in this annual report the Company's new brand identity which has been developed in the last year.
Accounting Standards
This is our first full year report under the FRS 102 accounting standard, and as a consequence we have had to restate some prior year comparatives prepared under previous
There are four principal areas of change: the valuation of our assets; reporting by business segment and different accounting treatment for both lease commitments and for interest rate swaps. The specific impacts of these changes were set out in the transition document on
As part of this process, the Company has carried out a one-off revaluation of a significant proportion of its assets as at
Financial Performance
Turnover for the period increased by 1.2% to
Dividend
The Board is proposing a final dividend of 22.05p (2015: 21.40p), making the total dividend for the year 27.50p (2015: 26.70p), an increase of 3.0%. This represents underlying dividend cover of 2.0 times (2015: 1.8 times) which is in line with our stated policy following the share capital reorganisation of 2014. We will continue to target dividend cover at or above this level in the future. The final dividend will be paid on
Cash flow and Financing
Underlying EBITDA2 was up 4.3% to
During the period we realised proceeds from property sales of
[1] Profit before any profit or loss on the disposal of properties, investment property fair value movements and exceptional items
2 Underlying profit before tax pre net finance costs, depreciation, amortisation, profit or loss on sale of fixed assets excluding property and free trade loan discounts
Board of Directors
After more than 10 years of outstanding service to the Board,
I would like to take this opportunity to thank James and Oliver for their very significant individual contributions to the business. They have helped to steer the Company through some challenging times for the industry over the past 10 years and played a big part in helping the Company to achieve the strong position we are in today.
Following these changes,
Government and Regulation
During the year the Small Business Enterprise and Employment Bill completed its passage through
As announced in 2015, the Government introduced the National Living Wage from
Summary
This has been an excellent year for the Company. The continuous investment in our brands and significant improvement in the profile and quality of our pub estate in recent years has transformed the business.
The managed pub estate has been our principal engine for growth whilst our tenanted pubs and brewing and brands deliver strong cash generation.
Strong trading and operational cash flows, cash proceeds from disposals and refinancing, have all helped to put the Company in a good position to seek further growth opportunities through acquisition. We are delighted by the purchase of eight pubs since the year end and continue to pursue other opportunities.
We live in uncertain political and economic times and consumer confidence is very sensitive to changes in sentiment. The outcome of the EU Referendum in
Finally I would like to pay tribute to the dedicated and highly talented staff who contribute so much to the success of the Company year after year and whose efforts we rely on greatly. I would also like to congratulate Chief Executive,
Chairman
CHIEF EXECUTIVE'S REVIEW
This has been another successful year for the Company. I am delighted to report a record set of results and impressive progress against our strategic objectives.
Over the last few years we have undertaken a series of initiatives to refine our strategy, modernise our processes and increase our investment to support the growth areas of the business. In particular we have transformed the overall profile of our pub estate by investing the proceeds of pub disposals to build a smaller, but high-quality and well-invested tenanted business, that is providing strong cash generation, and a managed business that has been our key driver for growth.
This has been achieved in a year when consumer demand to eat and drink out was impacted by long spells of wet and unseasonable weather and, in the second half of the year, concerns about the EU Referendum. Within our markets, when the conditions are right, such as at times of holidays or celebration, or fine and settled weather, trade has been very strong. The Rugby World Cup provided a modest benefit in
Within our heartland, there has been increased economic activity with momentum in house building in areas of major development such as Ashford, the Medway Towns and Ebbsfleet Garden City.
In the
Within this overall market context we have made good progress towards our vision, which is to be a great British brewer and run the best pubs. At the same time, we have been developing a new brand identity for the business which we present for the first time in this report. The old logo has been in use for over 20 years and during that time the Company has changed substantially. Our beer range is more diverse and our pub portfolio appeals to a wider audience. We feel it is time, therefore, to introduce a more stylish and modern presentation of the Company logo across the business that articulates the real and original character of the business. We plan to roll out new signage across our pubs from the second half of the year and we will be upgrading to a more mobile friendly Company website in December.
1Source:
Tenanted and Managed Pub Operations
Overview
At the year end we operated 328 pubs and hotels (2015: 338) of which 285 are freehold (2015: 295). Of our total pubs 54 (2015: 52) were managed and 267 (2015: 280) were tenanted or leased and seven (2015: six) operated under commercial free of tie leases.
In the last five years we have actively addressed the changes in the market to reduce our exposure to small wet-led community pubs and to take the opportunities for growth in casual dining and accommodation. We have transformed our pub portfolio through progressive property management, and continue to pursue every opportunity to raise the average quality.
During this five year period, we have acquired 15 pubs and disposed of 46. This follows a similar period of activity in the previous five years. Since 2011, the average EBITDAR per tenanted pub has increased by 25.6% and per managed pub by 42.2%.
Our investment focus is to seek high quality, single-site acquisition opportunities within our heartland if they improve the overall business or reach new markets. We also pursue opportunities outside our historic trading area as evidenced by recent pub purchases. We are looking to acquire sites with unique character in landmark or high footfall locations with the potential for further development.
During the year we acquired three new outlets, of which two are operated as managed pubs: the Minnis Bay Bar and Restaurant and the Anchor, Hampstead Lock, Yalding. We have now secured planning permission to develop these sites and work will be carried out during the coming year. The third acquisition was the Coastguard in St. Margaret's Bay in
These three acquisitions cost
Since the year end, we have acquired eight freehold pubs in
Also since the year end, the Company has acquired
The combined investment in these two acquisitions (both of which completed in
Pub Strategy
Our pub strategy is built around three strategic pillars:
• To drive footfall to our pubs
• To develop our offer to enhance the customer experience
• To attract, retain and develop the best people
Driving footfall to our Pubs
We aim to drive footfall by designing and developing unique pubs and hotels with a 'wow' factor.
In addition to the new pub acquisitions we have invested
In the managed estate, major developments during the year have included a
In the tenanted estate, we have carried out major developments at a number of sites including the Poyntz Arms, East Molesey; the White Horse in Maldon; the William the Conqueror,
Developing our offer to enhance the customer experience
We aim to enhance the customer experience in our pubs by delivering great fresh food, providing accommodation of character, and offering an interesting range of products.
Our food continues to provide good growth in the business. In the managed estate, footfall from diners increased by +7.7% (2015: +9.6%) and spend per head by +3.9% (2015: +0.3%) to
We continue to develop initiatives to drive the quality of our menus and food presentation. With Dan and Gareth joining us following the acquisition of
During the year we have refurbished 39 bedrooms across the managed estate (2015: 68) and now offer a total of 283 rooms (2015: 279) presented to a very high standard. In the coming year we will add 11 rooms at the Ostrich in
Wine volume in our pubs has been good throughout the year. We have updated our popular Añuela and Mezzora ranges and expanded our supply of local quality English wines. Spirits too have seen a resurgence as we have introduced more premium, stylish and craft products. We have enhanced our range of premium mixers and local juices. All these actions strengthen the experience for those drinking or eating in our pubs.
Attracting, retaining and developing the best people
We aim to attract, retain and develop the best people, by understanding the potential in everyone, inspiring them to achieve their goals, and by building the loyalty and engagement of our licensees, through the professionalism of the support we provide.
In our managed estate we have appointed five head chefs to act as mentors, recruited an additional field trainer and further developed staff skills through e-learning. Our tenanted estate was fully let at the year end with new licensees being required for less than 6% of the total estate. Retention levels are rising as the quality of facility and level of support makes our tenanted offer increasingly commercially attractive.
I was particularly pleased that the Company scored strongly against a range of measures in an independent survey of pub companies. We were also finalists in the
Trading Performance
We have consistently pursued a strategy to invest in our pubs and this has resulted in a strong trading performance this year on the back of several years of sustained growth.
Total divisional turnover in the managed estate grew by +9.8% to
Total divisional turnover in the tenanted and leased estate grew by +0.3% to
Brewing and Brands
Overview
The Brewing and Brands business absorbed the first full year costs of the water treatment plant and the final impact of the loss of the Kingfisher contract. After a disappointing first half, performance improved in the second half with some excellent distribution gains.
The
Brewing and Brands Strategy
Our Brewing and Brands Strategy is built on two strategic pillars:
• To create demand and build awareness for our brands
• To attract, retain and develop the best people.
Creating demand and building awareness for our brands
We aim to create demand and build awareness for our brands by developing a range of distinctive beers, instilling a passion for quality and having great engagement with our customers.
Recent range developments have proved to be very successful. In particular, the Whitstable Bay Collection enjoyed excellent growth, with a strong performance from Whitstable Bay Blonde Lager. I am particularly pleased that our
The Spitfire brand has performed better in the last year but still experienced a modest decline. The portfolio has been significantly enhanced by the successful launch of Spitfire Gold in the early part of the year and Spitfire Lager, the Lager of
Our Heritage beers have performed well again, in particular the Classic Collection brews such as Double Stout and IPA.
The licensed portfolio has continued to do well with accelerating growth from
The investment focus in the last year has been to modernise the Brewhouse. After more than 100 years, our wooden mash tuns have been replaced and we have embarked on a major refurbishment of the fabric of our historic brewery buildings. Simultaneously we have replaced the glycol system and upgraded our quality processes. All these initiatives will help drive ever higher standards of quality and consistency, and I am particularly pleased that since the year end we have won seven awards for our brewing and bottling quality.
Attracting, retaining and developing the best people
During the last year we have strengthened the brewing and laboratory management team. In addition, we have developed our management training and enhanced our programme to improve communication across the business and awareness of the Company's strategic aims and objectives. The annual Shepherd Neame Employee Awards help to focus and reward those that have achieved the standards we require. We have successfully raised the knowledge of brewing and beer styles across the Company through our
Trading Performance
Divisional turnover for the year was down -4.1% to
Current Trading
We have made a good start to the new financial year, with a particularly strong performance from our coastal pubs during the fine summer weather. Recent pub investments have performed well and our newly acquired outlets have been integrated into the business and are performing in line with expectation.
For the 10 weeks to
Summary
We have ended the year with a strong financial performance, with opportunities to drive further growth in the business.
We have worked hard in recent years to improve the quality of our pub estate and modernise our brand portfolio. We have created a much stronger business with sustainable cash flows and the skills and ambition for further growth. The launch of our new brand identity will present some exciting opportunities to strengthen our engagement with consumers in the year ahead.
General political and economic uncertainty is likely to continue for the next few years as a consequence of the
Chief Executive
Profit and loss account
52 weeks ended
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52 weeks to
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52 weeks to |
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Underlying results
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Items excluded from underlying results
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Total statutory
|
Underlying results
|
Items excluded from underlying results
|
Total statutory
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note |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Turnover |
1,2
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139,890
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-
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139,890
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138,237
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-
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138,237
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Operating charges |
3
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(125,655)
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(495)
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(126,150)
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(124,479)
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(63)
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(124,542)
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Operating profit
|
1
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14,235
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(495)
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13,740
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13,758
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(63)
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13,695
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Net finance costs
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(3,898)
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-
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(3,898)
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(4,424)
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-
|
(4,424)
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Profit on disposal of property
|
3
|
-
|
4,235
|
4,235
|
-
|
354
|
354
|
|
Investment property fair value movements |
3
|
-
|
282
|
282
|
-
|
4,086
|
4,086
|
|
Profit on ordinary activities before taxation |
|
10,337
|
4,022
|
14,359
|
9,334
|
4,377
|
13,711
|
|
Taxation |
4
|
(2,254)
|
314
|
(1,940)
|
(2,134)
|
(600)
|
(2,734)
|
|
Profit after taxation |
|
8,083
|
4,336
|
12,419
|
7,200
|
3,777
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Earnings per 50p ordinary share
|
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Basic
|
6
|
|
|
84.0p
|
|
|
74.3p
|
|
Underlying basic |
6
|
|
|
54.7p
|
|
|
48.7p
|
|
Diluted
|
6
|
|
|
83.4p
|
|
|
73.8p
|
Statement of comprehensive income
52 weeks ended
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|
|
52 weeks ended
|
52 weeks ended
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|
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|
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note |
£'000 |
£'000 |
|
Profit after taxation |
|
12,419 |
10,977 |
|
Losses arising on cash flow hedges during the period |
|
(5,887) |
(2,263) |
|
Tax relating to components of other comprehensive income |
4 |
1,521 |
453 |
|
Other comprehensive losses |
|
(4,366) |
(1,810) |
|
Total comprehensive income |
|
8,053 |
9,167 |
Balance sheet
As at
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|
|||
|
£'000 |
£'000 |
||||
|
Fixed assets |
|
|
|
|
|
|
Tangible fixed assets |
279,872 |
279,247 |
|||
|
Investments and loans |
333 |
713 |
|||
|
|
|
|
|
280,205 |
279,960 |
|
Current assets |
|||||
|
Stocks |
|
|
|
6,580 |
7,001 |
|
Debtors |
|
|
|
18,114 |
16,103 |
|
Deferred tax asset due after one year |
|
|
4,409 |
3,965 |
|
|
Cash |
|
|
|
90 |
6,793 |
|
|
|
|
|
29,193 |
33,862 |
|
Creditors: amounts falling due within one year |
|
|
|||
|
Bank loans and overdrafts |
(727) |
(1,987) |
|||
|
Creditors |
(26,703) |
(24,156) |
|||
|
|
|
|
|
(27,430) |
(26,143) |
|
Net current assets |
1,763 |
7,719 |
|||
|
Total assets less current liabilities |
281,968 |
287,679 |
|||
|
Creditors: amounts falling due after more than one year |
|
|
|||
|
Bank loans |
(59,439) |
(73,592) |
|||
|
Derivative financial instruments |
(23,670) |
(17,783) |
|||
|
Deferred lease liability |
(1,831) |
(1,640) |
|||
|
Provision for liabilities |
(13,151) |
(14,838) |
|||
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Net assets |
183,877 |
179,826 |
|||
|
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|
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Capital and reserves |
|
|
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Called-up share capital |
7,429 |
7,429 |
|||
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Share premium account |
1,099 |
1,099 |
|||
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Revaluation reserve |
73,253 |
72,430 |
|||
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Reserve for own shares held |
(915) |
(827) |
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Hedging reserve |
(19,288) |
(14,226) |
|||
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Profit and loss account |
122,299 |
113,921 |
|||
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Equity shareholders' funds |
183,877 |
179,826 |
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These accounts for
Miles Templeman
Jonathan Neame
Directors
Statement of changes in equity
52 weeks ended
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Share capital
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Share premium
|
Revaluation reserve
|
Own shares held
|
Hedging reserve
|
Profit and loss account |
|
Total |
|||
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|||
|
Balance at |
7,429 |
1,099 |
13,125 |
(908) |
- |
108,006 |
128,751 |
|
|||
|
Changes on transition to FRS102 |
- |
- |
60,167 |
- |
(12,416) |
(1,985) |
45,766 |
|
|||
|
Balance at |
7,429 |
1,099 |
73,292 |
(908) |
(12,416) |
106,021 |
174,517 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
Profit for the financial year |
- |
- |
- |
- |
- |
10,977 |
10,977 |
|
|||
|
Losses arising on cash flow hedges during the year |
- |
- |
- |
- |
(2,263) |
- |
(2,263) |
|
|||
|
Tax relating to components of other comprehensive income |
- |
- |
- |
- |
453 |
- |
453 |
|
|||
|
Total comprehensive income |
- |
- |
- |
- |
(1,810) |
10,977 |
9,167 |
|
|||
|
Ordinary dividends paid |
- |
- |
- |
- |
- |
(3,861) |
(3,861) |
|
|||
|
Transfer of realised revaluation |
- |
- |
(862) |
- |
- |
862 |
- |
|
|||
|
Accrued share-based payments |
- |
- |
- |
- |
- |
425 |
425 |
|
|||
|
Purchase of own shares |
- |
- |
- |
(465) |
- |
- |
(465) |
|
|||
|
Distribution of own shares |
- |
- |
- |
405 |
- |
(362) |
43 |
|
|||
|
Unconditionally vested share awards |
- |
- |
- |
141 |
- |
(141) |
- |
|
|||
|
Balance at |
7,429 |
1,099 |
72,430 |
(827) |
(14,226) |
113,921 |
179,826 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
Profit for the financial year |
- |
- |
- |
- |
- |
12,419 |
12,419 |
|
|||
|
Losses arising on cash flow hedges during the year |
- |
- |
- |
- |
(5,887) |
- |
(5,887) |
|
|||
|
Tax relating to components of other comprehensive income |
- |
- |
696 |
- |
825 |
- |
1,521 |
|
|||
|
Total comprehensive income |
- |
- |
696 |
- |
(5,062) |
12,419 |
8,053 |
|
|||
|
Ordinary dividends paid |
- |
- |
- |
- |
- |
(3,977) |
(3,977) |
|
|||
|
Transfer of realised revaluation |
- |
- |
127 |
- |
- |
(127) |
- |
|
|||
|
Accrued share-based payments |
- |
- |
- |
- |
- |
528 |
528 |
|
|||
|
Purchase of own shares |
- |
- |
- |
(584) |
- |
- |
(584) |
|
|||
|
Distribution of own shares |
- |
- |
- |
359 |
- |
(328) |
31 |
|
|||
|
Unconditionally vested share awards |
- |
- |
- |
137 |
- |
(137) |
- |
|
|||
|
Balance at 25 June 2016 |
7,429 |
1,099 |
73,253 |
(915) |
(19,288) |
122,299 |
183,877 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Cash flow statement
52 weeks ended 25 June 2016
|
|
|
|
52 weeks ended
|
|
52 weeks ended
|
|
|
|
|
25 June 2016
|
|
27 June 2015
|
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Net cash flows from operating activities (see note 6a) |
|
20,293 |
|
21,375 |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
Proceeds of sale of tangible fixed assets |
11,893 |
|
3,155 |
|
|
|
Purchase of tangible fixed assets |
(15,391) |
|
(13,165) |
|
|
|
Additional loans to customers |
(21) |
|
(52) |
|
|
|
Customer loan redemptions |
245 |
|
173 |
|
|
|
Net cash flows from investing activities |
|
(3,274) |
|
(9,889) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
Dividends paid |
(3,977) |
|
(3,861) |
|
|
|
Interest paid |
(3,904) |
|
(4,391) |
|
|
|
Repayment of long-term loan |
(16,000) |
|
(2,000) |
|
|
|
Issue costs of new long-term facility |
(313) |
|
- |
|
|
|
Purchase of own shares |
(287) |
|
(465) |
|
|
|
Share option proceeds |
32 |
|
43 |
|
|
|
Net cash flows from financing activities |
|
(24,449) |
|
(10,674) |
|
|
Net (decrease)/increase in cash and cash equivalents |
|
(7,430) |
|
812 |
|
|
Cash and cash equivalents at beginning of the period |
|
6,793 |
|
5,981 |
|
|
Cash and cash equivalents at end of the period |
|
(637) |
|
6,793 |
|
Notes to the accounts
25 June 2016
1 Segmental reporting
In adopting FRS 102, the operating segment disclosure requirements of IFRS 8 are required as the Company has publically traded equity instruments. The standard is applied retrospectively. The accounting policy for identifying segments is based on internal management reporting information that is regularly reviewed by the chief operating decision-maker.
The Company has three operating segments, which are largely organised and managed separately according to the nature of the products and services provided and the profile of the customers:
• Brewing and Brands which comprises the brewing, marketing and sales of beer, wine and spirits;
• Managed Pubs and Hotels which comprises managed pubs and managed hotels and;
• Tenanted and Leased Pubs which comprises pubs operated by third parties under tenancy or lease agreements.
Transfer prices between operating segments are set on an arm's length basis.
The measurement policies the Company uses for segment reporting under IFRS 8 are the same as those used in the financial statements.
|
|
|
|
|
||||
|
|
|
|
Brewing and Brands
|
Managed Pubs and Hotels
|
Tenanted and Leased Pubs
|
Unallocated
|
Total
|
|
52 weeks ended 25 June 2016 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
||
|
Turnover |
57,267 |
48,062 |
33,509 |
1,052 |
139,890 |
||
|
Underlying operating profit |
1,479 |
7,581 |
12,598 |
(7,423) |
14,235 |
||
|
Exceptional items |
- |
- |
(307) |
(188) |
(495) |
||
|
Divisional operating profit |
1,479 |
7,581 |
12,291 |
(7,611) |
13,740 |
||
|
|
|
|
|
|
|
||
|
Net finance costs |
|
|
|
|
(3,898) |
||
|
Profit on disposal of property |
|
|
|
|
4,235 |
||
|
Investment property fair value movements |
|
|
|
|
282 |
||
|
Profit on ordinary activities before taxation |
|
|
|
|
14,359 |
||
|
Other segment information |
|
|
|
|
|
|
Capital expenditure - tangible fixed assets |
2,374 |
6,055 |
6,774 |
436 |
15,639 |
|
Depreciation |
2,172 |
2,016 |
2,028 |
899 |
7,115 |
|
Underlying divisional EBITDA |
3,880 |
9,677 |
14,642 |
(6,521) |
21,678 |
|
Number of pubs |
- |
54 |
267 |
7 |
328 |
|
|
|
|
Brewing and Brands
|
Managed Pubs and Hotels
|
Tenanted and Leased Pubs
|
Unallocated
|
Total
|
|
52 weeks ended 27 June 2015 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
||
|
Turnover |
59,718 |
43,759 |
33,424 |
1,336 |
138,237 |
||
|
Underlying operating profit |
1,823 |
6,665 |
12,751 |
(7,481) |
13,758 |
||
|
Exceptional items |
- |
- |
(63) |
- |
(63) |
||
|
Divisional operating profit |
1,823 |
6,665 |
12,688 |
(7,481) |
13,695 |
||
|
|
|
|
|
|
|
||
|
Net finance costs |
|
|
|
|
(4,424) |
||
|
Profit on disposal of property |
|
|
|
|
354 |
||
|
Investment property fair value movements |
|
|
|
|
4,086 |
||
|
Profit on ordinary activities before taxation |
|
|
|
|
13,711 |
||
|
|
Brewing and Brands |
Managed Pubs and Hotels |
Tenanted and Leased Pubs |
Unallocated |
Total |
|
52 weeks ended 27 June 2015 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Other segment information |
|
|
|
|
|
|
Capital expenditure - tangible fixed assets |
1,827 |
6,382 |
4,180 |
625 |
13,014 |
|
Depreciation |
2,306 |
1,825 |
1,958 |
722 |
6,811 |
|
Underlying divisional EBITDA |
4,368 |
8,464 |
14,709 |
(6,757) |
20,784 |
|
Number of pubs |
- |
52 |
280 |
6 |
338 |
Geographical information
An analysis of the Company's turnover by geographical market is set out below:
|
|
52 weeks ended 25 June 2016 |
52 weeks ended 27 June 2015 |
|
|
£'000 |
£'000 |
|
UK |
137,424 |
134,966 |
|
Rest of the World |
2,466 |
3,271 |
|
|
139,890 |
138,237 |
2 Turnover
An analysis of the Company's turnover is as follows:
|
|
52 weeks ended 25 June 2016 |
52 weeks ended 27 June 2015 |
|
|
£'000 |
£'000 |
|
Sale of goods and services |
131,253 |
129,531 |
|
Rental income |
8,637 |
8,706 |
|
|
139,890 |
138,237 |
3 Non-GAAP reporting measures
Certain items recognised in reported profit or loss before tax can vary significantly from year to year and therefore create volatility in reported earnings which does not reflect the underlying performance of the Company. The Directors believe that the "underlying operating profit", "underlying profit before tax", "underlying basic earnings per share", "underlying earnings before interest, tax, depreciation, and amortisation" presented provide a clear and consistent presentation of the underlying performance of ongoing business for shareholders. Underlying profit is not defined by FRS 102 and therefore may not be directly comparable with the "adjusted" profit measures of other companies. The adjusted items are:
• Profit or loss on disposal of properties
• Investment property fair value movements
• Exceptional items - these are items which are either material or infrequent in nature and do not relate to the underlying performance.
|
|
52 weeks ended 25 June 2016 |
52 weeks ended 27 June 2015 |
|
|
£'000 |
£'000 |
|
Underlying EBITDA |
21,678 |
20,784 |
|
Depreciation |
(7,115) |
(6,811) |
|
Free trade loan discounts |
(113) |
(136) |
|
Loss on sale of assets (excluding property) |
(215) |
(79) |
|
Underlying operating profit |
14,235 |
13,758 |
|
Net finance costs |
(3,898) |
(4,424) |
|
Underlying profit before tax |
10,337 |
9,334 |
|
|
|
|
|
Profit on disposal of properties |
4,235 |
354 |
|
Investment property fair value movements |
282 |
4,086 |
|
Exceptional items |
(495) |
(63) |
|
Profit on ordinary activities before taxation |
14,359 |
13,711 |
Exceptional items of £495,000 for the 52 weeks ended 25 June 2016 comprised an impairment charge of £307,000, legal and professional fees of £71,000 for the Consumer Credit Authorisation application, required by the Financial Conduct Authority; and £117,000 for the professional fees related to the transition for reporting under FRS 102. The charge of £63,000 for the 52 weeks ended 27 June 2015 relates to impairment of tangible fixed assets.
4 Taxation
a Tax on profit on ordinary activities
|
|
52 weeks ended 25 June 2016 |
52 weeks ended 27 June 2015 |
|
Tax charged to profit and loss |
£'000 |
£'000 |
|
Current tax |
|
|
|
UK Corporation tax at 20.0% (2015: 20.75%) |
2,573 |
2,270 |
|
Prior year under/(over) provision |
25 |
(19) |
|
Total current tax |
2,598 |
2,251 |
|
Deferred tax |
|
|
|
Origination and reversal of timing differences |
40 |
493 |
|
Effect of reduction in the rate of corporation tax |
(698) |
- |
|
Adjustments in respect of prior years |
- |
(10) |
|
Total deferred tax |
(658) |
483 |
|
Total tax charged to profit and loss |
1,940 |
2,734 |
|
|
|
|
|
Tax charged to other comprehensive income |
|
|
|
Deferred tax |
|
|
|
Losses arising on cash flow hedges in the period |
(1,177) |
(453) |
|
Effect of reduction in the rate of corporation tax |
(344) |
- |
|
Total tax charged to other comprehensive income |
(1,521) |
(453) |
b Reconciliation of the total tax charge
|
|
52 weeks ended 25 June 2016 |
52 weeks ended 27 June 2015 |
|
|
£'000 |
£'000 |
|
Profit on ordinary activities before tax |
14,359 |
13,711 |
|
|
|
|
|
UK corporation tax at average statutory rate 20.0% (2015: 20.75%) |
2,872 |
2,845 |
|
Expenses not deductible for tax purposes |
7 |
68 |
|
Profit on sale of property less chargeable gains |
(266) |
(150) |
|
Effect of reduction in the rate of corporation tax |
(698) |
- |
|
Prior year under/(over) provision |
25 |
(29) |
|
Total tax charge to profit and loss |
1,940 |
2,734 |
c Factors that may affect future tax charges
During the period the Finance Act 2015 received Royal Assent. The main impact was the reduction of the UK Corporation tax rate from 20% to 19% (effective from 1 April 2017) and 18% (effective from 1 April 2020). To the extent that these rate changes will affect the amount of future tax cash tax payments to be made by the Company, this will reduce the size of both the Company's deferred tax liability and tax asset. The impact in the 52 weeks to 25 June 2016 was an exceptional credit to profit and loss of £698,000 and a credit to other comprehensive income of £344,000. A further reduction in the UK corporation tax rate from 1 April 2020 to 17% has been announced but has not yet been substantively enacted.
During the 52 weeks beginning 26 June 2016, the net reduction of deferred tax liabilities expected to be credited to the profit and loss account is estimated at £500,000 due to the reversal of accelerated capital allowances and reduction in the deferred tax liability on the revaluation of freehold pubs.
There is no expiry date on timing differences.
5 Dividends
|
|
52 weeks ended 25 June 2016 |
52 weeks ended 27 June 2015 |
|
|
£'000 |
£'000 |
|
Declared and paid during the year |
|
|
|
Final dividend for 2015: 21.4p (2014: 20.75p) per ordinary share |
3,168 |
3,074 |
|
Interim dividend for 2016: 5.45p (2015: 5.30p) per ordinary share |
809 |
787 |
|
Dividends paid |
3,977 |
3,861 |
The Directors propose a final dividend of 22.05p (2015: 21.40p) per 50p ordinary share totalling £3,269,000 (2015: £3,168,000) for the year
ended 25 June 2016. The dividend is subject to approval by the shareholders at the Annual General Meeting, to be held on 14 October 2016
and has not been included as a liability in these financial statements, as it has not yet been approved or paid.
Shares held by the Company (and not allocated to employees under the Share Incentive Plan) are treated as cancelled when calculating dividends and earnings per share.
6 Earnings per share
|
|
52 weeks ended 25 June 2016 |
52 weeks ended 27 June 2015 |
|
|
£'000 |
£'000 |
|
Profit attributable to equity shareholders |
12,419 |
10,977 |
|
Items excluded from underlying results |
(4,336) |
(3,777) |
|
Underlying earnings attributable to equity shareholders |
8,083 |
7,200 |
|
|
|
|
|
|
Number |
Number |
|
Weighted average number of shares in issue |
14,779 |
14,770 |
|
Dilutive outstanding options |
113 |
113 |
|
Diluted weighted average share capital |
14,892 |
14,883 |
|
Basic |
84.0p |
74.3p |
|
Underlying basic |
54.7p |
48.7p |
|
Diluted |
83.4p |
73.8p |
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 in respect of employee incentive plans and options.
6 Notes to the cash flow statement
a Reconciliation of operating profit to cash generated by operations
|
|
52 weeks ended 25 June 2016
|
52 weeks ended 27 June 2015 |
||||
|
|
Underlying results |
Excluded from underlying results
|
Total
|
Underlying results |
Excluded from underlying results
|
Total
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Operating profit |
14,235 |
(495) |
13,740 |
13,758 |
(63) |
13,695 |
|
Adjustment for: |
|
|
|
|
|
|
|
Depreciation and amortisation |
7,115 |
- |
7,115 |
6,811 |
- |
6,811 |
|
Impairment provision |
- |
307 |
307 |
- |
63 |
63 |
|
Charge for share-based payments credited to reserves |
528 |
- |
528 |
425 |
- |
425 |
|
Decrease/(increase) in stocks |
421 |
- |
421 |
(584) |
- |
(584) |
|
(Increase)/decrease in debtors and prepayments |
(1,978) |
- |
(1,978) |
2,083 |
- |
2,083 |
|
Increase/(decrease) in creditors and accruals |
2,131 |
- |
2,131 |
1,548 |
(597) |
951 |
|
Free trade loan discounts |
113 |
- |
113 |
136 |
- |
136 |
|
Loss on sale of assets (excluding property) |
215 |
- |
215 |
79 |
- |
79 |
|
Interest received |
14 |
- |
14 |
13 |
- |
13 |
|
Income tax paid |
(2,313) |
- |
(2,313) |
(2,297) |
- |
(2,297) |
|
Net cash inflow/(outflow) from operating activities |
20,481 |
(188) |
20,293 |
21,972 |
(597) |
21,375 |
b Analysis of net debt
|
|
|
|
2015
|
Cash flow
|
Repayment of long-term loan
|
Issue costs of new loan
|
Amortisation of issue costs
|
2016
|
|
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Cash |
|
6,793 |
(6,703) |
- |
- |
- |
90 |
|
|
Bank overdraft |
|
- |
(727) |
- |
- |
- |
(727) |
|
|
Cash and cash equivalents |
6,793 |
(7,430) |
- |
- |
- |
(637) |
||
|
Debt due within one year |
|
(1,987) |
- |
2,000 |
- |
(13) |
- |
|
|
|
|
4,806 |
(7,430) |
2,000 |
- |
(13) |
(637) |
|
|
Debt due after more than one year |
(73,592) |
- |
14,000 |
313 |
(160) |
(59,439) |
||
|
Total |
|
(68,786) |
(7,430) |
16,000 |
313 |
(173) |
(60,076) |
|
7 Accounts
The financial information set out above does not constitute the Company's statutory accounts for the 52 weeks ended 25 June 2016 or 52 weeks ended 27 June 2015 but is derived from those accounts. Statutory accounts for 2015 have been delivered to the Registrar of Companies and those for 2016 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under s498(2) or (3) of the Companies Act 2006.
The preliminary announcement is prepared on the same basis as set out in the previous year's annual accounts.
This information is provided by RNS