THWAITES (DANIEL) PLC - Annual Financial Report
Announcement provided by
Daniel Thwaites PLC · THW24/06/2014 10:00
Chairman's Statement Results The results reflect the continuing execution of our strategy and the culmination of three years of restructuring the business. Group turnover for the year ofGBP138.7m represents a 2% increase on last year. Operating profit (before exceptional items) ofGBP10.3m represents a 2% decrease on last year. Earnings per share prior to exceptional items increased by 65% to 12.4p (2013: 7.5p). Exceptional items in the year largely linked to the restructuring of our brewery amounted toGBP11.6m before tax. During the year we have continued to invest in our pubs, inns and hotels, whilst continuing to churn the bottom end of our pub estate. This has resulted in net debt increasing fromGBP56.8m at31 March 2013 toGBP57.9m at31 March 2014 . Strategy Over the course of the year we have reviewed our strategy and confirmed our commitment to focusing our efforts on developing the business to offer superb hospitality in outstanding properties in great locations. Our actions over the next year and beyond will be based upon this vision as we continue to develop our company. Thwaites Pubs - We own and support an estate of high quality tenanted pubs, run by increasingly entrepreneurial individuals, who are attracted by the support package that we offer them to enable them to realise their pub's potential. The investments that we have made in the estate over the past few years have created sustainable, long term businesses with multiple income streams and strong food offerings. We will continue to focus on improving the quality of the estate which will mean that we are likely to continue to dispose of bottom end wet led pubs over the next 3 to 5 years.Thwaites Inns of Character - We have a small but growing number of inns to be proud of, and will actively look to grow this arm of the business. The inns are a natural place to showcase our beers, offer fantastic local food and comfortable rooms. We remain committed to acquiring and developing these larger managed properties which ideally will have bedrooms as well as offering excellent and exciting food and drink.Shire Hotels and Spas - Our collection of freehold provincial hotels are distinguished by their individuality, but united by their welcome and service. We will continue to invest in the hotels to maintain them in good order and provide a welcoming environment for our guests. We are looking to add to the number of hotels that we own through acquisition.Thwaites Beer Company - we are part way through our plan to reinvest in our brewery on a new site nearby. We are selling our beers more widely and are well represented in the national managed house groups, local free trade operators and the supermarkets. Brewing is an important part of our heritage and we are committed to brewing great beers and growing our brands.New Brewery InJuly 2011 we announced our intention to restructure our brewery inBlackburn , and that we had reached a conditional agreement with Sainsbury's to sell ourBlackburn brewery site with the intention that it should be redeveloped as a supermarket within the town centre. InJanuary 2014 we made a further announcement that we had not been able to make the progress we had hoped with Sainsbury's andBlackburn withDarwen Council , and therefore we would be moving forward with the next stage in seeing through our commitment to investing in a new brewery locally. As a result of this announcement we carried out a restructuring and closure of parts of our old brewery, and although we continue to brew our cask and craft ales inBlackburn , in this transitional phase we are not able to satisfy all the demand for our beers and lagers and so some of them are being brewed by external partners. We are delighted to announce that we have purchased a site to house our new brewery and offices. The site atMellor Brook , which is a short distance from our existing site, fits perfectly with what we have been looking for. Completion of the purchase will take place towards the end of the year. In the intervening period we will be applying for planning permission to build our new brewery, offices and visitor centre. The new brewery will be located on the A59, at the foot of theRibble Valley , and will be very accessible for people coming to visit us. It will be smaller than our current brewery, which is old, inefficient and far too big for our future needs. Our investment in the new brewery will allow us to brew a full range of our cask, seasonal and craft ales. The brewers and production team will continue to be focused on the quality and consistency of our beers, safeguarding our brewing heritage, but with new and more efficient and flexible equipment helping them to develop new and interesting beers cost effectively. We do not have any immediate plans for our existing site, as we have not been able to gainBlackburn with Darwen Council's support for our plan to bring Sainsbury's intoBlackburn , and those discussions have now ended. We continue to believe that a redevelopment of the site presents an exciting opportunity for the regeneration ofBlackburn town centre, and we are looking to find partners who can help us to realise its value. Exceptional items The results for the year include five exceptional items totallingGBP11.6m before tax. In announcing the restructuring of our brewing operations and the move to the new site atMellor Brook , we have written down the plant, machinery and buildings on our current site, incurring an exceptional impairment charge ofGBP8.0m . In addition, there have been restructuring costs, which are predominantly redundancy costs, totallingGBP2.5m . During the year we extended the offer we made last year to our existing pensioners in the 1959 defined benefit scheme, giving them the option to receive an increase to their pension from1 April 2013 , in exchange for giving up some of their future annual increases. This exercise will reduce the company's future pension costs byGBP0.2m . In accordance with the Group's accounting policy, we have undertaken the normal review of the valuations of our pub estate, hotels and inns. Furthermore, in line with our strategy of disposing of the bottom end of our pub estate, we have carried out an additional internal review of the valuation of wet led poor performing pubs. We have written the values down to what we consider to be realisable values under current market conditions in the areas that these pubs operate in. We have also revalued our currentBlackburn site, taking into account the costs of decommissioning and demolishing the existing buildings and the potential redevelopment value for the land. The net impact of these property valuations comprises a reduction against original cost ofGBP3.3m , charged to the profit and loss account, and an upward revaluation ofGBP4.2m added to the revaluation reserve. At31 March 2013 , we had a total ofGBP55m of interest rate swap contracts, against which we had previously made a provision ofGBP11.2m onGBP35m of these contracts where we were committed to paying the difference between LIBOR and the fixed rates for periods of up to 20 years. The expected future liability of these swaps has reduced fromGBP11.2m toGBP7.9m at31 March 2014 . We have releasedGBP2.0m to the profit and loss account, which represents the reduced liability net of interest paid during the year ofGBP1.3m . Acquisitions and disposals During the year we have evaluated a large number of potential acquisitions, but have been unable to secure any properties that meet our criteria. We continue to look for new properties to acquire and have the resources to be able to make acquisitions in all areas of the business. Over the same period we have sold fifteen pubs from the bottom end of our estate at a small loss. Dividend An interim dividend of 1.10p (2013: 1.10p) was paid inJanuary 2014 and the Board recommends a final dividend of 3.36p (2013: 3.36p). The Board will keep the level of dividend under review, and assess the level of future dividends in light of company performance. Board I am delighted thatJohn Barnes has joined the Board. John has experience in marketing and leisure businesses and has previously held a number of notable Board positions. John's experience will be invaluable to us as we move forward. People I would like to welcome all those who have joined us during the year, and wish them every success with the Company. It has been a difficult year for the staff in our brewery due to the further restructuring process that has been undertaken, and I would like to thank those involved for their support and understanding during this period of change. We now have the team in place with the experience to take us forward. I would also like to thank all our staff, customers, suppliers and shareholders for their continued commitment and support. Outlook The last three years have been very difficult due to the changes in the beer market and the difficult economic conditions. During this time we have undergone significant restructuring, however we have a clear vision and in this year have put in place the foundations and structure for the future. As a result of the changes we have made and signs of an improving economy and consumer confidence, I believe that we are in a strong position to develop the business over the next year and beyond. MrsAnn Yerburgh Chairman 24 June 2014 Operating Review Overview The trade across all areas of the business has had a mixed year, with a strong start and good weather over the summer leading into a more subdued trading period throughout the autumn. However, as we have entered our new financial year we are seeing the signs of increasing consumer confidence in all areas of the business. Our strategy remains focused on the four key parts of the business and we have plans to continue to invest in them to underpin our future growth. Beer C° and Pubs Thwaites Beer C° The sales of Thwaites ales and beers continued to outperform the market in a year where volumes in the on trade market fell by approximately 7%. In contrast our own production volumes dropped by 1% in total, largely as a consequence of having come away from contract work last year. Our beer brands once again performed strongly, with cask ale volumes growing by 8% on last year, underpinned by the continuing strong growth of Wainwright, volumes of which grew by 31%. Wainwright is the category leader in the Golden Ale market and has risen to be 17th in the ranking ofUK cask ale brands. We continue to invest heavily in our marketing support of Wainwright, which continues to drive its profitable growth. Our craft beer range, launched during the year, is another exciting development that has potential for the future. Comprising 13 Guns, an American Pale Ale, Big Ben, an English Brown Ale, and Triple C, a hoppy Golden Ale, the range has achieved listings both in the supermarkets and also in the on-trade. It won a design award at the International Beer Awards 2014 and the feedback from our tasting panels and customers has been excellent. Our Free Trade business had a good year, with sales up 2% and growth in operating profit on the previous year. The success of Wainwright in our national pub customers resulted in a number of new listings and turnover ending 4% up. In the supermarkets our range of premium bottled ales exceeded expectations, which was offset by a decline in sales of our canned lager and mild range. The changes we made to the brewery were complete by the year end and saw the closure of parts of the old brewery. In the period until the new brewery is built we are brewing in our modern craft brewery which we installed in 2011. As the brewery is at full capacity some of our beers are currently being brewed by external partners, and we have put in place additional quality control structures to ensure that the quality and consistency of our beers is unaffected. We have secured our new site and the design and planning process is underway; we hope to start construction of the new brewery in 2015. Thwaites Pubs We have an estate of over 300 pubs, which operate almost exclusively on a traditional tenancy basis. Our pub estate encompasses community locals to food led pubs in both rural and town centre locations, ranging geographically fromCumbria to theMidlands , and fromNorth Wales toYorkshire . Our strategy in recent years has been to invest in developing the quality of our pub estate with an extensive refurbishment programme and to acquire good quality pubs in areas with strong demographics and high disposable incomes. At the same time we have disposed of the bottom end of our estate. In the medium term this approach will lead to a smaller but higher quality and sustainable estate. The performance of our pub estate has benefitted from the sunny summer weather of 2013 and the investments that we have made over the past few years. During the year we completed a further 46 development projects at a cost ofGBP3.9m , making returns well ahead of our hurdle rate of 20%. Major projects in the year have been completed at The Little B, Sale, The Fighting Cocks, Arnside and The Higher Buck, Waddington. The sustained investments made over recent years have ensured that the fabric of our pub estate is in good order and the emphasis of our investments have positioned the pubs towards a mixed food and drinks offering that place them in better stead for the future. In the short term this inevitably means that the drinks mix changes with less beer sold in favour of wines, spirits and soft drinks. However our experience is that this effect is partially offset by an overall growth in sales as the pubs trade to a higher level overall. In addition, we have added letting accommodation to a number of our pubs, providing a further income stream for our publicans, and creating more sustainable long term businesses. Attracting the very best entrepreneurs to run our pubs is a key part of their success and we have made this an area of particular focus in the past few years by continuing to improve the quality of support and service that we offer our pubs. InDecember 2013 we launched a new recruitment website, which is considerably easier to use than its forerunner and offers a more responsive service. The new site has been very well received and has had over 14,500 unique visitors since launch. We have also seen a significant rise in the number of applicants for pubs, up by 34% on the same period last year, and a number of outstanding operators wanting to work with Thwaites have taken on our pubs over the course of the year. The market for food in pubs continues to be one of the key drivers across the sector. We grew the number of our pubs that sell food by 8%, largely through capital investment, so that over 70% of our estate now sells food. Our wine volumes grew across the estate in the year by 9%, largely as our food sales continue to grow. We offer a wine menu production service, very similar to our food menu packages and often using the same design templates. This ensures our pubs have the appropriate wine offer for their target market. We have focused our resource on reducing energy costs for our pubs which is important in sustaining their profitability over the medium term. This year we completed a three year programme to insulate all roof spaces across the estate and are replacing many windows across the estate with double glazing. We complement this with replacement boilers where necessary and can often see reductions in tenant's utility bills of up to 15%. Our annual tenanted awards ceremony `Thwaites Awards for Excellence 2014' was held inApril 2014 , and we were again delighted by the quality of the submissions and made awards in eight categories. Our congratulations go to the Eagle & Child, Ramsbottom, which won our Pub of the Year Award. We have continued to address the bottom end of our pub estate during the year, selling 15 pubs that were not well placed to make satisfactory future returns at a net loss ofGBP0.2m after disposal costs. We continue to seek to acquire further good quality tenanted pubs with balanced income streams. The combined effect of continued investment in our core properties, disposing of pubs in the tail of our estate and acquiring good quality tenanted pubs will ensure over the medium term that we have a high quality, sustainable pub business. Hotels and InnsThwaites Inns of Character We currently own and manage eight `Inns of Character' and continue to seek high quality properties in outstanding locations to develop our Inns portfolio.These Inns have a busy bar as the hub, a quality food offering and comfortable accommodation - they focus on providing outstanding hospitality and offer an attractive and more personal alternative to the mid-market branded chains in busy locations. This has been a year of significant change and investment in the Inns in order to create a platform for our future growth and development. InApril 2014 we opened the Bulls Head, Earlswood,Solihull . This previously sat within our tenanted pub division, and has been fully refurbished to provide a high quality country pub and kitchen. Following last year's acquisition of The Judge's Lodging,York , we have undertaken a detailed design and planning exercise on this Grade 1 listed building located in the centre ofYork . The property was closed inJanuary 2014 to undergo major refurbishment and development at a cost ofGBP2.4m . This work will be completed inJune 2014 , when we will re-launch The Judge's Lodging with 21 bedrooms, an extensive food and beverage offering and several large external seating areas. Elsewhere, we refurbished all 26 bedrooms and associated corridors at The Millstone at Mellor, which is now well positioned to take advantage of the development of the newEnterprise Zone on the BAE site at Salmesbury. We have also rolled out new front of house EPoS systems to all of our inns during the year, which will provide us with better information and allow us to provide our guests with improved service and a better experience. Following the year end we closedThe Inn at Keswick to carry out a full refurbishment of the trading areas, bedrooms and kitchen. It has now reopened, renamed The Royal Oak, its original eighteenth century name, and is positioned to trade well through the summer season in theLake District . Sales in the Inns during the year increased by 29% compared to 2013, and whilst the impact of the closure and disruption during refurbishments meant that profitability remained flat they are well positioned to grow in the coming year.Shire Hotels & Spas We own and operate six full service four star regional hotels, which are geographically spread across the north and south ofEngland . The provincial hotel market is seeing a steady recovery as consumer confidence increases in an improving economic climate. Sales in our hotels increased by 4% year on year and occupancy rates have never been higher, although increasing room rates, which dropped between 2009 and 2012, remains our biggest challenge. Day meeting activity is relatively buoyant but residential conference business is recovering very slowly and is a long way below its pre-recession peak. We are proud of our track record of innovation in our hotels, being the first regional business to make our hotels fully non-smoking, the first to offer inclusive WiFi to all areas and the first to introduce Conference Café to our meeting rooms. In March we introduced a new concept in meeting rooms at theAztec Hotel & Spa ,Bristol . These meeting `pods', rented by the hour, are a halfway house between meeting in a bar or lounge and hiring a private meeting room and are proving popular. We continue to invest in our hotels to maintain and develop their sales and profitability.The Cottons Hotel and Spa , Knutsford, now in its thirtieth year as a Shire Hotel, has grown from strength to strength. A new external terrace for eating and drinking is nearing completion and compliments a refurbishment of the bar and lounge areas completed earlier in the year to accommodate the trends towards less formal dining. This year we completed a three year programme to upgrade the air conditioning systems in all our southern hotels. We have also started the implementation of new IT systems with the replacement of the spa system and the introduction of a sophisticated revenue management system. The replacement of the room management and the EPoS systems will take place this coming year. Summary and outlook The investments in our pubs, inns and hotels have provided a solid platform for future development and our plans to reinvest in our brewery are now moving forward. With the changes we have made, and improving economic conditions, we believe we are well placed for the future. Financial Review Results Turnover for the year ended31 March 2014 increased by 2% toGBP138.7m . Turnover in theBeer Company and Pubs decreased by 1% toGBP96.0m , due primarily to the exit from contract work in the brewery in the early part of the year, whilst turnover in the Hotels and Inns increased by 9%. Operating profit, before exceptional items, decreased by 2% toGBP10.3m . Loss after taxation, after exceptional items, for the year wasGBP4.1m (2013:GBP1.3m ). Business Review The key issues facing the Group are covered in the Chairman's Statement and Strategic Report. The principal non-financial indicators monitored by management are: Beer Co and Pubs Production indices, warehousing and logistics indices, utility indices, beer quality, health and safety incidents, beer volumes by sector and tenant recruitment. Hotels and Inns Room occupancy rates, customer complaints, health and safety incidents, spa memberships and wedding and event numbers. Exceptional Items Exceptional items amount toGBP11.6m before tax, and comprise a provision for restructuring costs ofGBP2.5m , an impairment charge for the brewery ofGBP8.0m , a property impairment charge ofGBP3.3m , a pension past service credit ofGBP0.2m , and a partial release of the provision for the settlement of fixed interest rate swaps ofGBP2.0m . The further announcement of our intention to relocate our brewery operations to a new site and the restructuring and closure of large parts of our existing brewery resulted in an exceptional restructuring provision, a large proportion of which is for redundancy costs, ofGBP2.5m . We have also written down the value of the buildings, plant and machinery in our current brewery resulting in an exceptional charge ofGBP8.0m . In line with our accounting policy we carried out a valuation exercise on 20% of our properties which generated a revaluation surplus ofGBP2.0m . In addition we carried out an internal valuation of the bottom end of our pub estate in line with our strategy of disposing of these bottom end pubs and this generated an impairment ofGBP3.7m . Whilst we have written down the value of the building, plant and machinery at the current brewery, we have revalued the land to take into account its potential development value after allowing for the costs of decommissioning and demolition, which increased the land value byGBP2.6m . In total these valuation exercises generated a property valuation surplus ofGBP0.9m . Reductions against historic cost amounted toGBP3.3m which is charged to the profit and loss account, and surpluses ofGBP4.2m are credited to the revaluation reserve. During the year we extended the offer we made in the previous year, whereby our existing pensioners in the 1959 defined benefit scheme were given the option to receive a single increase to their pension from1 April 2013 , in exchange for giving up some of their future annual increases. This exercise will reduce the company's future pension costs by a furtherGBP0.2m . At31 March 2013 , we had a total ofGBP55m of interest rate swap contracts, against which we made a provision ofGBP11.2m againstGBP35m of these contracts on which we were committed to paying the difference between LIBOR and the fixed rates for periods of up to 20 years. The remainingGBP20m of swaps are not provided against as they remain matched to the level of bank debt expected in the short to medium term. During the year we have paidGBP1.3m of interest on theseGBP35m of swaps, and due to the improving economic conditions the termination cost of these swaps has reduced toGBP7.9m at31 March 2014 . Consequently the reduction in the settlement provision required ofGBP2.0m has been credited to the profit and loss account. Interest payable Net interest payable decreased byGBP0.8m toGBP4.0m , despite an increased level of net debt fromGBP56.8m toGBP57.9m due to the savings made as a result of the full year effect of the settling ofGBP40m of interest rate swap contracts in the previous year. Taxation The tax charge on profit for the year before exceptional items wasGBP0.4m , an effective rate of 5%(2013: 25%) which is a result of tax losses utilised in the year. Allowable losses created by the restructuring provision have created an exceptional tax credit this year ofGBP0.1m . Earnings per share The loss per share after exceptional items increased from 2.2p to 6.9p. Earnings per share before exceptional items increased from 7.5p to 12.4p. Dividends An interim dividend of 1.10p has been paid and the Board recommends a final dividend of 3.36p, which will make a total of 4.46p for 2014 (2013: 4.46p). Cash flow and financing The Group's net borrowing increased byGBP1.1m , fromGBP56.8m at31 March 2013 toGBP57.9m at31 March 2014 due to the level of capital expenditure. The Group made contributions to the defined benefit pension scheme ofGBP3.8m (2013:GBP3.4m ). Whilst this scheme was closed inAugust 2009 , the Group is committed to funding the deficit on the scheme which wasGBP14.9m at31 March 2014 , a reduction ofGBP1.5m fromGBP16.4m at31 March 2013 . The Group has bank facilities ofGBP30m , which in addition toGBP45m of long term debt means the total facilities areGBP75m . These total facilities ofGBP75m are sufficient to meet the short term needs of the Group. Property During the year we sold 15 pubs for a total ofGBP2.7m generating a loss against book value, after disposal costs, ofGBP0.2m . In line with our accounting policy, 20% of our properties were subject to a formal revaluation, and additionally an impairment review was carried out on the rest of our property estate. This resulted in an increase in the total value of our property portfolio ofGBP0.9m of whichGBP3.3m was charged to the profit and loss account andGBP4.2m added to the revaluation reserve. Treasury policy and financial risk management Treasury policies are subject to Board approval. All borrowings are in sterling and comprise a mixture of fixed interest loans and facilities carrying LIBOR related floating rates. The Group has interest rate swaps forGBP55m where it is committed to pay the difference between LIBOR and fixed interest rates. At31 March 2014 a provision ofGBP7.9m is in place againstGBP35m of these interest rate swap contracts which are not considered highly likely to be matched against future borrowings. Kevin Wood Finance Director 24 June 2014 EXTRACT FROM AUDITED FULL FINANCIAL STATEMENTS FOR THE YEAR ENDED31ST MARCH 2014 GROUP PROFIT AND LOSS ACCOUNT 2014 2014 2014 2013 2013 2013 GBP'm GBP'm GBP'm GPB'm GBP'm GBP'm Before Exceptional Total Before Exceptional Total exceptional exceptional items items items ______ items ______ ______ ______ ______ ______ Turnover 138.7 - 138.7 136.4 - 136.4 Cost of sales (108.6) - (108.6) (104.2) - (104.2) ______ ______ ______ ______ ______ ______ Gross profit 30.1 - 30.1 32.2 - 32.2 Distribution costs (13.5) - (13.5) (15.0) - (15.0) Administrative expenses (6.3) - (6.3) (6.7) - (6.7) Restructuring costs - (2.5) (2.5) - (1.0) (1.0) Property impairment - (3.3) (3.3) - (1.6) (1.6) Brewery impairment - (8.0) (8.0) - - - Pension past service - 0.2 0.2 - 0.7 0.7 credit ______ ______ ______ ______ ______ ______ Operating profit (loss) 10.3 (13.6) (3.3) 10.5 (1.9) 8.6 Property disposals (0.2) - (0.2) (0.2) 2.4 2.2 ______ ______ ______ ______ ______ ______ Profit (loss) before 10.1 (13.6) (3.5) 10.3 0.5 10.8 interest Net interest payable (4.0) 2.0 (2.0) (4.8) (8.9) (13.7) Net interest on pension 1.7 - 1.7 0.5 - 0.5 liability ______ ______ ______ ______ ______ ______ Profit (loss) on 7.8 (11.6) (3.8) 6.0 (8.4) (2.4) ordinary activities before taxation Taxation on profit (0.4) 0.1 (0.3) (1.5) 2.6 1.1 (loss) for the year ______ ______ ______ ______ ______ ______ Profit (loss) 7.4 (11.5) (4.1) 4.5 (5.8) (1.3) on ordinary activities after taxation ______ ______ ______ ______ ______ ______ Dividends : 2014 2013 Ordinary paid per share 1.10p (2013 - 1.10p) 0.7 0.7 Ordinary recommended per 25p share 3.36p 2.1 2.1 (2013 - 3.36p) Loss per ordinary share (6.9)p (2.2) p The final dividend of 3.36p per ordinary share in respect of the year ended31st March 2014 will be paid on5th August 2014 to shareholders on the register at11th July 2014 . DANIEL THWAITES PLC GROUP BALANCE SHEET 2014 2013 At 31st March 2014 GBP'm GBP'm _____________________________________________________________________________ ________ ________ Fixed Assets Goodwill 0.1 0.2 Tangible assets 263.3 272.6 Investments 9.1 9.0 _____________________________________________________________________________ ________ ________ 272.5 281.8 Current assets Stocks 3.8 5.0 Debtors 16.8 17.4 Cash and bank 3.6 3.0 _____________________________________________________________________________ ________ ________ 24.2 25.4 _____________________________________________________________________________ ________ ________ Creditors due within one year Trade and other creditors (19.8) (20.8) _____________________________________________________________________________ ________ ________ (19.8) (20.8) _____________________________________________________________________________ ________ ________ Net current assets 4.4 4.6 _____________________________________________________________________________ ________ ________ Total assets less current liabilities 276.9 286.4 Creditors due after one year Loan capital (61.5) (59.8) Provisions for liabilities and charges Provisions for liabilities (10.7) (15.1) _____________________________________________________________________________ ________ ________ Net assets excluding pension liability 204.7 211.5 _____________________________________________________________________________ ________ ________ Net pension liability (14.9) (16.4) _____________________________________________________________________________ ________ ________ Net assets including pension liability 189.8 195.1 _____________________________________________________________________________ ________ ________ Capital and reserves Called up share capital 14.9 14.9 Capital redemption reserve 0.9 0.9 Revaluation reserve 84.8 81.2 Profit and loss account 89.2 98.1 _____________________________________________________________________________ ________ ________ Equity shareholders' funds 189.8 195.1 _____________________________________________________________________________ ________ ________DANIEL THWAITES PLC GROUP CASH FLOW STATEMENT For the year ended31st March 2014 ____________________________________________________________________________ 2014 2013 GBP'm GBP'm ________ _________ Cash flow from operating activities 14.2 14.4 Returns on investments and servicing of finance (5.3) (14.8) Tax refunded - 2.5 Capital expenditure and financial investment (7.3) (8.2) Equity dividends paid (2.7) (2.8) ____________________________________________________________________________ ________ ________ Cash flow before financing (1.1) (8.9) Financing - purchase and cancellation of shares - (2.9) Financing - increase in debt 1.7 11.8 ____________________________________________________________________________ ________ ________ Increase in cash 0.6 - ____________________________________________________________________________ ________ ________ Reconciliation of net cash flow to movement in net debt Increase in cash 0.6 - Cash flow from increase in debt (1.7) (11.8) ____________________________________________________________________________ ________ ________ Movement in net debt in the year (1.1) (11.8) Net debt at beginning of year (56.8) (45.0) ____________________________________________________________________________ ________ ________ Net debt at end of year (57.9) (56.8) ____________________________________________________________________________ ________ ________ Analysis of changes in net debt : At 31st At 31st March Cash March 2014 flow 2013 GBP'm GPB'm GBP'm Cash at bank and in hand 3.6 0.6 3.0 Debt due within one year - - - Debt due after one year (61.5) (1.7) (59.8) ________________________________________________________________________ ______ _______ ______ ________________________________________________________________________ (57.9) (1.1) (56.8) ______ _______ ______ Notice of Meeting Notice is hereby given that the Annual General Meeting of the Company will be held atThe Cottons Hotel and Spa ,Manchester Road , Knutsford,Cheshire , WA16 0SU on Thursday31 July 2014 at 12.00 noon for the transaction of the following business: Ordinary Business To consider, and if thought fit, pass the following resolutions which will be proposed as ordinary resolutions. 1. To receive and adopt the accounts for the year ended31 March 2014 and the reports of the directors and the auditor, and to declare a final dividend 2. To re-elect Miss A M R Yerburgh as a director 3. To re-elect Mr M J Barnes as a director 4. To confirm the remuneration of the directors 5.KPMG Audit Plc have notified the Company that they are not seeking reappointment. It is proposed thatKPMG LLP be appointed auditors of the Company to hold office from the conclusion of this meeting until the conclusion of the next general meeting at which accounts are laid before the Company, and that their remuneration be fixed by the Directors Special Business To consider, and if thought fit, pass the following resolutions of which resolutions 6 and 8 will be proposed as ordinary resolutions and resolution 7 as a special resolution. 6. THAT, for the purposes of section 551 of the Companies Act 2006 (the Act) the directors of the Company be and are hereby generally and unconditionally authorised to exercise all powers of the Company to allot equity securities (within the meaning of section 560 of the Act) up to an amount equal to the aggregate nominal amount of the authorised but unissued share capital of the Company provided that this authority shall expire (unless previously renewed, varied or revoked by the Company in general meeting) at the conclusion of the next annual general meeting of the Company, save that the Company may before such expiry make an offer or agreement which would or might require relevant securities to be allotted after such expiry and the directors of the Company may allot relevant securities in pursuance of such an offer or agreement as if the authority conferred hereby had not expired. This authority is in substitution for any and all authorities previously conferred upon the directors for the purposes of section 551 of the Act, without prejudice to any allotments made pursuant to the terms of such authorities. 7. THAT, subject to the passing of resolution 6 above, the directors of the Company be and are hereby empowered pursuant to section 570 of the Act to allot equity securities (within the meaning of section 560 of the Act) pursuant to the authority conferred by resolution 6 above as if section 561 of the Act did not apply to any such allotment provided that the power conferred by this resolution shall be limited to: i. the allotment of equity securities for cash in connection with an issue or offer of equity securities (including, without limitation, under a rights issue, open offer or similar arrangement) to holders of equity securities in proportion (as nearly as may be practicable) to their respective holdings of equity securities subject only to such exclusions or other arrangements as the directors of the Company may consider necessary or expedient to deal with fractional entitlements or legal or practical problems under the laws of any territory, or the requirements of any regulatory body or stock exchange in any territory; and ii. the allotment (otherwise than pursuant to resolution 7.1) of equity securities for cash up to an aggregate nominal amount ofGBP743,750 . The power conferred by this resolution 7 shall expire (unless previously renewed, revoked or varied by the Company in general meeting), at such time as the general authority conferred on the directors of the Company by resolution 6 above expires, except that the Company may at any time before such expiry make any offer or agreement which would or might require equity securities to be allotted after such expiry and the directors of the Company may allot equity securities in pursuance of such an offer or agreement as if the authority conferred hereby had not expired. 8. To authorise the Company generally and unconditionally to make market purchases (within the meaning of section 693(4) of the Companies Act 2006) of ordinary shares of25 pence each in the capital of the Company provided that: i. the maximum aggregate number of ordinary shares that may be purchased is 5,950,000. Representing 10% of the issued share capital of the Company; ii. the minimum price (excluding expenses) which may be paid for each ordinary share is25 pence . iii. the maximum price (excluding expenses) which may be paid for each ordinary share is an amount equal to 105 per cent of the average of the middle market quotations for an ordinary share of the Company (as derived from theICAP Securities & Derivatives (ISDX) website) for the five business days immediately preceding the day on which the purchase is made; and iv. unless previously renewed, varied or revoked, the authority conferred by this resolution shall expire at the earlier of the conclusion of the Company's next Annual General Meeting and the date which is six months from the end of the Company's next financial year save that the Company may, before the expiry of the authority granted by this resolution, enter into a contract to purchase ordinary shares which will or may be executed wholly or partly after the expiry of such authority. NOTES Resolution 6 - Authority to allot relevant securities The Company requires the flexibility to allot shares from time to time. The directors are limited as to the number of shares they can at any time allot because allotment authority continues to be required under the Companies Act 2006 (the Act). Accordingly, resolution 6 would grant this authority (until the next Annual General Meeting or unless such authority is revoked or renewed prior to such time) by authorising the directors (pursuant to section 551 of the Act) to allot relevant securities up to an amount equal to the aggregate nominal amount of the authorised but unissued share capital of the Company as at31 March 2014 . The directors believe it to be in the interests of the Company for the Board to be granted this authority, to enable the Board to take advantage of appropriate opportunities which may arise in the future. Resolution 7 - Disapplication of statutory pre-emption rights This resolution seeks to disapply the pre-emption rights provisions of section 561 of the Act in respect of the allotment of equity securities for cash pursuant to rights issues and other pre-emptive issues, and in respect of other issues of equity securities for cash up to an aggregate nominal value ofGBP743,750 , being an amount equal to approximately 5 per cent of the current issued share capital of the Company. If given, this power will expire at the same time as the authority referred to in resolution 6. The directors consider this power desirable due to the flexibility afforded by it. Resolution 8 - Authority to make market purchases of shares Resolution 8 seeks authority for the Company to make market purchases of its own ordinary shares. If passed, the resolution gives authority for the Company to purchase up to 5,950,000 of its ordinary shares, representing 10 per cent of the Company's issued ordinary share capital. Resolution 8 specifies the minimum and maximum prices which may be paid for any ordinary shares purchased under this authority. The authority will expire at the conclusion of the Company's next Annual General Meeting in 2015 or, if earlier, the date which is six months from the end of the Company's financial year which commenced on1 April 2014 . Any shares purchased under this authority will be cancelled. As a member of the Company entitled to attend and vote at the meeting convened by this notice you are entitled to appoint another person as your proxy to exercise all or any of your rights to attend and to speak and vote in your place at the meeting. Your proxy need not be a member of the Company. You may appoint more than one proxy in relation to the meeting convened by this notice provided that each proxy is appointed to exercise the rights attached to a different share or shares held by you. You may not appoint more than one proxy to exercise rights attached to any one share. By order of the Board MrsS. I. Woodward , A.C.I.S. Secretary Star Brewery, Blackburn
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