Fuller Smith & Turner plc Financial Results 2022

FULLER, SMITH & TURNER P.L.C.

(“Fuller's”, the “Company”, or the “Group”)

Financial results for the 52 weeks to 26 March 2022

Return to profitable growth with a strengthened Balance Sheet

Financial and Operational Highlights

All figures above are from continuing operations except for Group statutory profit/(loss) before tax which includes discontinued operations in the prior year

1  Adjusted profit/(loss) before tax is the profit/(loss) before tax excluding separately disclosed items.

2   Net debt comprises cash and short-term deposits, bank overdraft, bank loans, CCFF, debenture stock, preference shares and excludes IFRS 16 lease liabilities.

3   Calculated using adjusted profit/(loss) after tax and the same weighted average number of shares as for the basic earnings/(loss) per share and using a 40p ordinary share.

4  Calculated on a 40p ordinary share.

• Revenues recovered to £253.8 million (2021: £73.2 million) despite being significantly impacted during the year by coronavirus related closures, restrictions and working from home guidance
• Adjusted profit before tax returning to growth at £7.2 million (2021: loss £48.7 million)
• Net debt excluding leases reduced to £131.9 million and headroom for future growth in place with new four-year £200 million bank facilities
• New Directors' valuation of the total property portfolio at £995.6 million, approximately £400 million above our current book value, which implies an adjusted net asset value per share of £13.80, demonstrating the underlying Balance Sheet strength of the business
• Return to a progressive dividend policy with a proposed final dividend of 7.41p in addition to the interim dividend of 3.90p paid earlier in the year.

Strategic Highlights

• Digital Transformation project delivered, improving the customer experience and enhancing our analytical capabilities to target new and existing customers
• Successfully implemented our new central finance system, which has enhanced the quality and timeliness of business information
• Launched new recruitment platform and employer brand to help attract and retain outstanding people
• Deployed our ESG strategy and honed our Life is too good to waste programme
• Continued to maintain capital investment in the estate, with £26 million invested in the year to enhance capital values and drive growth
• Secured new four-year bank facilities to provide headroom for future growth
• Strengthened and refined our long-term strategy to ensure we are evolving and responding to changes in consumer behaviour and market dynamics.

Chief Executive Simon Emeny said:

“During the year we have returned to profitable growth with revenues of £253.8 million and adjusted profit before tax of £7.2 million. It is testament to the dedication and resilience of our team, across the business, that we have managed to trade profitability under such difficult circumstances.

“As a company, we have used the last two years wisely. While steering the business through challenging trading conditions, we have also completed a number of strategic projects that will deliver benefits over the coming years. We have successfully honed our offer, completed a digital transformation project, rolled out a new central finance system, delivered an employer brand and new recruitment platform. We have also refined our branding and reviewed and evolved our long-term strategy.

“The new strategic framework, driven by our purpose to create experiences that nourish the soul, and the pillars that underpin it, will give everyone in the company clear direction and ensure we work as a team, from our kitchens to our boardroom, to deliver excellent results for all our stakeholders.

“In addition, we have worked hard to strengthen our Balance Sheet and highlight how we will continue to deliver long-term value through the application of our capital allocation framework.  The completion of the bank refinancing provides us with the headroom to grow and the Directors' valuation of the estate demonstrates that the implicit net asset value per share of our business is £13.80. Through the successful delivery of our strategic objectives, we plan to grow this value over the long term.

“While the last financial year has adversely affected Fuller's – with some of our key sites being the most impacted by the pandemic, we have built a balanced business which positions us well to navigate the continued evolution in consumer trends and behaviour. The current year has started well. We welcome the gradual return of workers to the City and tourists to Central London, which is now underway, and we are seeing steady growth in our total weekly sales, which will have a positive impact in FY2023. Momentum in the City and Central London continues to build, and we are confident that we will see the benefits of our estate's composition come into play.

“In the first 10 weeks of the new financial year total sales are up 4% on pre pandemic levels and are up 130% on the same period last year. On a like-for-like basis, excluding closed periods, sales in the first 10 weeks of the year are up 21.4% on last year. Furthermore, the investments we have made in the last two years are not yet comparable and the return on our capex projects will benefit the current year's results. 

“Market conditions remain challenging with fragile consumer confidence and well-documented high inflationary pressures. Our premium offering provides some protection from inflation, however we are certainly not immune from its effects. In common with our peers, we have seen significant increases in food and utility costs and are proactively working with our suppliers, and actively managing our offering, to mitigate the effects of inflation without impairing the customer experience.

“We remain confident that, despite the current market challenges, we will maintain our growth trajectory for revenues and profits and as such we are pleased to announce a final dividend of 7.41p, which means a total dividend to shareholders of £7.0 million for the year.

“In conclusion, we are looking back on a volatile year of highs and lows with many moving parts – but we are starting the new financial year on a high. We may be facing some bracing headwinds, especially around energy and inflation, but we are well placed to tackle the issues with clear measures and solutions in place.

“The great British pub has always been, and will always be, an affordable treat and has proved its resilience over time with its position at the very heart of the communities we serve. With an amazing team of people, great pubs and a clear strategy, we look forward to the future with confidence and excitement.”

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