FULLER, SMITH & TURNER P.L.C.
(“Fuller's”, the “Group” or the “Company”)
Financial results for the 52 weeks ended 28 March 2020
A transformational year for a long-term business
Financial and Operational Indicators
- Revenue and other income from continuing operations up 3% to £333.0 million (2019: £324.7 million)
- Pre IFRS 16 profit before tax for total Group operations of £174.5 million (2019: £26.1 million). Statutory profit before tax for total Group operations of £166.2 million
- Basic earnings per share pre IFRS 16 for total Group operations of 305.86p (2019: 35.12p)
- Good performance from Managed Pubs and Hotels pre coronavirus with like for like sales[1] growth of 2.3% for the 49 weeks to 7 March 2020 (2019: +4.9%) – ahead of the industry average
- Like for like growth in all areas of the business – drinks sales up 1.7%, food sales up 1.9% and accommodation sales up 5.9% for the 49 weeks to 7 March 2020
- Steady performance from Tenanted Inns – like for like profits[2] declined 3% (2019: +1%) in a tough trading environment
- Net debt pre IFRS 16 reduced by £66.3 million to £178.9 million at year end
- Strong returns to shareholders during the year, equating to £1.33 per 'A' ordinary share
- £162.4 million profit from the sale of the Fuller's Beer Business
- Impact of coronavirus on 2019/20 trading is estimated in excess of £10 million
- Entire pubs and hotels portfolio closed post government coronavirus directive from 20 March 2020 – phased reopening started 4 July with 163 Managed Pubs and Hotels and almost all Tenanted Inns open as of today.
Strategy Update
Completed the sale of the Fuller's Beer Business to Asahi Europe Ltd for the enterprise value of £250 million in April 2019
- Acquired Cotswold Inns & Hotels for an enterprise value of £40 million – seven stunning freehold sites that are a great addition to our portfolio
- Returned £69 million to shareholders
- Voluntary contribution of £24 million to the defined benefit pension scheme
- Completed the Transitional Services Agreement with Asahi in April 2020
- Purchased Pier House – a new freehold office for our support centre in our Chiswick heartland
- Opened The Windjammer at Royal Docks, a new build site, and The Bear of Burton near Christchurch, Dorset – an outstanding pub with rooms
- Sold the freehold of The Castle, Acton for £10.3 million.
Current Trading and Outlook
- Over 75% of Managed Pubs and Hotels and almost all Tenanted Inns already reopened
- Too early to draw meaningful conclusions for the longer term, but comfortable with current levels of trade
- Issued £100 million of commercial paper through the Bank of England Covid Corporate Financing Facility
- Completed the integration of Cotswold Inns & Hotels and Bel & The Dragon
- Completed the sale of The Stable to Three Joes.
Commenting on the results, Chief Executive Simon Emeny said: “When we released our interim statement in December 2019, we were on track to finish the financial year in a good position having received the proceeds from the sale of the Fuller's Beer Business and with a clear future path laid out before us. It had been a transformational year for Fuller's – but we would never have anticipated that we would end it in March with the whole hospitality industry in a state of closure and with no income stream.
“Against this backdrop, it is easy to forget that the financial year started in April 2019 with the sale of the Fuller's Beer Business to Asahi Europe Ltd for an enterprise value of £250 million, followed in October 2019 by the acquisition of Cotswold Inns & Hotels – seven stunning hotels in the heart of the Cotswolds – from existing bank facilities. The decision to sell the Fuller's Beer Business at that time has proved fortuitous and ensured we were in a strong position, with substantial liquidity headroom, when the coronavirus pandemic struck.
“While it is still early days, it is pleasing to see our teams welcoming guests back and we have taken a range of actions and measures to ensure our pubs are safe and inviting. The first stage of our three stage plan saw 27 pubs open on 4 July 2020 and another 136 since – meaning over 75% of our Managed Pubs and Hotels are now open. Almost all our Tenanted Inns have also reopened. While it is too early to draw any meaningful conclusions, we are comfortable with the level of trade and we continue to monitor footfall in those areas where our pubs are not yet open.
“While we are prepared for business, particularly in London, to take some time to return to normal, we are well placed to satisfy the uptick in demand for staycations as many customers holiday closer to home – an opportunity we are supporting with marketing activity for our Beautiful Bedrooms. We continue to focus on minimising cash burn and returning to profitability. During August, we will gradually reintroduce rent for Tenants – but on a tapered basis to help with their own return to sustainable trading levels.
“In these uncertain times, it is challenging to accurately predict the future. But having begun reopening our pubs nearly four weeks ago, it is encouraging to see customers returning to our pubs and this steady growth in consumer confidence will be the key to success – not just of our Company or our industry but the economy as a whole. We have a well-balanced estate geographically and that, combined with a freehold asset base and the calibre of our people, puts us in a stronger position than many to build towards sustained profitability in this full year and a strong start to the FY2022 financial year.
“A freehold approach is a fundamental foundation of our long-term business. It is not always fashionable, but yet again it underpins our ability to survive the toughest of times. We are proud to be 175 years old this year and with our balanced and well-invested estate, prudent approach to finance and amazing team of dedicated people, we will still be here for generations to come.”