Fuller, Smith & Turner Plc – Half-Year Results 2021

FULLER, SMITH & TURNER P.L.C.

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

Financial results for the 26 weeks to 25 September 2021

Financial and Operational Summary

• Business is rebuilding well – profitable first half, despite only being free of restrictions for nine full weeks of the period
• Business is cash-generative, and trade is continually increasing
• Started the financial year with all pubs and hotels closed – gradual reopening from April, with all sites reopened in July
• £52 million equity placing successfully completed in April 2021 to strengthen the Balance Sheet and ensure the Company exited the pandemic in a strong position
• Continue to face well-documented industry cost pressures – but business is well funded and in a good position to tackle headwinds
• Business remains firmly underpinned by our predominately freehold estate of iconic, high quality pubs and hotels
• Interim dividend payment of 3.90p per 'A' and 'C' ordinary share, reflecting the reopening of our estate, return to profitability and reduction in net debt.

All figures above are from continuing operations except for Group statutory profit/(loss) before tax which includes discontinued operations in H1 2021.

1   Pre-separately disclosed earnings before interest, tax, depreciation, profit on disposal of plant and equipment and amortisation.

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

3   Per 40p 'A' or 'C' ordinary share. Adjusted EPS is calculated using earnings attributable to equity shareholders before tax excluding separately disclosed items. Basis EPS includes separately disclosed items.

4   Net debt comprises cash and short-term deposits, bank overdraft, bank loans, CCFF, debenture stock and preference shares.

Strategic Update

• Used period of closure and quieter trading to continue investing in our predominately freehold estate, ensuring our pubs and hotels are in excellent condition
• Built on consumer demand for a premium experience with transformational refurbishments – including opening our first new Bel & The Dragon site at The Red Lion, Wendover
• Invested in our infrastructure – new finance system, Microsoft Business Central, due to go live on Monday 22 November 2021
• Further development underway for our booking engines, pub websites and CRM system to improve the customer's digital booking journey, communication and internal connectivity between systems
• Maintained excellent relationships and worked in partnership with our suppliers to optimise availability
• Continued support and development of our team members, including an improved remuneration and benefits package
• Hired first Head of Sustainability to put our Life's too good to waste policy at the heart of everything we do.

Current Trading and Outlook

• Managed like for like sales for seven weeks to 13 November 2021 at 90% of 2019 levels
• Tenanted Inns performing ahead of plan
• Rural pubs and hotels continue to perform above 2019 levels
• Excellent performance from Cotswold Inns & Hotels
• Central London pubs showing steady growth – which will benefit from the further return of international tourists
• Low level of net debt, reduced by £3.3 million to £128.2 million since the period end
• New Bel & The Dragon site planned for The George & Dragon at Westerham
• Company in excellent shape to continue to deliver long-term strategy and take advantage of selected opportunities.

Chief Executive Simon Emeny said: “While the first half of this financial year has been a story of slowly returning to some semblance of what was known as normality, I am proud of what we have achieved. We have used the time wisely, planning for the future, further improving our already robust infrastructure and focusing on our people, our properties, our supplier relationships and our systems.

“Like for like sales in our Managed Pubs and Hotels continue to grow steadily and for the seven weeks to 13 November 2021 stand at 90% of 2019 levels.  Christmas bookings are in good shape and there is clearly continued appetite from our customers to get out and socialise with friends and family.

“During the second half of the year, we will continue to develop our business through investment in property and infrastructure. At our pubs and hotels, this will include further winterisation projects at sites including The Head of the River in Oxford and The Red Lion in Barnes, as well as transformational schemes at The White Star Hotel in Southampton among others. In a further commitment to continually premiumising our offer, we will also be rolling out our next Bel & The Dragon at The George & Dragon in Westerham.

“Our infrastructure projects will also be coming to fruition in the coming months, starting with the roll out of Microsoft Business Central, our new finance package, which goes live on Monday 22 November 2021 – just in time for the arrival of our new Finance Director, Neil Smith, who comes with a wealth of relevant industry experience and starts at the end of November. We will complete our wider digital transformation projects with upgraded pub websites and our improved CRM system providing a fantastic digital shop window and even more targeted communications based on our customers' existing behaviours.

“We are pleased with the steady growth we are seeing across our pubs and hotels and we will benefit as international tourists return and office workers continue to head back to their desks and colleagues. There are a number of well-documented issues facing the industry as a whole and, while we are not immune, we are a long-standing business that is well funded, backed by a substantial, predominately freehold estate, and has the benefit of experience to help us navigate through.

“Our vision and strategy are clear, consistent and relevant. We have a well-balanced business in both style and geography and we have a first-class team of dedicated people right across the Company. Fuller's has, and always will have, a long-term view and a strategic plan that reflects that – and we will continue to deliver it.”