Financial performance:
– Turnover increased by +11.7% to £156.2m (2016: £139.9m)
– Underlying operating profit1 up +7.2% at £15.3m (2016: £14.2m)
– Underlying profit before tax2 up +8.0% to £11.2m (2016: £10.3m)
– Statutory profit before tax was £11.8m (2016: £14.4m) primarily due to high, one off profits on property disposals in 2016
– Underlying basic earnings per ordinary share up +8.0% to 59.1.p (2016: 54.7p) and basic earnings per share 69.1p (2016: 84.0p)
– Proposed final dividend per share of 22.73p (2016: 22.05p) making total dividends for the year up +3.1% to 28.35p (2016: 27.50p)
Operational highlights:
– Investment, modernisation and premiumisation have driven sales outperformance in underlying business with managed pubs like-for-like sales growth of +8.1%, and own beer volume growth of +3.9%, both substantially ahead of the market. Like-for-like tenanted EBITDAR3was up +1.6%.
– 14 pubs acquired at a cost of £24.8m in the year including five from Village Green Restaurants and eight from EI Group plc continuing the strategy of enhancing the quality of our estate. Proceeds of £5.9m have been raised from disposal of 15 pubs. Over 5 years, 22 pubs have been acquired and 49 sold, transforming our estate and driving average EBITDAR per managed pub up by +30.5% and per tenanted pub up by +25.4%.
– Continued investment of £10.7m across estate to ensure every pub has high standards and a unique character with an attractive offer for customers. Accommodation remains a key theme and an incremental revenue stream – occupancy is growing and now stands at 79% (2016:78%) and RevPAR4 at £66 (2016: £63).
– New brand identity launched with new website and pub signage with 45 sites completed to date.
– First phase of the modernisation programme of the brewery completed. New, premium British brands launched and costs streamlined to mitigate the impact of the Asahi contract termination in February 2018. Strategy to move to smaller and higher quality Brewing and Brands business focused on own beers.
Current trading:
– We have made steady progress in the new financial year albeit with colder and unsettled weather compared to 2016.
– In the ten weeks to 2 September, like-for-like managed sales were up +1.5% (2016: +8.2%) and total beer volume excluding contract was up +4.4% (2016: +1.2%). In the 9 weeks to 26 August like-for-like tenanted EBITDAR up +0.6% (2016: +2.2%)
Jonathan Neame, Chief Executive, commented:
“This has been a good year for the company with strong underlying performance and some great acquisitions that add real value to the company.
We are pleased with the strategic and operational progress made in all areas of our business.
We are mindful of the political and economic backdrop, but our strategic focus on investing for the long term, innovating and consistently delivering great pub environments and outstanding service for our customers will stand us in good stead. We remain confident that the actions that have been taken and our relentless pursuit of excellence will continue to deliver good long-term returns for our shareholders.”