TIDMYNGA
RNS Number : 1531G
Young & Co's Brewery PLC
25 May 2017
Young & Co.'s Brewery, P.L.C.
Preliminary results for the 53 weeks ended 3 April 2017
2017 2016
53 weeks 52 weeks %
GBPm GBPm change
---------------------------------- --------- --------- -------
Revenue 268.9 245.9 +9.4
Adjusted operating profit(1)
(2) 46.1 41.2 +11.9
Operating profit(2) 42.7 38.4 +11.2
Adjusted profit before tax(1)
(2) 40.4 35.6 +13.5
Profit before tax(2) 37.0 32.8 +12.8
Net cash generated from
operations 63.5 60.4 +5.1
Adjusted basic earnings
per share(1) (2) 66.43p 58.44p +13.7
Basic earnings per share(2) 61.51p 54.73p +12.4
Dividend per share 18.50p 17.45p +6.0
(interim and recommended
final)
Net assets per share(3) GBP10.10 GBP9.30 +8.6
---------------------------------- --------- --------- -------
All of the results above
are from continuing operations.
(1) Reference to an "adjusted" item means that
item has been adjusted to exclude exceptional
items (see notes 3 and 4).
(2) The prior period comparatives have been
restated for a non-cash adjustment in respect
of the treatment of short leasehold premiums
(see note 1).
(3) Net assets per share are the group's net
assets divided by the shares in issue at the
period end.
PERFORMANCE HIGHLIGHTS
(All numbers below on a comparable 52 week vs 52 week basis)
-- Another very successful year's trading, continuing the
consistent run of outperformance driven by our premium estate of
differentiated, individual pubs and hotels;
-- Young's, Geronimo and Ram Pub Company revenues all in high single-digit growth;
-- Total managed house revenues up 7.0%, and up 4.7%
like-for-like; operating profit up 9.8% to GBP58.4 million;
-- Ram Pub Company revenues up 7.1% and up 3.2% like-for-like; operating profit up 11.1%;
-- Investment of GBP38.2 million in acquisitions,
transformational developments and estate upgrades;
-- Record cash generation, with operating cash flow up 5.1% to
GBP63.5million and year-end net debt representing a conservative
1.9 multiple of EBITDA;
-- Proposed 6.1% increase in final dividend to 9.62 pence,
resulting in a total dividend of 18.50 pence (2015: 17.45 pence);
20(th) consecutive year of dividend growth;
-- Positive trading since the period end; managed house revenue
in the first seven weeks was up 6.1% in total, and 4.7%
like-for-like.
Patrick Dardis, Chief Executive of Young's, commented:
"I am delighted with these results. Yet again we have
outperformed the sector, and made progress on all key measures,
with revenue, profit, margin, cash generation, investment, the
value of our pub estate and shareholder returns all strongly ahead.
This is the reward for our consistent strategy of running high
quality, differentiated, individual and well invested pubs, at the
heart of the communities in which they sit, staffed by well-trained
and motivated teams of people.
"The pub is now the most popular destination for eating out in
the evening, and recent trading has been strong, with our ranges of
craft beer, our "Cocktail Collective", and our brunch and Sunday
lunch offerings all helping drive performance. The good weather at
the start of the year and the increase in 'staycations' during the
Easter holidays ensured our pubs were busy, particularly those on
the river and with large gardens.
"The broader economic and political environment remains
uncertain and our sector faces unwelcome cost pressures on a number
of fronts. In response, we are working hard to ensure we are best
placed for whatever is around the corner. We have a reliable track
record, a very clear strategy, a great team of people, and the
financial muscle to continue to grow. We will continue to surprise
and delight our customers, and to grow our estate through carefully
selected acquisitions and developments, all in pursuit of
delivering superior returns for our shareholders."
For further information, please contact:
Young & Co.'s Brewery, P.L.C. 020 8875 7000
Patrick Dardis, Chief Executive
Steve Robinson, Chief Financial
Officer
MHP Communications 020 3128 8100
John Olsen/James White/Gina
Bell
PRELIMINARY RESULTS FOR THE 53 WEEKSED 3 april 2017
I am delighted to announce that the 53 weeks ended 3 April 2017
has seen another strong performance. Revenue was up 9.4% to
GBP268.9 million and within managed houses, which make-up 94.8% of
our total sales, like-for-like sales were up 4.7%. Operating cash
generation is at an all-time high at GBP63.5 million (2016: GBP60.4
million) which has allowed us to continue our investment plans,
both through internal developments and acquisitions, while also
reducing our net debt. At the year-end, our net debt to adjusted
EBITDA ratio was 1.9 times (2016: 2.2).
Our profitability is also improving, with basic earnings per
share increasing by 12.4% to 61.51 pence (2016: 54.73 pence) and
adjusted basic earnings per share by 13.7% to 66.43 pence.
CREATING AN EXPERIENCE IS KEY
The pub is now the most popular destination for eating out in
the evening, with 37% of Britons visiting pubs more regularly than
restaurants and fast food outlets. Furthermore, spend in pubs is
growing, outstripping the increase in overall national consumer
spending.
We operate in the premium pub sector and the resilience of this
segment's more affluent customer base has, so far, been
particularly encouraging. Consumers, when they do go out, are
looking for an experience, and going to a Young's pub is seen as an
affordable lifestyle choice - a treat but not an extravagance.
Our well-invested, well-positioned pub estate is geared up to
deliver those experiences through our highly motivated and talented
staff and our premium and evolving product range.
The estate now stands at 252 pubs; we acquired four pubs during
the period, sold one and two leases expired. Its value has
increased again, now to GBP689.1 million (2016: GBP649.8 million),
and this firm foundation allows us to look for further
opportunities to expand, whether that be on an individual pub
purchase basis or groups.
Proven TRACk RECORD, READY FOR ChaLLENGES AHEAD
Our performance in recent times has been highly consistent; the
outperformance of our managed estate has been the reward for our
consistent strategy of running differentiated, individual pubs at
the heart of the communities in which they reside.
However, we live in interesting times with both economic
uncertainty and the political environment becoming unpredictable as
a result of the snap UK General Election.
Looking forward, there will be some impact to our margins due to
the significant hike in business rates, the next instalment of the
National Living Wage and the introduction of the Apprenticeship
Levy, as well as by a predicted period of cost inflation. Business
rates have been a contentious subject for the retail sector and it
is with cautious optimism that we greeted the Government's
acknowledgement of the issue and the Chancellor's announcement that
it would commit to reform. We believe that there must be a better
method to calculating business rates to level the playing field
between physical and online based companies and would welcome and
support any initiative to achieve this.
Additionally, the Government's surprising recent increase in
alcohol excise duty by almost 4% has not helped an industry that
invested over GBP2bn and contributed over GBP23bn overall to the
British economy in 2016, and currently employs over 900,000
people.
Despite that backdrop, we remain positive and will channel our
efforts into our proposition and continue to deliver great customer
service. Superior productivity, aided by our investment and
innovation in technology, will mitigate some cost pressures. We are
also mindful that pubs are people businesses and are enjoyable
places to work; therefore maintaining the morale and motivation of
our staff is paramount.
We have a strong track record; a very clear and consistent
strategy; the financial muscle to continue to grow and an engaged
team of people that are our main competitive advantage. Despite the
headwinds, we look forward to continuing to surprise and delight
our customers, and will work hard to continue to grow our estate
through carefully selected acquisitions and development
opportunities, all key ingredients in delivering superior returns
for our shareholders.
PROGRESSIVE DIVID POLICY
The board is delighted to recommend our 20th consecutive final
dividend increase, this time by 6.1% to 9.62 pence. If approved by
shareholders, this will result in a total dividend for the year of
18.50 pence (2016: 17.45 pence). The final dividend is expected to
be paid on 13 July 2017 to shareholders on the register at the
close of business on 9 June 2017.
MANAGED HOUSES
2017 financial figures are on a 53 week basis unless specified
(2016: 52 weeks).
Our managed houses delivered another strong performance in 2017.
After five highly successful years, the comparable figures were
always going to be tough. However, we relish a challenge at Young's
and see the delivery of results that consistently outperform the
industry average as the reward for the work ethic that runs
throughout our organisation and for the consistent execution of our
clearly defined strategy. Ultimately, it is our people and our
proposition that underpin our achievements.
The vast majority of our managed estate (160 out of 173 pubs) is
on a like-for-like basis. Our run of managed house like-for-like
sales performance is a beacon of consistency at 6.0%, 4.6%, 6.7%,
6.5% and 5.6%, averaging 5.7%. This year's 4.7% was especially
satisfying as last year's results included the Rugby World Cup
which was played out within our heartland and where we maximised
revenue opportunities both in the lead-up to and throughout the
tournament.
REVENUE AND PROFITS
Our two managed house brands, Young's and Geronimo, have both
delivered strong performances. Total managed sales were up 7.0% on
a 52 week basis. This year, Young's managed houses delivered
like-for-like sales growth of 5.0% and we are confident that we can
continue to outperform the sector with more opportunities to drive
further growth.
The turnaround in our Geronimo performance has been equally
pleasing. From a decline of 1.0% in sales on a like-for-like basis
last year, the business has bounced back to deliver 3.8%
like-for-like sales growth this year. This achievement has been
realised by focussing on the individuality of each pub, restoring
the menu to the Best of British and re-energising the service
teams.
Although food sales have been gaining product share from drink
over the past few years, drink sales remain almost two thirds
(65.6%) of our managed house sales mix. With our strong London
weighting (86% of our pubs are within the M25), the proximity of
our pubs to public transport and our premium, ever-evolving drinks
range, we expect this ratio to remain at around the current level.
At Young's, we believe in "best in class" and are proud of the
diversity we are able to offer our customers. We have great
partnerships with our suppliers which allow us to be flexible with
both global and local brands to ensure we represent current trends
and tastes. Thankfully, Young's Bitter is a wonderful beer and more
than holds its own in the ever competitive world of craft ales.
We are pleased to welcome back Guinness, after a three year
absence, in a partnership which will strengthen our rugby
association, especially in our backyard of South West London. This
draught stalwart has been joined by exciting new brands such as
Beavertown Neck Oil, Twickenham Grandstand and Founders All Day
IPA.
This year-end marks the first anniversary of our partnership
with Berkmann Wine Cellars. This relationship has borne fruit in
the past year and we hope will only get better with age. Through
the introduction of a refreshed wine menu design, wine pairing
events and better informed staff through our jointly run "Grape
Masters" programme, we have seen a shift away from traditional
"house wines" to New World wines. The bubble has yet to burst on
our customers' thirst for sparkling wine, with volume up 11.4% in
the last year alone and up 121% over a three-year period.
Spirit sales are also in strong growth, with volumes up 3.7%.
Gin's remarkable resurgence continues and we are well placed to
further expand into this market. Through the creation of the
Young's "Cocktail Collective", we have refreshed and reinvigorated
our training and support to allow our pubs to offer a range of
on-trend cocktails to our discerning customers. Drink sales were up
7.1% in total and up 4.8% on a like-for-like basis.
Food sales were up 7.4% in total and up 4.9% on a like-for-like
basis. The standout success story within our food offering has been
our Ultimate Sunday Lunch; our customers are welcome to grab a
comfy corner, read the papers, play a board game and enjoy a roast
with all the trimmings. Even our Mayfair institution, the Guinea
Grill, which has been serving ales since 1423, is opening on
Sundays again to meet this growing demand. The Guinea Grill is a
founding member of the Scotch Beef Club and the pub and its team
won the award for Best Steaks and Grills in Harden's London
Restaurant Awards 2016.
Having increased the roll-out of our innovative and successful
BurgerShack concept, including its little sister, 'Shack-in-a-Box',
which can pop up to maximise sunny days in smaller gardens, we now
have 25 'shacks', an increase of 13 over the year. BurgerShacks
allow us to offer a fast, convenient service to our customers,
taking pressure off our kitchens during busy times, while
delivering an indulgent treat to satiate our nation's growing
hunger for better burgers.
We completed a number of projects within our hotel division this
year. We started the year by putting the finishing touches to our
new 12-bedroom boutique hotel at the Hand and Spear (Weybridge)
which increased our total room stock to 486 rooms. During late
spring and early summer 2016, we transformed the trading space and
kitchen at the Brook Green (Hammersmith) and the 21 rooms at the
Greyhound (Carshalton) into stylish retreats of calm and
relaxation. Finally, throughout the final quarter of the financial
year, we temporarily closed the City Gate (Exeter) to completely
overhaul the pub and its 14 bedrooms to boutique standard. 53%
(255) of our room stock is now of boutique standard with an average
room rate of GBP97.02 compared with GBP64.50 for our classic rooms.
Despite the disruption caused by these investments and tough
comparatives as a result of the excellent work we did to maximise
returns during the Rugby World Cup in September and October 2015,
accommodation revenue was up 2.8% driven by occupancy rate, up 2.0%
to 74.9%. As a result, RevPAR was GBP60.86 (2016: GBP60.01)
The combination of the impact of the new wine deal, tight
control over labour costs and the fixed nature of some other costs
has resulted in a 0.8% point improvement in our managed house
adjusted operating profit margin to 24.6%. Coupled with the rising
sales performance, managed house adjusted operating profit grew by
9.8% to GBP58.4 million on a 52 week basis. Full year profits were
GBP59.7 million.
INVESTMENT
We run a well-invested managed pub estate and have a clear and
consistent investment plan that underpins our growth. This year we
have invested GBP35.7 million, spread over acquisitions,
transformational developments and day-to-day maintenance to
preserve the quality to which our customers have grown
accustomed.
We acquired three freehold properties and opened one leasehold
during the year, spending GBP12.0 million in the process. The Blue
Boar at the gateway to the Cotswolds in Chipping Norton reopened
after a major refurbishment in October. The Woolpack (Bermondsey)
transferred from the Ram Pub Company in October, having spent six
months trading under the previous tenant following its purchase at
the start of the financial year. The Riverstation, anchored on
Bristol's beautiful and historic harbourside, landed in November.
Finally, the Station Tavern (Cambridge) signalled our broadening
appetite for destination market towns.
Within the existing estate, we invested GBP23.7 million (2016:
GBP25.6 million) on refurbishing the Brook Green (Hammersmith),
Bear (Oxshott), Coach and Horses (Barnes), County Arms
(Wandsworth), Devonshire (Balham), Eagle (Shepherd's Bush),
Fentiman Arms (Vauxhall), Fox and Anchor (Smithfield Market),
Greyhound (Carshalton), Hammersmith Ram, Hand and Spear
(Weybridge), Hare and Hounds (Sheen), Old Brewery (Greenwich),
Trinity Arms (Brixton) and the Victoria (Surbiton). The White Bear
(Kennington) was this year's largest investment and is a stunning
example of traditional pub meets modern design, with an eclectic
collection of artwork and bric-a-brac overlooking the original
wooden bar. On the total internal investments we made in the prior
year we have delivered a 25.0% return on capital in the current
year.
CUSTOMER ENGAGEMENT AT THE HEART OF WHAT WE DO
The hospitality sector as a whole has seen a recent renaissance
of people considering it to be a career instead of a stepping stone
to something else. At Young's, we understand the importance of
nurturing talent within our organisation and we are proud to have
seen the number of Pub Manager vacancies filled through internal
appointments grow to 61%. The vast majority of these promoted
Deputy Managers have completed our internally run Management
Academy, which is now in its third rotation. We ensure the
programme is demanding enough to set participants up for success,
living the Young's values and culture and they then, themselves,
start succession planning to identify and develop the next
generation of talent for the Academy.
Just before Christmas, we launched our own white label mobile
app - Young's On Tap - which is available to download for free on
iPhone and Android from the App Store. The Young's App seeks to
facilitate our customers' digital journey by enabling them to find
a pub, book a table, pay or split the bill, or just change the
music in their local; all of these things are aimed at growing
engagement, driving loyalty and enhancing customers' experiences.
From dray horses to digital pioneers, Young's On Tap represents the
next generation in our technological journey. By the year-end we
already had over 30,000 downloads and all our staff have embraced
Young's On Tap by becoming "Appbassadors". The app is just one of
the ever-growing social media tools we have at our disposal to
interact with our customers.
RAM PUB COMPANY
It has been a strong year for our tenanted estate, further
underlining the decisions made in previous years to focus on the
long-term opportunities that a smaller and better supported
operation can deliver. We want to build and maintain healthy
working relationships with our tenants so that both parties can
prosper. The Ram Pub Company tenants benefit from the same
contemporary and diverse product range as our managed pubs, in
addition to "local heroes" specific to their communities. Together
with the business advice, training and sales expertise our in-house
team provide, we believe we have the right ingredients to attract
and retain entrepreneurs who can operate a flourishing
business.
REVENUE AND PROFITS
In total, on a 53 week basis, revenue was up 8.7%. On a
comparable 52 week basis, revenue was up 7.1% in total and up 3.2%
on a like-for-like basis. The first six months of the year
benefitted from the Woolpack (Bermondsey) before it was transferred
from the Ram Pub Company to our Young's managed estate. Our
like-for-like business has benefitted from the capital investments
made in the previous year and the new wine deal that refreshed the
range available to our tenant partners and their customers. This
better buying has led to operating efficiencies which have
generated enhanced margins. The combination of increasing sales and
improving margins has resulted in the division's adjusted, both for
the 53rd week and exceptional items, operating profit rising to
GBP5.0 million, up 11.1% and up 4.5% on a like-for-like basis.
At year end, the Ram Pub Company's estate stood at 79 pubs and
generated 5.1% of our group revenue (2016: 5.2%). Although a small
part of our overall business, the Ram Pub Company is important to
us; it is cash generative and offers us a different route to market
both as a day-to-day business and through acquisitions that may
already have tenants in situ.
INVESTMENT
The investment in our tenanted estate has continued throughout
the financial year. Major developments have been completed at the
Grand Junction Arms (Harlesden), Malt Shovel (Dartford), O'Connors
(Chelmsford), Pig and Whistle (Wandsworth), Robin Hood (Sutton) and
the Ship (East Grinstead).
In May 2016, we sold the Lord Napier, a small tenancy in
Thornton Heath. Just after the current year end we sold the Kings
Arm's (Epsom) and the Bell Inn (Illminster). All three sites were
at the lower end of the estate and failed to meet our internal
returns criteria.
TENANT ENGAGEMENT
The rebadging of the Ram Pub Company is well underway, offering
our pubs and tenants a refreshed identity that will serve us well
for many years to come. The new-look signage captures the essence
of the tenanted business, with the strapline "Everyone's
local".
The Ram Pub Company offers tenants the chance to run their own
highly successful individual businesses while having the financial,
operational and marketing support that being part of an established
group presents. The tenanted model has challenges for both pubcos
and tenants, but we believe in operating these as sustainable
businesses that fairly reward the risk that both partners face.
PROPERTY, TREASURY, RETIREMENT BENEFITS, EXCEPTIONAL ITEMS AND
TAX
PROPERTY
Our property estate remains the foundation for our growth and
healthy operating cash generation. In total, we have 252 pubs, with
the vast majority in prime locations and 82% inside the M25. Being
based in Wandsworth, South West London remains our stronghold, but
in recent years we have been expanding our reach by acquiring pubs
in similarly affluent areas. We have the desire and scope to
increase our expansion rate, but we will not make acquisitions for
the sake of it and all new opportunities must meet our returns
criteria and complement our existing estate.
We have a predominantly freehold backed estate (194) with a
number of long leaseholds with peppercorn rents (16). In accordance
with International Financial Reporting Standards ("IFRS"), these
properties are revalued each year to reflect their current market
values. This exercise is undertaken using a combination of an
independent and leading commercial property adviser, Savills, who
revalue 20% of the estate annually, and an internal review of the
remainder led by Andrew Cox, MRICS, our Director of Property and
Tenancies. The valuation method uses a number of inputs of which
deriving the sustainable trade of each pub is key.
The review has resulted in a net upward movement of GBP22.6
million, driven by our improving trade and continued strong demand
for pubs in prime London and South East locations. In gross terms
and in accordance with IFRS, individual movements in value,
totalling GBP23.1 million (2016: GBP20.0 million), are reflected in
the revaluation reserve in the balance sheet, while GBP0.5 million
of downward movement (2016: GBP1.2 million) has been charged to the
income statement under exceptional items. All these adjustments are
non-cash items.
As highlighted at the half year, we have changed our approach to
recording our short leasehold properties (17% of our total number
of pubs). In the prior period, this resulted in a non-cash decrease
in the carrying value of our property and equipment and an increase
in lease premiums, split between non-current and current assets
(see note 1).
The total estate, at the period end, is now valued at GBP689.1
million.
TREASURY
Our business model is highly cash generative. Increasing sales,
strong improving operating margins and our high proportion of
freehold pubs provide increasing operating cash flow, this year
GBP63.5 million (2016: GBP60.4 million). After paying interest,
taxation and other costs, we are left with three options for our
cash: invest it, repay our debt or return it to our shareholders.
This year we have done all three. The vast majority, GBP38.2
million, was re-invested to continue our strong success in future
years. Our net debt has decreased by GBP3.6 million to GBP126.6
million, with gearing falling to 25.7% (2016: 28.8%) and our net
debt to EBITDA ratio dropping to 1.9 times (2016: 2.2 times). Our
proposed final dividend per share of 9.62p, as recommended to our
shareholders, represents an increase of 6.1% and the 20th
consecutive annual increase.
GOING CONCERN
Just after the year-end we extended GBP20 million of our GBP175
million long-term debt facility to 2024. Our facility is now held
across three banks - Royal Bank of Scotland, Barclays and HSBC -
and is repayable between 2019 and 2024. GBP100 million of our
GBP126.6 million net debt is on fixed interest rates through a
combination of different interest rate swaps which provide some
protection from possible adverse interest rate movements in future
years. Given these committed facilities, our freehold-backed
balance sheet, significant free cash flow and the conservative
financial ratios above, we have prepared these financial statements
on a going concern basis.
RETIREMENT BENEFITS
Like many UK companies with defined benefit pension schemes, we
have seen the balance sheet value of our pension deficit move
significantly throughout the year. The volatility in the economic
climate, both in the short-term and long-term, has caused corporate
bond yields to decrease dramatically during the first six months of
the year and then to increase slightly in the second half of the
year. We use these corporate bond yields as a basis to discount our
future pension liabilities to present values which can cause large
non-cash movements in net pension deficit. At the end of last year,
our pension deficit was GBP6.3 million, by the half year it had
increased to GBP23.4 million and at the current year-end date it
had fallen back to GBP12.8 million. We have a strong relationship
with the pension trustees and continue to work with them to ensure
the pension fund is adequately funded.
EXCEPTIONAL ITEMS
In the current year, we purchased the Woolpack (Bermondsey) in a
two-stage process. On the first day of the financial year, we
purchased the freehold interest. The pub had, at the time, a tenant
in situ with an unexpired agreement for a number of years. In
October, both parties decided to terminate the agreement early,
allowing us to bring the pub into our managed house estate.
Although included in our internal investment decision from the
outset, the compensation paid to the former tenants, under IFRS,
has been expensed and is included within exceptional items.
This year's exceptional items also include a GBP0.7 million loss
flowing from the expiry of our own leases with Heathrow for the
Three Bells and Five Tuns, with the majority reflecting the
write-off of goodwill recognised on the initial acquisition of
Geronimo in December 2010.
The remaining exceptional items relate to the estate management
of our properties which, as mentioned previously, includes the
GBP0.5 million (2016: GBP1.2 million) downward movement in the
property valuation and GBP0.2 million (2016: GBP0.4 million) of
acquisition costs associated with business combinations.
TAX
The corporation tax charge for the year was GBP7.0 million, with
our effective corporation tax rate for the year, adjusted for
exceptional items, at 19.8% (2016: 20.5%). Next year we expect our
effective rate to decrease as the UK's headline corporation tax
rate falls from 20% to 19%.
CORPORATE AND SOCIAL RESPONSIBILITY
Our pubs aim to be at the centre of their communities; to us, a
socially responsible business is one that enriches the area in
which it operates. Our pubs offer jobs and training to local
people, build partnerships with local suppliers and provide the
perfect venues for people to be neighbourly. There has been no
finer example of our approach this year than the Alexandra
(Wimbledon). The pub and its managers, Mick and Sarah Dore, became
internet sensations over the festive period when they offered a
full turkey dinner and a beer to anyone alone on Christmas Day. The
pub has opened its arms to those on their own at Christmas for a
number of years but this past year, a few tweets led to the story
trending on social media and hitting the national press. Mick
explained "It's not just about a free plate of food but making a
fuss of them and introducing them to each other so they can chat
and hopefully make some new friends."
We also work hard to improve the environment in which we
operate. In the current year, we have raised our recycling efforts
by more than 16% to 6,768 tonnes (2016: 5,803 tonnes) and reduced
the waste going to landfill to 1.0% (2016: 1.4%). We sent enough
litres of used cooking oil to be recycled into biofuel to power a
London taxi ride to the moon and back twice over. Both our Young's
and Geronimo operations have been awarded two stars by the
Sustainable Restaurant Association.
Our pubs work with many local charities in their communities,
but as a company we decided to support the children's charity of
rugby, Wooden Spoon, for a second year. Wooden Spoon funds around
70 projects each year that support disadvantaged and disabled
children. One of these projects is the Oasis Children's venture
based on our doorstep in Stockwell, London. Oasis has a simple aim
of improving the lives of children, young people and the local
community. Many of our staff have spent volunteer days with Oasis,
helping maintain the freshness and fun side of the nature garden,
adventure playground and karting track.
SHAREHOLDER RETURNS
As a business, we focus on long-term sustainable growth, each
year investing in our estate through a structured
refurbishment/redevelopment plan that harnesses opportunities on a
consistent basis. Our estate, as a result, remains well-invested
which is reflected in our strong balance sheet; our major
investments in the previous year have fuelled a return of 25.0% in
the current year. The combination of revenue growth of 9.4% and
improved operating profit margins has increased our adjusted profit
before tax by 13.5% and our adjusted earnings per share by 13.7% to
66.43 pence. Unadjusted earnings per share rose by 12.4% to 61.51
pence.
We are very proud of our dividend record and are pleased to be
recommending raising the final dividend for the 20th consecutive
year, a feat that few companies can claim. This year, the
recommended increase is 6.1% to 9.62 pence, which will result, if
approved by shareholders, in a total dividend for the year of 18.50
pence (2016: 17.45 pence). The dividend is covered 3.6 times by our
adjusted earnings per share and 3.3 times by our unadjusted
earnings per share.
OUTLOOK
Managed house revenue in the first seven weeks of the new
financial year was up 6.1% in total and up 4.7% on a like-for-like
basis. The mild and dry weather during April and the increase in
"staycations" during the Easter holidays drove footfall, however
this was dampened by a comparatively wet May.
This year, we will benefit from a full year's trade at the
Station Tavern in Cambridge which opened in March, and from the two
high turnover pubs added to our managed house estate in October
last year: the Woolpack (Bermondsey) and the Riverstation
(Bristol). All are stunning examples of our acquisition strategy
which will enhance our portfolio. Just after the year end, we
exchanged contracts of the Bull (Bracknell) and transferred three
pubs from our Ram Pub Company to managed houses; namely the King's
Arms (Wandsworth), the Hope and Anchor (Brixton) and the Grove
(Camberwell). We also sold the Kings Arm's (Epsom) and the Bell Inn
(Illminster) both from our Ram Pub Company.
In the short-term, the impact on consumer confidence from the
prospect of Brexit has not been as harsh as some expected, being
softened by a combination of falling sterling, low interest rates
and the resilience of the British consumer. In the longer-term, we
remain busy, while the broader economic environment remains
uncertain, to ensure we are best placed for whatever is around the
corner.
As previously announced in the interim results, the new business
rates are expected to increase our cost base by roughly GBP1.8
million in the 2018 financial year. Together with the next
instalment in the National Living Wage and the introduction of the
Apprenticeship Levy, there are challenges ahead.
We remain confident in our strategy and our ability to meet and
exceed our customers' expectations. The team we have has the
wherewithal to deliver on a 'best in class' proposition, both in
our current footprint and in new locations, and we expect this
combination to provide our shareholders with superior returns.
Patrick Dardis
Chief Executive
24 May 2017
GROUP INCOME STATEMENT
For the 53 weeks ended 3 April 2017
Restated(1)
2017 2016
53 weeks 52 weeks
Notes GBPm GBPm
------------------------------------- ------ --------- ------------
Revenue 268.9 245.9
Operating costs before exceptional
items (222.8) (204.7)
------------------------------------- ------ --------- ------------
Operating profit before exceptional
items 46.1 41.2
Operating exceptional items 3 (3.4) (2.8)
------------------------------------- ------ --------- ------------
Operating profit 42.7 38.4
Finance costs (5.5) (5.3)
Other finance charges (0.2) (0.3)
------------------------------------- ------ --------- ------------
Profit before tax 37.0 32.8
Taxation 5 (7.0) (6.2)
Profit for the period attributable to
shareholders of the parent company 30.0 26.6
--------------------------------------------- --------- ------------
Pence Pence
------------------- ---- ------------ ------
Earnings per 12.5p ordinary share
Basic 7 61.51 54.73
Diluted 7 61.47 54.70
------------------- ---- ------------ ------
(1) The prior period comparatives have been restated for a
non-cash adjustment in respect of the treatment of short leasehold
premiums (see note 1).
All of the results above are from continuing operations.
GROUP STATEMENTS OF COMPREHENSIVE INCOME
For the 53 weeks ended 3 April 2017
Restated(1)
2017 2016
53 weeks 52 weeks
Notes GBPm GBPm
---------------------------------------------------- ------------- ---------
Profit for the period 30.0 26.6
------------------------------------------------- ------------- ---------
Other comprehensive income
Items that will not be reclassified subsequently
to profit or loss:
Unrealised gain on revaluation of
property 8 23.1 20.0
Remeasurement of retirement benefit
schemes 9 (7.7) 4.2
Tax on above components of other comprehensive
income 1.2 0.5
Items that will be reclassified subsequently
to profit or loss:
Fair value movement of interest rate
swaps 1.3 -
Tax on fair value movement of interest
rate swaps (0.3) (0.2)
------------------------------------------------- ------------- ---------
17.6 24.5
---------------------------------------------------- ------------- ---------
Total comprehensive income for shareholders
of the parent company 47.6 51.1
----------------------------------------------------- ------------- ---------
(1) The prior period comparatives have been restated for a
non-cash adjustment in respect of the treatment of short leasehold
premiums (see note 1).
All of the results above are from continuing operations.
GROUP BALANCE SHEET
At 3 April 2017
Restated(1) Restated(1)
2017 2016 2015
Notes GBPm GBPm GBPm
----------------------------------- ------ -------- ------------ ------------
Non-current assets
Goodwill 19.9 20.6 20.9
Property and equipment 8 689.1 649.8 607.7
Deferred tax assets 7.4 6.2 7.7
Lease premiums 7.6 8.2 6.1
----------------------------------- ------ -------- ------------ ------------
724.0 684.8 642.4
----------------------------------- ------ -------- ------------ ------------
Current assets
Inventories 2.8 2.6 2.7
Trade and other receivables 7.2 6.4 5.5
Lease premiums 0.6 0.5 0.5
Cash 6.6 13.2 0.2
----------------------------------- ------ -------- ------------ ------------
17.2 22.7 8.9
----------------------------------- ------ -------- ------------ ------------
Assets held for sale 1.3 - -
----------------------------------- ------ -------- ------------ ------------
Total assets 742.5 707.5 651.3
----------------------------------- ------ -------- ------------ ------------
Current liabilities
Borrowings (28.5) - (5.0)
Derivative financial instruments (2.9) (3.1) (2.5)
Trade and other payables (35.3) (35.5) (29.2)
Income tax payable (4.7) (3.2) (4.0)
----------------------------------- ------ -------- ------------ ------------
(71.4) (41.8) (40.7)
----------------------------------- ------ -------- ------------ ------------
Non-current liabilities
Borrowings (104.7) (143.4) (124.2)
Derivative financial instruments (7.9) (9.0) (9.5)
Deferred tax liabilities (51.6) (53.5) (56.2)
Retirement benefit schemes 9 (12.8) (6.3) (13.1)
Provisions (1.1) (1.0) -
----------------------------------- ------ -------- ------------ ------------
(178.1) (213.2) (203.0)
----------------------------------- ------ -------- ------------ ------------
Total liabilities (249.5) (255.0) (243.7)
----------------------------------- ------ -------- ------------ ------------
Net assets 493.0 452.5 407.6
----------------------------------- ------ -------- ------------ ------------
Capital and reserves
Share capital 6.1 6.1 6.1
Share premium 5.2 4.1 2.7
Capital redemption reserve 1.8 1.8 1.8
Hedging reserve (8.8) (9.8) (9.6)
Revaluation reserve 247.7 224.6 203.2
Retained earnings 241.0 225.7 203.4
----------------------------------- ------ -------- ------------ ------------
Total equity 493.0 452.5 407.6
----------------------------------- ------ -------- ------------ ------------
(1) The prior period comparatives have been restated for a
non-cash adjustment in respect of the treatment of short leasehold
premiums (see note 1).
GROUP STATEMENT OF CASH FLOW
For the 53 weeks ended 3 April 2017
2017 2016
53 weeks 52 weeks
Notes GBPm GBPm
---------------------------------------------- --------- ---------
Operating activities
Net cash generated from operations 10 63.5 60.4
Tax paid (7.6) (7.8)
------------------------------------------- --- --------- ---------
Net cash flow from operating activities 55.9 52.6
------------------------------------------- --- --------- ---------
Investing activities
Sale of property and equipment 0.4 3.6
Purchases of property, equipment
and lease premiums (34.5) (41.6)
Business combinations, net of cash
acquired (3.8) (3.5)
Net cash used in investing activities (37.9) (41.5)
------------------------------------------- --- --------- ---------
Financing activities
Interest paid (5.7) (4.4)
Issued equity 0.2 0.5
Equity dividends paid 6 (8.7) (8.2)
(Decrease)/increase in borrowings (10.4) 14.0
Net cash flow used in financing activities (24.6) 1.9
------------------------------------------------ --------- ---------
(Decrease)/increase in cash (6.6) 13.0
Cash at the beginning of the period 13.2 0.2
------------------------------------------- --- --------- ---------
Cash at the end of the period 6.6 13.2
------------------------------------------- --- --------- ---------
GROUP STATEMENT OF CHANGES IN EQUITY
At 3 April 2017
Capital
Share redemption Hedging Revaluation Retained Total
capital(1) reserve reserve reserve earnings equity
Notes GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------------ -------- ------------ -------- ------------ --------- -------
At 31 March 2015 8.8 1.8 (9.6) 209.6 196.4 407.0
Prior period adjustment - - - (6.4) 7.0 0.6
At 31 March 2015
restated(2) 8.8 1.8 (9.6) 203.2 203.4 407.6
Total comprehensive
income
Profit for the period
- 52 weeks(2) - - - - 26.6 26.6
---------------------------- ------------ -------- ------------ -------- ------------ --------- -------
Other comprehensive
income
Unrealised gain on
revaluation of property(2) 8 - - - 20.0 - 20.0
Remeasurement of
retirement benefit
schemes 9 - - - - 4.2 4.2
Fair value movement
of interest rate
swaps - - - - - -
Tax on above components
of other comprehensive
income(2) - - (0.2) 1.9 (1.4) 0.3
---------------------------- ------------ -------- ------------ -------- ------------ --------- -------
- - (0.2) 21.9 2.8 24.5
---------------------------- ------------ -------- ------------ -------- ------------ --------- -------
Total comprehensive income
restated(2) - - (0.2) 21.9 29.4 51.1
------------------------------------------ -------- ------------ -------- ------------ --------- -------
Transactions with owners recorded directly in
equity
Share capital issued 1.4 - - - - 1.4
Dividends paid on
equity shares - - - - (8.2) (8.2)
Revaluation reserve
realised on disposal
of properties - - - (0.5) 0.5 -
Share based payments - - - - 0.5 0.5
Tax on share based
payments - - - - 0.1 0.1
---------------------------- ------------ -------- ------------ -------- ------------ --------- -------
1.4 - - (0.5) (7.1) (6.2)
---------------------------- ------------ -------- ------------ -------- ------------ --------- -------
At 28 March 2016
restated (2) 10.2 1.8 (9.8) 224.6 225.7 452.5
---------------------------- ------------ -------- ------------ -------- ------------ --------- -------
Total comprehensive
income
Profit for the period
- 53 weeks - - - - 30.0 30.0
---------------------------- ------------ -------- ------------ -------- ------------ --------- -------
Other comprehensive
income
Unrealised gain on
revaluation of property 8 - - - 23.1 - 23.1
Remeasurement of
retirement benefit
schemes 9 - - - - (7.7) (7.7)
Fair value movement
of interest rate
swaps - - 1.3 - - 1.3
Tax on above components
of other comprehensive
income - - (0.3) 0.1 1.1 0.9
- - 1.0 23.2 (6.6) 17.6
---------------------------- ------------ -------- ------------ -------- ------------ --------- -------
Total comprehensive
income - - 1.0 23.2 23.4 47.6
---------------------------- ------------ -------- ------------ -------- ------------ --------- -------
Transactions with owners recorded directly
in equity
Share capital issued 1.1 - - - - 1.1
Dividends paid on
equity shares - - - - (8.7) (8.7)
Revaluation reserve
realised on disposal
of properties - - - (0.1) 0.1 -
Share based payments - - - - 0.4 0.4
Tax on share based
payments - - - - 0.1 0.1
1.1 - - (0.1) (8.1) (7.1)
---------------------------- ------------ -------- ------------ -------- ------------ --------- -------
At 3 April 2017 11.3 1.8 (8.8) 247.7 241.0 493.0
---------------------------- ------------ -------- ------------ -------- ------------ --------- -------
(1) Total share capital comprises the nominal value of the
share capital issued and fully paid of GBP6.1 million (2016:
GBP6.1 million) and the share premium account of GBP5.2 million
(2016: GBP4.1 million). Share capital issued in the period
comprises the nominal value of GBPnil (2016: GBPnil) and share
premium of GBP1.1 million (2016: GBP1.4 million).
(2) The prior period comparatives have been restated for a
non-cash adjustment in respect of the treatment of short leasehold
premiums (see note 1).
NOTES TO THE FINANCIAL STATEMENTS
1. Accounts
This preliminary announcement was approved by the board on 24
May 2017. The financial statements in it are not the group's
statutory financial statements. The statutory financial statements
for the period ended 28 March 2016 have been delivered to the
Registrar of Companies. The auditor has reported on those financial
statements and on the statutory financial statements for the period
ended 3 April 2017, which are expected to be delivered to the
Registrar of Companies shortly. Both audit reports were
unqualified, did not include a reference to any matters to which
the auditor drew attention by way of emphasis without qualifying
the reports and did not contain any statement under s.498(2) or (3)
of the Companies Act 2006.
The current period and prior period relate to the 53 weeks ended
3 April 2017 and the 52 weeks ended 28 March 2016 respectively. The
financial statements are presented in pounds sterling and all
values are rounded to the nearest hundred thousand (GBP0.1 million)
except where otherwise indicated.
This preliminary announcement has been agreed with the company's
auditor for release.
The audited financial information in this statement has been
prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted for use in the European Union. The
accounting policies used have been consistently applied and are
described in full in the statutory financial statements for the
period ended 3 April 2017, which are expected to be mailed to
shareholders on or before 14 June 2017. The financial statements
will also be available on the group's website,
www.youngs.co.uk.
Prior period adjustment
The comparative figures for the 52 weeks ended 28 March 2016
have been restated for a non-cash prior period adjustment in
respect of the treatment of premiums paid for short leasehold pubs
which are held as operating leases. The premiums were previously
revalued which was not in accordance with IAS 17: Leases. The
revaluation has been reversed and the premiums have been
reclassified from property and equipment to lease premiums which
are held on the balance sheet as current (the portion relating to
the next financial period) and non-current assets. The premiums are
amortised on a straight-line basis over the length of the
leases.
The restatement has had the following impact on the prior period
comparatives ended 28 March 2016 and 31 March 2015. The restatement
had no effect on the group's cash flow:
Previously Previously
----------------------------
Prior Prior
reported period Restated reported period Restated
28 March adjustments 28 March 31 March adjustments 31 March
2016 2016 2016 2015 2015 2015
Balance Sheet GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------- ----------- ------------ --------- ----------- ------------ ---------
Property and equipment 665.8 (16.0) 649.8 617.3 (9.6) 607.7
Lease premiums
- non-current - 8.2 8.2 - 6.1 6.1
Lease premiums
- current - 0.5 0.5 - 0.5 0.5
Deferred tax liabilities (57.4) 3.9 (53.5) (59.8) 3.6 (56.2)
Revaluation reserve (234.5) 9.9 (224.6) (209.6) 6.4 (203.2)
Retained earnings (219.2) (6.5) (225.7) (196.4) (7.0) (203.4)
Previously Previously
----------------------------
Prior Prior
reported period Restated reported period Restated
----------------------------
52 weeks adjustments 52 weeks 52 weeks adjustments 52 weeks
2016 2016 2016 2015 2015 2015
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------- ----------- ------------ --------- ----------- ------------ ---------
Income statement 27.1 (0.5) 26.6 26.7 (0.5) 26.2
Statement of comprehensive
income 55.1 (4.0) 51.1 33.6 (0.2) 33.4
2. Segmental reporting
The group is organised into the reporting segments referred to
below. These segments are based on the different resources and
risks involved in the running of the group. The executive board of
the group internally reviews each reporting segment's operating
profit or loss before exceptional items for the purpose of deciding
on the allocation of resources and assessing performance.
The group has three operating segments: Young's managed houses,
Geronimo managed houses and the Ram Pub Company. Both Young's and
Geronimo managed houses operate pubs. Revenue is derived from sales
of drink, food and the provision of accommodation. Due to common
economic characteristics, similar product offerings and customers,
the Young's managed houses and Geronimo managed houses operating
segments have been reported below as a single reportable segment:
managed houses. The Ram Pub Company consists of pubs owned or
leased by the company and leased or sub leased to third parties.
Revenue is derived from rents payable by, and sales of drink made
to, tenants. Unallocated relates to head office costs.
Total segment revenue is derived externally with no intersegment
revenues between the segments in either period. The group's revenue
is derived entirely from the UK.
Income statement Managed Ram Pub Segments Unallocated Total
houses Company total
2017 - 53 weeks GBPm GBPm GBPm GBPm GBPm
------------------------------------- -------- -------- --------- ------------ ------------
Total segment revenue 254.8 13.8 268.6 0.3 268.9
------------------------------------- -------- -------- --------- ------------ ------------
Operating profit/(loss)
before exceptional items 59.7 5.1 64.8 (18.7) 46.1
Operating exceptional
items (4.7) 1.3 (3.4) - (3.4)
------------------------------------- -------- -------- --------- ------------ ------------
Operating profit/(loss) 55.0 6.4 61.4 (18.7) 42.7
------------------------------------- -------- -------- --------- ------------ ------------
2016 - 52 weeks
------------------------------------- -------- -------- --------- ------------ ------------
Total segment revenue 232.9 12.7 245.6 0.3 245.9
------------------------------------- -------- -------- --------- ------------ ------------
Operating profit/(loss)
before exceptional items
restated 53.5 4.5 58.0 (16.8) 41.2
Operating exceptional
items restated (0.6) (1.2) (1.8) (1.0) (2.8)
------------------------------------- -------- -------- --------- ------------ ------------
Operating profit/(loss)
restated 52.9 3.3 56.2 (17.8) 38.4
------------------------------------- -------- -------- --------- ------------ ------------
The following is a reconciliation of the operating profit
to the profit before tax:
Restated
2017 2016
53 weeks 52 weeks
GBPm GBPm
------------------------------------- -------- -------- --------- ------------ ------------
Operating profit 42.7 38.4
Finance costs (5.5) (5.3)
Other finance charges (0.2) (0.3)
------------------------------------- -------- -------- --------- ------------ ------------
Profit before tax 37.0 32.8
--------------------------------------------------------- --------- ------------ ------------
3. Exceptional items
2017 2016
53 weeks 52 weeks
GBPm GBPm
----------------------------------------- --------- ---------
Amounts included in operating profit:
Upward movement on the revaluation of
properties(1) (note 8) restated 3.0 1.6
Downward movement on the revaluation of
properties(1) (note 8) restated (3.5) (2.8)
Tenant compensation(2) (2.0) -
Acquisition costs(3) (0.2) (0.4)
Goodwill disposal(4) (0.7) (0.3)
Net profit on sale of properties(5) - 0.1
Restructuring costs(6) - (1.0)
(3.4) (2.8)
----------------------------------------- --------- ---------
Exceptional tax:
Tax attributable to above adjustments
restated 0.1 (0.7)
Change in corporation tax rate 0.9 1.7
1.0 1.0
----------------------------------------- --------- ---------
Total exceptional items after tax (2.4) (1.8)
----------------------------------------- --------- ---------
(1) The movement on the revaluation of properties is a non-cash
item that relates to the revaluation exercise that was completed
based on the period end date. The revaluation was conducted at an
individual pub level and identified an upward movement of GBP3.0
million (2016: restated GBP1.6 million), representing reversals of
previous impairments recognised in the income statement, and a
downward movement of GBP3.5 million (2016: restated GBP2.8
million), representing downward movements in excess of amounts
recognised in equity. These resulted in a net downward movement of
GBP0.5 million (2016: restated GBP1.2 million net downward) which
has been taken to the income statement. The downward movement for
the period ended 3 April 2017 was split between land and buildings
of GBP0.5 million downwards (2016: restated GBP0.9 million
downward) and fixtures and fittings of GBPnil (2016: restated
GBP0.3 million downward). See note 2 for segmental information.
(2) During the current period, the company paid GBP2.0 million
to the previous tenants of the Woolpack (Bermondsey) to terminate
their lease agreement early.
(3) The acquisition costs relate to the purchases of the Blue
Boar (Chipping Norton) and the Riverstation (Bristol). They include
legal and professional fees and stamp duty. The prior period
acquisition costs related to the purchase of the Canonbury
(Islington) and the Old Brewery (Greenwich).
(4) The goodwill disposal is a non-cash item and relates to the
Three Bells (Heathrow Airport) and the Five Tuns (Heathrow Airport)
whose leases expired during the period. The Three Bells and Five
Tuns formed part of the Geronimo group of cash generating units
(which are pubs under the Geronimo concept) and fall within the
Geronimo managed houses segment.
(5) The profit on sale of properties relates to the difference
between the cash, less selling costs, and the carrying value of the
assets on the date of sale. In the current period there was no
profit or loss from the sale of Lord Napier (Thornton Heath). In
the prior period, sales of properties included the Seven Stars
(Brighton), New Town (Sutton) and the Sekforde Arms
(Clerkenwell).
(6) In the prior period, restructuring costs relate to a
reorganisation of the group's head office functions. These are
largely made up of severance costs and consultancy fees.
4. Other financial measures
The table below shows how adjusted group EBITDA, operating
profit and profit before tax have been arrived at. These
alternative performance measures have been provided as the board
believes that they give useful additional measures of the group's
underlying performance. Details of the exceptional items can be
seen in note 3. All the results below are from continuing
operations.
2017 - 53 weeks 2016 restated - 52
weeks
------------------------------------ ------------------------------------
Exceptional Exceptional
Unadjusted items Adjusted Unadjusted items Adjusted
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------- ----------- ------------ --------- ----------- ------------ ---------
EBITDA 63.6 2.9 66.5 56.8 1.6 58.4
Depreciation and
net movement on
the revaluation
of properties (20.3) 0.5 (19.8) (17.9) 1.2 (16.7)
Amortisation of
lease premiums (0.6) - (0.6) (0.5) - (0.5)
----------------------- ----------- ------------ --------- ----------- ------------ ---------
Operating profit 42.7 3.4 46.1 38.4 2.8 41.2
Net finance costs (5.5) - (5.5) (5.3) - (5.3)
Other finance charges (0.2) - (0.2) (0.3) - (0.3)
----------------------- ----------- ------------ --------- ----------- ------------ ---------
Profit before tax 37.0 3.4 40.4 32.8 2.8 35.6
----------------------- ----------- ------------ --------- ----------- ------------ ---------
5. Taxation
Restated
2017 2016
53 weeks 52 weeks
Tax charged in the group income statement GBPm GBPm
--------------------------------------------------- ------------- ---------
Current tax
Current tax expense 8.9 7.1
Adjustment in respect of current tax of
prior periods 0.2 (0.1)
--------------------------------------------------- ------------- ---------
9.1 7.0
--------------------------------------------------- ------------- ---------
Deferred tax
Origination and reversal of temporary differences (0.7) 1.6
Change in corporation tax rate (0.9) (1.7)
Adjustment in respect of deferred tax of
prior periods (0.5) (0.7)
--------------------------------------------------- ------------- ---------
(2.1) (0.8)
--------------------------------------------------- ------------- ---------
Tax expense 7.0 6.2
--------------------------------------------------- ------------- ---------
Deferred tax in the group income statement
--------------------------------------------------- ------------- ---------
Property revaluation and disposals (1.4) (0.5)
Fair value gains on acquisition of subsidiaries - (0.1)
Capital allowances (0.7) (0.1)
Retirement benefit schemes 0.1 0.2
Share based payments (0.1) (0.3)
Tax credit (2.1) (0.8)
--------------------------------------------------- ------------- ---------
Deferred tax in the group statement of comprehensive income
-----------------------------------------------------------------------------
Property revaluation and disposals 2.0 2.0
Retirement benefit schemes (1.4) 0.9
Interest rate swaps 0.2 -
Change in corporation tax rate (1.7) (3.2)
--------------------------------------------------- ------------- ---------
Tax credit (0.9) (0.3)
--------------------------------------------------- ------------- ---------
Changes to the UK corporation tax rate from 20% to 19%
(effective from 1 April 2017) and then to 17% (effective from 1
April 2020), were substantively enacted into law on 6 September
2016. Deferred tax balances that will be realised or settled
between 1 April 2017 and 1 April 2020 have been measured at 19%,
with the remainder re-measured at 17%.
6. Dividends on equity shares
2017 2016 2017 2016
53 weeks 52 weeks 53 weeks 52 weeks
Pence Pence GBPm GBPm
--------------------------- --------- --------- --------- ---------
Final dividend (previous
period) 9.07 8.56 4.4 4.1
Interim dividend (current
period) 8.88 8.38 4.3 4.1
--------------------------- --------- --------- --------- ---------
17.95 16.94 8.7 8.2
--------------------------- --------- --------- --------- ---------
In addition, the board is proposing a final dividend in respect
of the period ended 3 April 2017 of 9.62 pence per share at a cost
of GBP4.7 million. If approved, it is expected to be paid on 13
July 2017 to shareholders who are on the register of members at the
close of business on 9 June 2017.
7. Earnings per ordinary share
Restated
(a) Earnings 2017 2016
53 weeks 52 weeks
GBPm GBPm
--------------------------------------------------- ----------- -----------
Profit attributable to equity shareholders
of the parent 30.0 26.6
Operating exceptional items 3.4 2.8
Tax attributable to above adjustments (0.1) 0.7
Change in corporation tax rate (0.9) (1.7)
--------------------------------------------------- ----------- -----------
Adjusted earnings after tax 32.4 28.4
--------------------------------------------------- ----------- -----------
Number Number
--------------------------------------------------- ----------- -----------
Basic weighted average number of ordinary
shares in issue 48,774,457 48,598,203
Dilutive potential ordinary shares from
outstanding employee share options 26,331 26,324
--------------------------------------------------- ----------- -----------
Diluted weighted average number of shares 48,800,788 48,624,527
--------------------------------------------------- ----------- -----------
(b) Basic earnings per share
Pence Pence
--------------------------------------------------- ----------- -----------
Basic 61.51 54.73
Effect of exceptional items and other adjustments 4.92 3.71
--------------------------------------------------- ----------- -----------
Adjusted basic 66.43 58.44
--------------------------------------------------- ----------- -----------
(c) Diluted earnings per share
Pence Pence
--------------------------------------------------- ----------- -----------
Diluted 61.47 54.70
Effect of exceptional items and other adjustments 4.92 3.71
--------------------------------------------------- ----------- -----------
Adjusted diluted 66.39 58.41
--------------------------------------------------- ----------- -----------
The basic earnings per share figure is calculated by dividing
the profit attributable to equity shareholders of the parent for
the period by the weighted average number of ordinary shares in
issue during the period.
Diluted earnings per share have been calculated on a similar
basis taking into account 26,331 (2016: 26,324) dilutive potential
shares under the SAYE scheme.
Adjusted earnings per share are presented to eliminate the
effect of the exceptional items and the tax attributable to those
items on basic and diluted earnings per share.
8. Property and equipment
Fixtures,
fittings
Land & &
buildings equipment Total
GBPm GBPm GBPm
---------------------------------- ------- ---------- -------
Cost or valuation
At 31 March 2015 607.1 106.8 713.9
Prior period adjustment (15.4) - (15.4)
At 31 March 2015(1) restated 591.7 106.8 698.5
Additions restated 14.0 25.0 39.0
Business combinations 2.3 1.2 3.5
Disposals (4.2) (1.5) (5.7)
Fully depreciated assets - (12.7) (12.7)
Revaluation(1) restated
-effect of upward movement
in property valuation 25.5 - 25.5
-effect of downward movement
in property valuation (5.5) - (5.5)
At 28 March 2016(1) restated 623.8 118.8 742.6
Additions 9.4 25.0 34.4
Business combinations 3.0 0.8 3.8
Disposals (0.3) (0.2) (0.5)
Transfer out to assets held
for sale (1.6) (0.3) (1.9)
Fully depreciated assets (6.5) (22.8) (29.3)
Revaluation
-effect of upward movement
in property valuation 27.0 - 27.0
-effect of downward movement
in property valuation (7.5) - (7.5)
---------------------------------- ------- ---------- -------
At 3 April 2017 647.3 121.3 768.6
---------------------------------- ------- ---------- -------
Depreciation and impairment
At 31 March 2015 43.6 53.0 96.6
Prior period adjustment (5.3) (0.5) (5.8)
At 31 March 2015(1) restated 38.3 52.5 90.8
Depreciation charge(1) restated 1.6 15.1 16.7
Disposals (0.9) (1.3) (2.2)
Fully depreciated assets - (12.7) (12.7)
Transfers (1.0) - (1.0)
Revaluation(1) restated
-effect of downward movement
in property valuation 2.5 0.3 2.8
-effect of upward movement
in property valuation (1.6) - (1.6)
At 28 March 2016(1) restated 38.9 53.9 92.8
Depreciation charge 1.6 18.2 19.8
Disposals - (0.1) (0.1)
Transfer out to assets held
for sale (0.4) (0.2) (0.6)
Fully depreciated assets (6.5) (22.8) (29.3)
Revaluation
-effect of downward movement
in property valuation 3.6 - 3.6
-effect of upward movement
in property valuation (6.7) - (6.7)
---------------------------------- ------- ---------- -------
At 3 April 2017 30.5 49.0 79.5
---------------------------------- ------- ---------- -------
Net book value
At 31 March 2015(1) restated 553.4 54.3 607.7
---------------------------------- ------- ---------- -------
At 28 March 2016(1) restated 584.9 64.9 649.8
---------------------------------- ------- ---------- -------
At 3 April 2017 616.8 72.3 689.1
---------------------------------- ------- ---------- -------
(1) The prior period comparatives have been restated for a
non-cash adjustment in respect of the treatment of short leasehold
premiums (see note 1).
The group's net book value uplift during the period was GBP22.6
million (2016: GBP18.8 million restated). This uplift was
recognised either in the revaluation reserve or the income
statement, as appropriate. The impact of the revaluations was as
follows:
Restated
2017 2016
GBPm GBPm
---------------------------------------- ------ ---------
Income Statement
Revaluation loss charged as impairment (3.5) (2.8)
Reversal of past impairment 3.0 1.6
---------------------------------------- ------ ---------
(0.5) (1.2)
---------------------------------------- ------ ---------
Revaluation Reserve
Unrealised revaluation surplus 30.7 25.5
Reversal of past surplus (7.6) (5.5)
---------------------------------------- ------ ---------
23.1 20.0
---------------------------------------- ------ ---------
Net increase in property, plant and
equipment 22.6 18.8
---------------------------------------- ------ ---------
9. Retirement benefit schemes
Movement in scheme deficits in the period
2017 2016
Health Health
Pension care Pension Care
scheme scheme Total scheme scheme Total
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------- -------- -------- ------- -------- -------- -------
Changes in the present value of the schemes are as follows
Opening deficit (2.2) (4.1) (6.3) (8.6) (4.5) (13.1)
Current service cost (0.3) - (0.3) (0.5) - (0.5)
Contributions 1.5 0.2 1.7 3.1 0.3 3.4
Other finance charges (0.1) (0.1) (0.2) (0.2) (0.1) (0.3)
Remeasurement through
other comprehensive income (7.7) - (7.7) 4.0 0.2 4.2
Closing deficit (8.8) (4.0) (12.8) (2.2) (4.1) (6.3)
----------------------------- -------- -------- ------- -------- -------- -------
10. Net cash generated from operations and analysis of net
debt
Restated
2017 2016
53 weeks 52 weeks
GBPm GBPm
---------------------------------------------------- --------- ---------
Profit before tax on continuing operations 37.0 32.8
Net finance cost 5.5 5.3
Other finance charges 0.2 0.3
---------------------------------------------------- --------- ---------
Operating profit on continuing operations 42.7 38.4
Depreciation 19.8 16.7
Amortisation 0.6 0.5
Movement on revaluation of properties 0.5 1.2
Net profit on sales of property and associated
goodwill - (0.1)
Goodwill impairment 0.7 0.3
Difference between pension service cost
and cash contributions paid (1.4) (2.9)
Movement on onerous lease 0.1 -
Share based payments 0.4 0.5
Movements in working capital
- Inventories (0.3) -
- Receivables (0.8) (0.9)
- Payables 1.2 6.7
---------------------------------------------------- --------- ---------
Net cash generated from operations 63.5 60.4
---------------------------------------------------- --------- ---------
Analysis of net debt
2017 2016
GBPm GBPm
---------------------------------------------------- --------- -----------
Cash 6.6 13.2
Current borrowings and loan capital (28.5) -
Non-current borrowings - loan capital and
finance lease (104.7) (143.4)
---------------------------------------------------- --------- -----------
Net debt (126.6) (130.2)
---------------------------------------------------- --------- -----------
11. Post balance sheet events
There were no post balance sheet events apart from the exchange
of contracts on the Bull (Bracknell), the transfer of three pubs
within the Ram Pub Company segment to the managed house segment and
the disposal of the King's Arms (Epsom) and the Bell Inn
(Illminster).
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR USUVRBKAVUAR
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May 25, 2017 02:00 ET (06:00 GMT)
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