Fuller, Smith & Turner P.l.c. Class A · LSE:FSTA
Fuller, Smith & Turner P.l.c. Class A — H1 2018 Earnings Presentation
23 slides from Fuller, Smith & Turner P.l.c. Class A's earnings presentation, November 2017
Slide 1: Half Year Results for the 26 weeks ended 30 September 2017
Fuller, Smith & Turner PLC HA L F Y EA R R ESU L T S FOR THE 26 WEEKS ENDED 30 SEPTEMBER 2017
Slide 2: Highlights
Highlights A good performance against strong headwinds Managed LFL Revenue Adjusted profit Adjusted EPS Interim dividend sales H1 2018 £209.3m £23.8m 34.22p 7.55p +3.6% +6% +4% +5% +4% H1 2017 £197.6m £22.8m 32.44p 7.25p 2 Half Year Results for the 26 weeks ended 30 September 2017
Slide 3: Group performance
Group performance H1 2018 H1 2017 YoY £m £m Growth Revenue 209.3 197.6 +6% Operating costs (182.6) (171.4) +7% Operating profit 26.7 26.2 +2% Net finance costs (2.9) (3.4) -15% Adjusted profit 23.8 22.8 +4% Depreciation and amortisation 10.9 10.1 +8% EBITDA 37.6 36.3 +4% All items are before separat
Slide 4: Group overview: five year history
Group overview Five year history Adjusted profit* Adjusted EPS Interim dividend +42%† +50%† +41%† £23.8m 34.22p 7.55p £18.1m 24.79p 5.80p H1 2018 H1 2014 H1 2018 H1 2014 H1 2018 H1 2014 *Adjusted profits are before separately disclosed items and tax † 5 year growth rates 4 Half Year Results for the
Slide 5: Managed Pubs and Hotels
Managed Pubs and Hotels H1 2018 H1 2017 £m £m LFL sales growth +3.6% +3.4% • Improved LFL performance despite challenging Revenue 140.2 130.8 +7% conditions Operating costs* (121.2) (112.8) +7% • Operating margin down Operating profit* 19.0 18.0 +6% slightly due to 4% LFL cost base increase Operatin
Slide 6: Tenanted Inns
Tenanted Inns H1 2018 H1 2017 £m £m LFL profits +3% -2% 30 Sept 1 April 24 Sept Average EBITDA per pub +7% +1% 2017 2017 2016 Pubs 181 192 196 Revenue 15.6 15.6 Level Operating costs* (8.9) (9.0) -1% • Operating profit up despite decreased site numbers Operating profit* 6.7 6.6 +2% Operating margin
Slide 7: The Fuller's Beer Company
The Fuller’s Beer Company H1 2018 H1 2017 £m £m Total beer and cider volumes +1% -4% • Challenging cask market offset by growth in cider Revenue 78.9 74.8 +5% and craft beer Operating costs* (75.5) (70.9) +6% • Increased marketing and Operating profit* 3.4 3.9 -13% site repairs spend Operating margi
Slide 8: Cash generation
Cash generation 220 £206.1m £37.6m £8.6m £201.5m 200 £6.4m £1.5m £8.7m £4.6m £1.6m £3.5m £12.7m £2.8m 180 £m 160 Operating free cash flow: £25m 140 120 100 Net debt EBITDA Capex - Capex - Investment - Property Interest Tax Share Dividends Working Net debt 1 April 2017 existing estate freehold buy ne
Slide 9: Strong financial position
Strong financial position Borrowing Capacity • Net debt at 30 Sept 2017 of £201.5 million (30 Sept 2017) • Net Debt/EBITDA* reduced from 3.0 times to 2.8 times £65.5m Available committed facilities & cash • £65.5 million available committed facilities and cash • 58% of period end net borrowings fixe
Slide 10: Investing for the long term
Investing for the long term New ERP 90 £81m 80 Corporate acquisitions 70 £56m £56m New site 60 development costs 50 £38m Pub acquisitions £36m 40 30 Fuller's Inns (existing estate investment) 20 The Fuller's Beer 10 Company 0 2014 2015 2016 2017 2018E 10 Half Year Results for the 26 weeks ended 30 S
Slide 11: Consistent strategy
Consistent strategy • To deliver a distinctive customer experience across the whole Fuller’s estate • To grow by carefully targeted acquisitions and developments that enhance our premium business • To build a leaner cost base by investing and improving processes to increase efficiency • To grow the
Slide 12: Resilient and balanced business model
Resilient and balanced business model • Our vertically integrated business model, with three distinct segments, helps mitigate our exposure to economic pressures • We have accommodated unprecedented cost pressures in H1 2018 • Business rates increased £1.0 million • Staff cost pressures including Na
Slide 13: Managed Pubs and Hotels
Managed Pubs and Hotels • Consistent outperformance of Peach Tracker • All parts of the business in growth • Drinks sales continue to grow through a vibrant portfolio of exciting brands • Accommodation continues to grow strongly, RevPAR up 7% • The Stable performing in line with expectations, suppor
Slide 14: Managed Pubs and Hotels
Managed Pubs and Hotels • Committed to maintaining and improving well-invested pubs in stunning locations offering outstanding customer experiences • Investment in our estate in H1, with 28 closure weeks and schemes completed at sites including: • The Barrowboy & Banker, London Bridge • The Great No
Slide 15: Managed Pubs and Hotels
Managed Pubs and Hotels • Enhanced digital presence • Improved websites with focus on online booking for tables and events, generating improved management information • Investment in app-based communications and learning system • Continued programme of targeted emails with relevant news • New food m
Slide 16: Tenanted Inns
Tenanted Inns • Taking our Tenanted Inns to a new high with a new turnover based agreement and exciting initiatives • Seven pubs now on new agreement with positive early results • Over £1 million invested in capital projects, including The Ship & Bell, Horndean and King Charles, Winchester • Plans t
Slide 17: The Fuller's Beer Company
The Fuller’s Beer Company • Total beer and cider volumes have grown slightly in a challenging market, with margin under pressure • Strategy in place for London Pride – reinforcing the premium position of our core brand • Rebranded livery, supported by upweighted marketing investment • Award winning
Slide 18: The Fuller's Beer Company
The Fuller’s Beer Company • Major investment in our Chiswick Brewery to reduce operating costs through increased efficiency • Improved automation on the cask racking line • Installation of new bottling line equipment • Purchased new vehicles for our distribution fleet • Nectar progressing according
Slide 19: Summary
Summary • A good performance against strong headwinds • Adjusted PBT up 4% to £23.8m • Adjusted EPS up 5% to 34.22p • Interim dividend up 4% to 7.55p • Another industry leading performance by the Managed Estate • Realising benefits of improved digital footprint with better customer journey and manag
Slide 20: Current trading and outlook
Current trading and outlook • Current trading • Managed LFL sales up 3.7% for 33 weeks • Tenanted LFL profits up 2% for 33 weeks • Total beer & cider volumes up 1% for 33 weeks • Projects started in last 12 months are poised to deliver benefits to the business • Well-prepared for a continued uncerta
Slide 21: Appendix – Reconciliation to statutory profit
Appendix – Reconciliation to statutory profit H1 2018 H1 2017 £m £m Adjusted profit 23.8 22.8 +4% Separately disclosed items (0.2) (1.4) Profit before tax 23.6 21.4 +10% Tax on adjusted profit (4.9) (4.9) Tax on separately disclosed items – 1.2 Profit after tax 18.7 17.7 +6% Adjusted EPS 34.22p 32.4
Slide 22: Appendix – Separately disclosed items
Appendix – Separately disclosed items H1 2018 H1 2017 £m £m Profit on sale of properties 4.8 0.5 Acquisition costs (0.1) (0.6) Upgrade and replacement of core IT systems (1.5) – Asset impairments (2.9) – Reorganisation costs – (0.6) Deemed remuneration on the future purchase – (0.3) of shares in The
Slide 23: Appendix – Fuller's Inns
Appendix – Fuller’s Inns 1 Apr Disposed Lease 30 Sept Acquired Disposed 24 Nov Within 2017 expiry 2017 2017 the M25 Managed Pubs & 198 – (1) 197 1 – 198 61% Hotels Tenanted Inns 192 (11) – 181 – (1) 180 28% Total Fuller’s 390 (11) (1) 378 1 (1) 378 The Stable 17 – – 17 – – 17 Total Group 407 (11) (1
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