Fuller, Smith & Turner P.l.c. Class A · LSE:FSTA
Fuller, Smith & Turner P.l.c. Class A — FY2004 Earnings Presentation
43 slides from Fuller, Smith & Turner P.l.c. Class A's earnings presentation, Mar 27, 2004
Slide 1: Fuller, Smith and Turner PLC Preliminary Results
Fuller, Smith and Turner PLC Preliminary Results for the Year Ended 27 March 2004
Slide 2: Michael Turner, Chief Executive
Michael Turner Chief Executive
Slide 3: Agenda
Agenda Strategy Corporate Progress Key Financial Data Fuller’s Inns The Fuller’s Beer Company Prospects
Slide 4: Consistent Strategy
Consistent Strategy Fundamental objective to maximise shareholder returns by generating high quality, sustainable earnings • Long term focus • Culture of style not fashion • Passion for quality • Pride in our premium brands • Medium term aim – to double estate, subject to sensible freehold prices
Slide 5: Corporate Progress
Corporate Progress • Beer Company profits up 14% with volumes up 2% • Mixed results in Managed Pubs & Bars: –– City City was was weak weak with with LFL LFL sales sales down down 5% 5% –– Food Food sales sales up up 11% 11% • Tenanted profits up 5% • Hotel occupancy lower but comparable room rates m
Slide 6: Financial Highlights
Financial Highlights • Turnover up 2% to £140.3m (2003: £137.6m) • Profits before tax up 13% to £19.2m (2003: £17.0m) • Normalised* profits before tax up 3% to £16.9m (2003: £16.4m) • Basic EPS up 26% to 60.63p (2003: 48.04p) • Normalised* EPS up 9% to 49.84p (2003: 45.59p) • Final dividend up 7% to
Slide 7: Normalised Profits
Normalised Profits 18 16 16.4 16.9 14 14.8 15.6 14.9 12 £m 10 8 6 4 2 +6% +6% -4% +10% +3% 0 2000 2001 2002 2003 2004
Slide 8: Normalised EPS
Normalised EPS 60 50 Pence per share 49.84 40 45.59 40.73 42.69 40.07 30 20 10 +9% +5% -6% +14% +9% 0 2000 2001 2002 2003 2004
Slide 9: Dividends
Dividends 18 16 17.31 14 16.12 15.17 Pence per share 14.38 12 13.41 10 8 6 4 2 +8% +7% +5% +6% +7% 0 2000 2001 2002 2003 2004
Slide 10: Paul Clarke, Finance Director
Paul Clarke Finance Director
Slide 11: Financial Strengths
Financial Strengths • Highly cash generative business • Gearing low at 11% • Over 90% of property freehold • Prudent accounting policies • Strong balance sheet
Slide 12: Key Figures
Key Figures March March March March 2004 2004 2003 2003 Net Debt £17.0m £21.9m Gearing 10.7% 14.5% Net Assets £159.8m £151.2m Net Assets Per Share £6.95 £6.52 EBITDA £27.7m £27.0m Interest Cover* 9.7x 9.4x Effective Tax Rate* 32.5% 32.5% ** Based Based on on normalised normalised profits profits
Slide 13: Profit Reconciliation
Profit Reconciliation 2003/2004 2004 2004 2003 2003 £m £m £m £m Normalised profit 16.86 16.42 Exceptional profit on disposals 2.37 0.58 Statutory profit 19.23 17.00
Slide 14: Total Capital Expenditure
Total Capital Expenditure 35 30 30.2 30.2 25 Fuller’s Fuller’s Inns Inns 26.2 26.2 £m 20 23.3 23.3 15 18.3 18.3 Beer Beer Company Company 16.5 16.5 10 and and Central Central 12.0 12.0 5 0 2000 2001 2002 2003 2004 2005 Projected Projected
Slide 15: Simon Emeny, Retail Director
*- ee v4 . p = ~~ » mall > ‘ail Simon Emeny Retail Director
Slide 16: Retail Split
Retail Split March Net Additions Net May 2003 / Sales Transfers 2004 Managed Pubs & Bars 115 +1 nil 116 Tenanted Pubs 115 nil -1 114 Hotels 8 -1 +1 8 238 nil nil 238
Slide 17: Fuller's Inns Key Figures
Fuller’s Inns Key Figures March March March March 2004 2004 2003 2003 Turnover £97.0m £97.0m level Profit £15.3m £16.0m -4% EBITDA £22.3m £22.7m -2%
Slide 18: Managed Pubs & Bars
Managed Pubs & Bars
Slide 19: Managed Pubs & Bars Trading Patterns
Managed Pubs & Bars Trading Patterns • Turnover for the year up 1% • Uninvested LFL* turnover was down 2%, which includes City LFL down 5% • Strong summer in garden and waterside pubs • Continued repositioning of estate has increased food and wine sales by 11% • Extensive investment in the estate re
Slide 20: Managed Pubs & Bars Strategy
Managed Pubs & Bars Strategy • Retail position differentiated by clear focus on quality • Targeting discerning customers • Premium products • Strength of offer underpins pricing policy • Focus on freshly prepared food • Supported by tailored investment programme
Slide 21: Focus on Cask Ale and Wine
Focus on Cask Ale and Wine • Cask Ale – investment in cellar equipment – Master Cellarman status – seasonal ales – beer appreciation tutoring • Wine – quality and varied wine list – many exclusive to Fuller’s – training and expertise in wine
Slide 22: Food and Service
Food and Service • Food – focus on freshly prepared food – quality, not price driven – matching food with beer and wine – targeted Thai food franchises • Service – employing people with character and personality – investment in staff training and development – better provision for non-smoking custom
Slide 23: Managed Pubs & Bars Investment Programme
Managed Pubs & Bars Investment Programme 2005 2005 2003 2003 2004 2004 Planned Planned Investment in existing estate £3.4m £4.4m £5.4m – including repairs £0.7m £1.0m £1.8m Number of £50k+ projects 8 13 26 Trading weeks lost 20 68 80
Slide 24: Recent Developments
a Ma ©» Recent Developments [FULLER
Slide 25: Case Study: Six Bells, Thame
Case Study Six Bells, Thame Average Average weekly weekly sales sales Pre Pre -- Post Post -- Project Project Project Project ££ ££ Total Sales 5,188 12,671 Wine Sales 249 1,496 Beer Sales 2,869 4,279 Food Sales 1,038 4,803 Cask Ale Sales 814 1,240
Slide 26: Tenanted Inns
Tenanted Inns
Slide 27: Tenanted Inns Key Facts
Tenanted Inns Key Facts • Average turnover per pub up 5% • Average profit per pub up 8% • Wine sales up 16% • Finalist in The Publican Tenanted Pub Co. of the Year Award • Now have 49 tenants converted to the new lease
Slide 28: Fuller's Hotels
ay <= i 5 ~ =, Fuller's Hotels
Slide 29: Fuller's Hotels Key Figures
Fuller’s Hotels Key Figures 2004 2004 2003 2003 No. of Rooms 458 492 -7% Room Rates £68.97 £67.81 +2% Occupancy 61% 65% -6% RevPar £42.09 £44.19 -5%
Slide 30: Red Lion Hotel, Hillingdon
Red Lion Hotel, Hillingdon Firicies|
Slide 31: Fuller's Inns Summary
Fuller’s Inns Summary A mixed year for Fuller’s Inns with profits down 4% on 2003 • Weak City trading continued with LFL sales down 5% - now showing growth • A year of substantial investment with 68 weeks trading lost through closure (2003: 20 weeks) • Turnover in redeveloped outlets up 28% • Anothe
Slide 32: John Roberts, Beer and Brands Director
John Roberts Beer and Brands Director
Slide 33: Fuller's Beer Company Key Figures
Fuller’s Beer Company Key Figures March March March March 2004 2004 2003 2003 Turnover £65.5m £62.7m +4% Profit £7.8m £6.8m + 14 % EBITDA £9.2m £8.1m + 13 %
Slide 34: Beer Volumes
Fuller’s Beer Company Beer Volumes 2004 2004 2003 2003 ‘000 ‘000 brls brls ‘000 ‘000 brls brls Free On Trade 142.4 137.3 +4% Fuller’s Inns 86.2 89.3 -3% Off Trade 28.9 26.5 +9% Exports 11.1 10.7 +4% Total Beer 268.6 263.8 +2% Own Beer 194.6 190.7 +2%
Slide 35: Comparison with UK Market
Fuller’s Beer Company Comparison with UK Market Fuller’s Fuller’s UK UK Market Market ** (UK (UK only) only) Total Beer +2% +2% Total Ale +2% -6% Cask Ale +1% -7% Off Trade Ale +9% +1% ** Source Source :: BBPA BBPA
Slide 36: London Pride
Fuller’s Beer Company London Pride • The leading premium ale in the country –– cask cask volumes volumes up up 1% 1% –– cans cans up up 13% 13% –– bottles bottles up up 23% 23% • Introduction of 12 pack to off trade • Highly successful advertising campaign built around the Rugby World Cup
Slide 37: Brewery Investment
Brewery Investment • Additional fermentation and maturation tanks costing £1.4m increased capacity by 25% • Acquisitions of adjoining land will add 11% to the Chiswick site
Slide 38: Seasonal Ales
Fuller’s Beer Company Seasonal Ales Summer / Winter Spring / Autumn festival Specials
Slide 39: Other Initiatives
Fuller’s Beer Company Other Initiatives • Fine Ale club now has more than 14,000 members • Head Brewer’s Roadshows held around the country • ‘Pride and Passion’ launched in spring 2004
Slide 40: Fuller's Beer Company Summary
Fuller’s Beer Company Summary A year of good growth for the Beer Company with profits up 14% • An excellent performance from the Wine Division with profits up 21% • Total Own Beer sales up 2% • Brewery capacity increased by 25% • Brand strength and quality continue to drive demand
Slide 41: Watch EURO 2004 Here
WATCH EURO 2004 Here 12" JUNE - 4" JULY WHATEVER YOU DO, TAKE PRIDE
Slide 42: Prospects
Prospects • Investment in premium assets and quality brands • Encouraging signs in City - Fuller’s well positioned for upturn • Improving hotel market - strong platform for growth • Steady progress in Beer Company and Tenanted Inns • Breadth and balance of portfolio - core strength of our business
Slide 43: Whatever You Do, Take Pride
WHATCYCR You bo. TAKE PRIDE e WHATEVER You Do, TAKE PRIDE WHATEVER You Do, TAKE PRIDE.
Fuller, Smith & Turner — FY2004 Earnings Presentation on 6ix