Slide 1: Interim Results 2008
Interim Results 2008 7 March 2008 1
Slide 2: Highlights – Six Months to 27 January 2008
Highlights – Six Months to 27 January 2008 • Turnover up 0.4% to £440.2m • Operating profit down 4% to £44.4m • Operating Margin down 0.5% to 10.1% • Profit before tax down 13% to £28.5m • Earnings per share down 11% to 12.9p • Free cash flow per share 11.3p (2007: 17.0p) • Dividend per share 4.4p (
Slide 3: Average Sales Per Pub Week
Average Sales Per Pub Week (including VAT) £000 30.6 31.0 29.5 30.0 29.0 29.0 28.0 28.2 28.0 26.4 27.0 26.0 24.7 25.0 24.0 23.0 22.0 21.0 20.0 2002 2003 2004 2005 2006 2007 H1 2008 Sales resilient despite non smoking 3
Slide 4: Like for Like Sales/Profits
Like for Like Sales/Profits % H1 FY FY FY FY 2008 2007 2006 2005 2004 Bar (6.0) 3.3 2.2 (1.4) 2.9 Food 9.7 12.6 3.6 2.1 4.2 Machine (6.0) 2.7 (1.4) (2.4) 6.1 Total (2.0) 5.6 2.0 (0.6) 3.4 sales LFL (3.1) 7.0 5.9 (4.0) (0.7) Profits Strong Food Sales 4
Slide 5: Pub Operating Margin
Pub Operating Margin • Slight gross margin decline due to increased food sales and some food cost pressure • Staffing Costs - Wages pay rates higher and impact of food service costs - One off Head Office payments due to staff reductions • Operating costs - Repairs lower - Utilities slightly lower •
Slide 6: Operating Margin - Summary
Operating Margin - Summary H1 H1 H1 H1 FY 2008 2008 2007 2007 2007 £000 % of £000 % of % of Sales Sales Sales Turnover 440,166 - 438,374 - - Pub Operating Profit 86,846 19.7 86,372 19.7 19.5 Head Office Costs (17,605) (4.0) (17,040) (3.9) (4.0) Share Incentive Plan (1,310) (0.3) (1,352) (0.3) (0.3)
Slide 7: Allocation of Resources
Allocation of Resources £162m £130m £116m £124m £92m Dividends £52m Buybacks Capex 2003 2004 2005 2006 2007 H1 2008 Careful management of resources 7
Slide 8: Movement in Net Borrowings
Movement in Net Borrowings • Free cash flow declined to £16.0m (2007: £25.6m). Excluding the £8.2m timing of interest payments of underlying free cash flow has declined £1.4m year on year. • Overall increase in net borrowings of £28.7m (2007: £30.2m) a reduction of £1.5m compared to same period last
Slide 9: Debt Position
Debt Position H1 H1 FY 2008 2007 2007 Net debt/ EBITDA 3.6 2.8 3.2 Interest cover (times) 2.8 3.5 3.1 Fixed charge cover (times) – statutory 1.7 1.8 1.8 - excluding 2.2 2.4 2.3 depreciation 9
Slide 10: Cash Flow
Cash Flow H1 H1 FY 2008 2007 2007 Cash from operations 55,617 60,273 124,933 Interest (23,653) (12,998) (27,422) Tax (8,974) (10,103) (19,598) Investment in existing pubs (6,229) (10,548) (24,046) Investment in own shares (SIP) (671) (1,053) (1,488) Free cash flow 16,090 25,571 52,379 Dividends (11,
Slide 11: Banking facilities
Banking facilities • UK banking facility £415m - Matures December 2010 - 10 participating lenders - £250m swap expiring in 2014 - £150m swap until 2009 replaced by new swap until 2016 - Average interest cost of swaps 5.5% • US private placement $140m -£87m - Matures September 2009 - Foreign Exchange
Slide 12: Dividends and Share buybacks
Dividends • Substantial increase last year (155%) • Increase of 10% H1 2008 on H1 2007 • 4.4p interim dividend (2007:4.0p) Share buybacks • 1.0m of shares bought at a cost of £5.7m • Total of £273m since 2003 • Flexibility on future cash allocation 12
Slide 13: Continued Improvement
Continued Improvement • New products eg. Coors light and cocktails • Success of wine and ale festivals • Fairtrade coffee • Training awards • New menu and food ranges Ongoing improvements in the business 13
Slide 14: Property
Property • 2007/08 H1 10 new pubs • 2007/08 FY c23 planned • 2009 c30 target • More favourable property market • Currently 42% freehold Maintain target return on investment 14
Slide 15: Non-Smoking – an update
Non-Smoking – an update • Strong food sales, decline in bar sales • Difficult to predict - Scotland - England pre-1st July • Exact timing of recovery uncertain 15
Slide 16: 2008 H2 Issues and Outlook
2008 H2 Issues • Similar H2 sales trends • Some cost pressures - Higher marketing costs - Lower GP due to cost increases and mix • Slightly more cautious trading outlook Outlook • Gearing impact of lower bar sales on operating margins • Bar sales recovery timing • Significant cost pressures • Dedica
Slide 17: Appendices
Appendices A 10 Year Financial Graphs B 10 Year Trends C Capital Trends D ROC/CROCCE/ROE Calculations E Net Debt year on year movement 17
Slide 18: 10 Year Summary
10 Year Summary Appendix A Number of Pubs Average Sales Per Pub Week (including VAT) 635 643 655 657 671 681 630 608 £000 32 30.7 29.5 522 30 29.0 28.0 28.2 28 26.4 480 428 26 24.7 23.5 24 22.7 327 330 22 20.4 252 19.2 19.7 20 194 18 19 9 7 199 8 199 9 2 0 00 2001 2002 2003 2004 2005 2006 2007 H1 20
Slide 19: JDW - Financial Trends
JDW - Financial Trends Appendix B H1 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Sales per pub (£000) 904 1,004 1,040 1,093 1,169 1,239 1,246 1,283 1,354 653 EBITDA per pub (£000) (1) 188.0 203.8 205.9 207.4 201.9 204.4 195.7 205.6 219.0 100 Number of pubs 327 428 522 608 635 643 655 657 671 6
Slide 20: Capital Trends
Capital Trends Appendix C H1 2000 2001 2002 2003 2004 2005 2006 2007 2008 Size (sq.ft.) – openings 3,217 3,713 3,808 3,721 4,317 4,176 3,637 3,885 3,595 Number of openings 101 94 87 45 28 13 9 18 10 % which are freehold 67 75 53 56 43 54 22 61 60 Freehold average cost (£k) 465 506 597 511 640 873 62
Slide 21: ROC/CROCCE/ROE
ROC/CROCCE/ROE Appendix D1 H1 H1 2008 2007 £000 £000 Profit after tax (e) 18,340 21,743 Add: interest (f) 15,949 13,398 Profit pre-interest (g) 34,289 35,141 Add: deferred tax 219 1,157 Depreciation 22,994 21,920 Cash return (h) 57,502 58,218 • P&L return on capital [(g)/average (c)] 10.7% 11.8% • C
Slide 22: ROC/CROCCE/ROE
ROC/CROCCE/ROE Appendix D2 H1 FY 2008 2007 £000 £000 Shareholder funds per balance sheet 166,091 172,607 Add: cum losses on disposal 13,884 13,884 : hedging provision 13,809 1,318 (a) 193,784 187,809 Add: net debt (b) 462,466 433,805 Capital employed (c) 656,250 621,614 Add: deferred tax provision 7
Slide 23: Movement in Net Borrowings
Movement in Net Borrowings Appendix E Jan 2008 V Jan 2007 Overall increase in net borrowings of £28.7m (2007:£30.2m) Compared to last half year the difference of £1.5m represents: £m Cash Operating profit (0.1) Working Capital (4.6) Cash from operations (4.7) Interest (10.7) Tax 1.1 Capital reinvest