Shepherd Neame Limited Class A · AQUIS:SHEP
Shepherd Neame Limited Class A — Shareholder Meeting (October 2013)
46 slides from Shepherd Neame Limited Class A's shareholder meeting presentation, October 2013
Slide 1: Shepherd Neame Ltd AGM October 2013
Shepherd Neame Ltd AGM October 2013
Slide 2: Miles Templeman, Chairman
Miles Templeman Chairman 1
Slide 3: 2013: A solid performance in difficult market conditions
2013: A solid performance in difficult market conditions Performance to 29 June 2013 highlights include: • Growth in turnover of 1.4% – 52 week year against a 53 week comparative • Operating profit before exceptional items level at £12.7m • Strong retail like for like sales and average EBITDAR growt
Slide 4: A year of further growth in net asset per share and dividend
A year of further growth in net asset per share and dividend • Final dividend per £1 share proposed at 20.15p, resulting in full year dividend 25.15p (2012: 24.5p) up 2.7% 3 • Net asset value per £1 share of £9.81 (2012: £9.61) up 2.1%
Slide 5: Business and Board reorganisation
Business and Board reorganisation • Beer Business key initiatives – Phased exit of contract brewing to best utilise plant capacity – Ten year logistics arrangement entered with Kuehne & Nagel Drinkflow Logistics • Reorganise Board around two divisions – Brewing and Brands – Retail and Tenanted Pubs
Slide 6: Business and Board reorganisation: Executive Board 2014
Business and Board reorganisation Executive Board 2014 Jonathan Neame Chief Executive Bill Brett Non-Executive Director Started September 2013 Retail & Tenanted Brewing & Pubs Division Brands Division Nigel Bunting Retail & George Barnes Graeme Craig Tenanted Property & Mark Rider Brewing & Tom Falc
Slide 7: Mark Rider, Finance and IT Director
Mark Rider Finance and IT Director 6
Slide 8: Performance
Performance 2013 2012 % Before exceptional items £m £m Turnover 134.9 133.0 1.4 Operating Profit 12.7 12.7 - Net Finance Costs (4.7) ( 4.3) (8.9) Profit before Tax 8.0 8.4 (4.5) Tax Rate (%) 23.8 24.6 (0.8) EPS (pence) 48.1 49.8 (3.4) Full Year Dividend per £1 share (pence) 25.2 24.5 2.7 Reconciliat
Slide 9: Exceptional Items
Exceptional Items 2013 2012 £m £m Business Reorganisation (1.2) - Property Profits 0.3 0.6 Number of Pubs Disposed 6 12 Impairment Charge - - Total Exceptional Items (0.9) 0.6 8 2012/13 was a 52 week year. 2011/12 was a 53 week year
Slide 10: Cash flows
Cash flows 2013 2012 £m £m EBITDA 19.6 19.8 Cash flow from operations 19.0 19.9 Interest and tax (6.8) (7.7) Dividends and purchase of own shares (3.1) (3.6) Disposal proceeds 2.7 3.5 Internally Generated Free Cash 11.8 12.1 Core Capex (10.2) (7.7) Acquisitions (3.6) (15.6) Net cash (outflow) (2.0)
Slide 11: Balance Sheet
Balance Sheet 2013 2012 £m £m Fixed Assets 202.4 198.6 Other assets and Liabilities 1.8 0.4 Net debt (78.4) (75.8) Shareholders Funds 125.8 123.2 Net Debt : EBITDA 4.0 3.8 Gearing 62% 62% Net asset per £1 share 9.81 9.61 10
Slide 12: Jonathan Neame, Chief Executive
Jonathan Neame Chief Executive 11
Slide 13: Overview
Overview • A satisfactory performance in the face of challenging market conditions – Strong like for like retail sales – Average EBITDAR growth in managed and tenanted – Volume growth in core brands • Positive actions taken – Beer portfolio development – New export opportunities – Business reorganis
Slide 14: Portfolio development: focus capacity on own beer and licensed brands
Portfolio development: To focus capacity on own beer and licensed brands where there are growth opportunities Heritage Mainstream Discovery/Craft Connoisseur Beers Regular Premium, World, For Special Occasions Beers Craft Beers 13
Slide 15: Discovery/Craft Classic Collection
Discovery/Craft Classic Collection New product development 14
Slide 16: Investment in brands
Investment in brands Movember Partnership Ground naming rights Comedy Duo Armstrong & Miller Serpentine Gallery Future Contemporaries Party Soul 2 Soul Watergate Varsity Match Twickenham 15 Bay Concert
Slide 17: Core brand performance: Ahead of the market
Core brand performance: Ahead of the market 2011 2012 2013 Volume Growth 2.3% 5.7% 2.7% 2011 2012 2013 2011 2012 2013 Volume Growth 16.8% 20.4% 9.4% Volume Growth 3.9% (9.1)% 1.0% 2012/13 growth rates on a 52 week comparable basis. 2011/12 was a 53 week year 16 * Own beer volume adjusted to exclude
Slide 18: Phased exit of Kingfisher contract mitigated by new growth opportunities
Phased exit of Kingfisher contract mitigated by new growth opportunities • Phased exit from contract brewing Kingfisher lager – 18.6% of own beer 2013 – Brewing ends December 2014 • We expect discontinued contract volume will be covered by new brand and sales initiatives • New export agreement into
Slide 19: Business reorganisation
Business reorganisation • March 2013 - 15 roles in Beer Business consolidated • July 2013 - 10 year agreement for distribution and warehousing services • Shepherd Neame continue to own site which becomes key part of KNDL network • Increased expansion opportunities outside heartland • Transfer of ope
Slide 20: Progress against long term pub strategy
Progress against long term pub strategy Objective Progress Improve quality and average • 26 pubs and hotels acquired, 51 earnings of pub and hotel estate sold since 2008 • Strong average EBITDAR per pub growth Build retail mix • Retail turnover 30% higher in 2013 than 2008 Grow accommodation busines
Slide 21: We own many of the best freehold pubs in Kent, London and South East
We own many of the best freehold pubs in Kent, London and South East. • Total investment in pubs £9.9m (2012: £20.6m) - Acquisitions £3.6m (2012: £15.4m) - Maintenance/development Capex £4.6m (2012: £3.7m) - Repairs £1.7m (2012: £1.5m) - Disposals £2.7m (2012: £3.5m) • Over last 5 years average EBIT
Slide 22: Pub performance robust in difficult On Trade market conditions
Pub performance robust in difficult On Trade market conditions • UK market On Trade volumes down -4.9% (2012: -3.4%) - Wet and dull Summer in 2012. Cold Spring in 2013 - Olympics 2012 below expectations - Consumer caution • Retail liquor LFL 2.0% (2012: 6.2%) 21
Slide 23: Food offer development has driven an increase in customer numbers
Food offer development has driven an increase in customer numbers Managed Houses 2013 Food LFL 5.0% Ave spend / head £11.23 Spend / head growth - 22
Slide 24: Hotel investment strategy
Hotel investment strategy • Acquisition of Royal Wells Hotel and Beau Nash for £3.6m • Redevelopment of Marine Hotel, Tankerton - £1.4m spend in 2013 • Major bedroom upgrades - The Royal Hotel, Deal - The Dog & Bear Hotel, Lenham - The Sun Inn, Faversham • 2014 – 15 investment plans - The Bell Hotel
Slide 25: Room refurbishment has supported an increase in occupancy and RevPAR
Room refurbishment has supported an increase in occupancy and RevPAR Managed Houses 2013 Accommodation LFL 7.9% Occupancy 73% Occupancy Growth 7% RevPAR £48 RevPAR Growth 11.6% • 501 letting rooms at year end: – Managed Houses 270 – Tenanted 231 24
Slide 26: Tenanted investment strategy
Tenanted investment strategy • Total investment in our tenanted estate £3.1m (2012: £2.6m) • We provide turnkey service to develop pub design interiors, provide fixtures & fittings with pre and post opening training & support 25
Slide 27: Supporting our Licensees
Supporting our Licensees • We have evolved our tenanted support with 9 new initiatives and services, for example – Catering advisory, menu design and bespoke coffee supply package – Enhanced range of national lagers and guest beers – New induction programme for for licensees and online training • Up
Slide 28: Summary
Summary • Challenging year but creditable performance • Decisive action to position the business for higher returns • Current trade strong….. … but we do not expect it to continue at this rate of growth through winter – Managed House LFL for first 10 weeks up 10.2% – Tenanted LFL EBITDAR up 1.7% – T
Slide 29: Questions?
Questions? BRITAIN'S OLDEST BREWER 28
Slide 30: Resolutions
Resolutions (o>) N
Slide 31: Resolution 1: To receive the Annual Report and Accounts
Resolution 1 To receive the Annual Report and Accounts 30
Slide 32: Resolution 1: Voting results
Resolution 1 To receive the Annual Report and Accounts No of No of Shareholders Votes % For + Discretion 306 42,003,750 99.77 Against 1 79,400 0.19 Other Discretion 12 15,530 0.04 100.00 Withheld 2 220 52.98% of total votes cast by proxy 31
Slide 33: Resolution 2: To declare a Final Dividend
Resolution 2 To declare a Final Dividend 32
Slide 34: Resolution 2: Voting results
Resolution 2 To declare a Final Dividend No of No of Shareholders Votes % For + Discretion 307 42,003,749 99.77 Against 1 79,400 0.19 Other Discretion 12 15,530 0.04 100.00 Withheld 1 221 52.98% of total votes cast by proxy 33
Slide 35: Resolution 3: Re-election of Jonathan Neame
Resolution 3 To propose the re-election of Jonathan Neame as a Director 34
Slide 36: Resolution 3: Voting results
Resolution 3 To propose the re-election of Jonathan Neame as a Director No of No of Shareholders Votes % For + Discretion 301 33,594,190 89.12 Against 3 4,085,129 10.84 Other Discretion 12 15,530 0.04 100.00 Withheld 5 4,404,051 47.44% of total votes cast by proxy 35
Slide 37: Resolution 4: Re-election of James Leigh-Pemberton
Resolution 4 To propose the re-election of James Leigh-Pemberton as a Director 36
Slide 38: Resolution 4: Voting results
Resolution 4 To propose the re-election of James Leigh-Pemberton as a Director No of No of Shareholders Votes % For + Discretion 300 29,936,820 79.42 Against 5 7,742,565 20.54 Other Discretion 12 15,530 0.04 100.00 Withheld 4 4,403,985 47.44% of total votes cast by proxy 37
Slide 39: Resolution 5: Re-election of George Barnes
Resolution 5 To propose the re-election of George Barnes as a Director 38
Slide 40: Resolution 5: Voting results
Resolution 5 To propose the re-election of George Barnes as a Director No of No of Shareholders Votes % For + Discretion 299 29,931,641 71.11 Against 7 12,145,817 28.85 Other Discretion 12 15,530 0.04 100.00 Withheld 4 5,912 52.98% of total votes cast by proxy 39
Slide 41: Resolution 6: Election of Bill Brett
Resolution 6 To propose the election of Bill Brett as a Director 40
Slide 42: Resolution 6: Voting results
Resolution 6 To propose the election of Bill Brett as a Director No of No of Shareholders Votes % For + Discretion 298 29,931,299 71.11 Against 8 12,146,294 28.86 Other Discretion 12 15,530 0.03 100.00 Withheld 4 5,777 52.98% of total votes cast by proxy 41
Slide 43: Resolution 7: Reappoint the Auditors
Resolution 7 To reappoint the Auditors and to authorise the Directors to fix their remuneration 42
Slide 44: Resolution 7: Voting results
Resolution 7 To reappoint the Auditors and to authorise the Directors to fix their remuneration No of No of Shareholders Votes % For + Discretion 302 38,342,873 91.09 Against 5 3,736,991 8.88 Other Discretion 12 15,530 0.03 100.00 Withheld 3 3,506 52.98% of total votes cast by proxy 43
Slide 45: Resolution 8: Market purchases of 'A' Ordinary Shares
Resolution 8 To authorise the Company to make market purchases of ‘A’ Ordinary Shares 44
Slide 46: Resolution 8: Voting results
Resolution 8 To authorise the Company to make market purchases of ‘A’ Ordinary shares No of No of Shareholders Votes % For + Discretion 297 37,933,292 90.22 Against 9 4,094,876 9.74 Other Discretion 12 15,530 0.04 100.00 Withheld 3 55,202 52.91% of total votes cast by proxy 45