Fuller, Smith & Turner P.L.C. Class A · LSE:FSTA
Fuller, Smith & Turner P.L.C. Class A — FY2023 Earnings Presentation
31 slides from Fuller, Smith & Turner P.L.C. Class A's earnings presentation, June 2023
Slide 1: Full Year Results for the 53 weeks ended 1 April 2023
Full Year Results for the 53 weeks ended 1 April 2023 Reopening The Admiralty, the only pub on Trafalgar Square Fuller’s Chief Executive Simon Emeny and London Fire Brigade Deputy Assistant Commissioner Greg Ashman
Slide 2: Agenda
AGENDA RETURN TO GROWTH FINANCIAL REVIEW STRATEGY UPDATE CURRENT TRADING & OUTLOOK The Sanctuary House Hotel, near Westminster Abbey Open and ready in time to celebrate The King’s Coronation in style
Slide 3: A Return to Strong Like for Like Growth
A RETURN TO STRONG LIKE FOR LIKE GROWTH Revenue by week • Business performing well with year-on- year like for like sales up 17.5% for the 7.0 full year and up 13.9% in the first 10 6.5 weeks of FY2024 6.0 • Long-term fundamentals remain in £m 5.5 place • Predominately freehold, well-invested 5.0 es
Slide 4: Our Strategy
OUR STRATEGY Purpose kh, [ We create experiences that nourish the soul Mh y we exist 9 6 Mission Q ° Values Strategy Delight our Inspire Enhance Evolve our customers our people our estate business
Slide 5: Pathway to Further Growth
PATHWAY TO FURTHER GROWTH • Investment in our estate to protect and grow the underlying business Growing our existing • Cost opportunities as inflation abates business • Volume growth through driving sales and innovation • Upside from pricing changes • London continues to return – both offices and t
Slide 6: London's Continued Recovery
LONDON’S CONTINUED RECOVERY London Calling: LFL Food Sales +57.3% LFL Drink Sales +32.3% LFL Accommodation Sales +79.3% Hotel RevPar +83% Photo: Transport for London
Slide 7: Financial Review
FINANCIAL REVIEW The Willow, Bourton-on-the-Water An iconic location in the Venice of the Cotswolds
Slide 8: Income Statement
INCOME STATEMENT FY2023 FY2022 • Revenues increased by 33% despite trading 53 weeks 52 weeks disrupted by train and tube strikes. There were £m £m covid restrictions in the prior year Revenues 336.6 253.8 +33% • Adjusted profit increase of 76% to £12.7m despite the challenging cost environment Opera
Slide 9: Divisional Results
DIVISIONAL RESULTS FY2023 FY2022 £m £m Managed Pubs and Hotels • Managed Pubs and Hotels delivered revenues of £306.8m (up 34%) and operating profit of Revenue 306.8 228.8 £30.0m (up 21%) Operating profit* 30.0 24.7 • Decline in reported EBITDA margin from 21.0% EBITDA* 53.4 48.0 to 17.4% impacted b
Slide 10: Managed Revenue Analysis
MANAGED REVENUE ANALYSIS FY2023 FY2022 • Well balanced revenues with strong growth £m £m across all categories Drink 179.9 132.8 • FY2023, like for like sales against prior year Food 91.4 72.6 were at +17.5%, and total sales were up 34% Accommodation 33.7 21.9 Other 1.8 1.5 • Strong growth in both s
Slide 11: Energy Costs
ENERGY COSTS Total Gas and Electricity • Total utilities cost for FY2023 was £14.2m Gas Electricity representing an 87% increase on FY2022 • We mitigated some of the increases through Total: £14.2m forward market purchases Total: £11.4m • We have also reduced usage significantly – 14% gas and 13% el
Slide 12: The Inflationary Environment
THE INFLATIONARY ENVIRONMENT • Investment in home-grown talent – April 2023 pay awards of 6-11% Labour • Enhanced reporting and dynamic management of sales per labour hour • Implemented improved labour scheduling tool • Drink price inflation – relatively modest due to long-term supply agreement with
Slide 13: Strong Balance Sheet
STRONG BALANCE SHEET FY2023 FY2022 £m £m • High quality asset base Property, plant & equipment 583.3 592.7 • 92% of Fuller’s estate is freehold by book value Right-of-use assets (IFRS 16) 66.4 73.8 Other non-current assets 46.7 47.3 • Directors’ valuation of the estate at £995.6m performed June last
Slide 14: Net Debt
NET DEBT • Net debt at 1 April 2023 of £132.8m excluding leases (26 March 2022: £131.9m) • New bank facilities of £200m were agreed in May 2022 with a term of four years, split between a term loan of £90m and a RCF of £110m • Significant cash headroom Drawn Facility Facility Term Cost (net of cash)*
Slide 15: Cashflow
CASHFLOW FY2023 FY2022 £m £m • Steady improvement in trading resulting in improved EBITDA of £51.8m Adjusted EBITDA 51.8 44.3 Working capital (1.1) 27.8 • Small working capital outflow due to 53rd week Interest (8.7) (7.2) including extra supplier payment run. One-off Tax credit - 2.5 benefit last y
Slide 16: Capital Allocation Framework
CAPITAL ALLOCATION FRAMEWORK Policy Targets & Philosophy Outlook • Maintaining annual investment of £10-15m Invest in long-term Returns-based approach to on maintenance capex and £10-15m on organic growth capital investment trade enhancing capex Sustainable & • FY2023 Final Dividend of 10.0p Dividen
Slide 17: FY2024 Guidance
FY2024 GUIDANCE • Continued recovery of revenues • Depreciation expected to be in the region of £25m • Interest charge expected to be in the region of £13-14m • Adjusted effective tax rate of 25% • Capital expenditure of £20-25m • IFRS 16 guidance in appendix
Slide 18: Strategy Update
STRATEGY UPDATE The George & Dragon, Westerham A stunning terrace overlooking the Kent countryside
Slide 19: Building on Our Strengths
BUILDING ON OUR STRENGTHS Strengths • An outstanding, predominately freehold estate that is well-invested, geographically balanced and in excellent condition • A cash generative business driven by an iconic Managed business and entrepreneurial Tenants • A strong Balance Sheet and careful financial m
Slide 20: Delight Our Customers
DELIGHT OUR CUSTOMERS • Creating experiences that nourish the soul • Pride in celebrating the individuality of our pubs and people to deliver outstanding visits for our guests • Like for like drink sales rose 20.5% • Stunning terrace takeovers with Maison Mirabeau, our new Provence rosé wine partner
Slide 21: Inspire Our People
INSPIRE OUR PEOPLE • People & Talent Director Dawn Browne will join the Main Board as of 3 July 2023, recognising the importance of people development to the business • A further 220 apprenticeships planned for this year, including around 130 in the Chefs’ Guild – making full use of our Apprenticesh
Slide 22: Enhance Our Estate
ENHANCE OUR ESTATE • Long-term strategic objectives • Acquisition and investment to maximise the performance of iconic properties • Add long-term value to our property portfolio • Significant Investments during the year • The Plough at East Sheen – £1.0m investment • The George & Dragon, Westerham –
Slide 23: Proactive Asset Management
PROACTIVE ASSET MANAGEMENT Action Sites Financials The Willow, Bourton-on-the-Water £7.8m investment in acquisition and Acquisitions The Rising Sun, near Bashley development costs The Queen’s Arms, Heathrow T2 Disposal of properties with 6 non trading sites £16m of proceeds, yielding £12m of profit
Slide 24: Evolve Our Business
EVOLVE OUR BUSINESS • Live by our value of always asking what’s next? • Strengthened Executive Team with appointment of Sam Bourke, a seasoned retail marketeer with digital experience • Continue to realise benefits from the digital transformation project, delivering smooth and effective engagement a
Slide 25: Own Our Impact Because Life is too good to waste
OWN OUR IMPACT BECAUSE Life is too good to waste • Good progress made on targets around reduce, recycle and reuse • Opened our first two fully electric pubs – The Admiralty on Trafalgar Square and The Queen’s Arms at Heathrow Terminal 2 • Reduced energy usage by 14% for gas and 13% for electricity •
Slide 26: Tenanted Inns
TENANTED INNS • Tenanted Inns revenue of £29.8m and profits of £13.2m • Capex investment of £4.7m in exciting joint schemes in partnership with our Tenants • Turnover-linked pubs performing well as central marketing support continues to add value • Financial benefit of transfers • Lower capex • Shar
Slide 27: Current Trading and Outlook
CURRENT TRADING AND OUTLOOK • Momentum continues to grow, increasingly strong sales • Excellent start to the year with like for like sales up 13.9% • London trading is strong with more still to come from international tourists, office workers and increased footfall at transport hubs • Continued focu
Slide 28: Annual bridge walk delivered £20,000 for Special Olympics GB
This year’s annual bridge walk delivered £20,000 for Special Olympics GB
Slide 29: Appendix: Fuller's Estate
Appendix: Fuller’s Estate 26 Mar 1 April 10 June Within 2022 New Disposed Transfers 2023 Transfers 2023 the M25 Total Fuller’s 385 3 (11) - 377 - 377 44% Managed Pubs & Hotels 211 3 (6) (4) 204 (4) 200 57% Tenanted Inns 174 - (5) 4 173 4 177 29% Number of bedrooms 1,033 13 - - 1,046 (22) 1,024
Slide 30: Appendix: IFRS16 reconciliation
Appendix: IFRS16 reconciliation Pre IFRS16 IFRS16 Post IFRS16 £m £m £m Revenue and other income 336.6 - 336.6 Operating costs (313.5) 2.0 (311.5) Adjusted operating profit 23.1 2.0 25.1 Finance costs (9.5) (2.9) (12.4) Adjusted profit before tax 13.6 (0.9) 12.7 Separately disclosed items (4.0) 1.6 (
Slide 31: Appendix: A geographically balanced business
Appendix: A geographically balanced business
Fuller, Smith & Turner P.l.c. — FY2023 Earnings Presentation on 6ix