Fuller, Smith & Turner P.L.C. Class A · LSE:FSTA
Fuller, Smith & Turner P.L.C. Class A — H1 2023 Earnings Presentation
29 slides from Fuller, Smith & Turner P.L.C. Class A's earnings presentation, November 2022
Slide 1: Half Year Results for the 26 weeks ended 24 September 2022
Half Year Results for the 26 weeks ended 24 September 2022
Slide 2: Agenda
Agenda 2 THE EXTERNAL ENVIRONMENT H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S E P T E M BE R 2 0 2 2 FINANCIAL REVIEW S T R AT E G Y U P D AT E CURRENT TRADING OUTLOOK
Slide 3: What a difference a year makes
WHAT A DIFFERENCE A YEAR MAKES This time last year Today 80% compared to H1 2020 101% compared to PY-2 for the last Like for like sales seven weeks Slower recovery - City still working from Like for like sales in the first half of the home and like for like sales at 58% of year in Central London and
Slide 4: External environment remains challenging
H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S E P T E M BE R 2 0 2 2 EXTERNAL ENVIRONMENT REMAINS CHALLENGING
Slide 5: Long-term resilience
LONG-TERM RESILIENCE 5 • Predominately freehold-backed company with over 175 years of history and experience • Directors’ estate valuation of £996m H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S E P T E M BE R 2 0 2 2 • High-quality, premium estate, geographically balanced, cas
Slide 6: Financial Review
H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S E P T E M BE R 2 0 2 2 6 FINANCIAL REVIEW
Slide 7: Income statement
INCOME STATEMENT 7 H1 2023 H1 2022 £m £m • Revenues increased by 45% with prior year Revenues 168.9 116.3 impacted by Covid-19 restrictions on trade, current year affected by rail and tube strikes H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S E P T E M BE R 2 0 2 2 Operating c
Slide 8: Divisional results
DIVISIONAL RESULTS 8 H1 2023 H1 2022 £m £m Managed Pubs and Hotels • Managed Pubs and Hotels delivered revenues of Revenue 153.8 104.4 £153.8m and operating profit of £18m Operating profit* 18.0 13.6 H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S E P T E M BE R 2 0 2 2 • Declin
Slide 9: Managed revenue
MANAGED REVENUE 9 • Trendline shows continued momentum in sales Revenue by week despite the challenging trading environment 6,600 3 rail 3 rail &1 &1 1 tube tube 2 rail tube • Disruption caused throughout H1 by tube and rail 6,400 H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S
Slide 10: The inflationary environment – energy
THE INFLATIONARY ENVIRONMENT – ENERGY 10 • Previously announced total utilities cost for FY23 would Total Gas and Electricity be in the region of £18m. Government support scheme has reduced this forecast to a full year cost in the region Gas Electricity of £15m H AL F Y E AR R E S U L T S F O R T H
Slide 11: The inflationary environment
THE INFLATIONARY ENVIRONMENT 11 Current challenges: Mitigating factors: • Continued investment in home-grown talent • Extensive package of benefits at all levels including healthcare cash plan • H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S E P T E M BE R 2 0 2 2 Labour • Roll
Slide 12: Strong balance sheet
STRONG BALANCE SHEET 12 H1 2023 H1 2022 • High quality asset base £m £m • 92% of Fuller’s estate is freehold by book Property, plant & equipment 591.8 588.4 value H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S E P T E M BE R 2 0 2 2 Right-of-use assets (IFRS 16) 69.2 77.5 • Upd
Slide 13: Net debt
13 NET DEBT • Net debt at 24 September 2022 of £129.2m excluding leases (25 September 2021: £131.5m) • 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 H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2
Slide 14: Cashflow
CASHFLOW 14 • Steady improvement in trading resulting in much H1 2023 H1 2022 improved EBITDA of £28.9m £m £m • No similar working capital benefit as seen in the prior Adjusted EBITDA 28.9 22.8 year as estate was fully open at the beginning of the H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS
Slide 15: Capital allocation framework
CAPITAL ALLOCATION FRAMEWORK 15 Policy Targets & Philosophy Outlook • H1 FY23 investment of £11.8m Invest in long-term Returns-based approach to capital • FY23 full year investment of c£25m with 50% on organic growth investment trade enhancing and 50% on maintenance H AL F Y E AR R E S U L T S F O R
Slide 16: FY23 guidance
FY23 GUIDANCE 16 • Continued recovery of Managed revenues • Inflationary pressures persist but being managed H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S E P T E M BE R 2 0 2 2 • Depreciation expected to be in the region of £26m • Interest charge expected to be in the region
Slide 17: Strategy Update
H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S E P T E M BE R 2 0 2 2 17 STRATEGY UPDATE Outside tables now account for 25% of pre-booked covers
Slide 18: Our customer
OUR CUSTOMER 18 • Affluent customer base – over-index by 48% in attracting customers with household income over £75k • Over index in all household income groups over £40k • Customers still well-financed due to covid savings H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S E P T E
Slide 19: Delighting our customers
DELIGHTING OUR CUSTOMERS 19 • Customers looking for a premium experience in return for their money • Over £500k incremental sales generated from Shakespeare in the Garden and Opera in the Garden H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S E P T E M BE R 2 0 2 2 • Part of an
Slide 20: Inspiring our people
INSPIRING OUR PEOPLE 20 • Continued investment in homegrown talent • 65% of general managers have been internally appointed • 2,500 training days in the first six months H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S E P T E M BE R 2 0 2 2 • 177 team members currently on an app
Slide 21: Enhance our estate
ENHANCE OUR ESTATE 21 • Continue to take appropriate acquisition opportunities – acquired three new sites since the year end Freehold acquisitions in iconic locations • The Queen’s Arms, Landside at The Queen’s Terminal Heathrow H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S E
Slide 22: Evolve our business
EVOLVE OUR BUSINESS 22 • Leveraging the benefits of our new digital platforms • Sent almost six million emails through 200 campaigns, ensuring customers hear from Fuller’s, or their favourite Fuller’s pub, at least once a month H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S E P
Slide 23: Own our impact
OWN OUR IMPACT BECAUSE Life is too good to waste 23 • Roll out of energy saving measures to reduce usage by 5% per annum – investment of £0.5m to deliver: • Improved cellar controls and remote beer coolers, saving £390k pa H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S E P T E
Slide 24: Tenanted Inns
TENANTED INNS 24 • Total tenanted profit of £6.8m (H1 2022: £4.8m) • Tenancies remain an integral, highly profitable and cash generative part of our business H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S E P T E M BE R 2 0 2 2 • 92% of tenanted pubs are on substantive agreemen
Slide 25: Current trading
CURRENT TRADING 25 • Like for like sales increased 13% v PY for the seven weeks to 12 November 2022 • Sales continue to recover well – strong growth in the H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S E P T E M BE R 2 0 2 2 City and Central London with like for like sales for
Slide 26: Outlook
OUTLOOK 26 • Looking forward to our first restriction-free Christmas for three years • Christmas bookings looking strong • The World Cup provides an additional trading opportunity pre- H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S E P T E M BE R 2 0 2 2 Christmas • Strong Bala
Slide 27: Appendix
Slide 28: Appendix: Fuller's Estate
Appendix: Fuller’s Estate 28 26 Mar 24 Sept 5 Nov Within 2022 New Disposed Transfers 2022 New 2022 the M25 Total Fuller’s 385 2 (1) - 386 1 387 44% H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S E P T E M BE R 2 0 2 2 Managed Pubs & Hotels 211 2 (1) (4) 208 1 209 57% Tenanted I
Slide 29: Appendix: IFRS 16 reconciliation
Appendix: IFRS 16 reconciliation 29 Pre IFRS 16 IFRS 16 Post IFRS 16 Revenue and other income 168.9 - 168.9 H AL F Y E AR R E S U L T S F O R T H E 2 6 W E E KS E N D E D 2 4 S E P T E M BE R 2 0 2 2 Operating costs (154.5) 1.2 (153.3) Adjusted operating profit 14.4 1.2 15.6 Finance costs (4.3) (1.5
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