Fuller, Smith & Turner P.L.C. Class A · LSE:FSTA
Fuller, Smith & Turner P.L.C. Class A — H1 2014/15 Earnings Presentation
36 slides from Fuller, Smith & Turner P.L.C. Class A's earnings presentation, November 2014
Slide 1: Fuller, Smith & Turner PLC Half Year Results
Fuller, Smith & Turner PLC Half Year Results for the 26 weeks ended 27 September 2014
Slide 2: Michael Turner, Chairman
Michael Turner Chairman
Slide 3: Agenda
Agenda • Overview • Financial Results • Strategic Progress and Operations • Prospects
Slide 4: Highlights
Highlights Continued strong performance for the first half Growth on prior year (%) £161.6m +10% Revenue £146.3m +6% H1 2014 +6.5% H1 2013 Managed LFL sales +7.9% £19.6m +8% Adjusted profits £18.1m +8% 27.67p +12% Adjusted EPS 24.79p +9% 6.40p +10% Interim dividend 5.80p +8% 2.6 times Net Debt / EBI
Slide 5: James Douglas, Finance Director
James Douglas Finance Director
Slide 6: Group Performance
Group Performance H1 2014 H1 2013 £m £m Revenue 161.6 146.3 +10% Operating costs (138.9) (125.3) +11% Operating profit 22.7 21.0 +8% Net finance costs (3.1) (2.9) +7% Adjusted profit 19.6 18.1 +8% Depreciation & amortisation 8.0 7.1 +13% EBITDA 30.7 28.1 +9% Note: all items exclude exceptional incom
Slide 7: Exceptional Items
Exceptional Items H1 2014 H1 2013 £m £m Profit on sale of properties 0.8 0.5 Acquisition costs (1.0) (0.3) Asset impairments (0.5) (0.5) Onerous lease provision charges & (0.2) 0.6 reversals Reorganisation costs - (1.3) Pension scheme finance costs (0.4) (0.3) Total exceptional items (1.3) (1.3) Tax
Slide 8: Group Performance
Group Performance Share of Five Year History 2009 2014 Operating Profit 19.6 27.67p 6.40p +34% +48% +42% 14.6 17% 18.67p 4.50p 25% 58% Managed Pubs & Hotels Tenanted Inns The Fuller's Beer Company Adjusted Profits Adjusted EPS Interim Dividend £m Share of operating profit above excludes exceptional
Slide 9: Managed Pubs and Hotels
Managed Pubs and Hotels H1 2014 H1 2013 LFL sales +6.5% +7.9% Revenue £106.4m £94.4m +13% Operating costs £92.1m £81.8m +13% Operating profit £14.3m £12.6m +13% Operating margin 13.4% 13.3% Depreciation & amortisation £5.6m £4.8m +17% EBITDA £19.9m £17.4m +14% Note: all items exclude exceptional inc
Slide 10: Margin Evolution
Margin Evolution Managed Pubs and Hotels margin up 9 bps on last year Managed Pubs and Hotels operating margin H1 2013 H1 2014/15 Full Year 2014/15 Food buying deflation and impact of Gross profit % Further progress expected premium strategy on wet mix Large improvements made in prior Payroll % year
Slide 11: Tenanted Inns
Tenanted Inns H1 2014 H1 2013 LFL profits +5% +1% Average EBITDA per pub +4% level Revenue £16.0m £16.0m level Operating costs £9.7m £9.8m -1% Operating profit £6.3m £6.2m +2% Operating margin 39.4% 38.8% Depreciation £0.8m £0.8m level EBITDA £7.1m £7.0m +1% Note: all items exclude exceptional incom
Slide 12: The Fuller's Beer Company
The Fuller’s Beer Company H1 2014 H1 2013 Total beer and cider volumes +6% -1% Revenue £62.4m £58.3m +7% Operating costs £58.3m £54.3m +7% Operating profit £4.1m £4.0m +3% Operating margin 6.6% 6.9% Depreciation & amortisation £1.6m £1.5m +7% EBITDA £5.7m £5.5m +4% Note: all items exclude exceptiona
Slide 13: Generation and Use of Cash
Generation and Use of Cash H1 2014 H1 2013 £m £m EBITDA 30.7 28.1 Working capital / other adjustments 4.2 2.8 Interest (2.8) (2.7) Tax (3.8) (4.0) Cash available for discretionary spend 28.3 24.2 Capex on existing estate and brewery (13.3) (6.6) Corporate acquisitions (3.6) (2.1) Pub acquisitions* (
Slide 14: Borrowing Capacity
Borrowing Capacity Sep Mar Sep 2014 2014 2013 £m £m £m • New bank facilities signed 200 August 2014 44.5 • £180m committed across 160 33.5 five banks until August 2019 Available 38.0 committed five year facilities 120 • Freedom to add further funding for acquisitions Bank debt 134.4 • 69% of period
Slide 15: Annual Capital Expenditure
Annual Capital Expenditure 80 76 Corporate acquisitions 70 Development costs for 60 new pubs 53 Pub acquisitions 50 44 39 £m 40 Fuller's Inns 31 30 Fuller's Beer Company 20 12 10 0 2010 2011 2012 2013 2014 2015E Capital expenditure for all years includes pub acquisition costs paid in the period, whi
Slide 16: Simon Emeny, Chief Executive
Simon Emeny Chief Executive
Slide 17: The Fuller's Vision
The Fuller’s Vision “We will create and operate the most stylish pubs and hotels whilst brewing Britain’s most coveted premium brands for discerning customers both at home and abroad.” Drivers for Growth Distinctive Pub & Targeted Premium Brand Hotel Experience Acquisitions & Portfolio Developments
Slide 18: Managed Pubs and Hotels Trading
Managed Pubs and Hotels Trading • Sector leading LFL sales, substantially LFL Growth Rates ahead of Peach Tracker 12% • Drinks sales driven by our 10.4% focus on premium brands 10% • Food continues to perform 7.7% 8% 6.5% strongly 6% 5.5% ‒ Total covers up 10% 4% ‒ Average food spend per 1.7% cover
Slide 19: Our People
Our People People are at the heart of the Fuller’s experience • Fuller’s Inns currently employs over 3,200 • 1,100 aged between 18 and 24 • 59 Service Coaches spreading our exceptional service culture • New approach to recruitment • Since launch in July, 8,000 applications have been made online and
Slide 20: Our Fresh Food
Our Fresh Food Promoting our great fresh food to our customers • “Hero” ingredients • Celebration of a delicious seasonal ingredient each month • Working closely with key small, local suppliers to create dishes with a story – such as our field of strawberries • Focussed campaigns • Dedicated food ma
Slide 21: Our Continuing Investment Programme
Our Continuing Investment Programme • High level of investment in our existing estate is a key driver for growth The Distillers, Hammersmith • Increased level of investment in H1: • £9.6m capital expenditure • 80 weeks of pub closures for refurbishment (H1 2013: 29 weeks) • £4.2m repairs spend, £0.6
Slide 22: Our New Additions
Our New Additions The Harp, Covent Garden • Freehold acquired August 2014 • Very popular pub, which was named CAMRA Pub of the Year in 2011 The Bull Hotel, Bridport • Freehold hotel purchased in June 2014 as part of The Stable acquisition The Harp, Covent Garden • 19 boutique rooms The Windmill Inn,
Slide 23: Leo
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Slide 25: Majority investment in The Stable acquired for £3.6m
Majority investment in The Stable acquired for £3.6m in June 2014 51% of trading operations of the original six sites under The Stable Pizza & Cider Ltd Put and call option for the staged purchase of the remaining stake in future years Craft cider and gourmet pizza under a characterful and distincti
Slide 26: A Cathedral to Cider and Pizza
Style - Characterful, unique - Natural surroundings - Informal, communal benches - Candlelight Customer appeal Ethos - All ages, young - Strong community links A Cathedral to old - Wanting premium - Local, fresh to Cider and social experience produce Pizza - Mixed - families, - Energetic, couples an
Slide 27: Openings Pipeline
Openings Pipeline 2014 2015 Oct Nov Dec Q1 Q2 Q3 Q4 The Admiralty, Trafalgar Square Opening of up to four new Stable restaurants The Blue Boat, Fulham Reach One Over the Ait, Kew Bridge The Sail Loft, Greenwich
Slide 28: Tenanted Inns
Tenanted Inns Tenanted estate over five years • LFL profits up 5% on prior period No of pubs despite increased investment MAT EBITDA per pub £'000 in repairs 250 80 • Average EBITDA per pub is up 4% and 66 67 70 65 has increased 21% over five years in 59 the first half 57 60 200 50 • Strongest Tenan
Slide 29: Building Business Together
Building Business Together • New subsidised online training platform, assisting tenants to train their staff at low cost • Joint investment programme The Royal Oak, continues to improve quality of estate Isleworth • Industry-leading tenanted operation has led to an increase in quantity and quality o
Slide 30: The Fuller's Beer Company
The Fuller’s Beer Company A good start to the year as our new strategy takes effect • Completed our £1.7m investment in 10 new tanks supporting growth in Frontier and Exports • Excellent London Pride advertising campaign emphasising our heritage and London credentials • Sierra Nevada off to a strong
Slide 31: Made of London Campaign – Autumn 2014
Made of London Campaign – Autumn 2014 • Exciting social media activity aimed at increasing IMAGES: engagement Evening Standard feature • Phase four of Made of London activity underway • Evening Standard partnership driving deeper connection with Londoners
Slide 32: Broadening Our Portfolio
Broadening Our Portfolio • Sierra Nevada – following the agreement of exclusive UK distribution rights in March 2014, sales in this first period have been strong • Cornish Orchards – new listings in supermarkets obtained during the period • Veltins and Chimay are adding interest and broaden our rang
Slide 33: Frontier
Frontier • Frontier now stocked in over 340 premium pubs, bars and restaurants across the country • The majority are outside the Fuller’s estate • Successful appearances at key London food festivals over the summer Pork Life, Dalston Yard The Scoop, Tower Bridge 26-27th September Pop up bar for thre
Slide 34: Summary
Summary • Continued strong performance from the Group – Adjusted PBT up 8% to £19.6m – Adjusted EPS up 12% to 27.67p – Capital investment of £34.4m in the period • Good performance achieved across all divisions • Long term investment strategy is delivering growth • Continuing with expansive capital
Slide 35: Current Trading and Prospects
Current Trading and Prospects • Momentum continuing into second half – Managed LFL sales up 6.8% for 33 weeks – Tenanted LFL profits up 3% for 33 weeks – Total beer & cider volumes up 4% for 33 weeks • Record year of investment in the existing business • Exciting pipeline of developments and new ope
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