Fuller, Smith & Turner P.L.C. Class A · LSE:FSTA
Fuller, Smith & Turner P.L.C. Class A — FY2014 Earnings Presentation
35 slides from Fuller, Smith & Turner P.L.C. Class A's earnings presentation, Mar 29, 2014
Slide 1: Final Results for the 52 weeks ended 29 March 2014
Fuller, Smith and Turner PLC Final Results for the 52 weeks ended 29 March 2014 London’s Pride, Heathrow Terminal 2
Slide 2: Agenda
Agenda • Overview • Financial Results • Strategy and Operations • Prospects
Slide 3: Highlights
Highlights A very strong year for the Group Growth on prior year (%) +8.3% FY 2014 Managed LFL sales +2.1% FY 2013 £288.0m +6% Revenue £271.5m +7% £34.1m +10% Adjusted profits* £31.1m +4% 46.94p +11% Adjusted EPS* 42.18p +7% 15.10p +10% Total annual dividend 13.70p +8% 2.5 times Net Debt / EBITDA 2.
Slide 4: Group Performance
Group Performance 2014 2013 £m £m Revenue 288.0 271.5 +6% Operating costs* (248.1) (234.5) +6% Operating profit* 39.9 37.0 +8% Net finance costs* (5.8) (5.9) -2% Adjusted profit* 34.1 31.1 +10% Depreciation & amortisation 14.6 14.2 +3% EBITDA* 54.5 51.2 +6% * Excluding exceptional items. 2013 has be
Slide 5: Exceptional Items
Exceptional Items 2014 2013 £m £m Profit on sale of properties 1.9 5.0 Acquisition costs (1.1) (0.5) Asset impairments & reversals (0.5) (1.0) Onerous lease provision releases 0.9 - Reorganisation costs (1.2) - Pension scheme finance costs* (0.6) (0.9) Total exceptional items* (0.6) 2.6 Tax on excep
Slide 6: Group Performance: Five Year History
Group Performance Share of Five Year History 2009 2014 Operating Profit 34.1 46.94p 15.10p +48% +59% +53% 20% 23.1 29.48p 9.85p 28% 52% Managed Pubs & Hotels Tenanted Inns The Fuller's Beer Company Adjusted Profits Adjusted EPS Full Year Dividend £m Share of operating profit above excludes exception
Slide 7: Managed Pubs and Hotels
Managed Pubs and Hotels 2014 2013 LFL sales +8.3% +2.1% Revenue £186.0m £170.1m +9% Operating costs* £163.5m £150.7m +8% Operating profit* £22.5m £19.4m +16% Operating margin 12.1% 11.4% Depreciation & amortisation £10.0m £9.6m +4% EBITDA* £32.5m £29.0m +12% * Excluding exceptional items
Slide 8: Margin Evolution
Margin Evolution Managed Pubs and Hotels margin up 69 bp on last year Managed Pubs and Hotels operating margin FY2013 2013/14 2014/15 Food margin improvements Gross profit % continue and impact of premium Further progress expected strategy on wet mix Further efficiency is achievable Payroll % Contin
Slide 9: Tenanted Inns
Tenanted Inns 2014 2013 LFL profits +2% +1% Average EBITDA per pub +1% +9% Revenue £31.3m £30.8m +2% Operating costs* £19.0m £18.6m +2% Operating profit* £12.3m £12.2m +1% Operating margin 39.3% 39.6% Depreciation £1.6m £1.6m level EBITDA* £13.9m £13.8m +1% * Excluding exceptional items
Slide 10: The Fuller's Beer Company
The Fuller’s Beer Company 2014 2013 Total beer & cider volumes +1% level Revenue £115.8m £113.6m +2% Operating costs* £107.3m £104.9m +2% Operating profit* £8.5m £8.7m -2% Operating margin 7.3% 7.7% Depreciation & amortisation £3.0m £3.0m level EBITDA* £11.5m £11.7m -2% * Excluding exceptional items
Slide 11: Borrowing Capacity
Borrowing Capacity Mar 14 Mar 13 £m £m • £150m committed across five banks until May 2015 160 33.5 37.0 Available • Refinancing likely in 2014 committed facilities 120 • Freedom to add further Bank debt funding for acquisitions 80 116.2 112.5 • 78% of period end gross Other net borrowings fixed or c
Slide 12: Generation and Use of Cash
Generation and Use of Cash 2014 2013 £m £m EBITDA 54.5 51.2 Working capital / other adjustments 4.9 (2.4) Interest (5.3) (5.4) Tax (8.0) (8.1) Cash available for discretionary spend 46.1 35.3 Capex on existing estate and brewery (16.4) (12.7) Fuller’s Beer Company acquisitions (2.5) - Pub acquisitio
Slide 13: Annual Capital Expenditure
Annual Capital Expenditure 80 76 Fuller's Beer Company acquisitions 70 Development costs for 60 new pubs Pub acquisitions 50 44 39 £m 40 36 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
Slide 14: 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 15: Managed Pubs and Hotels Trading
Managed Pubs and Hotels Trading • Sector leading LFL sales, LFL Growth Rates substantially ahead of Peach Tracker throughout year 12% 10.4% 10.4% 10% • Drinks sales growing, through 8.3% premiumisation of portfolio 8% 7.5% and good trading conditions 6% • Food continues to perform 4% strongly 2.6% 2
Slide 16: Our Fresh Food
Our Fresh Food Key elements in the Fuller’s experience • Continuing our Only at Fuller’s range • London Porter smoked salmon is our highest selling starter • New additions include Cornish Orchards cider pork sausage • Freshly prepared • Launch of new chef development programme • Investment in kitche
Slide 17: Our People
Our People People are fundamental to the delivery of Engaging Service • Almost 10,000 days invested on pub staff training during year • E-learning, in pub activity, events and off-site training courses • 25% increase in training budget • 50 Service Coaches • Fresh approach to recruitment • Focus on
Slide 18: Our Boutique Accommodation
Our Boutique Accommodation • 622 bedrooms across 12 hotels and 14 pubs with rooms The White Buck Burley • 13 new bedrooms added during the year • Eight at The White Buck, Burley in the New Forest • Five at The Pilot, Greenwich • Additional 71 refurbished to our high quality boutique standard • Impro
Slide 19: Our New Additions
Our New Additions The Albannach, Trafalgar Square • Lease acquired March 2014 • Prime tourist location with a large trading area over three floors • Planned conversion to Ale & Pie format under new name, The Admiralty The White Hart, Southwark • Purchased in July 2013 The Albannach, Trafalgar Square
Slide 20: London's Pride, Heathrow Terminal 2
London’s Pride, Heathrow Terminal 2 • £1.7m investment now complete • Opened for first flights 4 June • Prominent location with 5,500 square feet, the only airside pub in the new Queen’s Terminal • 200 covers for eating in and dedicated area for plane picnics to take away • Bespoke library area and
Slide 21: Development Pipeline – Riverside Pubs
Development Pipeline – Riverside Pubs One over the Ait, Kew Bridge Two floor riverside pub within a new development, close to Kew Gardens, will open Autumn 2014 The Tideway, Fulham Reach South facing terrace with views over The Harrods Depository and the Boat Race course, will open late 2014 The Sai
Slide 22: Tenanted Inns
Tenanted Inns Tenanted estate over five years • LFL profits up 2% on prior year No of pubs EBITDA per pub £'000 following increased investment 260 70 in repairs 66 66 240 65 • 207 Tenanted pubs at 29 March 60 220 57 58 60 2014 200 55 • Four Managed pubs have 180 50 been transferred to Tenanted 160 4
Slide 23: Working with our Tenants
Working with our Tenants • Top rated company in recent industry survey of tenants* • Best Tenanted & Leased Pub Company 2014 at Publican Awards • Average length of tenure of our Tenants remains over six years • Sector leading service agreement now Paul and Pippa Hitchcock, The Butcher’s Arms covers
Slide 24: The Fuller's Beer Company
The Fuller’s Beer Company A transformational year as our new strategy shows promising progress • Acquisition and investment in Cornish Orchards • Launch of Frontier, our new wave craft lager, now available in bottles in over 600 Tesco stores • Expansion of agency beer portfolio • Commenced our £1.7m
Slide 25: Made of London Campaign – Spring 2014
Made of London Campaign – Spring 2014 • Latest phase reached 8.3 million adults in London including adverts in print, underground stations and increased emphasis on social media
Slide 26: Cornish Orchards Acquisition Update
Cornish Orchards Acquisition Update • Exceptional quality cider made from freshly pressed local apples • Premium soft drinks range now available in a number of Fuller’s pubs • Recently installed new tanks have already increased cider capacity by 60% • Currently increasing capacity further for next h
Slide 27: Exclusive drinks portfolio
Exclusive drinks portfolio • Since launch in October 2013 this new sales team has already been successfully opening up new markets • Targeting stylish bars, clubs and restaurants seeking premium products on their bar Sierra Nevada • Exclusive UK distribution rights for Sierra Nevada range agreed Mar
Slide 28: Frontier
Frontier • Frontier is currently stocked in over 230 premium pubs, bars and restaurants across the country • The majority are outside the Fuller’s estate
Slide 29: Fuller's Beers at Home and Abroad
Fuller’s Beers at Home and Abroad Fuller’s beers are loved both at home and overseas • Award-winning – most recently London Porter won SIBA’s Best Keg Beer for 2013/14 • Constant innovation – changing programme of seasonal beers as the trend continues for interesting, flavourful craft ales Exports •
Slide 30: Summary
Summary • A very strong performance from the Group – Adjusted PBT up 10% to £34.1m – Adjusted EPS up 11% to 46.94p • Growth led by Managed Pubs and Hotels, in the underlying business and new developments • Recognition for our continued commitment in supporting our Tenants • Transformational year for
Slide 31: Current Trading and Prospects
Current Trading and Prospects • Continuing good progress – Managed LFL sales up 8.0% for nine weeks – Tenanted LFL profits up 4% for nine weeks – Total beer & cider volumes up 10% for nine weeks • Strong pipeline of investment – Three Thames-side pubs to be opened this year – Acquisition of The Wind
Slide 32: Slide 32
Slide 33: Appendix – Fuller's Inns
Appendix – Fuller’s Inns March Acquired/ March Acquired/ June 2013 developed Disposed Transfers Transfers 2014 developed Transfers 2014 Managed Pubs and Hotels 177 3 (2) (4) 3 177 2 1 180 Tenanted Inns 209 1 (4) 4 (3) 207 - (1) 206 Total 386 4 (6) - - 384 2 - 386 • Since the year end we have opened
Slide 34: Appendix – Reconciliation to Statutory Profit
Appendix – Reconciliation to Statutory Profit 2014 2013 £m £m Adjusted profit# 34.1 31.1 +10% Exceptional items# (0.6) 2.6 Profit before tax* 33.5 33.7 -1% Tax on adjusted profit (7.9) (7.6) +4% Exceptional tax 3.5 2.0 Profit after tax* 29.1 28.1 +4% Adjusted EPS# 46.94p 42.18p +11% Basic EPS* 52.14
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Fuller, Smith & Turner — FY2014 Earnings Presentation on 6ix