Fuller, Smith & Turner P.l.c. Class A · LSE:FSTA
Fuller, Smith & Turner P.l.c. Class A — H1 2024 Earnings Presentation
31 slides from Fuller, Smith & Turner P.l.c. Class A's earnings presentation, Nov 15, 2023
Slide 1: Half Year Results for the 26 weeks ended 30 September 2023
Half Year Results for the 26 weeks ended 30 September 2023
Slide 2: Agenda
AGENDA HIGHLIGHTS FINANCIAL REVIEW TRADING UPDATE CURRENT TRADING & OUTLOOK
Slide 3: Highlights
HIGHLIGHTS Strong progress as revenues and profits continue to rise Managed LFL Revenue Adjusted profit Adjusted EPS Interim dividend sales before tax H1 2024 £188.8m £14.5m 17.16p 6.63p +12.7% +12% +48% +38% +42% H1 2023 £168.9m £9.8m 12.48p 4.68p
Slide 4: Drivers of Growth
DRIVERS OF GROWTH We have achieved everything that we set out to achieve in the first half • An external environment evolving in our favour • Accelerated return of office workers – like for like sales in our City pubs up by 16.3% • Changing dynamic in the City – continued growth across all days as l
Slide 5: Delivering in the Near Term
DELIVERING IN THE NEAR TERM While investing for the long term Near term performance strong – sales and profits in growth Long-term fundamentals remain robust • Predominately freehold, well-invested estate in iconic locations • Highly cash generative business • Premium positioning Consistent strategy
Slide 6: Financial Review
FINANCIAL REVIEW The Mill at Elstead
Slide 7: Income Statement
INCOME STATEMENT H1 2024 H1 2023 £m £m • Strong topline growth with revenues up 12% Revenues 188.8 168.9 +12% • Operating margin improvement from 9.2% to 11.3% despite the challenging Operating costs (167.4) (153.3) cost environment Adjusted operating profit 21.4 15.6 • Adjusted profit increasing by
Slide 8: Divisional Results
DIVISIONAL RESULTS H1 2024 H1 2023 £m £m Managed Pubs and Hotels Revenue 172.5 153.8 • Managed revenue increased by 12% Operating profit* 25.4 18.0 driven by strong performances across EBITDA* 37.1 30.0 the estate EBITDA % 21.5% 19.5% • Managed Pubs and Hotels EBITDA Tenanted Inns margin improved to
Slide 9: Managed Revenue Analysis
MANAGED REVENUE ANALYSIS LFL Sales v PY • H1 2024, like for like sales against prior year +16.5% were at +12.7% +12.7% +11.0% • Particularly strong performance in Urban +8.0% areas, which were up 16.5% Rural Suburban Urban Total Total Sales £m • Well-balanced revenues with strong Drink Food Accommod
Slide 10: Sales Mix and Pricing
SALES MIX AND PRICING Sales Growth • We are delivering volume growth across the business Price/mix LFL sales 15.5% • Inflationary pressures remain – albeit some signs of easing 12.0% 10.9% • Food inflation at 9.3% 9.5% • Drink inflation at 6.3% • Labour inflation at 7.6% • We work hard to manage the
Slide 11: Energy Costs
ENERGY COSTS Total Gas and Electricity 15.0 Total: £13.5m • Total utilities cost for FY 2024 is expected to 13.0 be £11.5m, down 15% on FY 2023 Total: £11.5m 11.0 • We have forward market purchases: Total: £9.5m 9.0 • 100% hedged for both gas and electricity for FY 2024; and 7.0 • 80% hedged for FY
Slide 12: Strong Balance Sheet
STRONG BALANCE SHEET • High quality asset base H1 2024 H1 2023 • 92% of Fuller’s estate is freehold by book £m £m value; 85% by number Property, plant & equipment 580.5 591.8 • Directors’ valuation of the estate at £995m Right-of-use assets (IFRS 16) 62.8 69.2 reported in Spring 2022 – remains our v
Slide 13: Net Debt
NET DEBT • Net debt at 30 September 2023 of £129.4m excluding leases (1 April 2023: £132.8m, 24 September 2022: £129.2m) • Significant cash headroom, will be boosted further with the sale of The Mad Hatter, Southwark, in July 2024 which will realise £20m in value • Extension agreed on £200m bank fac
Slide 14: Cashflow
CASHFLOW H1 2024 H1 2023 • Strong cashflow generation has £m £m delivered shareholder returns and Adjusted EBITDA 34.8 28.9 enabled continued investment in the Working capital (4.2) (2.5) estate Interest (5.2) (4.0) • Underlying earnings growing with Pension (1.2) (1.1) adjusted EBITDA up 20% Capita
Slide 15: 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 & • H1 2024 Interim Dividend of 6.63p Divi
Slide 16: FY2024 Guidance
FY2024 GUIDANCE • Continued sales growth • Depreciation expected to be in the region of £25-26m • Interest charge expected to be in the region of £14-15m • Adjusted effective tax rate estimated at 28%-29% • Capital expenditure of £20-25m • IFRS 16 reconciliation in appendix
Slide 17: Trading Update
TRADING UPDATE The Holly Bush, Hampstead
Slide 18: High-Quality, Premium Freehold Assets
HIGH-QUALITY, PREMIUM FREEHOLD ASSETS RURAL: URBAN LONDON: The Swan Hotel, Bibury The Red Lion, Westminster URBAN OUTSIDE LONDON: SUBURBAN: The Ox Row, Salisbury The Prince's Head, Richmond
Slide 19: Investing in Long-Term Growth
INVESTING IN LONG-TERM GROWTH • Growing our business profitably by always putting the customer first – and using customer feedback and data in our decision-making • Investing in our people – in recruitment, development, retention – and training to deliver operational excellence • Building sales thro
Slide 20: Strong Sales of Delicious Food
STRONG SALES OF DELICIOUS FOOD • Focused on delicious fresh food from predominately British suppliers • A winning approach, which is constantly evolving and improving • Like for like food sales up 15.5% • Collaborative process of menu development and dish creation involving a number of stakeholders
Slide 21: Drinks – Building on a Position of Strength
DRINKS – BUILDING ON A POSITION OF STRENGTH • Like for like drinks sales up 10.9% • Category leaders in cask and craft beer • Successfully using cask as a point of difference – embracing the opportunity our heritage gives us • Looking to emulate category leadership in wine, spirits and cocktails • B
Slide 22: Adding Value to Accommodation
ADDING VALUE TO ACCOMMODATION • Like for like accommodation revenue up 13.4% Case Study: The Sanctuary House • Continued focus on increasing direct bookings • 18.6% increase in revenue taken through our hotel booking engines against H1 2023 • Realising further benefits from our booking engine: • Eas
Slide 23: Investing in Our People
INVESTING IN OUR PEOPLE To deliver an exceptional service-led culture that puts the customer first • 25% increase in training budget for FY 2024 – including new leadership programme for all Fuller’s General Managers • Laser focus on Be the difference – ensuring our team members have all the tools th
Slide 24: Life is too good to waste
Life is too good to waste Our people are too good to waste • Participation rates, happiness and engagement scores in employee survey increased for second year running • Substantial reduction in labour turnover rates – now well below pre-pandemic levels • Launched Inclusion Action Plan, with inclusiv
Slide 25: Our planet is too good to waste
Our planet is too good to waste Measurement Actions Results Already Rolled Out • Gas usage in H1 down 11 fully electric kitchens 8.5% Site audits, toolkits and how to videos • Electricity usage in H1 down 5% Increased cooking oil recycling • Recycling rates Addition of Endotherm to heating system in
Slide 26: Tenanted Inns
TENANTED INNS • Exceptionally high-quality Tenanted estate: well- invested, well-located, entrepreneurial Tenants and an award-winning Tenanted Team • Tenanted Inns continue to perform strongly with H1 revenue of £16.3m and profits of £6.9m • Invested £1.6m of capex across 23 schemes through joint i
Slide 27: Current Trading and Outlook
CURRENT TRADING AND OUTLOOK • Business is in great shape – and continued investment in our people will drive further success for our highly motivated team, with a true customer-first approach • Strong start to the year with volume and margin growth, despite a tougher external trading environment • L
Slide 28: The 2023 Fuller's Graduation
The 2023 Fuller’s Graduation
Slide 29: Appendix: Fuller's Estate
Appendix: Fuller’s Estate 1 Apr 30 Sep 15 Nov Within 2023 New Disposed Transfers 2023 Transfers 2023 the M25 Total Fuller’s 377 - (1) - 376 - 376 43% Managed Pubs & Hotels 204 - (1) (16) 187 (4) 183 58% Tenanted Inns 173 - - 16 189 4 193 30% Number of bedrooms 1,046 6 - (37) 1,015 - 1,015
Slide 30: Appendix: IFRS16 reconciliation
Appendix: IFRS16 reconciliation Pre IFRS16 IFRS16 Post IFRS16 £m £m £m Revenue and other income 188.8 - 188.8 Operating costs (168.8) 1.4 (167.4) Adjusted operating profit 20.0 1.4 21.4 Finance costs (5.5) (1.4) (6.9) Adjusted profit before tax 14.5 - 14.5 Separately disclosed items 0.6 (0.2) 0.4 Pr
Slide 31: Appendix: A geographically balanced business
Appendix: A geographically balanced business
Fuller, Smith & Turner P.l.c. — H1 2024 Earnings Presentation on 6ix