31st May 2007 07:02
Young & Co's Brewery PLC31 May 2007 31 May 2007 YOUNG & CO.'S BREWERY, P.L.C. PRELIMINARY RESULTSFOR THE 52 WEEKS TO 31 MARCH 2007 Financial highlights Turnover £126.6 million Up 2.2%Turnover from retail operations £113.3 million Up 15.3%Adjusted profit before tax* £12.0 million Up 18.5%Adjusted EBITDA* £24.2 million Up 11.8%Profit before tax £46.3 million Up 517.2%Adjusted earnings per share* 75.36p Up 28.3%Dividend per share (interim + recommended final) 37.35p Up 50.0% * Adjusted to exclude exceptional items Operational highlights • Business transformed and benefits already showing through; • Managed house sales up 18.1%, with like for like sales up 10.5%; • Very strong H2 performance, with adjusted profits up 34.7%; • £56.8 million invested in the business, including £36.4 million on the acquisition of 14 pubs; • Preparations well advanced for the 1 July smoking ban, with 25% of managed pub estate already trading successfully as non-smoking pubs; • Successful integration of Wells & Young's completed; • Acquisition of the Courage Brands in January establishes Wells & Young's as one of the UK's leading cask ale producers. Stephen Goodyear, Chief Executive, commented: "Young's has been transformed over the past year. The substantial changes wehave made to the business, together with the improving returns we are gettingfrom ongoing investment in our estate, are clearly evident in our underlyingresults, particularly in our second half trading. "This momentum has continued into the current financial year. Trading in ourpubs in the first eight weeks has been strong, with total sales for the periodto 26 May up 25.1% and up 9.6% on an uninvested like for like basis. "Whilst there are clearly near term risks for our industry, from the smoking banand pressures on consumer spending, we believe we are well prepared to facethese challenges. Young's is a business in very good shape. We have a strongcustomer offering, a great team and a clear strategy for growth. We face thefuture with considerable confidence." For further information, please contact: Young & Co.'s Brewery, P.L.C.Stephen Goodyear Today: 020 7357 9477Chief Executive Thereafter: 020 8875 7000 Peter Whitehead Today: 020 7357 9477Finance Director Thereafter: 020 8875 7000 Hogarth PartnershipJames Longfield 020 7357 9477 Photographs are available from Hogarth on request. YOUNG & CO.'S BREWERY, P.L.C. PRELIMINARY RESULTS FOR THE 52 WEEKS TO 31 MARCH 2007 Operational review After a first half of enormous change at Young's, which included our brewingjoint venture with Charles Wells, the sale of the Ram Brewery and nearby officeand warehouse space, our Wandsworth sites, and a significant investment in ourretail estate, our second half trading and profits have prospered, demonstratingthe benefits of these actions. Turnover was up 2.2% for the year. Increased managed pubs sales and sales to ourtenanted and leased estate have more than offset the loss of wholesale turnoversince the brewery closed at the end of September. These sales were up 15.3% forthe year, and up 17.9% in the second half alone. More importantly, adjustedprofit in the second half, which excludes exceptional items, was up 34.7%, asthe benefits of significant prior year investment in our estate and the improvedsupply terms from Wells & Young's were demonstrated. The results for the year as a whole are, however, distorted by a number ofexceptional operating and non-operating one-off items. Reported profit beforetax was £46.3 million (2006: £7.5 million). This includes £46.6 million profiton the sale of the Wandsworth sites, as well as £9.0 million of exceptionalcosts connected with this deal and the formation of Wells & Young's. Inaddition, we completed the final phase of our restructuring just after the endof the year, with the relocation of our head office from the Ram Brewery to new,modern offices at Riverside House in Wandsworth. Excluding these adjustments,profit before exceptional items and tax was £12.0 million and adjusted earningsper share were 75.36p, up 18.5% and 28.3% respectively. The foundations are now firmly in place for Young's continued success. We have aclear retail and property strategy which has already begun to deliver a stepchange in our financial performance. As a result the board, as it did at thehalf year, is proposing a 50% increase in the dividend. With a final dividend of19.35p, the total dividend for the year will be 37.35p. If approved byshareholders, the final dividend will be paid on 12 July 2007 to shareholders onthe register at the close of business on 15 June 2007. Retail operations With the transfer of our brewing and wholesaling activities to Wells & Young's,our focus is now firmly on our retail activities and these have performed verywell in the year, particularly in the second half, primarily as a consequence ofimproved purchasing economies. Benefits from significant recent investments arealso beginning to be achieved. Our strong retail performance gives us great confidence in our strategy ofpositioning Young's at the premium end of the pub sector, differentiating ouroffer in a competitive market place by exploiting our excellent locations,customer focused designs, high service standards, quality food and marketleading drinks. We have never been more proud of the overall quality of ourestate. Young's retail business comprised 216 pubs at the year end, of which 176 werefreehold and 10 were leases with in excess of 45 years to run, with rents thatin total amounted to less than £10,000. 114 of these pubs were operated asmanaged pubs and 102 as tenanted or leased ones. Managed pubs The managed division saw an increase in turnover of 18.1% to £98.6 million. Likefor like sales increased 10.5% on a same outlet basis and 6.9% on an uninvestedbasis. Strong like for likes, transfers from tenanted, new developments andacquisitions all contributed to an increase of 17.6% in our managed division'soperating profit. The improvement in operating profit was most marked in the second half, with anincrease of 29.4% year on year, as the full benefits of the drinks supplyagreement with Wells & Young's took effect. This improvement was achieveddespite the impact of closures during our refurbishment programme, large startup costs incurred on pubs acquired in the year, long lead times for our newlybuilt riverside sites as well as ongoing increases in the minimum wage,utilities and business rates. Operational improvements have played a significant part in driving our like forlike sales and profits. New management initiatives have created a total serviceculture within our pubs, with imaginative and extensive training programsdesigned to drive increased trade. This has been delivered in tandem with thecontinued roll-out of our websites which currently allow targeted marketingbenefits for nearly half of our estate. In March alone, our pub websites enjoyedover 120,000 hits, showing massive month on month growth. Food has been a significant growth driver across our managed pubs, where ourhigh quality, individual, non-branded offering has led to an overall growth infood sales of 33.0%. Food sales now account for 23.6% of total managed sales. We have also seen a welcome return to growth from our hotel rooms reflecting thebenefits of our room refurbishment programme which was completed in the year andwhich has targeted consumer demand for boutique hotels. This has coincided witha more buoyant tourist market in London. RevPar for all our hotel rooms (averageroom rate achieved multiplied by occupancy percentage) was up 10.3% at £40.14. We invested a total of £38.4 million in our managed estate in the year, of which£7.5 million was on existing pubs and £30.9 million on acquisitions. Nine majordevelopments were completed at the Windmill in Clapham, the Ship and the Alma inWandsworth, the Duke's Head in Putney, the Bear in Esher, Horts in Bristol, theDog & Fox in Wimbledon, the Lamb Tavern in Leadenhall Market and the DoubleLocks in Exeter. In addition three new Thames-side pubs - the Riverside inVauxhall, the Waterside in Fulham and the Waterfront in Battersea - were alsodeveloped and opened. Our estate now includes 13 Thames-side pubs, the largestestate of this kind of any pub group. We acquired and developed eight pubs in the year: the Grange in Ealing, thePrince Alfred in Maida Vale, the Fire Stables in Wimbledon, the Crown & Anchornear Chichester, the Grove in Camberwell, the Waterfront in Battersea, theHollywood in Fulham and the Hand & Spear in Weybridge. Despite the impendingsmoking ban, pub prices remain at historically high levels, particularly inLondon. Whilst we are constantly looking to add to our managed estate, we willonly invest in acquisitions that meet our strict investment criteria and producereturns in excess of our cost of capital. The success of our refurbishments and developments is most encouraging. Overhalf of the managed estate has been refurbished in the last two years and thisfigure is planned to reach 80% by the end of this calendar year. The pubs thathave now finished their first full year post refurbishment investment of £3.3million are generating sales growth of 79.7% and a return on invested capital of24.5%. We believe we are well prepared for the smoking ban, which comes into effect on1 July. In recent years, all development activity has included, whereappropriate, investment in covered, well-lit and comfortable outside areas thatwill enable those customers who wish to smoke to be able to do so in comfort.Already we have introduced no smoking in about a quarter of the managed estateand these pubs are adjusting well. We plan to have all pubs non-smoking ahead ofthe 1 July ban and, whilst there may be some initial downside from the ban, webelieve that the medium to long term effects will be positive for Young's,especially with our enhanced food offering and premium market positioning. Tenanted and leased pubs The tenanted and leased division's turnover was down 0.6% to £14.7 million butprofit was up 7.3% and like for like profits increased by 4.6%. This improvementin profit was achieved despite the transfer during the year of some landmarktenanted pubs back into management (The Ship and the Alma in Wandsworth and theDuke of Cambridge in Battersea) and reflects the improved drink supply termsthat benefited second half trading. We invested £6.9 million in the tenanted and leased estate in the year, of which£5.5 million was on six new freehold pubs. We have created a new tenanted sitefrom part of our Dog & Fox redevelopment, and disposed of one freehold and fiveleasehold pubs. Investments in the year have focused on helping our tenantsprepare for the smoking ban, with all but nine of our tenancies having outsideareas that can be used to provide an opportunity to smoke. We believe the tenanted estate provides substantial opportunity for growth. Wehave put in place a five year investment programme for the tenanted estate inwhich the pubs will be refurbished to bring them into line with the qualitystandards present in our managed estate. In addition to investing alongside ourtenants, we intend to increase markedly the number of long leases that we grant.Such a format inevitably attracts the best operators and should result in asignificant improvement in sales and profits. The following sites were all transferred from management: the Gardener's Arms inWandsworth, the Pig and Whistle in Earlsfield, the King's Arms in Mitcham, thePrincess of Wales in Merton, the Princess of Wales in Clapton and the SquareTavern in Euston. Wells & Young's Brewing Company Wells & Young's commenced trading at the beginning of October. This marked theculmination of many months of hard work on the integration of the twobusinesses, including the successful matching of Young's beers achieved throughthe dedication and expertise of our respective brewing teams. The combination of Charles Wells and Young's brewing interests has created asubstantial new beer company, with a broad portfolio of specialty cask ale andlager brands, led by Young's Bitter (standard) and Wells Bombardier (premium). This portfolio was further strengthened in January with the acquisition of theCourage beer brands (Courage Best Bitter, Directors, Courage Mild and CourageLight Ale) from Scottish & Newcastle. These brands have strong consumerrecognition which we believe will prosper with Wells & Young's and willadditionally have a dramatic impact on its brewing capacity utilisation andallow the business to focus on its core own brands. From 29 September 2006 (date of investment) to 31 March 2007, Wells & Young's,which is treated as an associated undertaking in our financial statements, hadsales of £89.5 million and through our 40% share, Young's benefited frompre-exceptional profits of £0.1M and EBITDA of £1.0M after adjusting for £0.2million of exceptional costs. The exceptional items reflect the restructuringcosts incurred as the two businesses were put together, as well as the costsassociated with the purchase of the Courage brands. Following this acquisitionWells & Young's is now one of the leading cask ale brewers in the United Kingdomand the range and quality of beers in our pubs has never been better. It ishowever a business in transition and we anticipate it making a growingcontribution to our performance in the years ahead. Investment and finance During the course of the year we invested a total of £56.8 million. Thisincluded £45.3 million on new and existing pubs and £10.0 million as part of ourinvestment in Wells & Young's. The investment has been funded by new short datedbank facilities and a £4.0 million improvement in working capital, largely as aresult of the brewery merger. Net debt at the end of the year was £101.2million, and gearing was 50.7%. Cash receipts from sale of the Wandsworth sitesfall due within the new financial year, the first £10.3 million in July with theremaining £58.7 million in January. These receipts along with the improvedfinancial performance provide the opportunity for further investment in thebusiness or capital returns to shareholders as appropriate. The Ram Brewery site will be vacated during the current financial year. Itsongoing decommissioning will continue until handover in January 2008. The impactof this is expected to be neutral to Young's over the period as the costs areexpected to be offset by receipts from the sale of scrap, reclaimed materialsand any other items of interest that arise from this work. In November we commissioned Fleurets Chartered Surveyors to revalue our entireestate. The market value of the estate was determined as £399 million, an upliftof £174 million on the then book value. There has been some estate activitysince then both in terms of investment and disposal. The valuation has not beenincorporated into the financial statements; if it had, allowing for the recentestate activity, the net assets per share would have increased by £14.88 pershare to £31.96. This valuation was made in accordance with the RICS Appraisaland Valuation Standards (Red Book) and represented the aggregate sum of theproperty assets. It was not a portfolio valuation and the value of the estate asa single entity would have been significantly higher. Shortly after the year end we proposed to stockholders the early redemption ofour 9.5% debenture stock due 2018 and gave notice of our intention to acceptcertain offers for this stock. On 16 May 2007 stockholders approved the proposaland the stock was redeemed on 21 May 2007. This debenture was expensive in termsof coupon and inflexible with regards certain covenants. This is a non-adjustingpost balance sheet event and will result in a £6.9 million exceptional loss inthe new financial year. In connection with this we negotiated a new £40.0million revolving credit facility expiring on 16 May 2008. At the year end £39.2 million (38.7%) of net debt was at fixed interest rates,of which £29.1 million related to the debenture referred to above. The boardrecognises there is always an interest rate risk attached to variable rateborrowings but having taken into account the proceeds due within the next twelvemonths from the unconditional sale of the Wandsworth sites to Minerva, itbelieves this risk is not inappropriate. Board changes The year also saw a number of changes to the board, most significantly the saddeath of our chairman, John Young. John was a strong supporter of the changesmade to the business over the year, which he believed were in the best interestsof shareholders whilst preserving the unique heritage of our beers. It wasparticularly poignant that his death should occur in the week that the lastbarrels of beer were being brewed at the Ram Brewery and the first were beingbrewed by Wells & Young's in Bedford. John was succeeded as chairman byChristopher Sandland, a long-serving director of Young's and the firstnon-family chairman in the company's history. Other changes included the appointment in July of Nicholas Bryan, CEO andco-founder of Innserve plc, as a non-executive director. Nick has a wealth ofexpertise in the hospitality, property and brewing sectors gained throughvarious senior positions in the industry, including managing director of Courageand a non-executive director of Inntrepreneur. We also said farewell and thank you to two long-serving family directors, BrianPalmer and James Young, who both retired from the board at the end of ourfinancial year. Brian and James made enormous contributions to the company overtheir many years of service and we wish them well for a long and happyretirement. Strategy Young's is a focused pubs and property business; operating managed, tenanted andleased pubs in London and Southern England. Our strategy, as set out in theinterim results in November, is as follows. Active operational management We seek to position the Young's estate at the premium end of the pub market,focusing on the style, quality and individuality of each outlet. We measureourselves against the best individual pub and restaurant operators in thelocations where we trade, with a strong emphasis on service and training and bymaintaining a high level of investment in the estate. By investing in high quality pub design, ambience, food, service and ensuring apremium drinks offering, we have an operational strategy to drive performance.Through this investment, further innovation and the differentiation of theYoung's brand, we plan to deliver both absolute and like for like sales growth.Our premium strategy aims to attract more customers and improve gross margins. Active estate management Organic growth will be augmented by the active management of our estate,including acquisitions of individual pubs or pub packages to build scale to thebusiness and maximise value for shareholders. We have in place an operatinginfrastructure and management team capable of managing a significantly largerpub estate and we are actively exploring acquisition opportunities to deliverthis. We will monitor the balance of the estate between managed, tenanted and leasedto ensure that we are adopting the most beneficial format and we will maintainour programme of investments in high returning projects across the existing pubestate. Where appropriate, we will continue to make disposals. Our overridingproperty objective is to maximise returns, whilst maintaining and improving theoverall quality of the Young's estate. We will target pubs that meet our strict investment criteria and produce returnsin excess of our cost of capital. Acquisitions will be focused on our existingtrading areas of London and Southern England. In line with the board's statedpolicy, investment opportunities will be measured against the benefits ofreturning capital to shareholders. Outlook and current trading The benefits of our strategy are evidenced by our trading performance. Tradingin our pubs in the first eight weeks of the current financial year has beenstrong, building on the momentum achieved in the second half and benefiting fromgood weather in April. Total sales for the period to 26 May were up 25.1% and up9.6% on an uninvested like for like basis. Whilst there are clearly near term risks for our industry, from the smoking banand pressures on consumer spending, we believe we are well prepared to facethese challenges. In addition to continuing like for like growth and positiveoperational performance, our financial results in the coming year will benefitfrom a full year effect of improved drink supply terms, first full year returnson acquisitions and major developments in 2007, reduced head office costs, theinitial interest benefit from the cash receipts of the brewery sale and animproving contribution from Wells & Young's. Young's is a business in very good shape. We have a strong customer offering, agreat team and a clear strategy for growth. We face the future with considerableconfidence. YOUNG & CO.'S BREWERY, P.L.C. Audited consolidated profit and loss account For the 52 weeks ended 31 March 2007 2007 Restated 2006 £000 £000-------------------------------------- --------- ---------Turnover 126,636 123,873Net operating costs before exceptional items (111,262) (110,381)-------------------------------------- --------- ---------Operating profit before exceptional items 15,374 13,492Operating exceptional items (709) (2,098)-------------------------------------- --------- ---------Operating profit 14,665 11,394Share of operating profit of associated undertaking 336 -Non-operating exceptional itemsCosts of fundamental reorganisation (9,016) (476)Profit/(loss) on sale of fixed assets 46,164 (70)-------------------------------------- --------- ---------Profit on ordinary activities before interest 52,149 10,848Net interest charge (5,418) (3,873)-------------------------------------- --------- ---------Net interest charge - group (5,165) (3,873)Net interest charge - associated undertaking (253) --------------------------------------- --------- --------- Discount of site proceeds (2,161) -Other finance income 1,731 527-------------------------------------- --------- ---------Profit on ordinary activities before tax 46,301 7,502Tax on profit on ordinary activities (890) (2,958)-------------------------------------- --------- ---------Profit attributable to ordinary shareholders 45,411 4,544Ordinary dividends on equity shares (3,589) (2,808)-------------------------------------- --------- ---------Retained profit for the financial period 41,822 1,736-------------------------------------- --------- --------- Pence Pence-------------------------------------- --------- ---------Basic earnings per 50p ordinary share 391.29 39.39Effect of exceptional items (315.93) 19.33-------------------------------------- --------- ---------Adjusted earnings per 50p ordinary share 75.36 58.72-------------------------------------- --------- ---------Diluted basic earnings per 50p share 383.26 38.43-------------------------------------- --------- --------- The results above are all in respect of continuing operations of the group. The comparative figures have been restated for the effects of the adoption ofFRS 20 Share-based payment. The comparative figures included as site review and transaction costs inoperating exceptional items in the prior year have been reclassified as costs offundamental reorganisation in non-operating exceptional items. YOUNG & CO.'S BREWERY, P.L.C. Audited consolidated balance sheet At 31 March 2007 2007 Restated 2006 £000 £000--------------------------------------- -------- --------Fixed assetsTangible fixed assets 232,286 217,526Investment in associated undertaking 22,458 ---------------------------------------- -------- -------- 254,744 217,526--------------------------------------- -------- --------Current assets and liabilitiesStocks 1,431 4,193Debtors 71,536 6,839Cash 999 ---------------------------------------- -------- -------- 73,966 11,032 Short term borrowings (58,184) (283)Other creditors (23,383) (19,219)--------------------------------------- -------- --------Creditors: amounts falling due within one year (81,567) (19,502)--------------------------------------- -------- --------Net current liabilities (7,601) (8,470)--------------------------------------- -------- -------- Total assets less current liabilities 247,143 209,056 Creditors: amounts falling due after more than one year (43,979) (54,140)Provisions for liabilities and charges (4,295) (8,122)--------------------------------------- -------- -------- Net assets excluding retirement benefit asset/(liability) 198,869 146,794Retirement benefit asset/(liability) 669 (4,129)--------------------------------------- -------- --------Net assets 199,538 142,665--------------------------------------- -------- -------- Capital and reservesCalled-up share capital 6,028 6,028Share premium account 1,274 1,296Revaluation reserve 77,574 87,139Capital redemption reserve 1,808 1,808Investment in own shares (2,123) (2,861)Share-based payments reserve 197 107Profit and loss account 114,780 49,148--------------------------------------- -------- -------- Equity shareholders' funds 199,538 142,665--------------------------------------- -------- -------- The comparative figures have been restated for the effects of the adoption ofFRS 20 Share-based payment. YOUNG & CO.'S BREWERY, P.L.C. Audited consolidated cash flow statement For the 52 weeks ended 31 March 2007 2007 Restated 2006 £000 £000--------------------------------------- -------- --------Net cash inflow from operating activities 28,356 22,245--------------------------------------- -------- --------Interest received 3 8Interest paid (5,622) (4,021)--------------------------------------- -------- --------Returns on investments and servicing of finance (5,619) (4,013)--------------------------------------- -------- --------Corporation tax paid (2,706) (3,088)--------------------------------------- -------- --------Purchase of tangible fixed assets (46,755) (13,451)Sales of tangible fixed assets 468 123Cost of fundamental reorganisation (6,896) (476)--------------------------------------- -------- --------Capital expenditure and financial investment (53,183) (13,804)--------------------------------------- -------- --------Investment in associated undertaking (10,000) ---------------------------------------- -------- --------Acquisitions and disposals (10,000) ---------------------------------------- -------- --------Equity dividends paid (3,589) (2,808)--------------------------------------- -------- --------Cash outflow before financing (46,741) (1,468)--------------------------------------- -------- --------Increase in loan capital 47,851 362Decrease in lease finance (17) (16)--------------------------------------- -------- --------Financing 47,834 346--------------------------------------- -------- --------Increase/(decrease) in cash in period 1,093 (1,122)--------------------------------------- -------- -------- The comparative figures included as site review and transaction costs inoperating exceptional items in the prior year have been reclassified as costs offundamental reorganisation in non-operating exceptional items. YOUNG & CO.'S BREWERY, P.L.C.Audited consolidated reconciliation of net cash flow to movement in net debt For the 52 weeks ended 31 March 2007 2007 Restated 2006 £000 £000--------------------------------------- -------- --------Increase/(decrease) in cash in period 1,093 (1,122)Increase in debt in period (47,834) (346)--------------------------------------- -------- --------Increase in net debt in period (46,741) (1,468)Opening net debt (54,423) (52,955)--------------------------------------- -------- --------Closing net debt (101,164) (54,423)--------------------------------------- -------- -------- YOUNG & CO.'S BREWERY, P.L.C. Audited consolidated statement of total recognised gains and losses For the 52 weeks ended 31 March 2007 2007 Restated 2006 £000 £000--------------------------------------- -------- --------Profit for the financial period 45,411 4,544Actuarial gain on retirement benefit schemes 3,539 5,750Deferred tax on actuarial gain (1,062) (1,725)Gain on exchange of assets for interest in associatedundertaking 11,205 ---------------------------------------- -------- --------Total recognised gains for the financial period 59,093 8,569Prior year adjustment (107) ---------------------------------------- -------- --------Total gains recognised since last annual report 58,986 8,569--------------------------------------- -------- -------- YOUNG & CO.'S BREWERY, P.L.C. Audited consolidated reconciliation of movements in shareholders' funds For the 52 weeks ended 31 March 2007 2007 Restated 2006 £000 £000--------------------------------------- -------- --------Profit attributable to ordinary shareholders 45,411 4,544Dividends (3,589) (2,808)Movement in own shares: Employee benefit trust allocations 1,279 406Share-based payment 90 107Actuarial gain on retirement benefit schemes, net ofdeferred tax 2,477 4,025Gain on exchange of assets for interest in associatedundertaking 11,205 ---------------------------------------- -------- --------Net addition to shareholders' funds 56,873 6,274Opening shareholders' funds 142,665 136,391--------------------------------------- -------- --------Closing shareholders' funds 199,538 142,665--------------------------------------- -------- -------- The comparative figures have been restated for the effects of the adoption ofFRS 20 Share-based payment. Notes to the accounts (1) Accounts This preliminary announcement, which was approved by the board on 30 May 2007,has been prepared using the same accounting policies as set out in the previousannual accounts with the exception of the adoption of FRS 20 Share-basedpayment. The above financial information does not amount to full accounts within themeaning of S.240 of the Companies Act 1985. Full accounts for the period ended 1April 2006 have been delivered to the Registrar of Companies. The auditors'report on those accounts was unqualified and did not contain any statement underS.237 of the Companies Act 1985. (2) a) Operating exceptional items 2007 Restated 2006 £000 £000--------------------------------------- -------- -------- Capital gains tax on ESOP allocated shares (509) (708)Property valuation costs (200) -Transfer of company's share listing to AIM - (386)Lease compensation payments to tenants - (760)Other employee related matters - (244)--------------------------------------- -------- -------- (709) (2,098)--------------------------------------- -------- -------- (b) Non-operating exceptional items 2007 Restated 2006 £000 £000--------------------------------------- -------- -------- Proceeds from Wandsworth sites 69,000 -Less: Net book value of sites (10,849) -Assets held on sites (11,543) ---------------------------------------- -------- --------Gain on disposal of Wandsworth sites 46,608 -Loss on sales of properties and investments (444) (70)--------------------------------------- -------- -------- 46,164 (70) Cost of fundamental reorganisation (9,016) (476)--------------------------------------- -------- -------- 37,148 (546)--------------------------------------- -------- -------- The tax credit on exceptional items was £2,387,000 (2006: £413,000) The cost of fundamental reorganisation comprises redundancy costs,decommissioning costs and professional charges relating to the sale of theWandsworth sites and merger of brewing interests with Charles Wells Ltd. (3) Taxation Corporation tax has been provided on the profits for the 52 weeks to 31 March2007 at 30% (2006: 30%). (4) Earnings per share 2007 Restated 2006 £000 £000--------------------------------------- -------- -------- Profit attributable to ordinary shareholders 45,411 4,544Operating exceptional items, after adjusting for tax (note5(a)) 709 2,157Non-operating exceptional items, after adjusting for tax(note 5(b)) (39,535) 74Discount of site proceeds 2,161 ---------------------------------------- -------- --------Adjusted earnings after tax 8,746 6,775--------------------------------------- -------- -------- Number Number--------------------------------------- -------- -------- Weighted average number of ordinary shares in issue 11,605,450 11,536,993Add: the notional exercise of the weighted averagenumber of ordinary shares during the year 243,158 287,861--------------------------------------- -------- --------Diluted weighted average number of ordinary sharesin issue 11,848,608 11,824,854--------------------------------------- -------- -------- Pence Pence-------------------------------------- --------- ---------Basic earnings per 50p ordinary share 391.29 39.39Effect of exceptional items and discount of site proceeds (315.93) 19.33-------------------------------------- --------- ---------Adjusted earnings per 50p ordinary share 75.36 58.72-------------------------------------- --------- ---------Diluted basic earnings per 50p share 383.26 38.43-------------------------------------- --------- --------- The weighted average number of shares in issue exclude the group's investment inits own shares. An adjusted earnings per share figure is presented to eliminate the effect ofthe exceptional items on basic earnings per share. (5) Ordinary dividends on equity shares 2007 2006 Pence Pence--------------------------------------- -------- --------Final dividend (previous year) 12.90 12.25Interim dividend (current year) 18.00 12.00--------------------------------------- -------- -------- 30.90 24.25--------------------------------------- -------- -------- The trustee of the Ram Brewery Trust has waived its rights to dividends onshares held within the Ram Brewery Trust General Fund on behalf of the executiveshare option schemes. (6) Net cash inflow from operating activities 2007 Restated 2006 £000 £000--------------------------------------- -------- -------- Operating profit 14,665 11,394Depreciation 7,810 8,145Employee benefit trust share allocations 1,279 406Provision for capital gains tax on ESOP allocated shares 509 708Share-based payment 90 107Movements in working capitalStocks 2,716 (175)Debtors 2,485 (592)Creditors (1,198) 2,252--------------------------------------- -------- --------Net cash inflow from operating activities 28,356 22,245--------------------------------------- -------- -------- (7) Changes in accounting policies The company has adopted FRS 20 Share-based payment accounting standard duringthe year which requires recognition of an accounting charge for share optionplans. The charge to the profit and loss account for the year for FRS 20 is£90,000 (2006: £107,000). A corresponding entry has been made in the share-basedpayment reserve in equity shareholders' funds to reflect this entry. Comparativefigures have been restated for the effects of this change. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Young & Co's Brewery