15th Nov 2007 07:01
Young & Co's Brewery PLC15 November 2007 15 November 2007 INTERIM RESULTS For the 26 weeks ended 29 September 2007 Financial highlights Revenue £63.9m +11.9%EBITDA* £18.0m +77.5%Operating profit* £12.1m +72.1%Profit before tax £4.3m +867.4%Profit before tax* £10.9m +89.2%Earnings per share* 69.47p +105.8%Interim dividend per share declared 24.00p +33.3% All of the results above are on continuing operations. * Adjusted for exceptional items, premium on redemption of debenture, anddiscount of site proceeds. Operating highlights • Total managed house revenue +13.6% with operating profit +33.0%; • Like for like managed house revenue +5.7% on same outlet basis and +1.9% on an uninvested basis; • Food sales growth +23.9%, helping offset any possible effect of the smoking ban; • One pub acquired for £3.5 million; with £4.9 million invested on existing pubs; • Head office relocated and rationalised; and • Completion of the previously announced sale of Buckhold Road site for £10.3 million and £58.7 million due on completion of unconditional brewery sale on 4 January 2008. Stephen Goodyear, Chief Executive of Young's, commented: "I am very pleased with our strong first half performance, which reflects thebenefits from the substantial changes made to the company last year and has beenachieved despite the twin challenges of the disappointing summer weather and thesmoking ban. "Trading in our pubs in the first six weeks of the second half to date has beenresilient, with managed house sales up 8.7% and up 8.3% on a same outlet likefor like basis (up 1.4% on an uninvested basis). There are clearly somecontinuing uncertainties facing the market generally, in particular how thesmoking ban might affect trade over the colder winter months, although given the'summer' we had this contrast may be less obvious. It has also still to be seenwhether the summer's economic problems result in a dip in consumer confidence,which in turn could affect leisure spending. "Despite these challenges, we believe Young's is in very good shape and we areconfident in the outlook for the business for the year as a whole." For further information, please contact: Young & Co.'s Brewery, P.L.C 020 8875 7000Stephen Goodyear, Chief ExecutivePeter Whitehead, Finance Director Hogarth Partnership 020 7357 9477James Longfield / Sarah Richardson INTERIM RESULTS 26 weeks to 29 September 2007 Interim statement The business has delivered a strong first half performance, incorporatingbenefits from the substantial changes made to the company last year. With thesestrategic changes now completed, our focus in the period was on operationalimprovements and the continued drive to secure Young's position at the premiumend of the pub sector. The benefits of this strategy are evident in the results: revenues fromcontinuing operations were up 11.9%, adjusted profits up 89.2% and adjustedearnings per share up 105.8% to 69.47p. This has led to another step change inthe dividend, with the interim dividend being increased by a third to 24.00p pershare. This dividend has now doubled over the last two years, a measure of theBoard's determination to deliver increased shareholder value. It will be paid on7 December 2007 to shareholders on the register on 23 November 2007. Total basic earnings per share were 32.96p, significantly down on last year'searnings which were distorted by the one-off profit from the sale of the breweryand Buckhold Road sites. Retail operations Young's estate is positioned at the premium end of the pub market, focusing onthe style, quality and individuality of each outlet, with a strong emphasis onfood and service. By investing in high quality pub design, ambience, food andtraining and by ensuring a premium drinks offering, this consumer led strategyaims to deliver both absolute and like for like sales and profit growth. Managed pubs Revenue was up 13.6%, with like for like growth of 5.7% on a same outlet basis(up 1.9% on an uninvested basis). These figures mask some significant monthlyvariations, with a very strong start to the half offset by the poor summerweather. Operating profit for our managed division increased 33.0%. A key driver of this performance has been the continued growth of food sales, amajor part of our strategy to position Young's at the premium end of the pubsector and as a means to help combat the effects of the smoking ban. Food saleswere up 23.9% and now represent 24.5% of revenue. The quality of our pubs and ofour food offer has been highlighted in the press and this has been supported byexcellent feedback from our customers. The success of our recent redevelopments continues to support our premiumstrategy. The increase in EBITDA from the investment in major redevelopments inthe comparable period (pubs that have now completed their first twelve monthspost development) delivered a 26.4% cash return. A further £4.3 million wasinvested in managed pub refurbishments in the first half, including major worksat the Brewers Inn in Wandsworth, the Brook Green Hotel, the Bunch of Grapes atLondon Bridge, the Chequers in Walton on the Hill, the Clockhouse on PeckhamRye, the Crown in Chertsey, the Greyhound in Carshalton, the Halfway House inEarlsfield, the Spotted Horse in Putney and the Windmill on Clapham Common. We are half way through our five year investment plan to refurbish all our 359hotel rooms. During the six months we refurbished 70 rooms. RevPar for all ourhotel rooms (average room rate achieved multiplied by occupancy percentage) wasup 14.0% at £42.59, supporting our investment decision. Acquisitions remain a key part of our long term growth strategy butopportunities of the right quality at the right price have been limited. Weacquired only one pub in the period, the Rose and Crown in Farnborough, whichwas bought in the last week of the period for £3.5 million. The eight pubs andthe three Thames side developments acquired last year have been fully integratedinto the managed estate. These are good investments which we believe willprovide attractive returns over the longer term once we have been successful inrepositioning the pubs under the Young's brand. 56 of our managed pubs now host their own websites, with over 800,000 hitsduring the period, an increase of more than 185% over last year, and the pubdatabases now manage over 100,000 individual e-mail addresses. During the courseof the six months these venues sent out a combined total of more than fivemillion e-mails to customers who have registered to receive news about Young's,its pubs, events and products. This provides cost effective marketing with awide reach and is helping to drive customer visits. In addition to theindividual pub websites, Young's has updated and re-launched its corporatewebsite - www.youngs.co.uk. This e-marketing drive is complemented by increased investment in consumerpublic relations, focusing on promoting and marketing our pubs generally and inparticular after significant refurbishments. The profile of our estate has beenraised significantly both in the national and local press. Customer service remains a key point of differentiation for Young's with adoubling of training hours in the period and the benefits derived from adedicated central training team complete with its own facilities at our new headoffice. Pub managers are incentivised on service levels and on their performancein our independently managed mystery drinker programme which provides feedbackon all aspects of a pub's service quality from unannounced visits. Our managedpubs are now achieving average scores of 91%, compared with an industry norm of84% and our own target based on a selection of premium London pubs andrestaurants of 90%. Our aim is to improve these ratings still further. Our managed estate comprised 112 trading sites at the end of the period of which90 are freehold. Tenanted and leased Revenue was up 1.6%, with like for like growth up 0.8% on a same outlet basis(up 0.5% on an uninvested basis). Operating profit for our tenanted and leaseddivision increased 35.9%. The success of our mystery drinker programme has now been extended to includeall of our tenanted and leased pubs as we work to maintain consistent standardsacross our entire pub estate. The division benefited from a full six months' trade from the six pubs acquiredlast year and also from the Cock Inn in Maidstone, the Robin Hood in Sutton andthe Ship Inn in East Grinstead which were transferred from management during theperiod. We have invested £0.6 million on refurbishments with major worksunderway at the Red Cow in Richmond, the Thatched House in Hammersmith, theBlack Lion in Surbiton and the Half Moon in Putney. We regularly review the balance of the estate between managed, tenanted andleased to ensure that we are adopting the most beneficial format and we willmaintain our programme of investments in high returning projects across theexisting pub estate. The total number of tenancies and leases at the end of the half was 104 of which87 are freehold. Wells & Young's Brewing Company Wells & Young's has now completed its first full year of trading. This has beena transitional year which included the challenge of integrating the Wells,Young's and Courage beers into the portfolio (to which we have receivedexcellent consumer response) and combining the two workforces. Revenue for the six months under review was £108.6 million. Profit, beforecharging £2.1 million of exceptional costs, was £3.0 million. Young's share ofthis profit in the period was £1.2 million. This was against a background of adifficult beer market with higher raw material and utility costs compounded by apoor summer. Wells & Young's sold 458,000 barrels in the six months, of which255,000 were brewed in Bedford. At the end of the period, the southern distribution was outsourced to KN DrinksLogistics. This will not only reduce costs but at the same time provide greaterflexibility to exploit sales opportunities over a wider geographical area. Investment and finance We invested a total of £8.4 million in our estate in the period, including onenew site, leaving group net debt at the end of the period at £94.5 million. Onceadjusted for the remaining £58.7 million due from Minerva in January, thisleaves an adjusted net debt position of £35.8 million. This is partly funded bya long dated £15.0 million RBS facility fixed at 6.1%. The remaining debt is ata variable rate. In May 2007 the group redeemed a high coupon debenture at a premium. As noted inthe annual report, this resulted in a £6.8 million loss. The redemption of thisdebenture considerably improves the group's financial flexibility. Young's has substantial headroom for funding acquisitions and we continue toexplore opportunities for appropriate acquisitions, though at present these arelimited. We have an operating infrastructure and management team capable ofmanaging such growth. In line with the Board's stated policy, investmentopportunities will be measured against the benefits of returning capital toshareholders. Certain items have been classified as exceptional in order to give shareholdersa better understanding of the underlying trends in the business. These itemsinclude the £6.8 million costs resulting from the debenture redemption mentionedabove and losses and provision for losses on sales of properties (£0.2 million).These costs are partly offset by the discount on site proceeds; this was anaccounting charge made in the prior year which reverses this year. In addition,the results of Young's brewing and wholesaling operation have been separated outas a discontinued operation. International Financial Reporting Standards These are the first financial statements prepared under International FinancialReporting Standards and there have been a number of adjustments and restatementsas a result. The detail behind these adjustments is in a separate documentcalled the Restatement of Financial Information to International FinancialReporting Standards ("IFRS") which can be downloaded from the investor relationssection of the group's website - www.youngs.co.uk. Photocopies are alsoavailable from the Company Secretary on request. There is no material impact on the income statement as a result of IFRS. Themajor impacts of the new standards, as highlighted in the annual report, are onthe group's balance sheet where the net assets have been restated for the effectof the deferred tax on our revalued property and the tax payable on the capitalgain on the sale of the brewery and Buckhold Road sites. These liabilities wouldbecome payable only if the group were unable to invest the proceeds from thesale of these sites into replacement assets. Outlook We have delivered a strong first half performance, achieved despite the twinchallenges of disappointing summer weather and any possible effects of thesmoking ban. As expected, the first half benefited from the changes made to thebusiness in October 2006 and therefore these are already included in our secondhalf comparatives. The second half also has a number of uncertainties. How the smoking ban mightaffect trade over the colder winter months remains to be seen (although giventhe 'summer' we have had, this contrast may be less obvious). It has also stillto be seen whether the summer's economic problems result in a dip in consumerconfidence, which in turn could affect leisure spending. Despite these uncertainties, we believe we are in very good shape. Trading inour pubs in the first six weeks of the second half to date has been resilientwith managed house sales up 8.7% and up 8.3% on a same outlet like for likebasis (up 1.4% on an uninvested basis). We remain confident in the outlook forYoung's for the year as a whole. Interim report On 23 November 2007, the Interim Report 2007 will be mailed to shareholders.From that date, copies of it will also be available on the investor relationssection of the company's website - www.youngs.co.uk - and on request from theCompany Secretary. Independent review report to Young & Co.'s Brewery, P.L.C.For the 26 weeks ended 29 September 2007 Introduction We have been engaged by the company to review the financial information for the26 weeks ended 29 September 2007 which comprises the Group Income Statement,Group Balance Sheet, Group Cash Flow Statement, Group Statement of RecognisedIncome and Expense, and the related notes 1 to 10. We have read the otherinformation contained in the interim report and considered whether it containsany apparent misstatements or material inconsistencies with the information inthe condensed set of financial statements. This report is made solely to the company in accordance with guidance containedin ISRE 2410 (UK and Ireland) "Review of Interim Financial Information Performedby the Independent Auditor of the Entity" issued by the Auditing PracticesBoard. To the fullest extent permitted by law, we do not accept or assumeresponsibility to anyone other than the company, for our work, for this report,or for the conclusions we have formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the AIMRules issued by the London Stock Exchange. As disclosed in note 1, the next annual financial statements of the group willbe prepared in accordance with those IFRSs adopted for use by the EuropeanUnion. The accounting policies are consistent with those that the directors intend touse in the next financial statements. There is, however, a possibility that thedirectors may determine that some changes to these policies are necessary whenpreparing the full annual financial statements for the first time in accordancewith those IFRSs adopted for use by the European Union. Review work performed We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity" issued by the AuditingPractices Board for use in the United Kingdom. A review consists principally ofmaking enquiries of group management and applying analytical procedures to thefinancial information and underlying financial data, and based thereon,assessing whether the accounting policies have been applied. A review of interimfinancial information consists of making enquiries, primarily of personsresponsible for financial and accounting matters, and applying analytical andother review procedures. A review is substantially less in scope than an auditconducted in accordance with International Standards on Auditing (UK andIreland) and consequently does not enable us to obtain assurance that we wouldbecome aware of all significant matters that might be identified in an audit.Accordingly, we do not express an audit opinion. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the 26 weeks ended29 September 2007. Ernst & Young LLPLondon, England14 November 2007 Unaudited group income statementFor the 26 weeks ended 29 September 2007 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 £000 £000 £000----------------------------- --------- --------- ---------Continuing operationsRevenue 63,885 57,101 114,602Operating costs before exceptional (51,745) (50,046) (99,214)items ----------------------------- --------- --------- ---------Operating profit before exceptional 12,140 7,055 15,388itemsOperating exceptional items (note 4) (8) (1,260) (709)----------------------------- --------- --------- --------- Operating profit 12,132 5,795 14,679----------------------------- --------- --------- ---------Share of associate's profit beforeexceptionalitems and tax 1,210 - 83Share of associate's exceptional (852) - -items (note 4)Share of associate's tax (expense)/ (118) - 21credit (note 5) ----------------------------- --------- --------- ---------Share of post tax and post minority 240 - 104result of associate Non-operating exceptional items (225) (183) (444)(note 4) ----------------------------- --------- --------- --------- Profit before interest 12,147 5,612 14,339Net finance costs (3,094) (2,197) (5,184)Premium on redemption of debenture (6,827) - -(note 7)Discount of site proceeds 1,480 (3,863) (2,161)Other finance income 628 896 1,731----------------------------- --------- --------- --------- Profit before tax 4,334 448 8,725Taxation (note 5) (324) (1,815) (3,919)----------------------------- --------- --------- --------- Profit/(loss) from continuing 4,010 (1,367) 4,806operationsDiscontinued operation(Loss)/profit from discontinued (148) 34,060 31,441operation (note 2) ----------------------------- --------- --------- --------- Profit attributable to equity 3,862 32,693 36,247holders of parent ----------------------------- --------- --------- --------- Earnings per 50p ordinary share from continuing operations (note6) Pence Pence Pence----------------------------- --------- --------- ---------Adjusted 69.47 33.75 69.97Basic 34.23 (11.81) 41.41Adjusted diluted 68.94 32.89 68.53Diluted 33.97 (11.51) 40.56----------------------------- --------- --------- --------- Earnings per 50p ordinary share from continuing and discontinued operations(note 6) Pence Pence Pence----------------------------- --------- --------- ---------Basic 32.96 282.54 312.33Diluted 32.71 275.35 305.92----------------------------- --------- --------- --------- The comparative figures to 30 September 2006 and 31 March 2007 have beenrestated for the effects of IFRS. Unaudited group balance sheetAt 29 September 2007 At 29 Sept 07 At 30 Sept 06 At 31 Mar 07 £000 £000 £000----------------------------- ---------- ---------- ----------Non current assetsProperty, plant and equipment 226,906 218,013 223,425Prepaid operating lease premiums 5,894 5,968 5,918Investment in associate 23,930 22,508 22,458Receivable from site disposal - 55,236 -Derivative financial instruments 329 - 179Deferred tax 3,152 3,399 3,746Retirement benefit 6,219 - 955----------------------------- ---------- ---------- ---------- 266,430 305,124 256,681----------------------------- ---------- ---------- ---------- Current assetsPrepaid operating lease premiums 92 92 92Assets classified as held for sale 1,513 666 348Inventories 1,470 1,419 1,431Receivable from site disposal 58,069 9,901 66,839Trade and other receivables 6,300 11,000 4,697Cash - - 999----------------------------- ---------- ---------- ---------- 67,444 23,078 74,406----------------------------- ---------- ---------- ---------- Total assets 333,874 328,202 331,087----------------------------- ---------- ---------- ---------- Current liabilitiesBorrowings (60,001) (1,939) (58,185)Trade and other payables (23,534) (20,099) (21,212)Income tax payable (1,413) (66) (2,171)----------------------------- ---------- ---------- ---------- (84,948) (22,104) (81,568)----------------------------- ---------- ---------- ---------- Non current liabilitiesBorrowings (34,519) (100,675) (44,295)Derivative financial instruments - (264) -Provisions (1,771) (2,802) (2,171)Deferred tax (35,316) (36,382) (33,920)Retirement benefit obligations - (902) ------------------------------ ---------- ---------- ---------- (71,606) (141,025) (80,386)----------------------------- ---------- ---------- ---------- Total liabilities (156,554) (163,129) (161,954)----------------------------- ---------- ---------- ---------- Net assets 177,320 165,073 169,133----------------------------- ---------- ---------- ---------- Capital and reservesCalled-up share capital 6,028 6,028 6,028Share premium account 1,274 1,285 1,274Other reserves 2,181 1,623 2,071Investment in own shares (552) (2,657) (2,123)Retained earnings 168,389 158,794 161,883----------------------------- ---------- ---------- ---------- Total equity 177,320 165,073 169,133----------------------------- ---------- ---------- ---------- The comparative figures at 30 September 2006 and 31 March 2007 have beenrestated for the effects of IFRS. Unaudited group cash flow statementFor the 26 weeks ended 29 September 2007 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 £000 £000 £000----------------------------- ---------- ---------- ---------- Operating activitiesCash generated from operations (note 18,533 9,527 27,8219)Taxes paid - (1,500) (2,706)----------------------------- ---------- ---------- ---------- Net cash flow from operating 18,533 8,027 25,115activities----------------------------- ---------- ---------- ---------- Investing activitiesSale of brewery and Buckhold Road 10,250 - -sitesSales of other property, plant and 908 49 468equipmentPurchases of property, plant and (8,442) (37,786) (46,755)equipmentInvestment in associate - (10,000) (10,000)Restructuring costs (3,603) (4,389) (6,896)----------------------------- ---------- ---------- ---------- Net cash used in investing (887) (52,126) (63,183)activities ----------------------------- ---------- ---------- ---------- Financing activitiesInterest received 82 108 3Interest paid (3,096) (2,384) (5,622)Premium on redemption of debenture (6,827) - -Equity dividends paid (2,269) (1,498) (3,589)Proceeds from exercise of share 1,425 - 535options in the employee benefit trust(Decrease)/increase in borrowings (8,658) 46,226 47,851Repayment of finance leases (5) (9) (17)----------------------------- ---------- ---------- ---------- Net cash flow from financing (19,348) 42,443 39,161activities ---------- ---------- --------------------------------------- (Decrease)/increase in cash (1,702) (1,656) 1,093Cash at the beginning of the period 999 (94) (94)----------------------------- ---------- ---------- ---------- Cash at the period end (703) (1,750) 999----------------------------- ---------- ---------- ---------- Group analysis of net debtAt 29 September 2007 At 29 Sept 07 At 30 Sept 06 At 31 Mar 07 £000 £000 £000----------------------------- ---------- ---------- ---------- Cash - - 999Bank overdraft (703) (1,750) -Loan capital and finance leases (93,817) (100,864) (102,480)----------------------------- ---------- ---------- ---------- Net debt (94,520) (102,614) (101,481)----------------------------- ---------- ---------- ---------- The comparative figures to 30 September 2006 and 31 March 2007 have beenrestated for the effects of IFRS. Unaudited group statement of recognised income and expenseFor the 26 weeks ended 29 September 2007 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 £000 £000 £000----------------------------- ---------- ---------- ----------Income and expense recogniseddirectly in equityActuarial gain on retirement benefit 3,968 2,169 3,539schemesActuarial gain (net) on retirementbenefitschemes - associate 1,232 - -Cashflow hedges: profits taken to 150 186 629equityDeferred tax on other items taken (967) 676 322directly to equity (note 5) ----------------------------- ---------- ---------- ---------- 4,383 3,031 4,490 Profit for the financial period 3,862 32,693 36,247----------------------------- ---------- ---------- ----------Total recognised income for the 8,245 35,724 40,737period ----------------------------- ---------- ---------- ---------- The comparative figures to 30 September 2006 and 31 March 2007 have beenrestated for the effects of IFRS. Notes to the accounts (1) Accounts The interim financial statements were approved by the Board on 14 November 2007.They are unaudited, and do not constitute statutory accounts within the meaningof S.240 of the Companies Act 1985. Statutory accounts for the 52 weeks ended 31 March 2007 have been delivered tothe Registrar of Companies. The auditors' report on those accounts wasunqualified and did not contain any statement under S.237 of the Companies Act1985. Change in accounting policies In accordance with the directive of the Council of the European Union, Young &Co.'s Brewery, P.L.C. has adopted International Financial Reporting Standards('IFRS') this year, having previously applied UK generally accepted accountingprinciples ('UK GAAP'). These interim statements are the first that Young's hasprepared under IFRS and they have been prepared in accordance with the IFRSaccounting policies endorsed by the European Union that management expects toapply in the 2008 full year financial statements. These accounting policies areconsistent with those adopted for the restatement of the 2007 financialinformation. The restatement includes the consolidated financial information at 2 April 2006(date of transition), for the 26 weeks ended 30 September 2006, and for the 52weeks ended 31 March 2007. Both the restatement and a summary of significantaccounting principles are available as a separate document on the company'swebsite, www.youngs.co.uk. This interim report has been prepared in accordance with the AIM Rules issued bythe London Stock Exchange, and in accordance with pronouncements on interimreporting issued by the Accounting Standards Board. As permitted, the interimreport has not been prepared in accordance with IAS 34 'Interim FinancialReporting', which is not mandatory for UK Groups. Impact of IFRS on prior period reporting 26 weeks to 30 Sept 06 52 weeks to 31 Mar 07 ------------------ ------------------ Profit Net Profit Net before tax* assets before tax* assets £000 £000 £000 £000 ----------------- ----------- ---------- ---------- ---------- Reported under UK GAAP 5,774 195,334 12,023 199,538Discontinued operation (36) - (36) -Lease reclassifications 16 (318) 31 (317)Income tax and deferred - (29,758) - (30,213)taxFinancial instruments - (185) - 125----------------- ----------- ---------- ---------- ---------- Reported under IFRS 5,754 165,073 12,018 169,133----------------- ----------- ---------- ---------- ---------- * Continuing operations before exceptional items and discount of site proceeds. Under IFRS, revenue, previously known as turnover, includes only the grossinflows of economic benefits received and receivable by the enterprise on itsown account. Amounts collected on behalf of third parties such as excise duty(26 weeks to 30 September 2006: £5,533,000; 52 weeks to 31 March 2007:£5,533,000) are not economic benefits which flow to the enterprise and do notresult in increases in equity. Therefore, they are excluded from revenue. The classification and presentation of leased assets changes under IFRS. Forleases categorised as operating leases under IFRS, any upfront lease premiumamounts paid are treated as a prepayment and not as property, plant andequipment. Accordingly, any revaluation increment previously booked on operatingleases is required to be reversed. Under IFRS, deferred tax is recognised in respect of nearly all taxabletemporary differences arising between the tax base and the accounting book valueof balance sheet items (a balance sheet approach). This results in deferred taxbeing recognised on certain timing differences that would not have given rise todeferred tax under UK GAAP, including historic property revaluation gains, rollover capital gains tax relief claims, fair value gains on the exchange of assetsfor the associate, and share based payments. (2) Discontinued operation On 23 May 2006 the group announced the merger of its brewing, beer brands andwholesale operations with the brewing assets, beer brands and wholesaleoperations of Charles Wells Ltd to form a new brewing business called Wells &Young's Brewing Company Ltd. On 3 August 2006, the group announced the disposal of the Ram Brewery site andthe nearby Buckhold Road office and warehouse space in Wandsworth for a totalcash consideration of £69 million. The group's brewing, beer brands and wholesale operation has been treated as adiscontinued operation in the current and prior periods. The table below shows the results of the discontinued operation included in theincome statement of the group: 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 £000 £000 £000---------------------------- ---------- --------- ----------Sales to external customers - 6,501 6,501Intra-group sales - 10,533 10,533---------------------------- ---------- --------- ----------Total revenue - 17,034 17,034Operating costs before exceptional - (16,998) (16,998)items ---------------------------- ---------- --------- ----------Operating profit - 36 36 Non-operating exceptional itemsRestructuring costs (212) (4,404) (9,016)Profit on sale of Wandsworth sites - 46,608 46,608Gain on exchange of assets for - 11,205 11,205interest in associate ---------------------------- ---------- --------- ----------(Loss)/profit before tax (212) 53,445 48,833Taxation (note 5) 64 (19,385) (17,392)---------------------------- ---------- --------- ----------(Loss)/profit from discontinued (148) 34,060 31,441operation ---------------------------- ---------- --------- ---------- (3) Adjusted profit before tax and adjusted EBITDA* 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 £000 £000 £000---------------------------- ---------- --------- ---------- Profit before tax 4,334 448 8,725Exceptional items 1,085 1,443 1,153Premium on redemption of debenture 6,827 - -Discount on site proceeds (1,480) 3,863 2,161Share of associate's tax expense/ 118 - (21)(credit) ---------------------------- ---------- --------- ---------- Adjusted profit before tax* 10,884 5,754 12,018Depreciation of continuing 3,472 3,113 6,429operations - groupDepreciation - associate 634 - 679Net finance costs - group 3,094 2,197 5,184Net finance costs - associate 593 - 253Other finance income (628) (896) (1,731)---------------------------- ---------- --------- ---------- Adjusted EBITDA* 18,049 10,168 22,832---------------------------- ---------- --------- ---------- * Continuing operations before exceptional items, premium on redemption ofdebenture, and discount of site proceeds. Alternative performance measures have been provided as the Board believes thatthey give a useful additional indication of underlying performance. (4) Exceptional items 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 £000 £000 £000(a) Operating exceptional items---------------------------- ---------- --------- ----------Capital gains tax on ESOP allocated (8) (1,060) (509)sharesProperty valuation costs - (200) (200)---------------------------- ---------- --------- ---------- (8) (1,260) (709)---------------------------- ---------- --------- ---------- (b) Non-operating exceptional items ---------------------------- ---------- --------- ----------Loss on sales of properties and investments (4) (183) (444)Provision for loss on sales of properties (221) - ----------------------------- ---------- --------- ----------Profit/(loss) on sales of property, plant and (225) (183) (444)equipment ---------- --------- -------------------------------------- (c) Associate non-operating exceptional item Restructuring costs (852) - ----------------------------- ---------- --------- ---------- (5) Tax (charge)/credit 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 £000 £000 £000---------------------------- ---------- --------- ----------Income statementContinuing operationsGroup excluding associateTax on profit on ordinary activities (2,885) (1,080) (2,705)Movements in deferred tax (389) (769) (1,214)Adjustment in deferred tax from 30% 902 - -to 28%Tax on non-operating exceptional - 34 -itemsTax credit on premium on debenture 2,048 - -redemption ---------------------------- ---------- --------- ---------- (324) (1,815) (3,919)---------------------------- ---------- --------- ---------- AssociateTax on profit on ordinary activities (373) - 21Tax on non-operating exceptional 255 - -items ---------------------------- ---------- --------- ---------- (118) - 21---------------------------- ---------- --------- ---------- Discontinued operationGroup excluding associateTax on profit on ordinary activities - (10) (10)Movements in deferred tax - (1) (1)Tax on non-operating exceptional 64 (19,374) (17,381)items ---------------------------- ---------- --------- ---------- 64 (19,385) (17,392)---------------------------- ---------- --------- ---------- Statement of recognised income andexpenseMovements in deferred tax (1,171) 676 322Adjustment in deferred tax from 30% 204 - -to 28% ---------------------------- ---------- --------- ---------- (967) 676 322---------------------------- ---------- --------- ---------- (6) Earnings per 50p ordinary share 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 £000 £000 £000(a) Earnings------------------------------ ---------- ---------- ----------Profit/(loss) from continuing 4,010 (1,367) 4,806operations(Loss)/profit from discontinued (148) 34,060 31,441operation ------------------------------ ---------- ---------- ----------Profit attributable to equity 3,862 32,693 36,247holders of the parent ------------------------------ ---------- ---------- ---------- Profit/(loss) from continuing 4,010 (1,367) 4,806operationsOperating exceptional items, net of 8 1,260 709taxNon-operating exceptional items, net 225 149 444of taxAssociate exceptional items, net of 597 - -taxPremium on redemption of debenture, 4,779 - -net of taxDiscount of site proceeds (1,480) 3,863 2,161------------------------------ ---------- ---------- ----------Adjusted earnings after tax from 8,139 3,905 8,120continuing operations ------------------------------ ---------- ---------- ---------- Number Number Number------------------------------ ---------- ---------- ----------Weighted average number of ordinary 11,716,342 11,570,927 11,605,450shares in issueAdd: the notional exercise of theweighted average numberof ordinary share options 89,849 302,155 243,158outstanding during the year ---------- ---------- ----------------------------------------Diluted weighted average number of 11,806,191 11,873,082 11,848,608ordinary shares in issue ------------------------------ ---------- ---------- ---------- (b) Basic earnings per share Pence Pence Pence------------------------------ ---------- ---------- ----------Basic from continuing operations 34.23 (11.81) 41.41Effect of exceptional items, premium 35.24 45.56 28.56on redemption of debenture and ---------- ---------- ----------discount of site proceeds------------------------------Adjusted from continuing operations 69.47 33.75 69.97------------------------------ ---------- ---------- ---------- Basic from continuing operations 34.23 (11.81) 41.41Basic from discontinued operation (1.27) 294.35 270.92------------------------------ ---------- ---------- ----------Basic 32.96 282.54 312.33------------------------------ ---------- ---------- ---------- (c) Diluted earnings per share Pence Pence Pence------------------------------ ---------- ---------- ----------Diluted from continuing operations 33.97 (11.51) 40.56Effect of exceptional items, premium 34.97 44.40 27.97on redemption of debenture and ---------- ---------- ----------discount of site proceeds------------------------------Adjusted diluted from continuing 68.94 32.89 68.53operations ------------------------------ ---------- ---------- ---------- Diluted from continuing operations 33.97 (11.51) 40.56Diluted from discontinued operation (1.26) 286.86 265.36------------------------------ ---------- ---------- ----------Diluted 32.71 275.35 305.92------------------------------ ---------- ---------- ---------- The weighted average number of shares in issue excludes the group's investmentin its own shares. Adjusted earnings per share and adjusted diluted earnings pershare are presented to eliminate the effect of the exceptional items on basicand diluted earnings per share. (7) Premium on redemption of debenture The 9.5% debenture stock, repayable at par on 14 September 2018, and secured bya floating charge over the company's assets and undertaking, was redeemed inadvance on 21 May 2007. As a result of this repayment, the group has recogniseda loss before tax of £6,827,000 in the income statement in the period. (8) Ordinary dividends on equity shares 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 Pence Pence Pence------------------------------ ---------- ---------- ----------Final dividend 19.35 12.90 12.90Interim dividend - - 18.00------------------------------ ---------- ---------- ---------- 19.35 12.90 30.90------------------------------ ---------- ---------- ---------- The trustee of the Ram Brewery Trust has waived its rights in respect of thedividends on the shares held in the trust on behalf of the directors' shareoption schemes. (9) Net cash generated from operations 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 £000 £000 £000------------------------------ ---------- ---------- ---------- Operating profit from continuing and 12,132 5,831 14,715discontinued operationsDepreciation 3,472 4,349 7,665Employee benefit trust share 786 204 744allocationsProvision for capital gains tax on 8 1,060 509ESOP allocated sharesShare based payment - - 90 Movements in working capitalInventories (39) 2,774 2,716Receivables (1,356) (4,161) 2,485Payables 3,530 (530) (1,103)------------------------------ ---------- ---------- ---------- Net cash generated from operations 18,533 9,527 27,821------------------------------ ---------- ---------- ---------- (10) Reconciliation of movements in equity 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 £000 £000 £000------------------------------ ---------- ---------- ----------Total recognised income for the 8,245 35,724 40,737periodDividends (2,269) (1,498) (3,589)Movement in own shares: Employeebenefit trust allocations 2,211 204 1,279 Share based payment:Movement for the period - - 90Deferred tax on movement - - (27)------------------------------ ---------- ---------- ---------- 8,187 34,430 38,490 Opening equity 169,133 130,643 130,643------------------------------ ---------- ---------- ---------- Closing equity 177,320 165,073 169,133------------------------------ ---------- ---------- ---------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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