25th Nov 2005 07:00
Fuller,Smith&Turner PLC25 November 2005 STRICTLY EMBARGOED UNTIL 7AM FRIDAY 25 NOVEMBER 2005 PRESS RELEASE FULLER, SMITH & TURNER P.L.C. Financial results for the six months ended 1 October 2005 Reported and restated under International Financial Reporting Standards (IFRS) Financial Highlights • Turnover up 4% to £67.4 million (2004: £64.5 million) • Normalised profit before tax1 up 5% to £8.4 million (2004: £8.0 million) • Profit before tax down 1% to £8.4 million (2004: £8.5 million) • Normalised earnings per share3 up 7% to 25.29p (2004: 23.67p) • Basic earnings per share2 were up 0.5% at 25.29p (2004: 25.17p) • Interim dividend per share2 increased 5% to 5.63p (2004: 5.36p) Corporate Progress • Beer Company profits up 6% • A good performance from Managed Pubs with profits up 10% and like for like sales up 4.4% • Good City trading with like for like sales up 7% • A solid first half for Hotels with profits up 7% • Tenanted Inns profits up 9% • Recommended cash offers for George Gale and Company Limited post the period end valuing the fully diluted share capital of Gales at approximately £82.7 million and represents an enterprise value of £91.8 million. 1 Profit before tax for the 26 weeks to 1 October 2005 now includes thecost of preference dividends. In accordance with the option available on firsttime adoption of IAS 32 and IAS 39 (which is explained further in Note 1), thecomparative numbers have not been restated. Normalised profit is the profitbefore tax excluding exceptional gains of £nil (2004: £0.5 million), andpreference dividends. 2 Calculated on the £1 'A' ordinary share and using the results ofcontinuing and total operations. 3 Calculated using pre-exceptional earnings of £5.6 million (2004: £5.3million) and the same weighted average number of shares as for the basicearnings per share. Commenting on the results, Anthony Fuller, Chairman of Fuller's, said: "It has been a good first half with turnover up 4% and normalised pre-taxprofits up 5%. All areas of the business are performing well. Our focus onproviding a premium retail experience is proving successful and deliveringexcellent sales and bottom line growth across our managed and tenanted pubestates and hotels. London Pride continues to grow market share and achieve newlistings while our other key brands are showing good growth. " We look forward to welcoming Gales' 111 high quality pubs into the Fuller'sGroup and enhancing our ale portfolio with their well respected brands. The nextstep will be to conduct a strategic review of the business and to commence theprocess of integration in order to achieve the expected synergies. These willclearly be areas of focus for us over the next few months and we will report inmore detail on the longer term prospects and exciting opportunities for thecombined business once the review has been completed. The acquisition of Galeswill give us benefits of scale that will help us continue to deliver improvedvalue to our shareholders." - Ends - For further information, please contact: Fuller Smith & Turner P.L.C.Press Office 020 8996 2175/2198/2048 Mobile 07831 299801/ 07748 657854 E-mail: [email protected] Michael Turner, Chief Executive: Press 020 8996 2048Paul Clarke, Finance Director: Analysts 020 8996 2048 Merlin 020 7653 6620Paul Downes 07900 244 888Vanessa Maydon 07802 961 902 (mobile)Rebecca Penney 07950 419 408 (mobile) Notes to Editors For an official photo please e-mail [email protected] and one will automatically be sent by return on receipt of your e-mail. Copies of this statement, the Interim Statement and press presentation will beavailable on the Company's web site, www.fullers.co.uk. Attached: Chairman's Statement Financial Highlights Unaudited Group Income Statement Unaudited Group Balance Sheet Unaudited Group Cash Flow Statement Other Unaudited Group Primary Statements Notes to the Accounts FULLER, SMITH & TURNER P.L.C. INTERIM RESULTS FOR THE SIX MONTHS TO 1 OCTOBER 2005 CHAIRMAN'S STATEMENT Whatever You Do, Take Pride It has been a good first half with normalised profits up 5% to £8.4 million(2004: £8.0 million) on a 4% increase in turnover to £67.4 million (2004: £64.5million). With no profits on disposal of properties in the first six months ofthe current financial year, against a surplus of £0.5million last year, postexceptional pre-tax profits were £8.4 million compared to £8.5 million in thecomparable period last year. Normalised earnings per share, which is our key measure, increased 7% to 25.29p(2004: 23.67p). Basic earnings per share was slightly higher than last year at25.29p (2004: 25.17p). Tax has been provided for at the expected effective ratefor the full year of 32.3% on normalised profits (2004: 32.7%). Earnings beforeinterest, tax, depreciation and amortisation (EBITDA) were up 7% to £13.8million (2004: £13.0 million). Since the beginning of the financial year, we acquired seven new pubs, completedthe construction of another and sold two. Total capital expenditure for thehalf-year was £19.7 million (2004: £6.5 million) of which £13.5 million (2004:£1.1 million) was on the seven pubs acquired and one pub built during the year.Since the end of the period, we have contracted to purchase two further pubs.In addition, we have announced a recommended offer for Gales for an enterprisevalue of £91.8 million. The current financial year is the first where we will be required to report ouraccounts under International Financial Reporting Standards (IFRS). The impactof IFRS on profits has been in the area of pension charges and share basedpayments which reduced last year's reported normalised profits by £0.2 millionto £8.0 million. The impact on September 2004 net assets has been a reduction£15.8 million to £147.5 million, a result of recognising the net deficit of thefinal salary pension schemes and deferred tax on past property revaluations inthe balance sheet. A detailed restatement document is available on our websitewww.fullers.co.uk . We shall be increasing the interim dividend by 5% to 5.63p per £1 'A' and 'C'ordinary share and 0.563p per 10p 'B' ordinary share, which will be paid onFriday 6 January 2006 to shareholders on the Share Register as at Friday 9December 2005. Fuller's Inns It has been a good first half for Fuller's Inns with profits up 10% to £8.4million on turnover up 5% to £51.4 million. EBITDA at £11.8 million was up 9%(2004: £10.8 million). Managed Pubs The better trading seen in the second half of last year has continued into thisyear and turnover was up 4% in the first half. On an uninvested like for likebasis turnover across the managed estate was up 4.4%. It was particularlypleasing to see continued buoyant trading in the City which, up to a year ago,had been suffering the effects of a sluggish economy. Sales in the City were up6.6% on a like for like basis. Since the start of the financial year, we acquired six new managed pubs, five ofwhich are freeholds. In September 2005, we also opened The Paper Mill ournewest development built on the Grand Union Canal in Apsley, Hertfordshire. Inline with our investment strategy, these are all high quality assets presentinggood opportunities to grow our food, cask ale and wine sales. All sites areperforming well and are excellent additions to the managed estate. In April2005 we sold two bars and transferred three pubs to tenancy and at the end ofthe first half had 120 pubs under management. We continue to invest in the existing estate and, in addition to theacquisitions during the period, there were 13 major projects undertaken in thefirst half compared to 16 in the same period last year. All of our investmentis aimed at maintaining the quality and longevity of the estate underpinning ourstrategy to deliver a premium retail experience. This emphasis on quality hastranslated into food sales up 9%, cask ale sales up 10% and wine sales up 5%despite the sale of two of our leasehold bars. Tenanted Inns The tenanted estate continues to perform well with profits up 9%. Averageprofits per pub were up 3% compared to last year while average turnover per pubwas level. As with all areas of the business, we target our acquisitions carefully and arepleased to report that the four tenanted pubs bought last year are allperforming well. We made one further acquisition in September 2005 which,combined with three transfers from the managed estate, means the total number oftenanted pubs at the end of the first half was 122. Since the period end wehave acquired a further pub, the Carpenter's Arms in Bransgore, near Bournemouth. Fuller's Hotels Fuller's Hotels has made a good start to the year with turnover up 12% andprofits up 7%. The average room rate was up 5% to £68.82 and occupancy up 7%which delivered an overall revpar of £45.60, an increase of 9% over last year. In order to maintain the quality of our hotels in this niche market we continueto invest in our estate. Room refurbishments were completed at the Mad HatterHotel during the first half. We are also pleased to report that the Red LionHotel in Hillingdon Village, which opened in May 2004, continues to grow itscustomer base and performed very well in the period. The Fuller's Beer Company Despite the challenging conditions in the cask ale market, Fuller's Beer Companyhas continued to perform well. Profits were up 6% to £3.6 million (2004: £3.4million), on turnover up 2% to £23.3 million (2004: £22.9 million). EBITDAincreased 5% to £4.4 million from £4.2 million last year. Overall total beer sales were down 1% to 134,000 barrels. During the first halfwe lost a large pub company customer after they were re-tied following atakeover and, primarily as a result of this, own beer sales fell 2% to 94,000barrels. We are confident, however, that the development of recent new on andoff trade listings will replace much of this lost volume by the end of thefinancial year. It has been particularly pleasing to see the growth of own beersales to our tied estate, up 4% on last year. This is evidence of the closeworking relationship between The Beer Company and Fuller's Inns to ensure thequality of our cask ales and that our pubs deliver a unique range of great caskales in the best condition. London Pride remains the UK's top selling premium cask ale and, despite thedifficult trading environment, has increased market share in all trade sectors.We continue to support the brand through creative marketing and have alreadygained new listings in the autumn. Our newest beer, Discovery Blonde Beer, waslaunched in May. Designed to be served cooler and add incremental volume byattracting lager drinkers, it has been supported by a comprehensive marketingcampaign including various promotional activities, radio, taxi and posteradvertising together with bespoke glassware. Sales have far exceeded our initialexpectations and in addition we have already achieved listings in three majorsupermarkets. ESB, the Champion Ale, has also had a good year following itsrelaunch last autumn. The Wine Division continues to make a valuable contribution to the business withprofits up 11% in the first half of the year. Our agency business now includeswines from Chile, New Zealand, Australia, South Africa and Spain as well as anexcellent Champagne. These have further enhanced the quality and range of ourwines and recognition of this outside our tied estate can be seen in the 7% winevolume growth to our free trade accounts. During the first six months we completed the £2.1 million development of thekegging line. This project has further automated the kegging process leading toincreased efficiency in the Brewery and reducing costs in the long term. Recommended cash offers for Gales Following the period end on 8 November 2005, Fuller's made recommended cashoffers for George Gale and Company Limited ("Gales"), the Hampshire-based brewerand operator of 111 pubs located throughout the South and South East of England.Their retail estate comprises 69 tenanted and 42 managed pubs. The offersvalue the fully diluted share capital of Gales at £82.7 million and represent anenterprise value of £91.8 million. The proposed acquisition of Gales isconsistent with Fuller's strategy of seeking acquisitions with an excellentgeographic fit and a high quality, largely freehold estate that provides costsavings through economies of scale and that will generate value for Fuller'sShareholders. In addition, Gales is a family-owned company with a strong history and traditionand a reputation for quality. It has a similar operating model to Fuller's andcan be integrated with our model with little adaptation. It has an excellentestate of well run and well maintained estate of pubs and it brews a number ofwell respected ale brands, including 'HSB' which will complement Fuller'sexisting brand portfolio. We anticipate that the acquisition will be earnings enhancing in the first fullfinancial year* and we have identified annualised synergy benefits of circa £3million**. Prospects All areas of the business are performing well. London Pride continues to growmarket share and achieve new listings while our other key brands are in goodgrowth. Our focus on providing a premium retail experience is provingsuccessful and delivering excellent sales and bottom line growth across ourmanaged and tenanted pub estates and hotels. We continue to invest in the business to maintain high standards and to ensurethe quality of our assets for the long term. In line with our targetedacquisition strategy, we bought seven and built one new pub in the first sixmonths of the financial year. A further pub was purchased in November 2005 andcontracts have been exchanged on another due to complete in January 2006. The Tenanted Division continues to deliver good profit growth and has benefitedfrom acquisitions and transfers from the managed estate. We are confident thatthis steady growth will continue. The Red Lion Hotel is now in its second yearof operation and has established a solid customer base which continues to grow.This has helped to deliver good growth from the Hotels' Division which we expectto continue in the second half. Our beer brands are performing well in a competitive market. The development ofrecent new listings should recover much of the volume shortfall seen in thefirst. Our brands remain second to none in terms of quality, and supported bycreative marketing and an increasingly efficient brewery, we are well placed forfuture growth. We look forward to welcoming Gales' 111 high quality pubs into the Fuller'sGroup and enhancing our ale portfolio with their well respected brands. The nextstep will be to conduct a strategic review of the business and to commence theprocess of integration in order to achieve the expected synergies. These willclearly be areas of focus for us over the next few months and we will report inmore detail on the longer term prospects and exciting opportunities for thecombined business once the review has been completed. The acquisition of Galeswill give us benefits of scale that will help us continue to deliver improvedvalue to our shareholders. A.G.F. Fuller CBEChairman25 November 2005 * This statement regarding earnings enhancement is not a profit forecast andshould not be interpreted to mean that Fuller's future earnings per share willnecessarily match or exceed the historical published earnings per share ofFuller's or Gales. ** This statement of estimated cost savings relates to future actions andcircumstances which, by their nature, involve risks, uncertainties and otherfactors. Accordingly, the cost savings referred to may not be achieved, orthose achieved could be materially different from those estimated. FULLER SMITH & TURNER P.L.C. FINANCIAL HIGHLIGHTS FOR THE 26 WEEKS ENDED 1 OCTOBER 2005 1 Restated Restated 26 weeks to 26 weeks to 53 weeks to 1 October 25 September Change 2 April 2005 2004 2005/2004 2005 £000 £000 £000 ______________________________ ___________ ___________ ___________ ___________ Revenue 67,356 64,504 4.4% 129,492Profit before tax 2 8,368 8,474 (1.3)% 17,620Normalised profits 3 8,428 7,993 5.4% 17,388EBITDA 4 13,817 12,970 6.5% 27,799Basic earnings per share 5 25.29 p 25.17 p 0.5% 52.41 pNormalised earnings per share 6 25.29 p 23.67 p 6.8% 51.68 pDividend per share 5 5.63 p 5.36 p 5.0% 18.46 pNet assets per share 5 £6.91 £6.60 4.7% £6.81Gearing ratio 21.0% 13.6% N/A 14.7% ______________________________ ___________ ___________ ___________ ___________ 1 The 25 September 2004 and 2 April 2005 results have beenrestated due to the adoption of International Financial Reporting Standards("IFRS") - see Note 1. 2 Profit before tax for the 26 weeks to 1 October 2005 nowincludes the cost of preference dividends. In accordance with the optionavailable on first time adoption of IAS 32 and IAS 39 (which is explainedfurther in Note 1), the comparative numbers have not been restated. 3 Normalised profit is the profit before tax excludingexceptional gains of £nil (2004: £0.5m), and preference dividends. 4 Earnings before interest, tax, depreciation andamortisation. 5 Calculated on the £1 'A' ordinary share, and using theresults of continuing and total operations. 6 Calculated using normalised profits after tax and the sameweighted average number of shares as for the basic earnings per share. FULLER SMITH & TURNER P.L.C. UNAUDITED GROUP INCOME STATEMENT FOR THE 26 WEEKS ENDED 1 OCTOBER 2005 26 weeks to 26 weeks to 53 weeks to 1 October 25 September 2 April 2005 2004 2005 £000 £000 £000 Restated Restated REVENUE 67,356 64,504 129,492Operating costs (57,903) (55,642) (110,241) ----------------- ----------------- -----------------OPERATING PROFIT 9,453 8,862 19,251Profit on disposal of properties - 481 232Interest receivable 85 229 336Finance costs (1,170) (1,098) (2,199) ------------------ ------------------ ------------------PROFIT BEFORE TAX 8,368 8,474 17,620Income tax expense (2,722) (2,758) (5,755) ----------------- ----------------- -----------------PROFIT AFTER TAXATION 5,646 5,716 11,865Preference dividends - (60) (120) ----------------- ----------------- -----------------ATTRIBUTABLE TO EQUITY SHAREHOLDERS 5,646 5,656 11,745 ======== ======== ========EARNINGS PER SHAREPER £1 'A' ORDINARY SHARE OR UNQUOTED £1 'C' ORDINARY SHAREBasic 25.29 p 25.17 p 52.41 pDiluted 25.03 p 25.03 p 51.94 pNormalised basis 25.29 p 23.67 p 51.68 p EARNINGS PER SHAREPER UNQUOTED 10P 'B' ORDINARY SHAREBasic 2.53 p 2.52 p 5.24 pDiluted 2.50 p 2.50 p 5.19 pNormalised basis 2.53 p 2.37 p 5.17 p The Directors have declared an interim dividend of 5.63p for the £1 'A' ordinaryshares and unquoted 'C' shares, and 0.563p for the unquoted 10 pence 'B' shares,with a total estimated cost to the Group of £1,257,000 (2004: £1,202,000) The results and EPS measures above are all in respect of continuing and totaloperations of the Company. The 25 September 2004 and 2 April 2005 results have been restated due to theadoption of International Financial Reporting Standards ("IFRS") - see Note 1. FULLER SMITH & TURNER P.L.C. UNAUDITED GROUP BALANCE SHEET 1 OCTOBER 2005 At At At 1 October 25 September 2 April 2005 2004 2005 £000 £000 £000 Restated RestatedNON-CURRENT ASSETSProperty, plant and equipment 216,558 196,359 201,226Investment properties 1,623 1,627 1,625Other non-current assets 737 994 737 ----------------- ----------------- ----------------- 218,918 198,980 203,588CURRENT ASSETSInventories 4,691 4,064 4,426Trade and other receivables 12,668 12,804 13,698Investments - 2,033 -Cash and cash equivalents 1,773 4,848 4,610 ----------------- ----------------- ----------------- 19,132 23,749 22,734CURRENT LIABILITIESOverdraft 7,096 - -Trade and other payables 25,352 24,693 23,476Current tax payable 2,991 2,456 2,306 ----------------- ----------------- ----------------- 35,439 27,149 25,782NON-CURRENT LIABILITIESDebenture stock 27,011 27,001 27,006Preference shares 1,600 - -Retirement benefit obligations 11,624 13,378 13,337Deferred tax liabilities 8,073 7,729 7,914 ----------------- ----------------- ----------------- 48,308 48,108 48,257 ----------------- ----------------- -----------------NET ASSETS 154,303 147,472 152,283 ======== ======== ========CAPITAL AND RESERVESShare capital 22,857 22,792 22,831Preference shares - 1,600 1,600Share premium account 4,248 3,991 4,150Capital redemption reserve 2,902 2,902 2,902Treasury shares (4,238) (2,860) (3,530)Retained earnings 128,534 119,047 124,330 ----------------- ----------------- -----------------TOTAL EQUITY 154,303 147,472 152,283 ======== ======== ======== The 25 September 2004 and 2 April 2005 balance sheets have been restated due tothe adoption of International Financial Reporting Standards ("IFRS") - see Note1. FULLER SMITH & TURNER P.L.C. UNAUDITED GROUP CASH FLOW STATEMENT FOR THE 26 WEEKS ENDED 1 OCTOBER 2005 26 weeks to 26 weeks to 53 weeks to 1 October 25 September 2 April 2005 2004 2005 £000 £000 £000 Restated RestatedCASH FLOWS FROM OPERATING ACTIVITIESProfit before tax 8,368 8,474 17,620Adjustments for: Depreciation 4,263 4,099 8,486 Loss / (profit) on disposal of fixed assets 101 (472) (170) Interest receivable (85) (229) (336) Finance costs 1,170 1,098 2,199 Difference between pension charge and cash paid (209) (221) (448) Share based payment charges 462 432 839 ----------------- ---------------- ----------------Operating profit before working capital changes 14,070 13,181 28,190 Change in trade and other receivables (594) (1,733) (1,352) Change in inventories (265) 205 (157) Change in trade and other payables 2,125 488 (677) ----------------- ---------------- ----------------Cash generated from operations 15,336 12,141 26,004Interest received 85 229 336Income tax paid (2,091) (2,712) (5,413) ----------------- ---------------- ----------------Net cash inflow from operating activities 13,330 9,658 20,927 ----------------- ---------------- ----------------CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment (19,900) (7,526) (18,503)Proceeds from sale of property, plant and equipment 1,650 321 674Cash (inflow)/outflow from movement in current asset - (1,021) 1,012investments ----------------- ---------------- ----------------Net cash used in investing activities (18,250) (8,226) (16,817) ----------------- ---------------- ---------------- CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of Share Capital 124 215 413Purchase of own shares (1,234) (2,001) (2,751)Sale of treasury shares 256 146 141Interest paid (1,176) (1,092) (2,188)Preference dividends paid (60) (60) (120)Equity dividends paid (2,923) (2,753) (3,956) ----------------- ---------------- ----------------Net cash used in Financing activities (5,013) (5,545) (8,461) ----------------- ---------------- ----------------Net decrease in cash and cash equivalents (9,933) (4,113) (4,351)Cash and cash equivalents at beginning of period 4,610 8,961 8,961 ----------------- ---------------- ----------------Cash and cash equivalents at end of period (5,323) 4,848 4,610 ======== ======== ======== The 25 September 2004 and 2 April 2005 figures have been restated due to theadoption of International Financial Reporting Standards ("IFRS") - see Note 1. FULLER SMITH & TURNER P.L.C. UNAUDITED STATEMENT OF RECOGNISED INCOME AND EXPENSE FOR THE 26 WEEKS ENDED 1 OCTOBER 2005 26 weeks to 26 weeks to 53 weeks to 1 October 25 September 2 April 2005 2004 2005 £000 £000 £000 Reversal of deferred tax liability due to indexation 237 332 537Net actuarial gains and losses on pension schemes 1,053 (1,541) (1,671) ----------------- --------------- -----------------Income and expense recognised directly in equity 1,290 (1,209) (1,134) ----------------- --------------- -----------------Profit attributable to ordinary shareholders 5,646 5,656 11,745 ----------------- --------------- -----------------Total recognised income and expense for the period 6,936 4,447 10,611 ======== ======= ======== FULLER SMITH & TURNER P.L.C. NOTES TO THE ACCOUNTS FOR THE 26 WEEKS ENDED 1 OCTOBER 2005 1. INTERIM STATEMENT The interim statement does not constitute full accounts as defined by S.240 ofthe Companies Act 1985. Full accounts for the year ended 2 April 2005,including an unqualified auditors' report, have been delivered to the Registrarof Companies. Change in Accounting policies In accordance with the directive of the Council of the European Union, FullerSmith & Turner P.L.C. ('Fullers') have adopted International Financial ReportingStandards ('IFRS') this year, having previously applied UK accounting standards.These interim statements are the first that Fullers has prepared under IFRSand they have been prepared in accordance with the IFRS accounting policies thatmanagement expects to apply in the 2006 IFRS-compliant full year financialstatements. These accounting policies are consistent with those adopted for therestatement of the 2005 financial information. Both the restatement and asummary of significant accounting policies are available as separate documentson the Company's website, www.fullers.co.uk, and are also available on requestfrom the Company Secretariat on 020 8996 2115. Fullers have adopted all existing IFRS with the exception of IAS 34 'InterimFinancial Reporting' which is not mandatory for UK Groups. It is anticipatedthat the amendments to IAS 19 'Actuarial Gains and Losses, Group Plans andDisclosure' and to IAS 39 'The Fair Value Option', which have yet to be formallyadopted for use in the EU, will be so adopted in time to be applicable to thenext annual financial statements. Accordingly, we have adopted these amendmentsin these interim statements. The Group has taken the option to only apply IAS 32 'Financial Instruments:Disclosure & Presentation', and IAS 39 'Financial Instruments: Recognition &Measurement' prospectively, with effect from 3 April 2005. The comparativeperiods have therefore not been restated for IAS 32 or 39. The effect of IAS 32is to reduce equity by £1.6 million as at 3 April 2005, by reclassifyingpreference shares as non-current liabilities, and to move the presentation ofpreference dividends of £60,000 on the face of the income statement. Preferenceshares were previously shown as part of equity. IAS 32 has also had an effecton preference dividends. Preference dividends were previously shown as adeduction from profit after tax, but under IAS 32 they are now included withinfinance costs. IAS 39 has had no effect on amounts recognised in the incomestatement or balance sheet. Neither IAS 32 nor IAS 39 have had any effect onbasic or diluted earnings per share. Restatement of revenue and profit before tax for the comparative periods As noted above, the 25 September 2004 and 2 April 2005 results have beenrestated, and the full details of the restatement are available in a separatedocument. To aid understanding of this document, the main effects of therestatement on revenue and on profit before tax are presented below. 26 weeks to 53 weeks to 25 September 2004 2 April 2005 £'000 £'000 Revenue as previously reported 72,961 147,483Excise duty (IAS 18) (8,457) (17,991)Revenue as reported under IFRS 64,504 129,492 Profit before tax as previously reported 8,686 18,046Retirement benefits (IAS 19) (170) (341)Share-based payments (IFRS 2) (42) (85)Profit before tax as reported under IFRS 8,474 17,620 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 dutyare not economic benefits which flow to the enterprise and do not result inincreases in equity. Therefore, they are excluded from revenue. This changedoes not apply to retailers who buy their goods duty paid and do not have toaccount to the government for duty. Excise duty has therefore been removed fromall revenue except for sales by the Inns division directly to its own retailcustomers. 2. SEGMENTAL ANALYSIS 26 weeks to 1 October 2005 Fuller's Inns Beer Company Total £000 £000 £000TOTAL REVENUES 51,366 23,265 74,631Inter-segment revenues - (7,275) (7,275) ----------- ----------- -----------Revenues from third parties 51,366 15,990 67,356 ----------- ----------- -----------DIVISIONAL PROFIT 8,359 3,643 12,002 ----------- -----------Net central costs (2,549) -----------Operating profit 9,453Profit on disposal of properties -Interest receivable 85Finance costs (1,170) ----------- ----------- -----------Profit before tax 8,359 3,643 8,368 ----------- ----------- -----------ASSETS EMPLOYED ----------- ----------- -----------Divisional assets 181,220 19,521 200,741 ----------- -----------Unallocated net liabilities* (46,438) -----------Total net assets 154,303 ----------- * Unallocated net liabilities represent the net of pension liabilities,debentures, income tax, cash and cash equivalents and assets held under centralmanagement. 26 weeks to 25 September 2004 Fuller's Inns Beer Company Total £000 £000 £000TOTAL REVENUES 48,694 22,853 71,547Inter-segment revenues - (7,043) (7,043) ----------- ----------- -----------Revenues from third parties 48,694 15,810 64,504 ----------- ----------- -----------DIVISIONAL PROFIT 7,627 3,447 11,074 ----------- -----------Net central costs (2,212) -----------Operating profit 8,862Profit on disposal of properties 481 481Interest receivable 229Finance costs (1,098) ----------- ----------- -----------Profit before tax 8,108 3,447 8,474 ----------- ----------- -----------ASSETS EMPLOYED ----------- ----------- -----------Divisional assets 159,879 17,059 176,938 ----------- -----------Unallocated net liabilities* (29,466) -----------Total net assets 147,472 -----------52 weeks to 2 April 2005 Fuller's Inns Beer Company Total £000 £000 £000TOTAL REVENUES 98,651 46,040 144,691Inter-segment revenues - (15,199) (15,199) ----------- ----------- -----------Revenues from third parties 98,651 30,841 129,492 ----------- ----------- -----------DIVISIONAL PROFIT 15,779 8,031 23,810 ----------- -----------Net central costs (4,559) -----------Operating profit 19,251Profit on disposal of properties 232 232Interest receivable 336Finance costs (2,199) ----------- ----------- -----------Profit before tax 16,011 8,031 17,620 ----------- ----------- -----------ASSETS EMPLOYED ----------- ----------- -----------Divisional assets 166,334 17,802 184,136 ----------- -----------Unallocated net liabilities* (31,853) -----------Total net assets 152,283 ----------- 3. TAXATION Corporation tax and deferred tax has been provided as follows: 26 weeks to 26 weeks to 53 weeks to 1 October 25 September 2 April 2005 2004 2005 £000 £000 £000 Restated RestatedTAX ON NORMALISED PROFITSCurrent tax 2,454 2,510 5,061Deferred tax 268 104 624 --------------- ----------------- --------------Total tax 2,722 2,614 5,685 --------------- ----------------- --------------TAX ON PROPERTY DISPOSALSCurrent tax - - 68Deferred tax - 144 2 --------------- ----------------- --------------Total tax - 144 70 --------------- ----------------- --------------TOTAL TAX ON PROFITSTotal current tax 2,454 2,510 5,129Total deferred tax 268 248 626 --------------- ----------------- --------------Total tax 2,722 2,758 5,755 --------------- ----------------- --------------Effective tax rate 32.5% 32.5% 32.7%Effective tax rate on normalised profits 32.3% 32.7% 32.7% Normalised profit is the profit before tax excluding exceptional gains andpreference dividends. 4. ORDINARY DIVIDENDS The Directors have declared an interim dividend of 5.63p for the £1 'A' ordinaryshares and unquoted £1 'C' ordinary shares, and 0.563p for the unquoted 10 pence'B' shares payable on 6 January 2006. 26 weeks to 26 weeks to 53 weeks to 1 October 25 September 2 April 2005 2004 2005 pence pence penceInterim 5.63 5.36 5.36Final - - 13.10 --------------- ----------------- -------------- 5.63 5.36 18.46 --------------- ----------------- -------------- The pence figures above are for the £1 'A' ordinary shares and unquoted £1 'C'ordinary shares. The unquoted 10p 'B' share carry dividend rights of 1/10 ofthose applicable to the £1 'A' ordinary shares. Own shares held in the Fuller,Smith & Turner P.L.C. Employee Share Trust 1998 do not qualify for dividends asthe trustees have waived their rights. Dividends are also not paid on sharesheld as treasury shares. 5. EARNINGS PER SHARE 26 weeks to 26 weeks to 53 weeks to 1 October 25 September 2 April 2005 2004 2005 £000 £000 £000 Restated RestatedProfit attributable to equity shareholders 5,646 5,656 11,745Profit on disposal of properties net of tax (337) (162) --------------- --------------- ---------------Normalised earnings attributable to equity shareholders 5,646 5,319 11,583 --------------- --------------- --------------- Number Number NumberWeighted average share capital 22,328,000 22,469,000 22,411,000Dilutive outstanding options 232,000 127,000 202,000 --------------- --------------- ---------------Adjusted weighted average share capital 22,560,000 22,596,000 22,613,000 --------------- --------------- --------------- £1 'A' ordinary shares or unquoted £1 'C' ordinary shares Pence Pence PenceBasic earnings per share 25.29 25.17 52.41Diluted earnings per share 25.03 25.03 51.94Normalised earnings per share 25.29 23.67 51.68 Unquoted 10p 'B' ordinary shares Pence Pence PenceBasic earnings per share 2.53 2.52 5.24Diluted earnings per share 2.50 2.50 5.19Normalised earnings per share 2.53 2.37 5.17 The calculation is based on earnings from continuing total operations (afterdeducting preference dividends) and on the weighted average ordinary sharecapital. Normalised earnings exclude all post-tax property impairments anddisposals as they can often distort the underlying performance of the Company. 6. RECONCILIATION OF MOVEMENTS IN TOTAL EQUITY 26 weeks to 26 weeks to 53 weeks to 1 October 25 September 2 April 2005 2004 2005 £000 £000 £000 Restated Restated Opening total equity 152,283 146,986 146,986Adjustments relating to the adoption of IAS 32 & 39 (1,600) - - --------------- --------------- --------------Opening equity restated 150,683 146,986 146,986 --------------- --------------- --------------Net actuarial gain/(loss) on pension schemes 1,053 (1,541) (1,671)Reversal of deferred tax liability due to indexation 237 332 537 --------------- --------------- --------------Net gains and losses not recognised in Income Statement 1,290 (1,209) (1,134) --------------- --------------- --------------Net profit for the period 5,646 5,656 11,745Dividends declared and paid (2,923) (2,753) (3,956)Issue of ordinary share capital 124 215 413Cost of share based payments 462 432 839Own shares purchased including treasury shares (1,234) (2,001) (2,751)Shares released including treasury shares 255 146 141Net other movements in the period 2,330 1,695 6,431 -------------- -------------- --------------Closing total equity 154,303 147,472 152,283 ======= ======= =======- 7. SHAREHOLDERS' INFORMATION Shareholders who converted their £1 'A' ordinary shares to £1 'C' ordinaryshares are reminded that they have 30 days from 25 November 2005 should theywish to reconvert those 'C' shares back to 'A' shares. The next availableopportunity after that will be June 2006. For further details please contactthe Company Secretariat on 020 8996 2115. 8. INTERIM REPORT Copies of the interim report are being sent to shareholders and will beavailable from the Company's registered office: Griffin Brewery, Chiswick,London W4 2QB and the Company's website www.fullers.co.uk. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Fuller Smith & Turner