23rd Nov 2007 07:01
Fuller,Smith&Turner PLC23 November 2007 STRICTLY EMBARGOEDUNTIL 7AM FRIDAY 23 NOVEMBER 2007 FULLER SMITH & TURNER P.L.C. Financial results for the 26 weeks ended 29 September 2007 Financial Highlights • Revenue up 3% to £93.3 million (2006: £91.1 million)• Profit before tax up 16% to £12.7 million (2006: £10.9 million)• Adjusted profits (1) up 11% to £12.1 million (2006: £10.9 million)• EBITDA (2) up 3% to £21.0 million (2006: £20.4 million)• Basic earnings per share (3) up 52% to 20.34p (2006: 13.42p)• Adjusted earnings per share (4) up 13% to 15.18p (2006: 13.42p)• Interim dividend (3) up 8% to 2.80p (2006: 2.59p) Corporate Progress • Managed invested like for like sales (5) up 5.3%• Fuller's Inns operating profits up 4%• Fuller's Beer Company operating profits up 2%• Interest cover up to 4.6 times• Five for two share split completed in August 2007• Successor to Finance Director already on the Board 1 Adjusted profit is the profit before tax excluding exceptional items.2 Pre-exceptional earnings before interest, tax, depreciation and amortisation.3 Calculated on a 40p ordinary share.4 Calculated using adjusted profits after tax and the same weighted average number of shares as for the basic earnings per share and using a 40p ordinary share.5 Invested like for like sales comprise all pubs in the managed estate, excepting acquisitions, transfers or disposals and with comparatives adjusted for refurbishment closures. Commenting on the results, Michael Turner, Chairman of Fuller's, said: "We have had a very pleasing start to the year across all parts of the businessand I am delighted to report another record-breaking set of results. Ouradjusted profits increased by 11% to £12.1 million (2006: £10.9 million) and,following an exceptional gain of £0.6 million on property disposals, ourstatutory profit before tax increased by 16% to £12.7 million (2006: £10.9million). Our adjusted earnings per share increased by 13% to 15.18p (2006:13.42p). "The profit after tax increased by 52% to £11.4 million from £7.5 million,benefiting substantially from a £2.5 million non-recurring tax credit relatingto the changes in future Corporation Tax rates. This one-off tax credit alsohelped boost basic earnings per share by 52% to 20.34p (2006: 13.42p). "We have a strong geographical balance across London and the South of Englandand we continue to seek to acquire additional sites and to manage our portfoliobetween the Managed and Tenanted divisions. Our investment in outside areas,marketing and focus on creating the best pub in any area ensure that we are wellpositioned to deal with the winter impact of the smoking ban. "The money raised from the sale of two hotels last year has enabled us to reduceour net debt and our gearing, reinforcing our strong position to access fundsfor further acquisitions. "The strong increase in the interim dividend reflects our confidence in ourfinancial strength and the potential for future growth. "We will continue to use the skills of our people to implement our long-termstrategy, maintain our profits growth and deliver good returns for ourshareholders." - Ends - For further information, please contact:Fuller Smith & Turner P.L.C.Press Office 020 8996 2175 / 2048 / 2198 07831 299801 / 07748 657 854 (mobile) E-mail: [email protected] Michael Turner, Chairman: Press 020 8996 2048Paul Clarke, Finance Director: Analysts 020 8996 2048 Merlin 020 7653 6620Paul Downes 07900 244888 (mobile)Vanessa Maydon 07802 961902 (mobile)Anja Kharlamova 07887 884788 (mobile) Notes to Editors For an official photograph, please e-mail [email protected] and one willautomatically be sent by return on receipt of your e-mail. Copies of this statement, the Half Year Statement and results presentation willbe available on the Company's website, www.fullers.co.uk. Attached: Chairman's Statement Financial Highlights Unaudited Condensed Group Income Statement Unaudited Condensed Group Balance Sheet Unaudited Condensed Group Cash Flow Statement Unaudited Condensed Statement of Recognised Income and Expenditure Notes to the Financial Statements FULLER SMITH & TURNER P.L.C. HALF YEAR RESULTS FOR THE 26 WEEKS ENDED 29 SEPTEMBER 2007 CHAIRMAN'S STATEMENT Whatever You Do, Take Pride We have had a very pleasing start to the year across all parts of the businessand I am delighted to report another record-breaking set of results. Ouradjusted profits increased by 11% to £12.1 million (2006: £10.9 million) and,following an exceptional gain of £0.6 million on property disposals, ourstatutory profit before tax increased by 16% to £12.7 million (2006: £10.9million). Our adjusted earnings per share increased by 13% to 15.18p (2006:13.42p). On an increase in revenue of 3% to £93.3 million (2006: £91.1 million),EBITDA was up 3% to £21.0 million (2006: £20.4 million). The profit after tax increased by 52% to £11.4 million from £7.5 million,benefiting substantially from a £2.5 million non-recurring tax credit relatingto the changes in future Corporation Tax rates. This one-off tax credit alsohelped boost basic earnings per share by 52% to 20.34p (2006: 13.42p). Strong trading and the sale of the Master Brewer and Brigstow hotels in theprior financial year has had a positive effect on our net debt, which has beenreduced to £103.7 million (2006: £127.4 million), lowering our gearing from80.7% to 54.1%. In consequence, our interest cover has risen to 4.6 times (2006:3.6 times). Fuller's Inns has performed well, with operating profits rising by 4% to £13.3million (2006: £12.7 million) and revenue increasing by 1% to £73.5 million(2006: £72.3 million). Total growth was moderated by the disposal of the twohotels in the second half of last year, which raised £35.6 million. Our investedlike for like sales in the managed estate have increased by 5.3%, one of thebest growth rates in the industry. This figure is particularly satisfying in thecontext of the unusual summer we have experienced this year. The Fuller's Beer Company has also shown a solid half year performance, withoperating profits rising by 2% to £3.5 million (2006: £3.4 million) and revenueincreasing by 4% to £30.3 million (2006: £29.1 million). London Pride again grewits market share and volumes in all markets, and we were delighted with thesuccess of our recent sponsorships in golf and the London Marathon. As previously announced, we made a cash injection of £8.0 million into theGroup's pension fund in April 2007 to reduce the scheme deficit, which is nowdown to £3.3 million (2006: £21.9 million). In addition, we spent £2.1 millionbuying back 288,000 40p 'A' ordinary shares. We completed the five for two sharesplit for all classes of ordinary shares on 6 August 2007. We continue to focus on providing good returns for our shareholders. Reflectingits confidence in the Company's financial strength and outlook for continuinggrowth, the Board has increased the interim dividend by 8% to 2.80p per 40p 'A'and 'C' ordinary share and 0.28p per 4p 'B' ordinary share. This will be paid onFriday 4 January 2008, to shareholders on the share register as at Friday 14December 2007. FULLER'S INNS Fuller's Inns has had a good first half despite the arrival of the smoking banand unusual summer weather. Operating profits are up by 4% to £13.3 million(2006: £12.7 million) and revenue has increased by 1% to £73.5 million (2006:£72.3 million). Revenue has increased by 5% when adjusted for the effect of thesale of the two hotels. We have spent the last few years refining our business and we are now reapingthe benefits. We continually improve the decor and facilities in our estate andwe start every major refurbishment by running a series of customer focus groups,which creates a feeling of community involvement. The money already invested in developing and promoting our outside areas put usin a strong position when the smoking ban was implemented. All our customershave clearly appreciated the efforts made outside our pubs and Fuller's took allthree top places in the pub and restaurant category at the London in Bloomawards. Although it is still too early to definitively discern the true impactof the smoking ban, we approach the winter with cautious optimism and 90% of ourpubs have a specific provision for smokers. At the end of September, our estate stood at 363 premises, comprising 150managed pubs, six hotels and 207 tenanted or leased pubs. Managed Pubs Our Managed Pubs continue to perform well, with operating profits up by 4% andrevenue up by 5%. This growth has come from a number of income streams includingincreased food sales and a rise in occupancy for pubs with accommodation. Theinput from our Hotels team has had a positive impact in our pub bedrooms and weanticipate further growth in this area. We have continued to build on our key differentiators of outstanding caskconditioned ales, delicious food, great wines and exemplary service. Inparticular, we are reaping the benefits of our chef training programme, whichhas helped us to develop kitchen personnel through the ranks into great chefs.The increasing focus on using local produce to make freshly cooked dishes hashad a positive effect on food sales, which have risen by 11%, with food nowaccounting for 29% of the total sales mix (2006: 27%). As well as developing our chefs, we invest heavily in all our pub staff and runstructured training programmes that are constantly improved and developed. OurRetail Sales Development Programme, aimed at bar staff, has helped to identifythe managers of the future and many former bar members are now running their ownpubs. This helps breed a culture of exemplary service and the results of ourMystery Customer initiative, which has been running for around six years, showthat our service gets even better every year. We acquired two new managed pubs during the period, namely the Ivy House atChalfont St Giles and the Pilgrims Inn near Southampton, transferred seven sitesto tenancy, and completed nine major projects (2006: 11). We are constantly trying to reduce our carbon footprint with a number ofinitiatives including energy monitoring and glass crushers in many of our pubs.We have also introduced fairtrade tea and coffee across the estate and weactively try to use local food suppliers where possible. Our retail marketing team have excelled in creating interesting and innovativeevents and ideas to attract new customers and encourage our existing customersto stay longer. Exciting events, organic growth and the constant development ofour people, combined with maintaining our high standards and focusing on ourfour key differentiators, will help us to grow our managed business in thefuture. Tenanted Pubs Our Tenanted Pubs division has delivered continued good performance with revenueup 6% and operating profits rising by 9%. Our average turnover per pub hasincreased by 4.5%, reflecting a positive underlying trend and the benefits ofcontinuous improvement in the quality of our tenanted sites. The biggest challenge facing any tenanted pub operator is recruiting the rightlicensees and, during the first half, we employed additional in-house resourceto support this process. We have also improved the range of training availableto tenants and lessees, and implemented a food development programme to helpcombat any impact from the smoking ban. Fuller's Hotels Following the disposal of two hotels in the second half of last year, we nowhave an estate of six quality hotels within the M25 area. These have produced astrong performance and, on a like for like basis, revenue is up by 7%, operatingprofits are up by 10%, and RevPar has increased by 8%. THE FULLER'S BEER COMPANY The Fuller's Beer Company has had a steady first half with operating profits upby 2% to £3.5 million (2006: £3.4 million) and revenue up by 4% to £30.3 million(2006: £29.1 million). We have now installed three new bright beer tanks, whichwill substantially increase our capacity to produce packaged and keg beers forour growing export and off trade business. Own beer volumes rose by 4%, with growth in all sectors. Foreign beer volumes,however, fell by 2% in what was a poor summer for lager sales. Overall, totalbeer volumes have increased by 2%, which is particularly pleasing as the UKmarket has fallen by 4%. Own beer volumes in the off trade grew by 3% andexports grew by 20%. London Pride has again grown its market share and volumes in all sectors and hasbenefited from continued marketing investment. Our support of the LondonMarathon resulted in excellent exposure on television and we have continued tostrengthen our involvement with golf, building on our position as the OfficialBeer of the English Golf Union. In addition, in October 2007 we were theofficial beer sponsor of the HSBC World Match Play at Wentworth, which againprovided significant television exposure for the brand. Our other brands have also performed well and we were delighted that four of ourbeers were featured in the International Beer Challenge World's 50 Best Beers -London Pride, ESB, London Porter and Discovery Blonde Beer. In addition, LondonPorter took the title of World's Best Porter at the World Beer Awards 2007. Our Wine Division also delivered a strong performance with profits up 12%. Muchof this growth came from the success of our agency wines and through new freetrade accounts attracted by our extensive portfolio of interesting wines. TRADING UPDATE In the 33 weeks to 17 November 2007, Fuller's Inns saw invested like for likesales in its managed pubs increase by 5.0%. Tenanted Pubs and Hotels continue tomake further progress, in line with expectations. Fuller's Beer Company volumesalso continued to show pleasing growth in a competitive market place. Since the half year end we have disposed of two tenanted pubs and two unlicensedproperties, raising £5 million on which there will be an exceptional gain of £4million. The next interim management statement will be issued on 1 February 2008. PROSPECTS We are pleased with the start to the financial year, with good results achievedacross the Company, although we are now in a more uncertain environment. Thesummer provided interesting challenges but, thanks to good planning, preparationand investment, we minimised any negative impact. We have a strong geographical balance across London and the South of England andwe continue to seek to acquire additional sites and to manage our portfoliobetween the Managed and Tenanted divisions. Our investment in outside areas,marketing and focus on creating the best pub in any area ensure that we are wellpositioned to deal with the winter impact of the smoking ban. The money raised from the sale of two hotels last year has enabled us to reduceour net debt and our gearing, reinforcing our strong position to access fundsfor further acquisitions. The strong increase in the interim dividend reflects our confidence in ourfinancial strength and the potential for future growth. Fuller's has a strong management team and a new Finance Director, James Douglas,has joined the Board to take over when Paul Clarke retires next year. We willcontinue to use the skills of our people to implement our long-term strategy,maintain our profits growth and deliver good returns for our shareholders. Michael TurnerChairman23 November 2007 FULLER SMITH & TURNER P.L.C.FINANCIAL HIGHLIGHTSFOR THE 26 WEEKS ENDED 29 SEPTEMBER 2007 Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September Change 31 March 2007 2006 2007/2006 2007 £m £m £m ____________ ____________ ____________ _____________ Revenue 93.3 91.1 3% 178.2Profit before tax 12.7 10.9 16% 42.2Adjusted profits 1 12.1 10.9 11% 22.1EBITDA 2 21.0 20.4 3% 40.7Basic earnings per share 3 20.34p 13.42p 52% 52.14pAdjusted earnings per share 4 15.18p 13.42p 13% 27.58pDividend per share 3 2.80p 2.59p 8% 9.09pGearing ratio 54.1% 80.7% N/A 52.8% ____________ ____________ ____________ _____________ 1 Adjusted profit is the profit before tax excluding exceptional items.2 Pre-exceptional earnings before interest, tax, depreciation and amortisation.3 Calculated on a 40p ordinary share.4 Calculated using adjusted profits after tax and the same weighted average number of shares as for the basic earnings per share and using a 40p ordinary share. FULLER SMITH & TURNER P.L.C.CONDENSED GROUP INCOME STATEMENT Unaudited 26 weeks to 29 September 2007 Before exceptional Exceptional items items Total Note £m £m £m Revenue 93.3 - 93.3 Operating costs (77.8) - (77.8) ------------- ------------- -------------Operating profit 15.5 - 15.5 Profit on disposal of properties 3 - 0.6 0.6Finance revenue 0.1 - 0.1Finance costs 4 (3.5) - (3.5) ------------- ------------- -------------Profit before tax 12.1 0.6 12.7Taxation 5 (3.6) 2.3 (1.3) ------------- ------------- -------------Profit for the period attributable to equity shareholders of the Parent Company 8.5 2.9 11.4 ======== ======== ======== Unaudited 26 weeks to 30 September 2006 Before exceptional Exceptional items items Total £m £m £m Revenue 91.1 - 91.1 Operating costs (76.0) - (76.0) ------------- ------------- -------------Operating profit 15.1 - 15.1 Profit on disposal of properties 3 - - -Finance revenue 0.1 - 0.1Finance costs 4 (4.3) - (4.3) ------------- ------------- -------------Profit before tax 10.9 - 10.9Taxation 5 (3.4) - (3.4) ------------- ------------- -------------Profit for the period attributable to equity shareholders of the Parent Company 7.5 - 7.5 ======== ======== ======== Audited 52 weeks to 31 March 2007 Before exceptional Exceptional items items Total Note £m £m £m Revenue 178.2 - 178.2 Operating costs (148.4) (0.4) (148.8) ------------- ------------- -------------Operating profit 29.8 (0.4) 29.4 Profit on disposal of properties 3 - 20.5 20.5Finance revenue 0.4 - 0.4Finance costs 4 (8.1) - (8.1) ------------- ------------- ------------- Profit before tax 22.1 20.1 42.2Taxation 5 (6.7) (6.4) (13.1) ------------- ------------- -------------Profit for the year attributable to equity shareholders of the Parent Company 15.4 13.7 29.1 ======== ======== ======== EARNINGS PER SHARE 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007Per 40p 'A' ordinary share or unquoted 40p 'C'ordinary shareBasic 6 20.34p 13.42p 52.14pDiluted 6 20.07p 13.26p 51.52pAdjusted basis 6 15.18p 13.42p 27.58pDiluted adjusted basis 6 14.98p 13.26p 27.25p Per unquoted 4p 'B' ordinary shareBasic 6 2.03p 1.34p 5.21pDiluted 6 2.01p 1.33p 5.15pAdjusted basis 6 1.52p 1.34p 2.76pDiluted adjusted basis 6 1.50p 1.33p 2.73p The results and EPS measures above are all in respect of continuing operationsof the Group. Earnings per share measures for the 26 weeks to 30 September 2006 and the 52weeks to 31 March 2007 have been restated for the effects of the five for twoshare split (note 6) as if the share split had occurred on the first day ofthese periods. FULLER SMITH & TURNER P.L.C.CONDENSED GROUP BALANCE SHEET29 SEPTEMBER 2007 Unaudited Unaudited Audited At At At 29 September 30 September 31 March 2007 2006 2007 Note £m £m £mNon-current assetsGoodwill 24.5 24.5 24.5Property, plant and equipment 8 311.2 306.8 307.1Investment properties 4.0 8.3 4.0Financial assets 1.0 - 1.2Other non-current assets 0.9 0.9 1.0Deferred tax assets 4.0 7.7 8.1 ------------- ------------- -------------Total non-current assets 345.6 348.2 345.9 Current assetsInventories 5.8 5.9 5.4Trade and other receivables 16.5 14.9 15.0Cash and short term deposits 1.3 1.3 8.9 ------------- ------------- -------------Total current assets 23.6 22.1 29.3 Assets classified as held for sale 6.9 9.3 6.5 Current liabilitiesBank overdraft 2.5 0.1 -Bank loans 5.0 5.0 5.0Loan notes 2.4 - 2.8Trade and other payables 35.8 34.5 33.9Current tax payable 2.3 2.8 2.7 ------------- ------------- -------------Total current liabilities 48.0 42.4 44.4 Non-current liabilitiesBank loans 66.5 92.0 69.0Debenture stock 27.0 27.0 27.0Loan notes - 3.0 -Preference shares 1.6 1.6 1.6Retirement benefit obligations 11 3.3 21.9 16.0Deferred tax liabilities 38.0 33.9 41.0 ------------- ------------- -------------Total non-current liabilities 136.4 179.4 154.6 ------------- ------------- -------------Net assets 191.7 157.8 182.7 ======== ======== ========Capital and reservesShare capital 22.8 22.8 22.8Share premium account 4.8 4.6 4.7Capital redemption reserve 3.1 3.1 3.1Own shares (6.7) (4.9) (5.2)Retained earnings 167.7 132.2 157.3 ------------- ------------- -------------Total shareholders' equity 9 191.7 157.8 182.7 ======== ======== ======== FULLER SMITH & TURNER P.L.C.CONDENSED GROUP CASH FLOW STATEMENTFOR THE 26 WEEKS ENDED 29 SEPTEMBER 2007 Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007 Note £m £m £m Group operating profit before exceptional items 15.5 15.1 29.8Depreciation 5.5 5.3 10.8Loss on disposal of property, plant and equipment - - 0.1Difference between pension charge and cash paid (8.4) (1.0) (3.1)Share-based payment charges 0.8 0.7 1.4Change in trade and other receivables (1.4) (0.3) (0.3)Change in inventories (0.4) (0.4) 0.1Change in trade and other payables 1.8 (0.4) (0.9) ------------- ------------- -------------Cash generated from operations 13.4 19.0 37.9Tax paid (2.2) (1.8) (5.1) ------------- ------------- -------------Cash generated from operating activities 11.2 17.2 32.8 ------------- ------------- -------------Cash flow from investing activitiesPurchase of property, plant and equipment (11.2) (6.6) (21.7)Sale of property, plant and equipment 1.9 1.3 37.7Interest received 0.1 0.1 0.4 ------------- ------------- -------------Net cash (outflow)/inflow from investing activities (9.2) (5.2) 16.4 ------------- ------------- -------------Cash flow from financing activitiesProceeds from issue of share capital 0.1 0.4 0.5Purchase of own shares (2.5) (2.8) (3.6)Sale of own shares to option schemes 0.2 0.3 0.3Interest paid (3.3) (4.0) (8.1)Preference dividends paid (0.1) (0.1) (0.1)Equity dividends paid (3.6) (3.2) (4.7)Repayment of loan notes (0.4) - (0.2)Repayment of bank loans (2.5) (2.5) (25.5) ------------- ------------- -------------Net cash outflow from financing activities (12.1) (11.9) (41.4) ------------- ------------- -------------Net movement in cash and cash equivalents 10 (10.1) 0.1 7.8Cash and cash equivalents at the start of the period 8.9 1.1 1.1 ------------- ------------- -------------Cash and cash equivalents at period end (1.2) 1.2 8.9 ======== ======== ======== Cash and cash equivalents comprise cash and other short term highly liquidinvestments with a maturity of three months or less. There were no significant non-cash transactions during any period. FULLER SMITH & TURNER P.L.C.CONDENSED STATEMENT OF RECOGNISED INCOME AND EXPENSEFOR THE 26 WEEKS ENDED 29 SEPTEMBER 2007 Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007 Note £m £m £m Reduction in deferred tax liability due to 0.1 0.2 0.4indexationNet (losses)/gains on valuation of financial assets (0.1) - 0.8Deferred tax on share-based payments (0.1) - 1.0Deferred tax adjustment for change in corporation tax rate (0.3) - -Net actuarial gains/(losses) on pension schemes 4.3 (1.1) 2.5Deferred tax on actuarial gains and losses on (1.3) 0.3 (0.7)pension schemes ------------- ------------- -------------Income and expense recognised directly in equity 2.6 (0.6) 4.0Profit for the period 11.4 7.5 29.1 ------------- ------------- -------------Total recognised income and expense for the period 9 14.0 6.9 33.1 ======== ======== ======== FULLER SMITH & TURNER P.L.C.NOTES TO THE FINANCIAL STATEMENTS 1. HALF YEAR REPORT Basis of preparation These half year financial statements for the 26 weeks to 29 September 2007,which are abridged and unaudited, have been prepared in accordance with theDisclosure and Transparency Rules of the Financial Services Authority andInternational Accounting Standard (IAS) 34, Interim Financial Reporting. IFRS7, Financial Instruments: Disclosures, and IAS 1, Presentation of FinancialStatements, will be applied for the first time for the 52 weeks to 29 March2008, however these standards do not impact the financial statements for the 26weeks to 29 September 2007. Otherwise, the accounting policies adopted areconsistent with those applied in the 52 weeks to 31 March 2007, which arepublished as part of the accounts for that year and which are available from theGroup's website, www.fullers.co.uk. The taxation charge is calculated by applying the Directors' best estimate ofthe annual effective tax rate to the profit for the period. The half year financial statements were approved by the Directors on 23 November2007. This half year statement does not constitute full accounts as defined by Section240 of the Companies Act 1985. The figures for the 52 weeks to 31 March 2007are derived from the published statutory accounts. Full accounts for the 52weeks to 31 March 2007, including an unqualified auditors' report which did notmake any statement under Section 237 of the Companies Act 1985, have beendelivered to the Registrar of Companies. 2. SEGMENTAL ANALYSIS Fuller's Beer Unaudited - 26 weeks to 29 September 2007 Fuller's Inns Company Unallocated Total £m £m £m £mRevenueSegment revenue 73.5 30.3 - 103.8Inter-segment sales - (10.5) - (10.5) ------------- ------------- ------------- -------------Revenue from third parties 73.5 19.8 - 93.3 ------------- ------------- ------------- -------------Operating profit 13.3 3.5 (1.3) 15.5Profit on disposal of properties 0.4 0.2 - 0.6Net finance costs - - (3.4) (3.4) ------------- ------------- ------------- -------------Profit before tax 13.7 3.7 (4.7) 12.7 ======== ======== ======== ======== Fuller's Beer Unaudited - 26 weeks to 30 September 2006* Fuller's Inns Company Unallocated Total £m £m £m £mRevenueSegment revenue 72.3 29.1 - 101.4Inter-segment sales - (10.3) - (10.3) ------------- ------------- ------------- -------------Revenue from third parties 72.3 18.8 - 91.1 ------------- ------------- ------------- -------------Operating profit 12.7 3.4 (1.0) 15.1Profit on disposal of properties - - - -Net finance costs - - (4.2) (4.2) ------------- ------------- ------------- -------------Profit before tax 12.7 3.4 (5.2) 10.9 ======== ======== ======== ======== In line with the presentation in the accounts to 31 March 2007, unallocatedamounts in the analysis for the 26 weeks to 30 September 2006 have been revisedto better reflect the extent to which these costs are attributable to theoperations. Fuller's Beer Audited - 52 weeks to 31 March 2007 Fuller's Inns Company Unallocated Total £m £m £m £mRevenueSegment revenue 140.9 58.4 - 199.3Inter-segment sales - (21.1) - (21.1) ------------- ------------- ------------- -------------Revenue from third parties 140.9 37.3 - 178.2 ------------- ------------- ------------- -------------Operating profit pre-exceptionals 24.0 7.9 (2.1) 29.8Operating exceptional items (0.4) - - (0.4) ------------- ------------- ------------- -------------Operating profit 23.6 7.9 (2.1) 29.4Profit on disposal of properties 20.5 - - 20.5Net finance costs - - (7.7) (7.7) ------------- ------------- ------------- -------------Profit before tax 44.1 7.9 (9.8) 42.2 ======== ======== ======== ======== 3. EXCEPTIONAL ITEMS Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007 £m £m £mPropertyProfit on disposal of properties 0.6 - 20.5Write down of assets held for sale - - (0.4) ------------- ------------- -------------Total exceptional items before tax 0.6 - 20.1 ======== ======== ======== The profit on disposal of properties during the 52 weeks to 31 March 2007relates in the main to the disposal of the Brigstow and Master Brewer Hotels. 4. FINANCE COSTS Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007 £m £m £mPreference dividends 0.1 0.1 0.1Finance charge on net pension liabilities - 0.1 0.2Interest payable on bank loans, loan notes and overdraft 2.3 3.0 5.6Interest payable on debentures 1.1 1.1 2.2 ------------- ------------- ------------- 3.5 4.3 8.1 ======== ======== ======== 5. TAXATION Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007 £m £m £mTax on profit on ordinary activitiesCurrent income tax:Corporation tax 1.7 3.2 6.5Amounts overprovided in previous periods - - (0.2) ------------- ------------- -------------Total current income tax 1.7 3.2 6.3 ------------- ------------- -------------Deferred tax:Origination and reversal of temporary differences 2.3 0.2 6.6Credit in relation to change in corporation tax rate (2.7) - -Amounts underprovided in previous periods - - 0.2 ------------- ------------- -------------Total deferred tax (0.4) 0.2 6.8 ------------- ------------- -------------Total tax charged in the income statement 1.3 3.4 13.1 ======== ======== ======== Tax relating to items charged/(credited) to equityDeferred tax:Reduction in deferred tax liability due to indexation (0.1) (0.2) (0.4)Actuarial gains/(losses) on pension schemes 1.3 (0.3) 0.7Financial assets (0.1) - 0.4Share-based payments 0.1 - (1.0)Charge in relation to change in corporation tax rate 0.3 - - ------------- ------------- -------------Tax charge/(credit) included in the statement of recognised income and expense 1.5 (0.5) (0.3) ======== ======== ======== During the period Finance Act 2007 has been "substantively enacted". The mainimpact is that the rate of UK corporation tax will reduce from 30% to 28% from 1April 2008. To the extent that this rate change will affect the amount offuture cash tax payments to be made by the Group, this will reduce the size ofboth the Group's balance sheet deferred tax liability and deferred tax asset. The impact in the 26 weeks to 29 September 2007 is a credit to the IncomeStatement of £2.7 million, of which £2.5 million has been recognised as anexceptional item, and a further charge to equity of £0.3 million. 6. EARNINGS PER SHARE Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007 £m £m £mProfit attributable to equity shareholders 11.4 7.5 29.1Exceptional items net of tax (2.9) - (13.7) ------------- ------------- -------------Adjusted earnings attributable to equity shareholders 8.5 7.5 15.4 ======== ======== ======== Number Number NumberWeighted average share capital 55,834,000 55,775,000 55,838,000Dilutive outstanding options 749,000 660,000 665,000 ------------- ------------- -------------Diluted weighted average share capital 56,583,000 56,435,000 56,503,000 ======== ======== ======== 40p 'A' ordinary shares or unquoted 40p 'C' ordinary Pence Pence PencesharesBasic earnings per share 20.34 13.42 52.14Diluted earnings per share 20.07 13.26 51.52Adjusted earnings per share 15.18 13.42 27.58Diluted adjusted earnings per share 14.98 13.26 27.25 Unquoted 4p 'B' ordinary shares Pence Pence PenceBasic earnings per share 2.03 1.34 5.21Diluted earnings per share 2.01 1.33 5.15Adjusted earnings per share 1.52 1.34 2.76Diluted adjusted earnings per share 1.50 1.33 2.73 During the period the shareholders of the Company agreed a sub-division of eachof the three classes of ordinary shares "the share split". Every two £1 'A'ordinary or £1 'C' ordinary shares became five new 40p 'A' ordinary or 40p 'C'ordinary shares and every two 10p 'B' shares became five 4p 'B' shares. Thiswas completed on 6 August 2007. The earnings per share calculation is based on earnings from continuing andtotal operations (after deducting preference dividends) and on the weightedaverage ordinary share capital which excludes shares held by trusts relating toemployee share options and shares held in treasury. Comparative information forthe 26 weeks to 30 September 2006 and the 52 weeks to 31 March 2007 have beenrestated for the effects of the share split. Diluted earnings per share are calculated on the same earnings figure as forbasic earnings per share, divided by the weighted average number of ordinaryshares outstanding during the period plus the weighted average number ofordinary shares that would be issued on the conversion of all the dilutivepotential ordinary shares into ordinary shares. Adjusted earnings per share are calculated on earnings excluding exceptionalitems and on the same weighted average ordinary share capital as for the basic earnings per share. 7. DIVIDENDS Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007 £m £m £mDeclared and paid during the periodEquity dividends on ordinary shares:Final dividend paid in the period 3.6 3.2 3.2Interim dividend paid in the period - - 1.5 ------------- ------------- -------------Equity dividends paid (note 9) 3.6 3.2 4.7 ======== ======== ======== ------------- ------------- -------------Dividends on cumulative preference shares (note 4) 0.1 0.1 0.1 ======== ======== ======== Dividends per 40p 'A' ordinary share or unquoted 40p 'C'ordinary share declared in respect of the period Pence Pence PenceInterim 2.80 2.59 2.59Final - - 6.50 ------------- ------------- ------------- 2.80 2.59 9.09 ======== ======== ======== The pence figures are for the 40p 'A' ordinary shares and unquoted 40p 'C'ordinary shares. The unquoted 4p 'B' ordinary shares carry dividend rights of 1/10 of those applicable to the 40p 'A' ordinary shares. Own shares held in theFuller Smith & Turner P.L.C. Employee Share Trust 1998 do not qualify fordividends as the trustees have waived their rights. Dividends are also not paidon own shares held as treasury shares. Comparative information for the 26 weeksto 30 September 2006 and the 52 weeks to 31 March 2007 have been restated forthe effects of the share split. The directors have declared an interim dividend of 2.80p (2006: 2.59p restatedfor the share split) for the 40p 'A' ordinary shares and unquoted 40p 'C'ordinary shares, and 0.280p (2006: 0.259p restated for the share split) for theunquoted 4p 'B' ordinary shares, with a total estimated cost to the Company of£1.6 million (2006: £1.4 million). 8. PROPERTY, PLANT AND EQUIPMENT Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007 £m £m £mNet book value at start of period 307.1 316.0 316.0Additions 11.2 6.5 21.7Disposals (0.3) (1.2) (17.2)Transfer to assets held for sale (1.4) (9.2) (2.7)Depreciation provided during the period (5.4) (5.3) (10.7) ------------- ------------- -------------Net book value at end of period 311.2 306.8 307.1 ======== ======== ======== 9. RECONCILIATION OF MOVEMENTS IN TOTAL EQUITY Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007 £m £m £m Opening total equity 182.7 155.7 155.7Total recognised income and expense for the period 14.0 6.9 33.1Issues of new shares 0.1 0.3 0.5Shares purchased including treasury shares (2.5) (2.8) (3.6)Shares released including treasury shares 0.2 0.3 0.3Dividends paid (3.6) (3.2) (4.7)Cost of share-based payments 0.8 0.6 1.4 ------------- ------------- -------------Closing total equity 191.7 157.8 182.7 ======== ======== ======== 10. ANALYSIS OF NET DEBT Opening Cash flow Non cash ClosingUnaudited - 26 weeks to 29 September 2007 £m £m £m £mCash and cash equivalentsCash and short term deposits 8.9 (7.6) - 1.3Bank overdraft - (2.5) - (2.5) ------------- ------------- ------------- ------------- 8.9 (10.1) - (1.2) ------------- ------------- ------------- ------------- Debt due within one yearBank loans (5.0) - - (5.0)Loan notes (2.8) 0.4 - (2.4) ------------- ------------- ------------- ------------- Debt due after one yearBank loans (69.0) 2.5 - (66.5)Debenture stock (27.0) - - (27.0)Preference shares (1.6) - - (1.6) ------------- ------------- ------------- -------------Net debt (96.5) (7.2) - (103.7) ======== ======== ======== ======== Opening Cash flow Non cash ClosingUnaudited - 26 weeks to 30 September 2006 £m £m £m £mCash and cash equivalentsCash and short term deposits 1.4 (0.1) - 1.3Bank overdraft (0.3) 0.2 - (0.1) ------------- ------------- ------------- ------------- 1.1 0.1 - 1.2 ------------- ------------- ------------- ------------- Debt due within one yearBank loans (2.5) (2.5) - (5.0) ------------- ------------- ------------- ------------- Debt due after one yearBank loans (97.0) 5.0 - (92.0)Debenture stock (27.0) - - (27.0)Loan notes (3.0) - - (3.0)Preference shares (1.6) - - (1.6) ------------- ------------- ------------- -------------Net debt (130.0) 2.6 - (127.4) ======== ======== ======== ======== Opening Cash flow Non cash ClosingAudited - 52 weeks to 31 March 2007 £m £m £m £mCash and cash equivalentsCash and short term deposits 1.4 7.5 - 8.9Bank overdraft (0.3) 0.3 - - ------------- ------------- ------------- ------------- 1.1 7.8 - 8.9 ------------- ------------- ------------- ------------- Debt due within one yearBank loans (2.5) (2.5) - (5.0)Loan notes - - (2.8) (2.8) ------------- ------------- ------------- ------------- Debt due after one yearBank loans (97.0) 28.0 - (69.0)Debenture stock (27.0) - - (27.0)Loan notes (3.0) 0.2 2.8 -Preference shares (1.6) - - (1.6) ------------- ------------- ------------- -------------Net debt (130.0) 33.5 - (96.5) ======== ======== ======== ======== 11. RETIREMENT BENEFIT OBLIGATIONS Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 29 September 30 September 31 March 2007 2006 2007 £m £m £mMovement in deficit during periodDeficit in scheme at beginning of the period (16.0) (21.6) (21.6)Movement in period: Current service cost (0.9) (0.9) (1.8) Past service cost - (0.1) (0.2) Gain on curtailment - 0.1 0.1 Contributions 9.2 1.8 5.2 Other finance income/(expense) 0.1 (0.1) (0.2) Actuarial gains/(losses) 4.3 (1.1) 2.5 ------------- ------------- -------------Deficit in scheme at end of the period (3.3) (21.9) (16.0) ======== ======== ======== 12. POST BALANCE SHEET EVENT Since 29 September 2007, the Group has sold 4 properties, including 2 tenantedpubs, for £5 million resulting in an exceptional profit on disposal of £4million. As required by IFRS5, Non Current Assets Held for Sale and DiscontinuedOperations, these properties are included within the balance sheet at 29September 2007 under 'Assets classified as held for sale'. 13. PRINCIPAL RISKS AND UNCERTAINTIES The Company faces a number of risks and uncertainties which may affectperformance in the next six months. Principal among these are the impact of newGovernment regulation, notably the Smoking Ban introduced in July 2007, togetherwith the risk that alcohol duties might increase. We remain exposed to theoverall strength of the UK economy and its influence on consumer spending withinthe leisure industry. We continue to have an ongoing exposure to incidentswhich may damage the reputation of the Company or its brands, or our ability tosupply our customers. 14. SHAREHOLDERS' INFORMATION Shareholders holding 40p 'C' ordinary shares are reminded that they have 30 daysfrom 23 November 2007 should they wish to convert those 'C' shares to 'A'shares. The next available opportunity after that will be June 2008. Forfurther details please contact the Company's registrars, Computershare on 0870702 0003. 15. HALF YEAR REPORT Copies of the half year 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. 16. STATEMENT OF DIRECTORS' RESPONSIBILITIES The Directors confirm, to the best of their knowledge, that this condensed setof financial statements has been prepared in accordance with IAS 34, InterimFinancial Reporting, as adopted by the European Union, and that the interimmanagement report herein includes a fair review of the information required byDTR 4.2.7 and DTR 4.2.8. By order of the Board Michael Turner ChairmanPaul Clarke Finance Director23 November 2007 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Fuller Smith & Turner