TIDMYNGA
RNS Number : 0187S
Young & Co's Brewery PLC
11 November 2021
YOUNG & CO.'S BREWERY, P.L.C.
INTERIM RESULTS FOR THE 26 WEEKSED 27 SEPTEMBER 2021
STRONG TRADING BENEFITTING FROM LAST YEAR'S CAPEX PROGRAMME AND
PENT-UP DEMAND
WELL POSITIONED FOR LONG-TERM GROWTH
2021 2020 %
GBPm GBPm change
----------------------------------------------- ------ -------- ------
Revenue(1) 149.6 52.7 +183.9
Net debt 140.3 203.8 +31.2
Net debt to EBITDA(1 2) 3.6x 6.5x
Operating profit/(loss)(1) 27.5 (17.3)
Profit/(loss) before tax from continuing
operations 22.2 (22.2)
Profit before tax from discontinued operations 9.8 0.4
Adjusted EBITDA(1 3) 42.7 1.5
Adjusted operating profit/(loss)(1) (3) 27.1 (14.7)
Adjusted profit/(loss) before tax(1) (3) 21.8 (19.6)
Adjusted basic earnings/(loss) per share(1)
(3) 28.22p (31.80)p
Basic earnings/(loss) per share(1) 17.96p (36.45)p
Interim dividend per share 8.55p -
----------------------------------------------- ------ -------- ------
1 The results exclude the impact of 56 sites which formed a
majority of the Ram Pub Company segment and are disclosed as
discontinued operations. Prior period comparatives have been
restated for the application of IFRS 5 to re-present financial
information in relation to discontinued operations (see notes 1 and
5).
2 Net debt to EBITDA has been calculated based on the last 12
months' actual adjusted EBITDA of GBP38.8 million (see notes 2 for
adjusted EBITDA and 9 for net debt).
3 Reference to an "adjusted" item means that item has been
adjusted to exclude non-underlying items (see note 2 for adjusting
items and note 7 for earnings/(loss) per share).
PERFORMANCE HIGHLIGHTS
-- Total revenue for the period from continuing operations was
GBP149.6 million, with an adjusted EBITDA of GBP42.7 million;
managed house EBITDA for the period was GBP52.2 million
-- For the same 24-week period since reopening on 12 April,
total managed revenue was encouragingly only 1% lower than 2019,
despite operating under significant covid-19 related restrictions
up until 19 July
-- Adjusted operating profit from continuing operations of
GBP27.1 million, and adjusted profit before tax of GBP21.8
million
-- Throughout our successful reopening, we benefited from the
major capex programme in our pubs, hotels and outdoor areas that
was largely undertaken in the last financial year. We have invested
GBP13.1 million during the period. However, our planned capex
programme does not kick into full force until the second half of
the year
-- Completed the sale of 56 tenanted businesses to Punch Pubs
& Co. for a total cash consideration of GBP53.0 million. Our
group strategy is now entirely focused on the development of well
invested, premium managed pubs and hotels in the south of
England
-- Net debt has reduced by GBP108.4 million to GBP140.3 million
since the year-end; headroom versus total committed bank facilities
of GBP188.2 million
-- Following the reopening of our pubs and positive cash
generation in the period, the board has decided that it is
appropriate to resume dividends, with payment of an interim
dividend of 8.55 pence per share. Total payment of GBP5.0 million,
the maximum allowable under current revised banking covenant
restrictions
-- Since the period end, managed house revenue for the last
thirteen weeks was ahead of 2019 by 7.9%, and up 2.7 on a
like-for-like basis
Patrick Dardis, Chief Executive of Young's, commented:
"Trading has been strong since the reopening of our pubs,
benefitting from our capex programme undertaken in the last
financial year and the underlying pent-up demand. I am particularly
pleased with the performance given restrictions were in place for a
significant part of the period. This has helped us celebrate 190
years as a business in a position of strength.
Starting the period in lockdown, our focus was firmly on how we
could safely welcome back as many customers as possible when
restrictions eased. Getting back to the pub has been a feel-good
factor for both our customers and employees, and we were pleased to
see all our pubs and beer gardens full again from mid-July.
We have shown that our pubs are safe and attractive places, that
we are ready to operate - and operate successfully - in both the
challenging times, and in what we believe will be some very good
times ahead. Above all, we continue to work hard to look after our
customers, their loyalty has never wavered. We are well-positioned
for future growth.
The proceeds from the sale of the tenanted pubs further
strengthens our balance sheet, ensuring we have sufficient funds to
invest further in our current estate and capitalise on any
attractive acquisition opportunities that present themselves.
Following the disposal, we are now a focused operator of
well-invested, premium managed pubs and hotels. We expect to
benefit further in future years from the planned capex programme
due to kick start in the second half and are well-positioned to
deliver long-term sustainable growth."
For further information, please contact:
Young & Co.'s Brewery, P.L.C. 020 8875 7000
Patrick Dardis, Chief Executive
Michael Owen, Chief Financial Officer
MHP Communications 020 3128 8742 / 8147
Tim Rowntree/Alistair de Kare-Silver/Robert Collett-Creedy youngs@mhpc.com
INTERIM STATEMENT
Strong trading since the reopening of our pubs has helped us
celebrate 190 years as a business in a position of strength.
With the UK economy in lockdown at the start of the period, we
were keen to get back to business once initial restrictions were
lifted in April. Demand was strong from day one, and we enjoyed
some encouraging trading weeks. Getting back to the pub has been a
feel-good factor for both our customers and employees. We were
pleased to see all our pubs and beer gardens full again from
mid-July. Helped by summer cocktails, Sunday roasts and our new
Burger Shack menu, total managed house revenue was encouragingly
only 1% lower compared with the same 24 weeks for 2019. For the
period, total revenue from ongoing operations was GBP149.6 million
(2020: GBP52.7 million), with adjusted EBITDA from continuing
operations of GBP42.7 million (2020: GBP1.5 million).
In July, we further focussed our business on operating
well-invested, premium managed pubs and hotels when we completed
the sale of most of our tenanted estate. This disposal of 56
tenanted pubs for a total cash consideration of GBP53.0 million to
Punch Pubs & Co cements our move away from operating a tenanted
model. The proceeds from the sale strengthen our balance sheet,
ensuring we have sufficient funds to invest further in our current
estate and capitalise on any attractive acquisition
opportunities.
We have now moved away from any specific additional funding
facilities introduced to help combat the covid-19 uncertainty. We
will not be requesting an extension to the GBP20.0 million
bilateral revolving credit facility with NatWest that matures at
the end of November 2021, and in May 2021 we repaid the GBP30.0
million commercial paper under the Bank of England's Covid
Corporate Financing Facility.
Challenges remain in terms of consumer confidence, and, along
with others in our sector, we face recruitment and staffing
challenges, as well as uncertainty in the supply chain. We are
working constantly with our suppliers on maintaining deliveries,
and ensuring we have advance knowledge of any possible issues.
BUSINESS REVIEW
MANAGED HOUSES
Total managed house revenue for the period was GBP148.9 million,
(2020: GBP52.1 million) with adjusted operating profit of GBP37.1
million compared to the restricted trading period in 2020 where we
recorded an operating loss of GBP7.5 million. For the 24 complete
weeks trading, like-for-like managed sales were 6.7% behind the
same 24 weeks in 2019.
Starting the period in lockdown, our focus was firmly on how we
could safely welcome back as many customers as possible when
restrictions eased. Benefiting from the significant investment in
outdoor space within our managed estate we were able to open 144 of
our pubs on 12 April, representing around three quarters of our
estate. The pent-up demand from customers was already evident.
Advance bookings for our gardens, huts and external space had been
flooding in, and we saw good footfall, down 13% on our 2019 trade
in the first six weeks, despite the ongoing restrictions and having
fewer pubs open.
The remainder of the estate could not be successfully operated
until restrictions on indoor trading were eased. The next phase of
the Government's plans to reopen the economy was crucial for us,
allowing all our pubs and hotels to reopen on 17 May with social
distancing and certain other restrictions.
This was an important step towards normality, but the key date
for us would be 'freedom day', scheduled for 21 June - when most
restrictions were due to be lifted, allowing for larger events and
removing limits on social contact. Unfortunately, facing spikes in
reported cases of covid-19, the Government delayed 'freedom day' by
one month, and restrictions remained until 19 July.
While trading held up well, this delay was disappointing when
the whole country was riding a wave of positivity with England's
progress to the final of the UEFA European Football Championships.
With the existing restrictions remaining in place, we were unable
to take large bookings, and customers had to remain seated inside.
Along with the wet and dull weather through July and August, this
curtailed our progress in the period.
The warm and sunny weather in September was therefore very
welcome, helping us celebrate 190 years of Young's - an event
marked at every Young's pub, from Cambridge to Devon. In London,
our famous dray horses took to the streets for 'The Great Greenwich
Tour', starting at the Richard the First, then from the Cutty Sark
to the Old Brewery, and ending at one of our newest pubs on the
banks of the river Thames, Enderby House.
Throughout our successful reopening, we benefited from the major
capex programme in our pubs, hotels and outdoor areas that was
largely undertaken in the last financial year. This involved
spending close to GBP1.0 million pounds on garden stretch tents,
heaters, and new furniture to ensure we were ready to hit the
ground running. We were also proactive in converting car parks
where licences allowed and adding extra trading space on pavements
and roads adjacent to our pubs, where councils gave us the
freedom.
All this has helped to future proof our business and maintain
trading levels, even in an environment where customers have had a
mixed appetite for the ongoing risks surrounding covid-19. In those
early months, our Young's app played a pivotal role in the customer
journey, accounting for 40% of food and drinks sales - offering the
ability to independently browse our menus, order food and drinks,
and split pay their bills.
Similar to last year, location was a big factor, with sales
across our estate varying considerably based on a pub's geography.
The suburbs of London and down into the southwest continued to
perform well, often trading ahead of where they were two years ago,
as our pubs and hotels benefitted from people working from home, as
well as staycation and weekend visitors taking holidays
locally.
The nature of the restrictions in the early months of the year
meant that initially our pubs operated more like restaurants, as
customers were required to book, be greeted on arrival by a host
and to sit at their tables rather than enjoy the freedom of
vertical drinking. Nonetheless that pent-up demand was a joyous
return as we welcomed customers eager to get out and enjoy being
back at the pub again. Along with the reduced VAT rate, this meant
a six per cent shift to our sales mix in favour of food. Drink
sales ultimately suffered, with the 24 complete weeks trading down
by 13.8% on a like-for-like basis, in comparison to the same
24-week period in 2019, whereas our like-for-like food sales were
up by 13.3%.
Our hotel performance has varied largely based on geography with
those in staycation hotspots benefiting from long periods of
restricted foreign travel, whilst those reliant on business
customers suffered. Accommodation sales gradually picked up as the
period progressed with improved consumer confidence in staying away
from home, but still ended the period behind 2019 by 26.7%, despite
benefitting from the reduced VAT rate.
With our focus on capitalising on the pent-up demand, our
planned development capex programme does not kick into full force
until the second half of the year. However, during the period, we
invested GBP9.0 million in our existing estate, with the standout
being the ongoing work at the Spread Eagle in Wandsworth, a
freehold pub and hotel which will also be home to our new head
office. We are on course to move in during spring 2022.
At the beginning of the period, we completed the freehold
acquisition of the Greenwich Union, a pub located adjacent to our
Richard the First pub. Initially, this provided additional external
trading space for the summer months, but with planning permission
approved we are due to press ahead combining the internal trading
areas. In September we transferred the Grand Junction Arms
(Harlesden) to managed operations, an example of capitalising on
opportunities within our remaining tenanted estate. Now closed for
a full and extensive investment, the transformation of the canal
side pub will be ready to open ahead of the new financial year.
With the limited property movements, we ended the period with
211 managed houses (including 30 hotels), up from 210 at the end of
the last period.
TENANTED DIVISION
Initially, approximately half the businesses in our tenanted
division were unable to open in April due to the lack of viable
external trading space. However, as restrictions began to ease,
most of the remaining pubs opened, and performance was
encouraging.
The sale of most of the tenanted division in the period has
obviously reduced the number of pubs dramatically, and along with
the other movements, we ended the period with just five tenanted
pubs. As a result, combined with the challenging trading
environment in the first half of the period, total turnover was
GBP3.2 million, with an adjusted operating profit of GBP1.0
million.
INVESTMENT AND FINANCE
Adjusting items from continuing operations totalled a profit of
GBP0.4 million, compared with a cost of GBP2.6 million last interim
period.
Apart from the sale of tenanted pubs which completed in August,
we also disposed of the Grove House (Camberwell) earlier in the
year at its full book value. Of the remaining six tenancies an
agreement was signed for the early termination of one lease, for
which we recognised a gain of GBP0.7 million in the period. The
business will continue to trade for the remainder of the financial
year. In September, the Grand Junction Arms (Harlesden) transferred
to the managed house division with tenant compensation cost of
GBP0.2 million. This is in line with our strategy of maximising the
returns of tenanted businesses where there are investment
opportunities to operate as a managed pub.
The remaining GBP0.1 million relates to purchase costs paid for
the Greenwich Union and lease extensions of the Cherry Tree
(Dulwich) and Riverside House.
With the sale of most of our tenancies, a gain on disposal of
GBP9.0 million was the difference between the carrying value of the
assets at disposal and the cash received, less costs, recognised in
discontinued operations.
Our top line trading performance has flowed through to strong
profit conversion and cash generation. Six months of positive
trading cash flow coupled with the sale of our tenanted pubs for a
cash consideration of GBP53.0 million, helped reduce our net debt
to GBP140.3 million, down significantly from the year-end of
GBP248.7 million. At the period end, we had cash of GBP68.2 million
and drawn down facilities of GBP135.0 million, giving us bank debt
headroom of GBP188.2 million, well inside our revised covenant
waivers.
As a result of the reopening of our pubs, the positive trading
and cash generation in the period, the board has decided that it is
appropriate to resume dividends with payment of an interim dividend
in respect of the period ended 27 September 2021.
ESG
As a group, we are committed to operating sustainably and to
continuously finding ways to reduce our carbon footprint. Our
managed houses lie at the heart of the communities in which we
operate, bringing people together and giving us the opportunity to
improve the health and well-being of both our teams and our
customers.
We are founding members of the Zero Carbon Forum and key members
of our leadership team actively participate in their working
groups, sharing ideas, collaborating, and collectively working
towards a net zero future. Our carbon footprint is currently being
calculated and we will announce our net zero commitments and our
short and longer-term ESG targets as part of the group's
preliminary results announcement in May 2022.
In the meantime, we will continue to play an active role in
developing sector wide plans to reduce emissions, whilst further
developing our own ESG initiatives. Examples include continuing to
evolve our menus to increase sustainability - sourcing
predominantly seasonal, premium, British produce; actively working
to reduce the number of food deliveries and, as a result, our food
miles; rolling out a building management system to our pubs to
monitor and reduce energy consumption and the resumption of
training for all general managers and head office line managers as
mental health first aid champions. Further information about our
ESG initiatives and our evolving sustainability strategy will be
provided in the ESG section of our 2022 Annual Report.
CURRENT TRADING AND OUTLOOK
We have come through a difficult period that has hit the
hospitality sector harder than most. If anything, trading in our
pubs has come back stronger than we could have anticipated, and in
many cases ahead of where we were two years ago. Future bookings
are also looking positive. With excitement for the festive season
building week on week, there is potential for a very good second
half. There is now a real sense of enthusiasm and anticipation
across the business for the months and years to come.
Whilst during the period, Central London and the City in
particular were impacted by fewer office workers and foreign
tourists, pub sales in these areas have picked up over the last few
weeks. International travel restrictions are easing, more people
have already returned to the workplace, and company events are
becoming more of a feature, boosting our pubs in London and
elsewhere, with more to come. Over the last 13 weeks these
improvements to trade have been evident with our total sales ahead
of the 2019 comparatives by 7.9%, and up by 2.7% on a like-for-like
basis.
As tough as the last 18 months have been, there is much to
suggest that we have come through it well, and that the business
continues to be in a position of strength. Ongoing support and
loyalty from our shareholders has also been key in ensuring we
remain focused on the long-term. The resilience of our people and
customers has been striking, and the demand for social interaction
and celebrations, things that people have really missed during the
pandemic, shows no sign of abating.
We have shown that our pubs are safe and attractive places, that
we are ready to operate - and operate successfully - in both the
challenging times, and in what we believe will be some very good
times ahead. Above all, we continue to work hard to look after our
customers, whose loyalty has never wavered. We are well-positioned
for future growth.
Patrick Dardis
Chief Executive
10 November 2021
Group income statement
For the 26 weeks ended 27 September 2021
Restated Restated
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
to 27 Sep to 28 Sep to 29 Mar
2021 2020 2021
Notes GBPm GBPm GBPm
------------------------------------------ ----- --------- --------- ---------
Continuing operations
Revenue 3 149.6 52.7 88.0
Other income 4 3.8 0.3 4.7
Operating costs before adjusting
items (126.3) (67.7) (125.9)
------------------------------------------ ----- --------- --------- ---------
Adjusted operating profit/(loss) 27.1 (14.7) (33.2)
Adjusting items 2 0.4 (2.6) (1.3)
------------------------------------------ ----- --------- --------- ---------
Operating profit/(loss) 27.5 (17.3) (34.5)
Finance costs (5.2) (4.8) (9.8)
Finance charge for pension obligations 12 (0.1) (0.1) (0.2)
------------------------------------------ ----- --------- --------- ---------
Profit/(loss) before tax from continuing
operations 22.2 (22.2) (44.5)
Income tax (expense)/credit 6 (11.7) 2.6 6.9
------------------------------------------ ----- --------- --------- ---------
Profit/(loss) after tax for the period
from continuing operations 10.5 (19.6) (37.6)
------------------------------------------ ----- --------- --------- ---------
Discontinued operations
Profit/(loss) after tax for the period
from discontinued operations 5 9.5 0.4 (0.7)
------------------------------------------ ----- --------- --------- ---------
Profit/(loss) for the period attributable
to shareholders of the parent company 20.0 (19.2) (38.3)
------------------------------------------ ----- --------- --------- ---------
Pence Pence Pence
------------------------------------------------ ------ ------- -------
Earnings/(loss) per 12.5p ordinary
share
Basic 7 34.20 (35.70) (68.23)
Diluted 7 34.20 (35.70) (68.23)
------------------------------------------------ ------ ------- -------
Earnings/(loss) per 12.5p ordinary share for continuing
operations
Basic 7 17.96 (36.45) (66.98)
Diluted 7 17.95 (36.45) (66.98)
------------------------------------------------ ------ ------- -------
Prior period comparatives have been restated for the application
of IFRS 5 to re-present financial information in relation to
discontinued operations (see note 1: New Accounting Standards and
Accounting Policies).
Group statement of comprehensive income
For the 26 weeks ended 27 September 2021
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
to 27 Sep to 28 Sep to 29 Mar
2021 2020 2021
Notes GBPm GBPm GBPm
--------------------------------------------- ----- ---------- ---------- ----------
Profit/(loss) for the period 20.0 (19.2) (38.3)
--------------------------------------------- ----- ---------- ---------- ----------
Other comprehensive income
Items that will not be reclassified
subsequently to profit or loss:
Unrealised gain on revaluation of
property - - 9.0
Remeasurement of retirement benefit
schemes 12 1.1 (9.2) 0.9
Tax on above components of other
comprehensive income 6 (14.9) 1.8 (4.0)
Items that will be reclassified subsequently
to profit or loss:
Fair value movement of interest rate
swaps 1.2 0.1 2.5
Tax on fair value movement of interest
rate swaps 6 (0.1) - (0.5)
--------------------------------------------- ----- ---------- ---------- ----------
(12.7) (7.3) 7.9
Total comprehensive income/(loss) attributable
to shareholders of the parent company 7.3 (26.5) (30.4)
---------------------------------------------------- ---------- ---------- ----------
Total comprehensive loss attributable
to shareholders of the parent company
from continuing operations (2.2) (26.9) (30.9)
---------------------------------------------------- ---------- ---------- ----------
Total comprehensive income attributable
to shareholders of the parent company
from discontinued operations 9.5 0.4 0.5
---------------------------------------------------- ---------- ---------- ----------
Group balance sheet
At 27 September 2021
Unaudited Unaudited Audited
at 27 Sep at 28 Sep at 29 Mar
2021 2020 2021
Notes GBPm GBPm GBPm
--------------------------------- ----- --------- --------- ---------
Non-current assets
Goodwill 32.5 32.5 32.5
Property and equipment 10 732.7 762.0 773.7
Right-of-use assets 11 149.0 159.9 158.0
Deferred tax assets 6.3 10.5 8.6
--------------------------------- ----- --------- --------- ---------
920.5 964.9 972.8
--------------------------------- ----- --------- --------- ---------
Current assets
Inventories 4.3 3.7 2.6
Trade and other receivables 3.9 8.2 10.4
Income tax receivable 6.5 2.1 5.8
Cash 68.2 39.8 4.7
--------------------------------- ----- --------- --------- ---------
82.9 53.8 23.5
--------------------------------- ----- --------- --------- ---------
Asset held for sale - - 1.2
--------------------------------- ----- --------- --------- ---------
Total assets 1,003.4 1,018.7 997.5
--------------------------------- ----- --------- --------- ---------
Current liabilities
Borrowings - (29.8) (29.8)
Lease liabilities (4.9) (5.0) (4.9)
Derivative financial instruments (1.6) (2.2) (1.8)
Trade and other payables (39.3) (33.9) (15.8)
(45.8) (70.9) (52.3)
--------------------------------- ----- --------- --------- ---------
Non-current liabilities
Borrowings (133.7) (133.3) (143.4)
Lease liabilities (69.9) (75.5) (75.3)
Derivative financial instruments (0.4) (3.4) (1.4)
Deferred tax liabilities (96.3) (69.8) (73.6)
Retirement benefit schemes 12 (4.5) (16.8) (6.1)
Other liabilities - (0.1) -
--------------------------------- ----- --------- --------- ---------
(304.8) (298.9) (299.8)
--------------------------------- ----- --------- --------- ---------
Total liabilities (350.6) (369.8) (352.1)
--------------------------------- ----- --------- --------- ---------
Net assets 652.8 648.9 645.4
--------------------------------- ----- --------- --------- ---------
Capital and reserves
Share capital 13 7.3 7.3 7.3
Share premium 13 7.7 7.5 7.6
Capital redemption reserve 1.8 1.8 1.8
Hedging reserve (1.3) (4.3) (2.4)
Revaluation reserve 228.2 248.5 253.6
Retained earnings 409.1 388.1 377.5
--------------------------------- ----- --------- --------- ---------
Total equity 652.8 648.9 645.4
--------------------------------- ----- --------- --------- ---------
Group statement of changes in equity
For the 26 weeks ended 27 September 2021
Share Capital
capital redemption Hedging Revaluation Retained Total
Notes and premium reserve reserve reserve earnings equity
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- ------------ ----------- -------- ----------- --------- -------
At 29 March 2021 14.9 1.8 (2.4) 253.6 377.5 645.4
-------------------------------- ------------ ----------- -------- ----------- --------- -------
Total comprehensive income
Profit for the 26 week period - - - - 20.0 20.0
-------------------------------- ------------ ----------- -------- ----------- --------- -------
Other comprehensive income
Remeasurement of retirement
benefit
schemes 12 - - - - 1.1 1.1
Fair value movement of interest
rate swaps - - 1.2 - - 1.2
Tax on above components of
other
comprehensive income 6 - - (0.1) (16.5) 1.6 (15.0)
-------------------------------- ------------ ----------- -------- ----------- --------- -------
Total comprehensive income - - 1.1 (16.5) 22.7 7.3
-------------------------------- ------------ ----------- -------- ----------- --------- -------
Transactions with owners recorded directly
in equity
Issued equity 13 0.1 - - - - 0.1
Revaluation reserve realised
on disposal of properties - - - (8.9) 8.9 -
0.1 - - (8.9) 8.9 0.1
At 27 September 2021 15.0 1.8 (1.3) 228.2 409.1 652.8
-------------------------------- ------------ ----------- -------- ----------- --------- -------
At 30 March 2020 13.6 1.8 (4.4) 248.4 331.4 590.8
-------------------------------- ------------ ----------- -------- ----------- --------- -------
Total comprehensive income
Loss for the 26 week period - - - - (19.2) (19.2)
-------------------------------- ------------ ----------- -------- ----------- --------- -------
Other comprehensive income
Remeasurement of retirement
benefit
schemes 12 - - - - (9.2) (9.2)
Fair value movement of interest
rate swaps - - 0.1 - - 0.1
Tax on above components of
other
comprehensive income 6 - - - 0.1 1.7 1.8
-------------------------------- ------------ ----------- -------- ----------- --------- -------
Total comprehensive loss - - 0.1 0.1 (26.7) (26.5)
-------------------------------- ------------ ----------- -------- ----------- --------- -------
Transactions with owners recorded directly
in equity
Issued equity(1) 13 1.2 - - - 83.6 84.8
Share based payments - - - - (0.2) (0.2)
1.2 - - - 83.4 84.6
-------------------------------- ------------ ----------- -------- ----------- --------- -------
At 28 September 2020 14.8 1.8 (4.3) 248.5 388.1 648.9
-------------------------------- ------------ ----------- -------- ----------- --------- -------
1 During the prior period, the group raised proceeds of GBP84.8
million, net of transaction costs. A cash box structure was used in
such a way that merger relief was available under Companies Act
2006, section 612, and thus no share premium was recorded. As the
redemption of the cash box entity's preference shares was in the
form of cash, the transaction was treated as qualifying
consideration and the premium is therefore considered to be a
realised profit.
Group statement of cash flow
For the 26 weeks ended 27 September 2021
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
to 27 Sep to 28 Sep to 29 Mar
2021 2020 2021
Notes GBPm GBPm GBPm
--------------------------------------------- ----- --------- --------- ---------
Operating activities
Net cash generated from operations 9 71.4 - (23.0)
Tax paid (2.9) - -
--------------------------------------------- ----- --------- --------- ---------
Net cash flow from operating activities 68.5 - (23.0)
--------------------------------------------- ----- --------- --------- ---------
Investing activities
Proceeds from disposal of property
and equipment 54.4 0.4 0.4
Purchases of property and equipment 10 (13.1) (4.2) (19.1)
Net cash used in investing activities 41.3 (3.8) (18.7)
--------------------------------------------- ----- --------- --------- ---------
Financing activities
Issued equity, net of transaction
costs 13 0.1 84.8 84.9
Interest paid (4.5) (4.6) (9.8)
Payments of principal portion of
lease liabilities (1.9) (2.2) (4.3)
Repayments of borrowings(1) (40.0) (115.5) (115.5)
Proceeds from borrowings - 80.0 90.0
--------------------------------------------- ----- --------- --------- ---------
Net cash flow used in financing activities (46.3) 42.5 45.3
--------------------------------------------- ----- --------- --------- ---------
Increase in cash 63.5 38.7 3.6
Cash at the beginning of the period 4.7 1.1 1.1
--------------------------------------------- ----- --------- --------- ---------
Cash at the end of the period 68.2 39.8 4.7
--------------------------------------------- ----- --------- --------- ---------
1 In the period the group repaid the GBP30 million Covid Corporate Financing
Facility and GBP10 million Revolving Credit Facility. During the prior
52 week period to March 2021, repayment of borrowings related to GBP65.5
million Revolving Credit Facility and GBP50 million syndicated facility
with RBS and Barclays.
NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTS
This interim report was approved by the board on 10 November
2021. The interim financial statements are unaudited and are not
the group's statutory accounts as defined in s.434 of the Companies
Act 2006.
The consolidated interim financial statements have been prepared
in accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 (UK-adopted
International Accounting Standards). These standards are applied
from 30 March 2021 with no changes to the accounting policies set
out in the statutory accounts of Young & Co.'s Brewery, P.L.C.
for the period ended 29 March 2021 (IFRS), except for those noted
below. The financial statements have not been prepared (and are not
required to be prepared) in accordance with IAS 34: 'Interim
Financial Reporting', with the exception of note 6, taxation, where
the tax charge for the half year to 27 September 2021 has been
calculated using an estimate of the full year effective tax rate,
in line with the principles of IAS 34. The accounting policies have
been applied consistently throughout the group for the purposes of
preparation of this financial information.
The interim report is presented in pounds sterling and all
values are shown in millions of pounds (GBPm) rounded to the
nearest GBP0.1 million, except where otherwise indicated.
Statutory accounts for the period ended 29 March 2021 have been
delivered to the Registrar of Companies. The auditor's report on
those accounts (i) was unqualified and (ii) contained a material
uncertainty in respect to the group and parent company's ability to
continue as a going concern, without modifying its opinion. That
report did not contain a statement under s.498(2) or (3) of the
Companies Act 2006.
This interim report has been prepared in accordance with the AIM
Rules issued by the London Stock Exchange.
NEW ACCOUNTING STANDARDS AND ACCOUNTING POLICIES
IFRS 5 - Non-current Assets Held for Sale and Discontinued
Operations
In the period ended 27 September 2021 the group disposed of the
majority of pubs previously traded under the Ram Pub Company as
tenanted pubs and were disclosed separately in the segmental
reporting note. Management has considered the sale and has
concluded that the sale meets the definition of a discontinued
operation.
A discontinued operation is a component of the entity that has
been disposed of, or is classified as held for sale, and that
represents a separate major line of business and is part of a
single co-ordinated plan to dispose of such a line of business. The
results of discontinued operations are presented separately in the
income statement.
The sale was completed in one transaction to one buyer and all
related assets and liabilities together met the definition of a
disposal group.
As a result of the above, the financial statements for the
period ended 27 September 2021 and prior comparative periods have
been restated in accordance with the standard to re-present
discontinued operations in the income statement and instead display
the impact as a separate income statement line showing the post-tax
profit of discontinued operations. Further detailed analysis of
that single amount into revenue, expenses and cash flows is
disclosed in note 5.
Non-current assets are not depreciated or amortised while they
are classified as held for sale. Interest and other expenses
attributable to the liabilities of a disposal group classified as
held for sale continue to be recognised.
The group will no longer be disclosing the segmental reporting
note due to the majority of the Ram Pub Company pubs' disposal.
Amendments to accounting standards
Other amendments to accounting standards applied from 30 March
2021 were as follows:
(1) Interest Rate Benchmark Reform - Phase 2 - amendments to
IFRS 9, IAS 39 and IFRS 7; and
(2) IFRS 16 (amended) - covid-19 related rent concessions beyond
30 June 2021.
The application of these did not have a material impact on the
group's accounting treatment and has therefore not resulted in any
material changes.
GOING CONCERN
At 27 September 2021, the group had cash in bank of GBP68.2
million and committed borrowing facilities of GBP255.0 million, of
which GBP135.0 million was drawn down. The group has forecast cash
flows for the period to the end of November 2022 (the 'going
concern period') and expects to have available facilities of
GBP235.0 million, with the GBP20.0 million RCF NatWest facility
maturing at the end of November 2021. In addition to these
committed facilities, we have a GBP10.0 million overdraft with
HSBC, which is not committed.
With the potential ongoing disruption due to covid-19, the group
previously agreed with its lenders that the financial covenants on
these facilities would be replaced by a monthly available liquidity
test, through to the quarter ending March 2022. These waivers
require the group to have GBP25.0 million of available liquidity at
each month-end until the quarter ending March 2022 and for total
drawn down loan facilities not to exceed GBP220.0 million during
the waiver period.
Aligned to the Government's hospitality reopening plan, all the
group's pubs were initially allowed to reopen on 12 April 2021 with
outdoor trading only, from 17 May 2021 indoor trading and finally
on 19 July 2021 all remaining restrictions were lifted. The group
is pleased with trading levels since reopening and the quick return
to positive trading cash flow. Since the year-end (29 March 2021),
cash reserves have been further supported through the sale of 56
tenanted pubs for total proceeds of GBP53.0 million.
Whilst the group's entire pub estate is open and trading, there
does remain a degree of uncertainty ahead due to the ongoing impact
of covid-19. As part of the directors' consideration of the
appropriateness of adopting the going concern basis, the group has
modelled several scenarios for the period to the end of November
2022. The key judgements applied are the extent of any potential
future disruption to trading as a result of covid-19, including a
general reduction in trade combined with the re-introduction of
more severe covid-related restrictions, such as periods of closure.
The base model assumes the group continues to trade as now with no
restrictions, and trade continues to build in line with Young's
growth strategy. The more severe scenario includes a period of
forced closure in January and further reduced levels of trade
during December by 20% and February by 30%. The group has assumed
no significant structural changes to the business will be needed in
any of the scenarios modelled.
In the base case scenario, there continues to be significant
headroom on our debt facilities, and when the group reverts to
testing the original banking covenants in March 2022 they are fully
complied with. Under the more severe scenario where the pubs are
forced to close in January and trade is reduced during December and
February, there still remains headroom on available debt facilities
and all banking covenants are complied with across the going
concern period. Under the reverse stress test, the group focussed
on the drop in profitability required to cause a failure to the
group's financial covenants. For these covenants to fail during the
going concern period, it would involve pubs being forced to close
for between four to six months, depending on whether this closure
impacted the Christmas period, and when open, to be at around 50%
of the base model profitability. Given the trading performance
since reopening, coupled with the current government covid-19
response plans, the board believes that this scenario is
remote.
Based on these forecasts and sensitivities, coupled with the
current debt levels and the ongoing debt structure in place, the
board has a reasonable expectation that the group is able to manage
its business risks and to continue in operational existence until
at least the end of November 2022. Accordingly, the board continues
to adopt the going concern basis in preparing the consolidated
interim statements.
2. ADJUSTING ITEMS AND OTHER FINANCIAL MEASURES
The table shows adjusting items from continuing operations. For discontinued
operations see note 5.
Restated Restated
26 weeks 26 weeks 52 weeks
to 27 Sep to 28 Sep to 29 Mar
2021 2020 2021
GBPm GBPm GBPm
------------------------------------------------- ---------- ---------- ----------
Amounts included in operating profit/(loss)
Net profit/(loss) on disposal of properties(1) 0.7 (0.2) (0.5)
Tenant compensation(2) (0.2) (0.5) (0.5)
Purchase costs(3) (0.1) - -
Group reorganisation(4) - (1.4) (1.4)
Covid restructuring(5) - (0.5) (0.5)
Upward movement on the revaluation of properties
(note 10)(6) - - 2.9
Downward movement on the revaluation of
properties (note 10)(6) - - (1.3)
------------------------------------------------- ---------- ---------- ----------
0.4 (2.6) (1.3)
------------------------------------------------- ---------- ---------- ----------
Tax on adjusting items
Tax attributable to above adjusting items (0.3) 0.1 0.2
Impact of change in corporation tax rate(7) (6.1) - -
------------------------------------------------- ---------- ---------- ----------
(6.4) 0.1 0.2
------------------------------------------------- ---------- ---------- ----------
Total adjusting items after tax (6.0) (2.5) (1.1)
------------------------------------------------- ---------- ---------- ----------
During the period tenant compensation and purchase costs related
to managed houses. Net profit on disposal of properties related to
tenanted houses.
(1) The profit on disposal of properties related to the
difference between cash, less disposal costs, received from the
sale of the Grove House (Camberwell) and the carrying value of its
assets, at the date of disposal, and the surrender premium related
to the lease of a tenanted pub. During the previous 52 week period
to 29 March 2021, the loss on disposal of properties related to the
difference between cash, less disposal costs, received from the
sale of the Horse Pond Inn (Castle Cary), the lease expiry of the
Black Cat (Catford), the Surprise (Chelsea) and the Greyhound
(Hendon) and the carrying value of their assets, including
goodwill, at the dates of disposal.
(2) Tenant compensation of GBP0.2 million was paid to previous
tenants of the Grand Junction Arms (Harlesden) to terminate their
lease agreement early. During the previous 52 week period to 29
March 2021, tenant compensation of GBP0.5 million was paid to
previous tenants of the Royal Oak (Bethnal Green) and an unlicensed
property (Wandsworth) to terminate their lease agreements
early.
(3) Costs related to the purchase of Greenwich Union
(Greenwich), lease extensions of Cherry Tree (Dulwich) and the
Riverside House (Wandsworth). These included legal and professional
fees and stamp duty land tax (note 6).
(4) During the previous 52 week period to 29 March 2021, the
group reorganisation cost of GBP1.4 million related to the stamp
duty land tax and associated legal and professional fees incurred
on the transfer of the business and assets of Spring Pub Company
Limited, a group of five sites acquired on 12 March 2020 to
Young's. The cost was foreseen at the time of the acquisition in
March 2020, but did not crystalise until the transfer happened in
September 2020.
(5) During the previous 52 week period to 29 March 2021, covid
restructuring costs of GBP0.5 million related to a reorganisation
of the group's head office functions. These were largely made up of
severance costs.
(6) The net upward movement on the revaluation of properties in
the previous 52 week period to 29 March 2021 related to net upward
movements in excess of amounts recognised in equity. See note 10(1)
in the statutory accounts for the period ended 29 March 2021 for
further details.
(7) An increase in the corporation tax rate from 19% to 25%,
with effect from 1 April 2023, was announced in the March 2021
Budget, and substantively enacted on 24 May 2021. This has resulted
in an increase in the deferred tax liabilities and assets of the
group, to the extent they are not expected to reverse prior to 1
April 2023, with a net charge of GBP6.1 million associated with the
rate change. This has been recognised as an adjusting item in the
tax charge for the period as it is unrelated to the underlying
trading activities of the group.
Other financial measures
The table below shows how adjusted EBITDA, adjusted operating
profit/(loss) and profit/(loss) before tax have been arrived at.
These alternative performance measures have been provided as the
board believes that they give useful additional measures of the
group's underlying performance and are the measures that the board
uses to assess the group's performance. Other financial measures
exclude discontinued operations.
Restated Restated
26 weeks 26 weeks 52 weeks
to 27 Sep to 28 Sep to 29 Mar
2021 2020 2021
GBPm GBPm GBPm
--------------------------------------- ---------- --------- ----------
Profit/(loss) before tax 22.2 (22.2) (45.5)
Adjusting items (0.4) 2.6 1.3
--------------------------------------- ---------- --------- ----------
Adjusted profit/(loss) before tax 21.8 (19.6) (44.2)
Net finance costs 5.2 4.8 9.8
Finance charge for pension obligations 0.1 0.1 0.2
--------------------------------------- ---------- --------- ----------
Adjusted operating profit/(loss) 27.1 (14.7) (34.2)
Depreciation and amortisation 15.6 16.2 31.8
--------------------------------------- ---------- --------- ----------
Adjusted EBITDA 42.7 1.5 (2.4)
--------------------------------------- ---------- --------- ----------
During the period, GBP37.1 million of adjusted operating profit
related to managed houses and GBP0.2 million related to tenanted
houses. Adjusted operating loss of GBP10.2 million mainly related
to head office costs and was unallocated.
During the period, GBP52.2 million of adjusted EBITDA related to
managed houses and GBP0.4 million related to tenanted houses.
Adjusted negative EBITDA of GBP9.9 million mainly related to head
office costs and was unallocated.
3. REVENUE
The recognition of revenue from continuing operations under each of the
group's material revenue streams is as follows:
Restated Restated
26 weeks 26 weeks 52 weeks
to 27 Sep to 28 Sep to 29 Mar
2021 2020 2021
GBPm GBPm GBPm
-------------------------------------------- ---------- --------- ----------
Sales of goods 143.6 50.6 84.9
Accommodation sales 5.5 1.6 2.5
-------------------------------------------- ---------- --------- ----------
Total revenue from contracts with customers 149.1 52.2 87.4
Rental income 0.5 0.5 0.6
-------------------------------------------- ---------- --------- ----------
Total revenue recognised 149.6 52.7 88.0
-------------------------------------------- ---------- --------- ----------
During the period, GBP148.9 million of revenue related to
managed houses, GBP0.6 million related to tenanted houses and
GBP0.1 million was unallocated.
4. GOVERNMENT GRANTS AND ASSISTANCE
During the period, the group was eligible for a number of government grant
schemes which were introduced to mitigate the impact of covid-19. The impact
of each scheme on the income statement was as follows:
26 weeks 26 weeks 52 weeks
to 27 to 28 to 29
Sep Sep Mar
2021 2020 2021
Government grant scheme Income statement line impacted GBPm GBPm GBPm
--------------------------------- --------------------------------- -------- -------- --------
Eat Out to Help Out Revenue - 2.4 2.4
Business rate grant Other income 3.8 0.3 4.7
Coronavirus Job Retention Operating costs before adjusting
Scheme ('CJRS') items 2.6 21.9 43.3
Covid Corporate Financing
Facility ('CCFF') Finance costs - 0.1 0.1
--------------------------------- --------------------------------- -------- -------- --------
Total government grants received 6.4 24.7 50.5
-------------------------------------------------------------------- -------- -------- --------
The table above shows government grants amounts related to continuing operations.
The Covid Corporate Financing Facility was repaid in full in May
2021.
In addition, during the period, the group continued to take
advantage of the business rate holiday, saving GBP3.7 million (26
weeks to 28 September 2020: GBP7.7 million), further business rate
relief under the expanded retail discount, saving GBP0.7 million
(26 weeks to 28 September 2020: GBPnil) and reduced 5% VAT on
eligible sales.
5. DISCONTINUED OPERATIONS
On 2 July 2021, the board made the decision to sell most of its
tenanted estate, and the 56 sites were classified as a discontinued
operation. The disposal for a total consideration of GBP53.0
million occurred on 9 August 2021 and was consistent with the
group's strategy to target growth through investment on higher
turnover managed pubs and hotels.
With the 56 out of 63 tenanted estate sites being classified as
discontinued operations, the Ram Pub Company segment is no longer
presented in a segmental reporting note. Total revenue generated
from the Ram Pub Company was GBP3.2 million, of which GBP0.6
million related to continuing operations and the remaining GBP2.6
million related to discontinued operations. The results from
discontinued operations for the period are presented below:
26 weeks 26 weeks 52 weeks
to 27 Sep to 28 Sep to 29 Mar
2021 2020 2021
GBPm GBPm GBPm
-------------------------------------------- ----------- ---------- ----------
Revenue 2.1 1.5 2.0
Rental income 0.5 0.9 0.6
-------------------------------------------- ----------- ---------- ----------
Total revenue 2.6 2.4 2.6
Operating costs (1.8) (2.0) (3.5)
-------------------------------------------- ----------- ---------- ----------
Adjusted operating profit/(loss) 0.8 0.4 (0.9)
Adjusting items(1) 9.0 - 0.2
-------------------------------------------- ----------- ---------- ----------
Profit/(loss) before tax 9.8 0.4 (0.7)
-------------------------------------------- ----------- ---------- ----------
Income tax expense (0.3) - -
-------------------------------------------- ----------- ---------- ----------
Profit/(loss) after tax from discontinued
operations 9.5 0.4 (0.7)
-------------------------------------------- ----------- ---------- ----------
1 Adjusting items related to the difference between cash, less disposal
costs, received from the sale of the 56 sites and the carrying value
of their assets, at the date of disposal. During the previous 52 week
period to 29 March 2021, the adjusting items related to the net upward
movement on the revaluation of properties in excess of amounts recognised
in equity. See note 10(1) in the statutory accounts for the period ended
29 March 2021 for further details.
Earnings/(loss) per ordinary share for discontinued operations
26 weeks 26 weeks 52 weeks
to 27 Sep to 28 Sep to 29 Mar
2021 2020 2021
Number Number Number
---------------------------------------------------- ---------- ---------- ----------
Basic weighted average number of ordinary
shares in issue 58,475,877 53,774,655 56,132,368
Dilutive potential ordinary shares from outstanding
employee share options 4,890 - -
---------------------------------------------------- ---------- ---------- ----------
Diluted weighted average number of shares 58,480,767 53,774,655 56,132,368
---------------------------------------------------- ---------- ---------- ----------
Pence Pence Pence
---------------------------------------------------- ---------- ---------- ----------
Basic 16.25 0.74 (1.25)
Effect of adjusting items (14.88) - (0.35)
---------------------------------------------------- ---------- ---------- ----------
Adjusted basic 1.37 0.74 (1.60)
---------------------------------------------------- ---------- ---------- ----------
Pence Pence Pence
---------------------------------------------------- ---------- ---------- ----------
Diluted 16.24 0.74 (1.25)
Effect of adjusting items (14.87) - (0.35)
---------------------------------------------------- ---------- ---------- ----------
Adjusted diluted 1.37 0.74 (1.60)
---------------------------------------------------- ---------- ---------- ----------
The table below shows tax charged on discontinued operations.
26 weeks 26 weeks 52 weeks
to 27 Sep to 28 Sep to 29 Mar
2021 2020 2021
Tax charged in the group income statement GBPm GBPm GBPm
--------------------------------------------------- ---------- ---------- ----------
Deferred tax
Rolled over gains on disposal of properties 1.8 - -
Reversal of temporary differences on revaluations (1.5) - -
-------------------------------------------------- ---------- ---------- ----------
Tax charge in the income statement 0.3 - -
--------------------------------------------------- ---------- ---------- ----------
The net cash flows incurred are, as follows:
26 weeks 26 weeks 52 weeks
to 27 Sep to 28 Sep to 29 Mar
2021 2020 2021
GBPm GBPm GBPm
--------------------------------- ------------ ---------- ----------
Operating 0.1 (5.9) (5.0)
Investing 52.5 (0.3) (0.7)
Financing (0.1) (0.1) (0.2)
--------------------------------- ------------ ---------- ----------
Net cash inflow/(outflow) 52.5 (6.3) (5.9)
--------------------------------- ------------ ---------- ----------
6. TAXATION
The taxation charge for the 26 weeks ended 27 September 2021 has
been calculated by applying an estimate of the current effective
tax rate before adjusting items for the 52 weeks ending 28 March
2022 at 8.7% (2021: 10.1%).
26 weeks 26 weeks 52 weeks
to 27 Sep to 28 Sep to 29 Mar
2021 2020 2021
Tax charged in the group income statement
from continuing operations GBPm GBPm GBPm
--------------------------------------------- ---------- ---------- ----------
Current tax
Corporation tax expense/(credit) 2.1 (2.0) (5.8)
2.1 (2.0) (5.8)
-------------------------------------------- ---------- ---------- ----------
Deferred tax
Origination and reversal of temporary
differences 3.5 (0.6) (1.6)
Change in corporation tax rate 6.1 - -
Adjustment in respect of prior periods - - 0.5
9.6 (0.6) (1.1)
-------------------------------------------- ---------- ---------- ----------
Tax charge/(credit) in the income statement 11.7 (2.6) (6.9)
--------------------------------------------- ---------- ---------- ----------
Deferred tax in the group income statement
--------------------------------------------- ---------- ---------- ----------
Property revaluation and disposals - - (0.1)
Capital allowances 1.9 (0.8) (0.2)
Retirement benefit schemes 0.1 0.1 0.2
Trade losses 0.6 - (1.0)
Capital losses 0.8 - -
Share based payments 0.1 0.1 -
Change in corporation tax rate 6.1 - -
--------------------------------------------- ---------- ---------- ----------
Tax charge/(credit) in the income statement 9.6 (0.6) (1.1)
--------------------------------------------- ---------- ---------- ----------
Deferred tax in the group statement of
comprehensive income
--------------------------------------------- ---------- ---------- ----------
Interest rate swaps 0.2 - 0.5
Retirement benefit schemes 0.2 (1.7) 0.2
Property revaluation and disposals 0.2 (0.1) 3.8
Capital losses (0.2) - -
Change in corporation tax rate 14.6 - -
--------------------------------------------- ---------- ---------- ----------
Tax charge/(credit) in other comprehensive
income 15.0 (1.8) 4.5
--------------------------------------------- ---------- ---------- ----------
The 2021 Budget announced an increase in the corporation tax
rate from 19% to 25% with effect from 1 April 2023. This was
substantively enacted on 24 May 2021. Accordingly, the deferred tax
assets and liabilities at the balance sheet date are calculated at
the substantively enacted rate of 25%, to the extent they are not
expected to reverse before 1 April 2023. This amount has been
recognised as an adjusting item (see note 2).
The effective full year current tax rate of 8.7% is down from
10.1% in the prior year. This is due largely to the temporary
differences arising from the introduction, with effect from 1 April
2021, of the capital allowances "super deduction" at 130% of
eligible expenditure and special rate allowance at 50% of eligible
expenditure, substantively enacted on 24 May 2021. The effective
tax rate is also impacted by losses brought forward from the prior
year, utilised in the period.
7. EARNINGS/(LOSS) PER ORDINARY SHARE
(a) Weighted average number of shares
26 weeks 26 weeks 52 weeks
to 27 Sep to 28 Sep to 29 Mar
2021 2020 2021
Number Number Number
----------------------------------------------- ---------- ---------- ----------
Basic weighted average number of ordinary
shares in issue 58,475,877 53,774,655 56,132,368
Dilutive potential ordinary shares from
outstanding employee share options 4,890 - -
----------------------------------------------- ---------- ---------- ----------
Diluted weighted average number of shares 58,480,767 53,774,655 56,132,368
----------------------------------------------- ---------- ---------- ----------
(b) Earnings/(loss) attributable to shareholders of the parent company
26 weeks 26 weeks 52 weeks
to 27 Sep to 28 Sep to 29 Mar
2021 2020 2021
GBPm GBPm GBPm
----------------------------------------------- ---------- ---------- ----------
Profit/(loss) for the period 20.0 (19.2) (38.3)
Adjusting items (9.4) 2.6 1.1
Tax on adjusting items 6.7 (0.1) (0.2)
----------------------------------------------- ---------- ---------- ----------
Adjusted earnings/(loss) after tax 17.3 (16.7) (37.4)
----------------------------------------------- ---------- ---------- ----------
Basic earnings/(loss) per share
Pence Pence Pence
----------------------------------------------- ---------- ---------- ----------
Basic 34.20 (35.70) (68.23)
Effect of adjusting items (4.62) 4.64 1.60
----------------------------------------------- ---------- ---------- ----------
Adjusted basic 29.58 (31.06) (66.63)
----------------------------------------------- ---------- ---------- ----------
Diluted earnings/(loss) per share
Pence Pence Pence
----------------------------------------------- ---------- ---------- ----------
Diluted 34.20 (35.70) (68.23)
Effect of adjusting items (4.62) 4.64 1.60
----------------------------------------------- ---------- ---------- ----------
Adjusted diluted 29.58 (31.06) (66.63)
----------------------------------------------- ---------- ---------- ----------
(c) Earnings/(loss) from continuing operations
GBPm GBPm GBPm
----------------------------------------------- ---------- ---------- ----------
Profit/(loss) for the period 10.5 (19.6) (37.6)
Adjusting items (0.4) 2.6 1.3
Tax on adjusting items 6.4 (0.1) (0.2)
----------------------------------------------- ---------- ---------- ----------
Adjusted earnings/(loss) after tax 16.5 (17.1) (36.5)
----------------------------------------------- ---------- ---------- ----------
Basic earnings/(loss) per share
Pence Pence Pence
----------------------------------------------- ---------- ---------- ----------
Basic 17.96 (36.45) (66.98)
Effect of adjusting items 10.26 4.65 1.96
----------------------------------------------- ---------- ---------- ----------
Adjusted basic 28.22 (31.80) (65.02)
----------------------------------------------- ---------- ---------- ----------
Diluted earnings/(loss) per share
Pence Pence Pence
----------------------------------------------- ---------- ---------- ----------
Diluted 17.95 (36.45) (66.98)
Effect of adjusting items 10.26 4.65 1.96
----------------------------------------------- ---------- ---------- ----------
Adjusted diluted 28.21 (31.80) (65.02)
----------------------------------------------- ---------- ---------- ----------
The basic earnings/(loss) per share figure is calculated by
dividing the net profit/(loss) for the period by the weighted
average number of ordinary shares in issue during the period.
Diluted earnings/(loss) per share are calculated on a similar basis
taking into account dilutive potential shares under our SAYE scheme
(2020: nil).
Adjusted earnings/(loss) per share are presented to eliminate
the effect of the adjusting items on basic and diluted
earnings/(loss) per share.
For basic, diluted and the effect of adjusting items on
earnings/(loss) per share on discontinued operations see note
5.
8. DIVIDS ON EQUITY SHARES
The interim dividend, in respect of the period ended 27
September 2021, at a cost of GBP5.0 million (for the period ended
28 September 2020: GBPnil), is expected to be paid on 3 December
2021 to shareholders on the register at the close of business on 18
November 2021.
9. NET CASH GENERATED FROM OPERATIONS AND ANALYSIS OF NET
DEBT
26 weeks 26 weeks 52 weeks
to 27 Sep to 28 Sep to 29 Mar
2021 2020 2021
GBPm GBPm GBPm
------------------------------------------------------ --------- --------- ---------
Profit/(loss) before tax from continuing operations 22.2 (22.2) (44.5)
Profit/(loss) before tax from discontinued operations 9.8 0.4 (0.7)
Finance costs 5.2 4.8 9.9
Finance charge for pension obligations 0.1 0.1 0.2
------------------------------------------------------ --------- --------- ---------
Operating profit/(loss) 37.3 (16.9) (35.1)
Depreciation of property and equipment 12.4 13.3 26.1
Depreciation of right-of-use assets 3.6 3.9 7.6
Movement on the revaluation of properties - - (1.8)
Net (gain)/loss on disposal of properties (9.6) 0.2 0.5
Difference between pension service cost and
cash contributions paid (0.6) (0.7) (1.4)
Share based payments - (0.2) (0.1)
Movements in working capital
- Inventories (1.7) (0.4) 0.7
- Receivables 6.5 1.0 (1.2)
- Payables 23.5 (0.2) (18.3)
------------------------------------------------------ --------- --------- ---------
Net cash generated from operations 71.4 - (23.0)
------------------------------------------------------ --------- --------- ---------
Analysis of group net debt
At 27 Sep At 28 Sep At 29 Mar
2021 2020 2021
GBPm GBPm GBPm
---------------------------------------- --------- --------- ---------
Cash 68.2 39.8 4.7
Current borrowings and loan capital - (29.8) (29.8)
Current lease liabilities (4.9) (5.0) (4.9)
Non-current borrowings and loan capital (133.7) (133.3) (143.4)
Non-current lease liabilities (69.9) (75.5) (75.3)
---------------------------------------- --------- --------- ---------
Net debt (140.3) (203.8) (248.7)
---------------------------------------- --------- --------- ---------
10. PROPERTY AND EQUIPMENT
Fixtures,
fittings
Land & &
buildings equipment Total
Cost or valuation GBPm GBPm GBPm
---------------------------------------------- --------- --------- ------
At 30 March 2020 714.1 160.7 874.8
---------------------------------------------- --------- --------- ------
Additions 3.9 15.2 19.1
Disposals - (0.2) (0.2)
Transfer out to asset held for sale (0.9) (0.4) (1.3)
Fully depreciated assets (7.7) (19.1) (26.8)
Revaluation
- effect of upward movement in property
valuation 14.5 - 14.5
- effect of downward movement in property
valuation (6.0) - (6.0)
---------------------------------------------- --------- --------- ------
At 29 March 2021 717.9 156.2 874.1
Additions 3.8 9.3 13.1
Disposals(1) (41.5) (10.4) (51.9)
Fully depreciated assets (0.5) (8.7) (9.2)
---------------------------------------------- --------- --------- ------
At 27 September 2021 679.7 146.4 826.1
---------------------------------------------- --------- --------- ------
Depreciation and impairment
---------------------------------------------- --------- --------- ------
At 30 March 2020 32.0 71.7 103.7
---------------------------------------------- --------- --------- ------
Depreciation charge 1.7 24.4 26.1
Disposals - (0.2) (0.2)
Transfer out to asset held for sale - (0.1) (0.1)
Fully depreciated assets (7.7) (19.1) (26.8)
Revaluation
- effect of downward movement in property
valuation (3.9) - (3.9)
- effect of upward movement in property
valuation 1.6 - 1.6
---------------------------------------------- --------- --------- ------
At 29 March 2021 23.7 76.7 100.4
Depreciation charge 0.8 11.6 12.4
Disposals(1) (5.2) (5.0) (10.2)
Fully depreciated assets (0.5) (8.7) (9.2)
---------------------------------------------- --------- --------- ------
At 27 September 2021 18.8 74.6 93.4
---------------------------------------------- --------- --------- ------
Net book value
---------------------------------------------- --------- --------- ------
At 30 March 2020 682.1 89.0 771.1
---------------------------------------------- --------- --------- ------
At 29 March 2021 694.2 79.5 773.7
---------------------------------------------- --------- --------- ------
At 27 September 2021 660.9 71.8 732.7
---------------------------------------------- --------- --------- ------
1 During the period, majority of the disposals related to the sale of
56 tenanted pubs (see note 5).
Revaluation of property and equipment
The values of the group's freehold land, buildings and fixtures
and fittings were reviewed in light of current market factors by
management and by Savills, who perform a desktop review based upon
information provided by the group, pursuant to the group's
accounting policy. The group considers that the valuation reached
at 29 March 2021, after the onset of covid, still represents the
best estimate of the fair value of the estate at 27 September
2021.
Details of the methodology used in determining the group's
property values are discussed in the group's audited accounts for
the 52 weeks ended 29 March 2021. The key inputs are EBITDA, a
multiplier and, in some cases, underlying property values. A
sensitivity analysis has been conducted on the property estate to
give an indication of the impact of movements in the most sensitive
assumption, EBITDA. The analysis considers this single change with
the other assumptions unchanged. In practice, changes in one
assumption may be accompanied by changes in another. Changes in
market values may also occur at the same time as any changes in
assumptions. This information should not be taken as a projection
of likely future valuation movements. Decreasing or increasing the
EBITDA used in the revaluation by 10% would decrease/increase the
valuation by GBP46.2 million.
11. LEASE LIABILITIES, RIGHT-OF-USE-ASSETS AND GOODWILL
Set out below are the carrying amounts of the group's right-of-use assets
and lease liabilities and the movements during the period:
Lease
Right-of-use
assets liabilities
GBPm GBPm
-------------------------------------- ------------------- -----------------
As at 30 March 2020 163.4 82.3
Additions 2.2 2.2
Depreciation expense (7.6) -
Accretion of interest - 2.6
Payments - (6.9)
--------------------------------------- ------------------- -----------------
As at 29 March 2021 158.0 80.2
--------------------------------------- ------------------- -----------------
Additions 0.1 0.1
Lease amendments (5.5) (3.6)
Depreciation expense (3.6) -
Accretion of interest - 1.3
Payments - (3.2)
--------------------------------------- ------------------- -----------------
As at 27 September 2021 149.0 74.8
--------------------------------------- ------------------- -----------------
Right-of-use assets predominantly relate to leasehold
properties, along with motor vehicles and IT equipment.
Lease amendments included the amounts disposed in relation to
the sale of 56 tenanted pubs (see note 5) and lease modifications
in respect of changes to lease terms and lease terminations.
Impairment considerations
The group has performed an assessment of whether any indicators
of impairment exist. This assessment included a review of internal
and external indicators and the group has concluded that no
impairment indicators existed at 27 September 2021. Assessments
were performed on groups of cash generating units with associated
right-of-use assets and/or goodwill.
At 29 March 2021 impairment tests, the inputs to both the
impairment models for the right-of-use assets and goodwill are
consistent, and are based on individual site 24-month cash flow
forecasts initially, followed by 1.4% long-term annual growth in
projected future cash flows, with the exception of Smiths of
Smithfield Limited where growth rates increase over a five-year
period to reflect the anticipated arrival of Crossrail in 2023 and
the opening of the Museum of London in 2025 before reverting to a
1.4% long-term growth rate. The pre-tax discount rate applied to
all cash flow projections was 8.8%.
The impairment calculation is most sensitive to the pre-tax
discount rate and EBITDA assumptions. At 29 March 2021 management
performed a sensitivity analysis on the impairment test and
considered the impact of an increase in either the pre-tax discount
rate to 10.3% or a reduction of EBITDA by 15% and none of the
models are sensitive to an impairment with these variables, with
the exception of the Smiths of Smithfield Limited, on which a small
impairment would be recognised with a change in these
variables.
12. RETIREMENT BENEFIT SCHEMES
The table below summarises the movement in the retirement
benefit schemes' deficit in the period.
26 weeks 26 weeks 52 weeks
to 27 Sep to 28 Sep to 29 Mar
2021 2020 2021
GBPm GBPm GBPm
--------------------------------------------- ----------- ----------- ----------
Changes in the present value of the retirement benefit schemes are as
follows:
Opening deficit (6.1) (8.2) (8.2)
Current service cost (0.2) (0.1) (0.2)
Contributions 0.8 0.8 1.6
Finance charge for pension obligations (0.1) (0.1) (0.2)
Remeasurement through other comprehensive
income 1.1 (9.2) 0.9
--------------------------------------------- ----------- ----------- ----------
Closing deficit (4.5) (16.8) (6.1)
--------------------------------------------- ----------- ----------- ----------
The GBP1.1 million remeasurement through other comprehensive income is
driven by better than expected return on the scheme's assets and experience
gains on the scheme's liabilities, offset to some extent by changes in
the financial assumptions. These assumptions include RPI inflation which
increased to 3.4% (at 29 March 2021: 3.3%) with the discount rate remaining
stable at 2.0% (29 March 2021: 2.0%).
13. SHARE CAPITAL
Total share capital comprises the nominal value of the share
capital issued and fully paid of GBP7.3 million (2021: GBP7.3
million) and the share premium account of GBP7.7 million (2021:
GBP7.6 million). Share capital issued in the period comprises a
nominal value of GBPnil (2021: GBP1.2 million) and a share premium
of GBP0.1 million (2021: GBP0.1 million).
The shares issued in the period related to SAYE scheme.
14. POST BALANCE SHEET EVENTS
There were no post balance sheet events.
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END
IR FFFSILDLILIL
(END) Dow Jones Newswires
November 11, 2021 02:00 ET (07:00 GMT)
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