TIDMYNGA
RNS Number : 3439T
Young & Co's Brewery PLC
14 November 2019
YOUNG & CO.'S BREWERY, P.L.C.
INTERIM RESULTS FOR THE 26 WEEKSED 30 SEPTEMBER 2019
2019 2019 2018 Change
post-IFRS pre-IFRS pre-IFRS pre-IFRS 16
16 16 illustrative 16 illustrative
GBPm GBPm(1) GBPm %
------------------------------------- ---------- ----------------- --------- -------------
Revenue 168.2 168.2 156.8 +7.3
Adjusted operating profit(2) 30.9 30.1 28.6 +5.2
Adjusted profit before tax(2) 26.6 27.0 26.1 +3.4
Adjusted EBITDA(2) 47.2 43.3 40.4 +7.2
Net debt 227.2 155.0 125.4 -23.6
Net debt to EBITDA(3) 2.7x 2.0x 1.8x -0.2x
------------------------------------- ---------- ----------------- --------- -------------
Operating profit 28.6 27.8 28.9 -3.8
Profit before tax 24.3 24.7 26.4 -6.4
------------------------------------- ---------- ----------------- --------- -------------
Adjusted basic earnings per share(2) 42.85p 43.67p 42.11p +3.7
Basic earnings per share 38.16p 38.98p 42.52p -8.3
Interim dividend per share 10.57p 10.57p 9.97p +6.0
------------------------------------- ---------- ----------------- --------- -------------
All of the results above are from continuing operations.
(1) The 2019 results have been reported under IFRS 16. The 2018
comparatives have not been restated, as permitted by the accounting
standard. The 2019 pre-IFRS 16 results, which are for comparative
purposes only, have been presented on a non-statutory illustrative
basis excluding the impact of IFRS 16.
(2) Reference to an "adjusted" item means that item has been
adjusted to exclude non-underlying costs of GBP2.3 million (2018:
non-underlying gains of GBP0.3 million) (see note 3).
(3) Net debt to EBITDA has been calculated based on the last 12
months' actual EBITDA, including the expected impact of IFRS 16 on
12 months of trading, based on the lease portfolio as at the date
of transition.
PERFORMANCE HIGHLIGHTS
-- Total revenue up 7.3% to GBP168.2 million, along with a 7.2%
increase in adjusted pre-IFRS 16 EBITDA to a half-year high of
GBP43.3 million
-- Like-for-like sales growth of 1.1% in our premium,
well-invested managed pub estate reflecting the challenging prior
comparatives from the hottest English summer on record and
England's FIFA World Cup performance
-- Total adjusted pre-IFRS 16 operating profit up 5.2% to
GBP30.1 million, with adjusted pre-IFRS 16 profit before tax also
up, by 3.4% to GBP27.0 million
-- Investment of GBP17.3 million during the period, including
the freehold acquisition of the White Bear (Tunbridge Wells)
-- The Redcomb pubs have been successfully integrated into the
existing Young's estate and, after a build-up period, are
performing in line with expectations
-- Healthy cash generation reduced the year-end net debt
position by GBP8.6 million to GBP155.0 million (pre-IFRS 16) -
strong balance sheet with financial capacity for further
investment
-- 23(rd) consecutive year-on-year interim dividend increase,
with a 6.0% rise to 10.57 pence per share
-- Strong trading in the last thirteen weeks, with managed house
revenue up 12.4% and up 5.1% on a like-for-like basis
Patrick Dardis, Chief Executive of Young's, commented:
"I am very pleased with the performance of our business during
the first half of the year. In what was a challenging period up
against tough comparatives, we continued to grow profits, make
acquisitions, invest organically and increase the dividend: a
reflection of the consistent execution of our strategy and the hard
work of our teams throughout those six months.
The start of the half year was challenging as the poor and
unpredictable weather was a far cry from last year's exceptional
early summer sunshine. However, the summer Bank Holiday
temperatures and late-September sunshine contributed to strong
like-for-like sales growth in the second 13 weeks which helped to
balance the first half, with like-for-like sales finishing up
1.1%.
We have added the White Bear, a freehold pub in Tunbridge Wells,
into our managed house estate and continue to seek out the right
opportunities in exciting new locations where we believe our
premium offer will flourish.
Although the upcoming general election prolongs the
unpredictability of the political environment, it does not change
our approach or confidence in our winning strategy of running
high-quality, well-invested premium pubs.
Our expectations for the full year remain unchanged and we
remain confident in our ability to deliver long-term growth and
sustainable superior investor returns."
For further information, please contact:
Young & Co.'s Brewery, P.L.C.
Patrick Dardis, Chief Executive
Michael Owen, Chief Financial Officer 020 8875 7000
MHP Communications
Tim Rowntree/Alistair de Kare-Silver/Robert
Collett-Creedy 020 3128 8147
INTERIM STATEMENT
I am very pleased with the performance of our business during
the first half of the year. In what was a challenging period up
against tough comparatives, we continued to grow profits, make
acquisitions, invest organically and increase the dividend: a
reflection of the consistent execution of our strategy and the hard
work of our teams throughout those six months.
Total revenue growth for the 26 weeks was up 7.3% to GBP168.2
million, helped by our recent acquisition activity, which included
the group of Redcomb pubs. These pubs are now fully integrated into
the Young's estate where, after a build-up period, they are trading
in line with expectations. The investment program we have planned
for them will continue through to the end of 2020.
At our AGM trading update after the first 13 weeks,
like-for-like sales were down by 2.1%. In what was a game of two
halves, the start of the half year was challenging as the poor and
unpredictable weather was a far cry from last year's exceptional
early summer sunshine. However, the summer Bank Holiday
temperatures and late-September sunshine contributed to strong
like-for-like sales growth of 4.4% in the second 13 weeks.
For the period, like-for-like sales in our well-invested managed
houses have finished ahead by 1.1%. We are pleased with this
performance given last year's exceptional summer and the uplift
from England's football success.
Ongoing investment has put, and will continue to put, pressure
on our operating margins. Our adjusted operating profit was up 5.2%
to GBP30.1 million, and adjusted profit before tax was up 3.4% to
GBP27.0 million, when excluding the impact of IFRS 16. The impact
of IFRS 16 increased our adjusted operating profit by GBP0.8
million to GBP30.9 million, whilst a further GBP1.2 million
interest charge decreased adjusted profit before tax to GBP26.6
million.
During the period we welcomed Mike Owen, our new Chief Financial
Officer, and Simon Dodd in the newly created role of Chief
Operating Officer. These appointments strengthen our executive
board and the business will benefit enormously from their
respective skills, experience and industry knowledge.
In line with our progressive dividend policy, the board has
decided to raise the interim dividend for the 23(rd) consecutive
year, by 6.0%, to 10.57 pence per share. This is expected to be
paid on 6 December 2019 to shareholders on the register at close of
business on 22 November 2019.
BUSINESS REVIEW
MANAGED HOUSES
Total revenue was up 7.8%, by GBP11.7 million, reflecting our
active investment over the past 18 months. Our managed house
division, now totalling 200 managed houses (including 30 hotels),
was up from 182 for the same period last year. On a like-for-like
basis, managed sales were up by 1.1%.
Despite the challenging prior period comparatives and ongoing
cost pressures, adjusted operating profits for our managed houses
increased, up by 4.2% to GBP37.2 million. Including the impact of
IFRS 16, our managed house adjusted operating profit rose to
GBP38.0 million.
Overall total drink sales were up 6.4%, or 0.7% on a
like-for-like basis. Last year's record summer temperatures had the
greatest benefit on drink sales as our garden and riverside pubs
provided the perfect setting. With the indifferent weather this
year, the comparatives were always going to pose a challenge, which
was reflected in a 6.6% decline in like-for-like draught lager
volumes.
Whereas last year it was the traditional summer drinks such as
Pimm's, rosé wine and draught lager that were our best sellers,
those more suited to cooler temperatures were well placed to reap
the benefits this year. Red wine was the strongest performer of all
wine categories, with sales up by 7.9%, and from our draught range,
the winner was Guinness with outstanding growth of 18.4%.
Encouragingly, our sales of cask ale have improved, reversing
the recent downward trend and ending the period with growth of
1.7%. Ahead of autumn, we have completed the rebranding of our
much-loved Young's beers, including the renamed Young's Original;
this extended to new livery on Young's dray lorries, further
endorsing our famous brands throughout our heartland.
Food sales outperformed drink for the period, with like-for-like
sales ahead of last summer by 1.9%, and up 10.6% in total. Given
the cooler weather, Sunday food sales were the main growth area, up
by 6.2%, as our range of new sharing roasts and seasonal vegetarian
options have continued to enhance the ultimate roast experience.
Our summer roadshows looked to reinvigorate the outdoor barbecue
offer that sits alongside our Burger Shacks, concentrating on the
lighter, healthier dishes. Recognising the need to provide greater
variety on our menus for non-meat options, we have introduced
dishes such as vegan fish and chips.
Our food strategy remains unchanged, focusing on premium quality
and the delivery of our five core classics whilst ensuring that
fresh, seasonal and locally sourced British ingredients remain at
the core of the dishes we serve. In recognition of our efforts, we
have been awarded a best in class three-star rating from the
Sustainable Restaurant Association and were also nominated for two
awards that celebrate the seasonal, local and responsible sourcing
of our produce.
Accommodation sales were up 12.9% in total, reflecting the
increase in our room stock, up by 88 rooms compared with the same
period last year. On a like-for-like basis, accommodation sales
increased by 1.4%, with RevPAR up GBP1.63 to GBP68.43. We now have
668 rooms in the estate.
In the second half of the year, there is planned investment to
upgrade the rooms at a number of hotels acquired last year,
including the Plantation (Poole), Station Hotel (Hither Green) and
Worplesdon Place (Guildford).
Investment in our managed houses during the first six months of
the year increased slightly to GBP15.4 million despite a quiet
period on the acquisition front. In April, we opened the Depot
(Kidbrooke Village), the latest pub in partnership with Berkeley
Homes, and the New Inn (Ealing), which transferred in from the Ram
Pub Company.
Towards the end of the period we also added the White Bear, a
premium freehold pub in Tunbridge Wells. Previously a high street
restaurant, the pub has been thoughtfully transformed into a
fashionable oasis, designed to bring the outside in through its
unique secret garden. This latest addition to the managed estate is
a testament to our acquisition strategy, and we continue to be open
to the right opportunities in exciting new locations where we
believe our premium offer will flourish.
Following their acquisition in March 2018 and significant recent
investments, we are now starting to see the benefits of the Bridge
(Chertsey) and the Park (Teddington), with both trading strongly at
the top end of our estate.
Elsewhere, major projects have been completed at the Adam &
Eve (Oxford Circus), Duchess of Kent (Islington), Guinea (Mayfair),
Riverside (Vauxhall), Waterfront (Wandsworth) and the White Hart
(Barnes). Of the Redcomb pubs, there was an investment at the Manor
Arms (Streatham) which re-opened in September, featuring the
botanical themed 'Kite Room', a metropolitan haven for diners and
drinkers. Development work also continues at the Dog & Fox
(Wimbledon Village) where the first phase of the Coach House, our
new function space, is on track to open for Christmas. The final
phase, which includes 11 new hotel rooms, will be completed in the
last quarter of the financial year.
There were two disposals during the period, as we exited the
tied leases at the Builder's Arms (Chelsea), a pub with Enterprise
Inns, and the Alphabet (Islington), a pub leased from Star Pubs
& Bars.
THE RAM PUB COMPANY
It was a challenging period for our tenanted division competing
against the tough comparatives posed by the highs of the football
World Cup last summer, reflected by a 1.6% decline in like-for-like
sales.
At the start of the financial year the New Inn (Ealing)
transferred to our managed houses, taking the estate of pubs to 69,
resulting in a decline to total sales of 4.5%, or GBP0.3
million.
Adjusted pre-IFRS 16 operating profits were down by GBP0.2
million, to GBP2.3 million, and down by GBP0.1 million on a
like-for-like basis. Under IFRS 16, adjusted operating profits for
the Ram Pub Company were GBP2.4 million.
Continued investment in the Ram Pub Company is vitally important
to ensure our pubs are maintained to a high standard in order to
attract and retain tenants. During the period, we therefore
invested in the Black Lion (Surbiton), Railway Telegraph (Thornton
Heath) and the Two Doves (Bromley).
The flagship project at the Ram Inn (Wandsworth), on the corner
of the old brewery site, was completed in October. This exciting
development features a traditional bar opening out onto the
bustling high street, and on the first floor, an indoor garden
equipped with two shuffle-board lanes and a taco truck.
FINANCE
Strong revenue growth has resulted in our adjusted earnings per
share rising 3.7% to 43.67 pence. On a post-IFRS 16 basis, our
adjusted earnings per share was 42.85 pence.
In the period, adjusting items, previously referred to as
exceptional items, totalled a cost of GBP2.3 million, compared with
a gain of GBP0.3 million last year. In line with our strategy of
investing for future growth, GBP1.8 million related to acquisition
costs and tenant compensation, including the White Bear (Tunbridge
Wells) and the New Inn (Ealing). There was a GBP0.5 million loss on
disposal for the Builder's Arms (Chelsea), a former Geronimo pub,
where the lease expired in the period, and the Alphabet
(Islington).
Our premium, well-invested, asset-backed estate and relatively
low debt levels resulted in us having one of the lowest gearing
ratios in the industry at 25.7% (April 2019: 27.6%) on a pre-IFRS
16 basis, providing the financial headroom for future
opportunities. The recent increase in M&A activity in the pub
sector is evidence that desirable locations are still well sought
after and pub property values see no sign of falling. Net debt has
come down to GBP155.0 million (April 2019: GBP163.6 million) on a
pre-IFRS 16 basis; with our record half-year adjusted EBITDA, our
net debt as a multiple of the last 12 months' adjusted EBITDA has
now reduced to 2.0 times (April 2019: 2.2 times), likewise on a
pre-IFRS 16 basis.
Under IFRS 16, the new leasing standard, there is no change to
our overall operating strategy nor impact on net cash generation.
The reallocation between operating costs and financing activities
has increased our adjusted operating profit by GBP0.8 million, with
an increase to our finance charge of GBP1.2 million, giving a
negative impact of GBP0.4 million to adjusted profit before tax.
However, due to the additional GBP72.2 million of lease liabilities
recognised under IFRS 16, our net debt increased to GBP227.2
million. Using the projected full year impact of IFRS 16 and the
last 12 months' adjusted EBITDA, our revised net debt to EBITDA
multiple increased to 2.7 times. This change in accounting standard
does not affect our ability to meet our banking covenants.
Since the year-end, corporate bond yields, the rate at which our
pension liabilities are discounted, have decreased, leading to an
increase in our retirement benefit deficit by GBP4.4 million to
GBP13.0 million. We remain committed to making additional
contributions over the coming years to help address this.
Our balance sheet strength and healthy cash generation have
allowed us to increase the interim dividend, for the 23(rd)
consecutive time. The dividend will increase by 6.0% to 10.57 pence
per share and is expected to be paid on 6 December 2019 to
shareholders on the register at close of business on 22 November
2019.
CURRENT TRADING AND OUTLOOK
Recent trading has been strong, with total sales for the past
thirteen weeks up 12.4% and up 5.1% on a like-for-like basis
demonstrating the strength of our underlying growth.
During October, key weekend trading days were dominated by heavy
rain. Although we saw an uplift from the knockout stages of the
Rugby World Cup with England's successful run to the final, there
will be an impact on the coming weeks in our heartland due to the
lack of autumn rugby internationals at Twickenham Stadium.
In the second half of the year we will see further benefit from
the Redcomb pubs through Christmas until the acquisition annualises
at the end of January. Investment is planned in the final quarter
at the Bickley (Chislehurst), Carnarvon Arms (Newbury) and
Worplesdon Place (Guildford), setting them up perfectly for the new
financial year. The New Inn (Ealing), which we transferred from the
Ram Pub Company earlier this year, will also undergo major
investment, opening in Spring 2020.
Following another period of intense Brexit debate and the
passing of yet another exit deadline, the impact that this
political and economic uncertainty has had on consumer confidence
cannot be underestimated. We hope that the upcoming general
election will bring an end to the current paralysis at Westminster.
However, its timing at the start of our busiest time of year, just
as the Christmas party season kicks into full swing, is far from
perfect. Although this prolongs the unpredictability of the
political environment, it does not change our approach or
confidence in our winning strategy of running high-quality,
well-invested premium pubs.
Our expectations for the full year are unchanged and we remain
confident in our ability to deliver long-term growth and
sustainable superior investor returns.
Patrick Dardis
Chief Executive
13 November 2019
Independent review report to the members of Young & Co.'s
Brewery, P.L.C.
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the interim report for the 26 weeks
ended 30 September 2019 which comprises the group income statement,
the group statement of comprehensive income, the group balance
sheet, the group statement of changes in equity, the group
statement of cash flow and the related explanatory notes. We have
read the other information contained in the interim report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the company in accordance with
guidance contained in International Standard on Review Engagements
2410 (UK and Ireland) "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the
Auditing Practices Board. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
company, for our work, for this report, or for the conclusions we
have formed.
Directors' Responsibilities
The interim report is the responsibility of, and has been
approved by, the directors. The directors are responsible for
preparing the interim report in accordance with AIM Rules issued by
the London Stock Exchange which require that it is presented and
prepared in a form consistent with that which will be adopted in
the company's annual accounts having regard to the accounting
standards applicable to such annual accounts.
As disclosed in note 1, the annual financial statements of the
company are prepared in accordance with IFRS's as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with AIM Rules issued by the London Stock Exchange.
Our Responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the interim report for the 26 weeks ended 30 September 2019 is
not prepared, in all material respects, in accordance with the
accounting policies outlined in note 1, which comply with IFRS's as
adopted by the European Union, and in accordance with AIM Rules
issued by the London Stock Exchange.
Ernst & Young LLP
London
13 November 2019
Group income statement
For the 26 weeks ended 30 September 2019
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
to 30 Sep to 1 Oct to 1 Apr
2019 2018 2019
Notes GBPm GBPm GBPm
------------------------------------ ----- --------- --------- --------
Revenue 2 168.2 156.8 303.7
Operating costs before adjusting
items (137.3) (128.2) (255.2)
------------------------------------ ----- --------- --------- --------
Adjusted operating profit 2 30.9 28.6 48.5
Operating adjusting items 3 (2.3) 0.3 (3.9)
------------------------------------ ----- --------- --------- --------
Operating profit 28.6 28.9 44.6
Finance costs (4.2) (2.4) (5.0)
Other finance charge 9 (0.1) (0.1) (0.1)
------------------------------------ ----- --------- --------- --------
Profit before tax 24.3 26.4 39.5
Taxation 4 (5.6) (5.6) (8.0)
------------------------------------ ----- --------- --------- --------
Profit for the period attributable
to
shareholders of the parent company 18.7 20.8 31.5
------------------------------------ ----- --------- --------- --------
Pence Pence Pence
------------------- --- ------------ ----- -----
Earnings per 12.5p ordinary share
Basic 5 38.16 42.52 64.36
Diluted 5 38.13 42.48 64.31
------------------- --- ------------ ----- -----
The results and earnings per share measures above are all from
continuing operations.
Group statement of comprehensive income
For the 26 weeks ended 30 September 2019
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
to 30 Sep to 1 Oct to 1 Apr
2019 2018 2019
Notes GBPm GBPm GBPm
--------------------------------------------- ----- ---------- --------- ---------
Profit for the period 18.7 20.8 31.5
--------------------------------------------- ----- ---------- --------- ---------
Other comprehensive income
Items that will not be reclassified
subsequently to profit or loss:
Unrealised gain on revaluation of
property - - 25.3
Remeasurement of retirement benefit
schemes 9 (4.9) 1.2 (1.2)
Tax on above components of other
comprehensive income 4 0.9 (0.1) (3.2)
Items that will be reclassified subsequently
to profit or loss:
Fair value movement of interest rate
swaps (0.2) 0.9 0.5
Tax on fair value movement of interest
rate swaps 4 0.1 (0.1) (0.1)
--------------------------------------------- ----- ---------- --------- ---------
(4.1) 1.9 21.3
Total comprehensive income attributable
to
shareholders of the parent company 14.6 22.7 52.8
---------------------------------------------------- ---------- --------- ---------
Group balance sheet
At 30 September 2019
Unaudited Unaudited Audited
at 30 Sep at 1 Oct at 1 Apr
2019 2018 2019
Notes GBPm GBPm GBPm
--------------------------------- ----- --------- --------- --------
Non-current assets
Goodwill and intangible assets 29.2 20.9 33.5
Property and equipment 8 755.0 744.1 807.0
Right-of-use asset 1 145.4 - -
Deferred tax assets 8.3 6.3 7.4
Lease premiums - 13.3 12.9
--------------------------------- ----- --------- --------- --------
937.9 784.6 860.8
--------------------------------- ----- --------- --------- --------
Current assets
Inventories 3.9 3.3 3.7
Trade and other receivables 8.8 9.0 8.3
Lease premiums - 0.7 0.7
Cash 9.3 6.4 8.5
--------------------------------- ----- --------- --------- --------
22.0 19.4 21.2
--------------------------------- ----- --------- --------- --------
Total assets 959.9 804.0 882.0
--------------------------------- ----- --------- --------- --------
Current liabilities
Borrowings - (9.5) (8.5)
Lease liability 1 (5.0) - -
Derivative financial instruments (2.1) (1.9) (1.9)
Trade and other payables (33.2) (31.2) (35.9)
Income tax payable (6.1) (6.2) (4.8)
--------------------------------- ----- --------- --------- --------
(46.4) (48.8) (51.1)
--------------------------------- ----- --------- --------- --------
Non-current liabilities
Borrowings (163.7) (122.3) (163.6)
Lease liability 1 (67.8) - -
Derivative financial instruments (4.2) (3.9) (4.2)
Deferred tax liabilities (60.5) (55.6) (60.6)
Retirement benefit schemes 9 (13.0) (4.3) (8.6)
Other liabilities (0.3) (1.1) (0.5)
--------------------------------- ----- --------- --------- --------
(309.5) (187.2) (237.5)
--------------------------------- ----- --------- --------- --------
Total liabilities (355.9) (236.0) (288.6)
--------------------------------- ----- --------- --------- --------
Net assets 604.0 568.0 593.4
--------------------------------- ----- --------- --------- --------
Capital and reserves
Share capital 10 6.1 6.1 6.1
Share premium 10 7.4 6.7 6.7
Capital redemption reserve 1.8 1.8 1.8
Hedging reserve (4.9) (4.4) (4.8)
Revaluation reserve 295.2 273.4 295.1
Retained earnings 298.4 284.4 288.5
--------------------------------- ----- --------- --------- --------
Total equity 604.0 568.0 593.4
--------------------------------- ----- --------- --------- --------
Group statement of changes in equity
For the 26 weeks ended 30 September 2019
Capital
Share capital redemption Hedging Revaluation Retained Total
Notes and premium reserve reserve reserve earnings equity
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- ------------- ----------- -------- ----------- --------- -------
At 1 April 2019 12.8 1.8 (4.8) 295.1 288.5 593.4
-------------------------------- ------------- ----------- -------- ----------- --------- -------
Impact of IFRS 16 transition 1 - - - - 0.4 0.4
Restated at 2 April 2019 12.8 1.8 (4.8) 295.1 288.9 593.8
-------------------------------- ------------- ----------- -------- ----------- --------- -------
Total comprehensive income
Profit for the 26 week period - - - - 18.7 18.7
-------------------------------- ------------- ----------- -------- ----------- --------- -------
Other comprehensive income
Remeasurement of retirement
benefit schemes 9 - - - - (4.9) (4.9)
Fair value movement of interest
rate swaps - - (0.2) - - (0.2)
Tax on above components of
other comprehensive income 4 - - 0.1 0.1 0.8 1.0
-------------------------------- ------------- ----------- -------- ----------- --------- -------
Total comprehensive income - - (0.1) 0.1 14.6 14.6
-------------------------------- ------------- ----------- -------- ----------- --------- -------
Transactions with owners recorded directly in
equity
Issued equity 10 0.7 - - - - 0.7
Dividends paid on equity shares - - - - (5.3) (5.3)
Share based payments - - - - 0.1 0.1
Movement in shares held by
Ram Brewery Trust II - - - - 0.2 0.2
Tax on share based payments - - - - (0.1) (0.1)
0.7 - - - (5.1) (4.4)
At 30 September 2019 13.5 1.8 (4.9) 295.2 298.4 604.0
-------------------------------- ------------- ----------- -------- ----------- --------- -------
At 2 April 2018 11.8 1.8 (5.2) 273.3 267.5 549.2
-------------------------------- ------------- ----------- -------- ----------- --------- -------
Total comprehensive income
Profit for the 26 week period - - - - 20.8 20.8
-------------------------------- ------------- ----------- -------- ----------- --------- -------
Other comprehensive income
Remeasurement of retirement
benefit schemes 9 - - - - 1.2 1.2
Fair value movement of interest
rate swaps - - 0.9 - - 0.9
Tax on above components of
other comprehensive income 4 - - (0.1) 0.1 (0.2) (0.2)
-------------------------------- ------------- ----------- -------- ----------- --------- -------
Total comprehensive income - - 0.8 0.1 21.8 22.7
-------------------------------- ------------- ----------- -------- ----------- --------- -------
Transactions with owners recorded directly in
equity
Issued equity 10 1.0 - - - - 1.0
Dividends paid on equity shares - - - - (5.0) (5.0)
Share based payments - - - - 0.1 0.1
1.0 - - - (4.9) (3.9)
-------------------------------- ------------- ----------- -------- ----------- --------- -------
At 1 October 2018 12.8 1.8 (4.4) 273.4 284.4 568.0
-------------------------------- ------------- ----------- -------- ----------- --------- -------
Group statement of cash flow
For the 26 weeks ended 30 September 2019
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
to 30 Sep to 1 Oct to 1 Apr
2019 2018 2019
Notes GBPm GBPm GBPm
-------------------------------------------- ----- --------- --------- --------
Operating activities
Net cash generated from operations 7 42.2 38.6 69.2
Tax paid (4.5) (4.0) (9.2)
-------------------------------------------- ----- --------- --------- --------
Net cash flow from operating activities 37.7 34.6 60.0
-------------------------------------------- ----- --------- --------- --------
Investing activities
Disposal of property and equipment 0.1 1.2 1.3
Purchases of property, equipment and
lease premiums(1) 8 (14.4) (13.5) (33.9)
Business combinations, net of cash
acquired 8 (2.9) - (25.3)
-------------------------------------------- ----- --------- --------- --------
Net cash used in investing activities (17.2) (12.3) (57.9)
-------------------------------------------- ----- --------- --------- --------
Financing activities
Issued equity - 0.2 0.3
Interest paid (3.0) (2.3) (5.1)
Equity dividends paid (5.3) (5.0) (9.9)
Capital repayment of lease liability (3.9) - -
Repayments of amounts borrowed (42.5) (16.0) (12.1)
Proceeds from borrowing 35.0 - 26.0
-------------------------------------------- ----- --------- --------- --------
Net cash flow used in financing activities (19.7) (23.1) (0.8)
-------------------------------------------- ----- --------- --------- --------
Increase/(decrease) in cash 0.8 (0.8) 1.3
Cash at the beginning of the period 8.5 7.2 7.2
-------------------------------------------- ----- --------- --------- --------
Cash at the end of the period 9.3 6.4 8.5
-------------------------------------------- ----- --------- --------- --------
(1) In the current period, in accordance with IFRS 16, there were no
investments in lease premiums.
NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTS
This interim report was approved by the board on 13 November
2019. 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
under IFRS's as adopted by the European Union, and on the basis of
the accounting policies set out in the statutory accounts of Young
& Co.'s Brewery, P.L.C. for the period ended 1 April 2019 other
than the adoption of the new accounting standard and amendment to
the accounting policy set out 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 4, taxation, where the tax charge for the half
year to 30 September 2019 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 GBP0.1m, except where otherwise indicated.
Statutory accounts for the period ended 1 April 2019 have been
delivered to the Registrar of Companies. The auditor's report on
those accounts was unqualified and did not contain any reference to
any matters to which the auditor drew attention by way of emphasis
without qualifying the report. Further, that report did not contain
a statement under s. 498(2) or (3) of the Companies Act 2006
(adequate accounting records not kept, returns inadequate, accounts
not agreeing with records and returns, or failure to obtain
necessary information and explanations).
This interim report has been prepared in accordance with the AIM
Rules for companies issued by the London Stock Exchange.
Amendments to accounting policies
The group has adopted the following change in accounting policy
during the period:
Adjusting items (previously referred to as exceptional items)
are separately disclosed to draw the attention of the reader of the
financial statements to them. This is due either to their material
and non-recurring nature or that, in management's judgement, they
are required to be disclosed separately in order to show more
accurately the business performance of the group in a consistent
manner and to reflect how the business is managed and measured on a
day-to-day basis. Prior period comparatives have not been impacted
by the change in accounting policy.
New accounting standards
The group has adopted the following new standard during the
period:
IFRS 16: 'Leases', which replaced IAS 17, was effective for the
financial period that started on 2 April 2019. IFRS 16 removed the
distinction between operating leases and finance leases for the
lessee and resulted in most leases being recognised on the balance
sheet as a lease liability and a right-of-use asset. The group has
applied the modified retrospective method of adoption; under this
method, the standard has been applied retrospectively with the
cumulative effect of initially applying the standard recognised in
retained earnings at the date of initial application, being 2 April
2019.
The group has considered its entire lease portfolio which
relates to land, buildings, vehicles and IT equipment. Before the
adoption of IFRS 16, the group classified each of its leases (as
lessee) at the inception date as either a finance lease or an
operating lease. A lease was classified as a finance lease if it
transferred substantially all the risks and rewards incidental to
ownership of the leased asset to the group; otherwise it was
classified as an operating lease. There is no change to lessor
accounting.
For leases previously classified as operating leases, the leased
property was not previously capitalised and the lease payments were
recognised as rent expense in the income statement on a
straight-line basis over the lease term. Any prepaid rent and
accrued rent were recognised under prepayments and trade and other
payables, respectively. Lease premiums paid on inception of a new
lease were capitalised and amortised over the length of the lease.
Under IFRS 16, the group has recognised a new lease liability equal
to the present value of the remaining lease payments discounted
using an incremental borrowing rate. A right-of-use asset has been
recognised equal to the lease liability, adjusted for any initial
direct costs, prepaid and accrued lease payments and any lease
premiums. The income statement now includes a depreciation charge
for the right-of-use asset and an interest expense on the lease
liability. This replaces the previous cost incurred for operating
leases that were expensed within operating expenses on a
straight-line basis over the term of the lease. Variable lease
payments, where the group's lease expense is linked to turnover or
other performance criteria, continue to be recognised as rent
within operating expenses.
For leases previously classified as finance leases, the leases
were capitalised at the commencement of the lease at the inception
date fair value of the leased asset or, if lower, at the present
value of the minimum lease payments. Lease payments were
apportioned between interest (recognised as finance costs) and
reduction of the lease liability. Under IFRS 16, the finance lease
liability and capitalised value of the lease assets have been
derecognised with, instead, a new lease liability being recognised
equal to the present value of the remaining lease payments
discounted using an incremental borrowing rate. Again, a
right-of-use asset has been recognised equal to the lease liability
adjusted for any initial direct costs, prepaid and accrued lease
payments. The right-of-use asset has further been adjusted by the
fair value of the lease assets, previously capitalised within
property and equipment, which is deemed to be the cost.
The group has applied the following practical expedients
permitted under the modified retrospective approach:
-- Excluded leases for measurement and recognition for leases
where the term ends within 12 months from the date of initial
application;
-- Applied a single discount rate to a portfolio of leases with
reasonably similar characteristics;
-- Relied on its assessment of whether leases are onerous
immediately prior to the date of initial application as an
alternative to performing an impairment review, and adjusted the
right-of-use asset accordingly on transition; and
-- Used hindsight to determine the lease term if the contract
contains options to extend or terminate.
Judgements and estimates
IFRS 16 requires certain judgements and estimates to be made.
The most significant of these relate to the following:
-- The discount rate used in the calculation of the lease
liability, which involves estimation. Discount rates are calculated
by categorising leases into portfolios with similar characteristics
and applying a single discount rate to each portfolio. This is
based on estimates of the incremental borrowing rates, dependent on
the nature of the lease terms and the lease conditions. The
weighted average incremental borrowing rate applied at the date of
transition was 3.4%.
-- IFRS 16 defines the lease term as the non-cancellable period
of a lease together with the options to extend or terminate a
lease, if the lessee were reasonably certain to exercise that
option. Where a lease includes the option for the group to
terminate the lease term, the group makes a judgement as to whether
it is reasonably certain that the option will be taken. This will
take into account the length of time remaining before the option is
exercisable, current trading, future trading forecasts as to the
ongoing profitability of the asset, and the level and type of
planned future capital investment.
Impact on transition
The lease liabilities as at 2 April 2019 can be reconciled to
the operating lease commitments as of 1 April 2019 as follows:
GBPm
------------------------------------------------ ----------- ----------- ----------
Minimum lease payments under operating leases at
1 April 2019 (120.3)
Weighted average incremental borrowing
rate at 2 April 2019 3.4%
------------------------------------------------ ----------- ----------- ----------
Discounted lease commitments at 2 April
2019 (87.8)
Less:
Adjustment in respect of variable lease
payments 4.2
Adjustment in respect of outstanding rent
reviews 5.7
Adjustment in respect of different treatment of termination
options and other changes 4.5
Add:
Commitments relating to leases previously classified as finance
leases (1.2)
Lease liability recognised as at 2 April
2019 (74.6)
------------------------------------------------ ----------- ----------- ----------
Of which:
Current lease liabilities (5.0)
Non-current lease liabilities (69.6)
------------------------------------------------ ----------- ----------- ----------
Lease liability recognised as at 2 April
2019 (74.6)
------------------------------------------------ ----------- ----------- ----------
The cumulative impact of the changes made to the group balance sheet
as at 2 April 2019 for the adoption of IFRS 16 is summarised as follows:
Pre-IFRS Post-IFRS
16 16
at 1 April IFRS 16 at 2 April
2019 adjustment 2019
GBPm GBPm GBPm
------------------------------------------------ ----------- ----------- ----------
Non-current assets
Goodwill and intangible assets(1) 33.5 (3.9) 29.6
Property and equipment 807.0 (56.5) 750.5
Right-of-use asset - 148.2 148.2
Lease premium 12.9 (12.9) -
Other non-current assets 7.4 - 7.4
------------------------------------------------ ----------- ----------- ----------
Total non-current assets 860.8 74.9 935.7
------------------------------------------------ ----------- ----------- ----------
Current assets
Lease premium 0.7 (0.7) -
Trade and other receivables 8.3 (1.3) 7.0
Other current assets 12.2 - 12.2
------------------------------------------------ ----------- ----------- ----------
Total current assets 21.2 (2.0) 19.2
------------------------------------------------ ----------- ----------- ----------
Current liabilities
Lease liability - (5.0) (5.0)
Trade and other payables (35.9) 1.3 (34.6)
Other current liabilities (15.2) - (15.2)
------------------------------------------------ ----------- ----------- ----------
Total current liabilities (51.1) (3.7) (54.8)
------------------------------------------------ ----------- ----------- ----------
Non-current liabilities
Lease liability (0.6) (69.0) (69.6)
Provisions and deferred income (0.5) 0.2 (0.3)
Other non-current liabilities (236.4) - (236.4)
------------------------------------------------ ----------- ----------- ----------
Total non-current liabilities (237.5) (68.8) (306.3)
------------------------------------------------ ----------- ----------- ----------
Net assets 593.4 0.4 593.8
------------------------------------------------ ----------- ----------- ----------
Net debt (163.6) (74.0) (237.6)
Equity
Retained earnings 288.5 0.4 288.9
Other equity accounts 304.9 - 304.9
------------------------------------------------ ----------- ----------- ----------
Total equity 593.4 0.4 593.8
------------------------------------------------ ----------- ----------- ----------
(1) The GBP3.9 million transition adjustment related to the transfer of
operating lease intangible assets into the right-of-use asset. There was
no impact on goodwill.
Amounts recognised in the balance sheet and income statement
Set out below are the carrying amounts of the group's right-of-use asset
and lease liability and the movements during the period:
Lease
Right-of-use
asset liability
GBPm GBPm
--------------------------------------------- ---------------- ------------
As at 2 April 2019 148.2 (74.6)
Lease additions and modifications 0.9 (0.9)
Depreciation expense (3.7) -
Interest expense - (1.2)
Capital repayment - 3.9
---------------------------------------------- ---------------- ------------
As at 30 September 2019 145.4 (72.8)
---------------------------------------------- ---------------- ------------
Summary of new IFRS 16 accounting policies
Right-of-use asset
The group recognises a right-of-use asset at the commencement
date of a new lease. Right-of-use assets are measured at cost, less
any accumulated depreciation and impairment losses, and adjusted
for any remeasurement of lease liabilities. The cost of a
right-of-use asset includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease payments made
at or before the commencement date less any lease incentives
received. Unless the group is reasonably certain to obtain
ownership of the leased asset at the end of the lease term, the
recognised right-of-use assets are depreciated on a straight-line
basis over the shorter of its estimated useful life and the lease
term. Right-of-use assets are subject to impairment under the
group's accounting policy for impairment.
Lease liabilities
At the commencement date of a new lease, the group recognises a
lease liability measured at the present value of lease payments to
be made over the lease term. The lease payments include fixed
payments less any lease incentives receivable, variable lease
payments that depend on an index or a rate, and amounts expected to
be paid under residual value guarantees. The lease payments also
include payments of penalties for terminating a lease, if the lease
term reflects the group exercising the option to terminate. The
variable lease payments that do not depend on an index or a rate
are recognised as an expense in the period on which the event or
condition that triggers the payment occurs.
In calculating the present value of lease payments, the group
uses the incremental borrowing rate at the lease commencement date
if the interest rate implicit in the lease is not readily
determinable. After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of interest and
reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in the
in-substance fixed lease payments or a change in the assessment to
purchase the underlying asset.
2. SEGMENTAL REPORTING
The group is organised into the reporting segments referred to
below. These segments are based on the different resources and
risks involved in the running of the group. The group's executive
board internally reviews each reporting segment's operating profit
or loss before adjusting items for the purpose of deciding on the
allocation of resources and assessing performance.
The group has two operating segments: managed houses and Ram Pub
Company. The managed house segment operates pubs. Revenue is
derived from sales of drink, food and accommodation. The Ram Pub
Company consists of pubs owned or leased by the company and leased
or subleased to third parties. Revenue is derived from rents
payable by, and sales of drink made to, tenants. Unallocated
relates to head office income and costs and unlicensed
properties.
26 weeks 26 weeks 52 weeks
to 30 Sep to 1 Oct to 1 Apr
2019 2018 2019
GBPm GBPm GBPm
--------------------------------------------- ---------- --------- ---------
Managed houses 161.3 149.6 289.7
Ram Pub Company 4.7 5.1 9.7
--------------------------------------------- ---------- --------- ---------
Revenue recognised under contracts with
customers 166.0 154.7 299.4
Managed houses 0.3 0.3 0.6
Ram Pub Company 1.7 1.6 3.3
--------------------------------------------- ---------- --------- ---------
Rental income 2.0 1.9 3.9
Unallocated income 0.2 0.2 0.4
--------------------------------------------- ---------- --------- ---------
Total revenue 168.2 156.8 303.7
--------------------------------------------- ---------- --------- ---------
Operating profit before adjusting items
Managed houses 38.0 35.7 61.5
Ram Pub Company 2.4 2.5 5.0
--------------------------------------------- ---------- --------- ---------
Adjusted operating profit before unallocated
expense 40.4 38.2 66.5
Unallocated expense (9.5) (9.6) (18.0)
--------------------------------------------- ---------- --------- ---------
Adjusted operating profit 30.9 28.6 48.5
--------------------------------------------- ---------- --------- ---------
Operating adjusting items
Managed houses (2.2) - (0.9)
Ram Pub Company - 0.3 (0.5)
Unallocated (0.1) - (2.5)
--------------------------------------------- ---------- --------- ---------
Operating profit 28.6 28.9 44.6
Finance costs (4.2) (2.4) (5.0)
Other finance charge (0.1) (0.1) (0.1)
--------------------------------------------- ---------- --------- ---------
Profit before tax 24.3 26.4 39.5
--------------------------------------------- ---------- --------- ---------
GBP0.2 million of unallocated income (2018: GBP0.2 million) is rental
income derived from unlicensed properties.
3. ADJUSTING ITEMS AND OTHER FINANCIAL MEASURES
26 weeks 26 weeks 52 weeks
to 30 Sep to 1 Oct to 1 Apr
2019 2018 2019
GBPm GBPm GBPm
------------------------------------------------- ---------- --------- ---------
Amounts included in operating profit
(Loss)/profit on disposal of properties(1) (0.5) 0.3 0.4
Tenant compensation(2) (1.5) - (0.5)
Acquisition costs(3) (0.3) - (1.2)
Upward movement on the revaluation of properties
(note 8)(4) - - 3.4
Downward movement on the revaluation of
properties (note 8)(4) - - (3.5)
Guaranteed minimum pension equalisation
(note 9)(5) - - (2.5)
------------------------------------------------- ---------- --------- ---------
(2.3) 0.3 (3.9)
------------------------------------------------- ---------- --------- ---------
Tax on adjusting items
Tax attributable to adjusting items - (0.1) 0.1
------------------------------------------------- ---------- --------- ---------
Total adjusting items after tax (2.3) 0.2 (3.8)
------------------------------------------------- ---------- --------- ---------
(1) The loss on disposal of properties related to the difference
between cash, less disposal costs, received from the lease expiry
of the Builder's Arms (Chelsea) and the termination of the lease of
the Alphabet (Islington) and the carrying value of their assets,
including goodwill, at the dates of disposal. During the previous
52 week period to 1 April 2019, the profit on sales of properties
related to the difference between cash, less selling costs,
received from the sales of the King's Arms (Mitcham) and the
William IV (Redhill) and the carrying value of their assets at the
dates of sale.
(2) During the period, the group paid GBP1.5 million to the
previous tenants of the White Bear (Tunbridge Wells), New Inn
(Ealing) and an unlicensed property (Wandsworth) to terminate their
lease agreements early. During the previous 52 week period to 1
April 2019, tenant compensation of GBP0.5 million was paid to the
previous tenants of the Bear (Cobham) and the Bayee Village
(Wimbledon Village) to terminate their lease agreements early.
(3) The acquisition costs related to professional fees and stamp
duty land tax arising on the acquisition of the White Bear
(Tunbridge Wells). During the previous 52 week period to 1 April
2019, the acquisition costs related to the purchase of Redcomb
Pubs, a corporate group with 15 sites acquired on 23 January 2019,
along with the People's Park Tavern (Hackney) and the Plantation
(Poole).
(4) The upward movement on the revaluation of properties in the
previous 52 week period to 1 April 2019 related to a reversal of
previous downward valuations in the income statement. The downward
movement on the revaluation of properties related to the impairment
charge.
(5) The Guaranteed Minimum Pension ('GMP') cost in the previous
52 week period to 1 April 2019 related to the minimum pension which
a UK occupational pension scheme must provide for those employees
who were contracted out of the State Earnings-Related Pensions
Scheme between 6 April 1978 and 5 April 1997. Following the ruling
of the High Court of Justice of England and Wales on 26 October
2018, the need to equalise the effect of differences in GMPs
between males and females was made more certain and consequently an
allowance for the effect of GMP equalisation was made in the prior
financial period. Although a number of methodologies could be used
to determine the impact, the group adopted method C2 to identify
its best estimate of the additional liabilities. The GMP
equalisation amount was charged as a past service cost in the
income statement as an exceptional item since the liabilities
related to employee service between 1990 and 1997 and it has no
link to current business performance.
Other financial measures
The table below shows how adjusted group EBITDA, operating
profit and profit 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.
26 weeks
to
30 Sep 2019 26 weeks 52 weeks
26 weeks to pre-IFRS to to
30 Sep 2019 16 1 Oct 2018 1 Apr 2019
post-IFRS pre-IFRS pre-IFRS
16 illustrative 16 16
GBPm GBPm(1) GBPm GBPm
----------------------------------- -------------- -------------- ------------- -------------
Profit before tax 24.3 24.7 26.4 39.5
Operating adjusting items 2.3 2.3 (0.3) 3.9
----------------------------------- -------------- -------------- ------------- -------------
Adjusted profit before tax 26.6 27.0 26.1 43.4
Net finance costs 4.2 3.0 2.4 5.0
Other finance charges 0.1 0.1 0.1 0.1
----------------------------------- -------------- -------------- ------------- -------------
Adjusted operating profit 30.9 30.1 28.6 48.5
Depreciation and amortisation 16.3 13.2 11.8 24.3
----------------------------------- -------------- -------------- ------------- -------------
Adjusted EBITDA 47.2 43.3 40.4 72.8
----------------------------------- -------------- -------------- ------------- -------------
(1) The 2019 results have been reported under IFRS 16. The 2018 comparatives
have not been restated,
as permitted by the accounting standard. The 2019 pre-IFRS 16 results,
which are for comparative
purposes only, have been presented on a non-statutory illustrative basis
excluding the impact of IFRS 16.
4. TAXATION
The taxation charge for the 26 weeks ended 30 September 2019 has
been calculated by applying an estimate of the effective tax rate
before adjusting items for the 52 weeks ending on 30 March 2020 of
21.1% (2019: 21.1%).
26 weeks 26 weeks 52 weeks
to to to
to 1 Oct to 1 Apr
30 Sep 2019 2018 2019
Tax charged in the group income statement GBPm GBPm GBPm
------------------------------------------------------ ----------- --------- ---------
Current tax
Corporation tax expense 5.9 5.9 9.3
Adjustment in respect of current tax of
prior periods (0.1) - (0.4)
----------------------------------------------------- ----------- --------- ---------
5.8 5.9 8.9
----------------------------------------------------- ----------- --------- ---------
Deferred tax
Origination and reversal of temporary differences (0.3) (0.3) (0.9)
Adjustment in respect of prior periods 0.1 - -
(0.2) (0.3) (0.9)
----------------------------------------------------- ----------- --------- ---------
Tax charge in the income statement 5.6 5.6 8.0
------------------------------------------------------ ----------- --------- ---------
Deferred tax in the group income statement
------------------------------------------------------ ----------- --------- ---------
Property revaluation and disposals (0.1) - (0.1)
Retirement benefit schemes 0.1 0.1 (0.2)
Capital allowances (0.4) (0.5) (0.5)
Share based payments 0.2 0.1 0.1
Trade losses - - (0.2)
------------------------------------------------------ ----------- --------- ---------
Tax (credit) in the income statement (0.2) (0.3) (0.9)
------------------------------------------------------ ----------- --------- ---------
Deferred tax in the group statement of comprehensive
income
------------------------------------------------------ ----------- --------- ---------
Interest rate swaps (0.1) 0.1 0.1
Retirement benefit schemes (0.8) 0.2 (0.3)
Property revaluation and disposals (0.1) (0.1) 3.5
Tax (credit)/charge in other comprehensive
income (1.0) 0.2 3.3
------------------------------------------------------ ----------- --------- ---------
The reduction in the headline rate of corporation tax from 19%
to 17% applicable from 1 April 2020 was substantively enacted on 15
September 2016. Accordingly, the deferred tax balances have been
measured at 17%.
5. EARNINGS PER ORDINARY SHARE
(a) Earnings
26 weeks to 26 weeks 26 weeks 52 weeks
30 Sep 2019 to to to
post-IFRS 16 30 Sep 2019 1 Oct 2018 1 April 2019
pre-IFRS pre-IFRS pre-IFRS
16 16 16
illustrative
GBPm GBPm(1) GBPm GBPm
---------------------------------------- ------------- -------------- ----------- -------------
Profit for the period 18.7 19.1 20.8 31.5
Operating adjusting items 2.3 2.3 (0.3) 3.9
Tax attributable to above adjustments - - 0.1 (0.1)
---------------------------------------- ------------- -------------- ----------- -------------
Adjusted earnings after tax 21.0 21.4 20.6 35.3
---------------------------------------- ------------- -------------- ----------- -------------
Number Number Number Number
---------------------------------------- ------------- -------------- ----------- -------------
Basic weighted average number
of ordinary shares in issue 49,003,822 49,003,822 48,919,596 48,941,761
Dilutive potential ordinary shares
from outstanding employee share
options 41,744 41,744 50,343 41,753
---------------------------------------- ------------- -------------- ----------- -------------
Diluted weighted average number
of shares 49,045,566 49,045,566 48,969,939 48,983,514
---------------------------------------- ------------- -------------- ----------- -------------
(b) Basic earnings per share
Pence Pence(1) Pence Pence
---------------------------------------- ------------- -------------- ----------- -------------
Basic 38.16 38.98 42.52 64.36
Effect of adjusting items 4.69 4.69 (0.41) 7.77
---------------------------------------- ------------- -------------- ----------- -------------
Adjusted basic 42.85 43.67 42.11 72.13
---------------------------------------- ------------- -------------- ----------- -------------
(c) Diluted earnings per share
Pence Pence(1) Pence Pence
---------------------------------------- ------------- -------------- ----------- -------------
Diluted 38.13 38.94 42.48 64.31
Effect of adjusting items 4.69 4.69 (0.41) 7.76
---------------------------------------- ------------- -------------- ----------- -------------
Adjusted diluted 42.82 43.63 42.07 72.07
---------------------------------------- ------------- -------------- ----------- -------------
(1) The 2019 results have been reported under IFRS 16. The 2018 comparatives
have not been restated,
as permitted by the accounting standard. The 2019 pre-IFRS 16 results,
which are for comparative
purposes only, have been presented on a non-statutory illustrative basis
excluding the impact of IFRS 16.
The basic earnings per share figure is calculated by dividing
the net profit for the period attributable to equity shareholders
of the parent by the weighted average number of ordinary shares in
issue during the period. Diluted earnings per share have been
calculated on a similar basis taking into account 41,744 (2018:
50,343) dilutive potential shares under the group's savings-related
share option scheme.
Adjusted earnings per share are presented to eliminate the
effect of the adjusting items on basic and diluted earnings per
share.
6. DIVIDS ON EQUITY SHARES
26 weeks 26 weeks 52 weeks
to 30 Sep to 1 Oct to 1 Apr
2019 2018 2019
Pence Pence Pence
---------------------------------- --------- -------- --------
Final dividend (previous period) 10.81 10.20 10.20
Interim dividend (current period) - - 9.97
---------------------------------- --------- -------- --------
10.81 10.20 20.17
---------------------------------- --------- -------- --------
The table above sets out dividends that have been paid. The
interim dividend, in respect of the period ended 30 September 2019,
of 10.57 pence per share at a cost of GBP5.2 million is expected to
be paid on 6 December 2019 to shareholders on the register at the
close of business on 22 November 2019.
7. NET CASH GENERATED FROM OPERATIONS AND ANALYSIS OF NET
DEBT
26 weeks 26 weeks 52 weeks
to 30 to 1 Oct to 1 Apr
Sep
2019 2018 2019
GBPm GBPm GBPm
-------------------------------------------- -------- -------- --------
Profit before tax 24.3 26.4 39.5
Finance costs 4.2 2.4 5.0
Other finance charge 0.1 0.1 0.1
-------------------------------------------- -------- -------- --------
Operating profit 28.6 28.9 44.6
Depreciation of property and equipment 12.6 11.4 23.4
Amortisation of lease premiums - 0.4 0.9
Depreciation of right-of-use asset 3.7 - -
Movement on the revaluation of property - - 0.1
Net loss/(profit) on disposal of property 0.5 (0.3) (0.4)
Guaranteed minimum pension equalisation - - 2.5
Movement in other provisions - (0.1) (0.7)
Difference between pension service cost and
cash contributions paid (0.6) (0.7) (1.3)
Share based payments 0.1 0.1 0.3
Movements in working capital
- Inventories (0.2) (0.3) (0.4)
- Receivables (1.9) (2.0) 2.4
- Payables (0.6) 1.2 (2.2)
-------------------------------------------- -------- -------- --------
Net cash generated from operations 42.2 38.6 69.2
-------------------------------------------- -------- -------- --------
Analysis of group net debt
At 30 Sep
2019 At 1 Oct At 1 Apr
pre-IFRS 2018 2019
At 30 Sep 2019 16 pre-IFRS pre-IFRS
post-IFRS 16 illustrative 16 16
GBPm GBPm(1) GBPm GBPm
------------------------------------------ -------------- -------------------- -------------- -------------
Cash 9.3 9.3 6.4 8.5
Current borrowings and loan
capital - - (9.5) (8.5)
Current lease liability (5.0) - - -
Non-current borrowings and
loan capital (163.7) (164.3) (122.3) (163.6)
Non-current lease liability (67.8) - - -
------------------------------------------ -------------- -------------------- -------------- -------------
Net debt (227.2) (155.0) (125.4) (163.6)
------------------------------------------ -------------- -------------------- -------------- -------------
(1) The 2019 results have been reported under IFRS 16. The 2018 comparatives
have not been restated,
as permitted by the accounting standard. The 2019 pre-IFRS 16 results,
which are for comparative
purposes only, have been presented on a non-statutory illustrative basis
excluding the impact of IFRS 16.
8. PROPERTY AND EQUIPMENT
Fixtures,
fittings
Land & &
buildings equipment Total
GBPm GBPm GBPm
--------------------------------------------- --------- --------- ------
Cost or valuation
At 2 April 2018 695.6 134.2 829.8
Additions 10.1 23.8 33.9
Business combinations 23.5 5.8 29.3
Disposals (1.1) (0.3) (1.4)
Fully depreciated assets (0.2) (15.5) (15.7)
Revaluation
- effect of upward movement in property
valuation 34.0 - 34.0
- effect of downward movement in property
valuation (10.4) - (10.4)
--------------------------------------------- --------- --------- ------
At 1 April 2019 751.5 148.0 899.5
Additions 2.8 11.6 14.4
Business combinations 2.3 0.6 2.9
Disposals (0.7) (0.4) (1.1)
Fully depreciated assets (0.2) (7.7) (7.9)
Transfer out to right-of-use asset (58.3) - (58.3)
--------------------------------------------- --------- --------- ------
At 30 September 2019 697.4 152.1 849.5
--------------------------------------------- --------- --------- ------
Depreciation and impairment
At 2 April 2018 29.9 57.0 86.9
Depreciation charge 1.9 21.5 23.4
Disposals (0.4) (0.1) (0.5)
Fully depreciated assets (0.2) (15.5) (15.7)
Revaluation
- effect of downward movement in property
valuation 3.5 - 3.5
- effect of upward movement in property
valuation (5.1) - (5.1)
--------------------------------------------- --------- --------- ------
At 1 April 2019 29.6 62.9 92.5
Depreciation charge 0.7 11.9 12.6
Disposals (0.7) (0.2) (0.9)
Fully depreciated assets (0.2) (7.7) (7.9)
Transfer out to right-of-use asset (1.8) - (1.8)
--------------------------------------------- --------- --------- ------
At 30 September 2019 27.6 66.9 94.5
--------------------------------------------- --------- --------- ------
Net book value
At 2 April 2018 665.7 77.2 742.9
--------------------------------------------- --------- --------- ------
At 1 April 2019 721.9 85.1 807.0
--------------------------------------------- --------- --------- ------
At 30 September 2019 669.8 85.2 755.0
--------------------------------------------- --------- --------- ------
Revaluation of property and equipment
The values of the group's freehold land and freehold buildings
and fixtures and fittings were reviewed in light of current market
factors by Andrew Cox MRICS, the group's director of property and
tenancies, and a Chartered Surveyor, pursuant to the group's
accounting policy. The values of the group's properties have not
been updated as at 30 September 2019 from their year-end market
values as there has been no material change in the current period.
Details of the methodology used, key inputs and their
sensitivities, and the assumptions in determining the group's
property values are detailed in the group's audited accounts for
the 52 weeks ended 1 April 2019.
9. 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 30 Sep to 1 Oct to 1 Apr
2019 2018 2019
GBPm GBPm GBPm
------------------------------------------ ---------- --------- ---------
Changes in the present value of the retirement benefit schemes are as
follows:
Opening deficit (8.6) (6.1) (6.1)
Current service cost (0.2) (0.1) (0.3)
Past service cost - - (2.5)
Contributions 0.8 0.8 1.6
Other finance charge (0.1) (0.1) (0.1)
Remeasurement through other comprehensive
income (4.9) 1.2 (1.2)
------------------------------------------ ---------- --------- ---------
Closing deficit (13.0) (4.3) (8.6)
------------------------------------------ ---------- --------- ---------
10. SHARE CAPITAL
Total share capital comprises the nominal value of the share
capital issued and fully paid of GBP6.1 million (April 2019: GBP6.1
million) and the share premium account of GBP7.4 million (April
2019: GBP6.7 million). Share capital issued in the period comprises
a nominal value of GBPnil (April 2019: GBPnil) and a share premium
of GBP0.7 million (April 2019: GBP1.0 million).
The shares issued in the current period relate to directors' and
senior management's share awards.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR LLFFTLDLVLIA
(END) Dow Jones Newswires
November 14, 2019 02:00 ET (07:00 GMT)
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