Financial Highlights
· Adjusted earnings per share up 6% to 32.44p (2015/16: 30.74p)
· Adjusted profit before tax up 6% to £22.8 million (2015/16: £21.6 million)
· Revenue up 11% to £197.6 million (2015/16: £177.7 million)
· EBITDA up 9% to £36.3 million (2015/16: £33.3 million)
· Interim dividend up 5% to 7.25p (2015/16: 6.90p)
· Net debt to EBITDA at 3.0 times (2015/16: 3.0 times)
Operational Indicators
· Managed Pubs and Hotels grew like for like sales by 3.4%, supported by further growth in food, with a rise in operating profit before exceptional items of 6%
· Tenanted Inns operating profit before exceptional items marginally down 1% and like for like profit down 2%
· Craft beer brands showed strong growth for The Fuller's Beer Company and operating profit before exceptional items rose by 8%, although total beer and cider volumes decreased by 4%
1. Calculated using adjusted profit after tax and the same weighted average number of shares as for the basic earnings per share and using a 40p ordinary share. Basic earnings per share were 32.08p (2015/16: 29.84p)
2. Adjusted profit before tax is the profit before tax excluding exceptional items. Statutory profit before tax was £21.4 million (2015/16: £21.2 million)
3. Pre-exceptional earnings before interest, tax, depreciation, profit on disposal of properties and amortisation
4. Net debt to EBITDA is calculated on a pro forma 12 month basis adjusting as appropriate for acquisitions and disposals
Strategy Update
· Acquired two new Managed Pubs, The Gun on the River Thames in Docklands overlooking The O2 arena, and The Half Moon, Herne Hill
· Added 16 boutique hotel rooms to our estate, which is well-positioned to attract expected additional inbound tourists and staycationers
· Further developed our portfolio of premium brands with the addition of new Sierra Nevada beers, Cornish Orchards Blush on draught and Alhambra, a refreshing premium lager imported from Spain
· Investment in additional warehouse capacity at Nectar, with further expansion at Cornish Orchards nearing completion
· Ongoing investment in our team across the Group to ensure we recruit, develop and retain motivated and inspired people
Current Trading and Outlook
· Managed Pubs and Hotels like for like sales up by 2.6% for 33 weeks
· Tenanted Inns like for like profit down by 2% for 33 weeks
· Total beer and cider volumes down by 5% for 33 weeks
· Acquired The Albert Arms in Esher – a freehold site and our first pub in the area
· Started development schemes in six pubs since the half year, with 15 more planned before the year end
· Opened The Stable, Exeter in October 2016
Commenting on the results, Chief Executive Simon Emeny said: “We have had a good start to the year and our Managed Pubs and Hotels, which represent the largest share of our profits, have yet again led the way with a rise in like for like sales that has outperformed the market.
“Trading since the period end has been good and as expected, with comparisons to last year being heavily influenced by the 2015 Rugby World Cup. For the first 33 weeks, like for like sales in our Managed Pubs and Hotels grew 2.6%, Tenanted Inns like for like profits declined 2% and Fuller's Beer Company volumes fell 5%.
“There is no doubt that the UK economy is facing some significant challenges. The impact of increases in business rates and the National Living Wage, combined with uncertainty around the UK's departure from the EU, make for changing times ahead. However, Fuller's has a long-term, strategic vision, a solid balance sheet and a predominantly freehold estate, which is well-invested and supported by excellent, engaged team members and dedicated, skilled management. These are the qualities needed to continue to delight and excite our customers, provide a good return for our shareholders and attract the best new recruits to our business.”