Interim results For the 26 weeks ended 1 st October 2018 FY19 H1 1 - - PowerPoint PPT Presentation

Interim results

For the 26 weeks ended 1st October 2018

1

FY19 H1

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Patrick Dardis

CEO

Strategy and

• verview

FY19 H1

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Premium Individual Differentiated

FY19 H1

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Performance history

FY15 Interim FY16 Interim FY17 Interim FY18 Interim FY19 Interim Managed House LFL performance +7.0% +5.5% +5.4% +4.6% +5.2% Strong operating margins 18.3% 18.5% 18.5% 19.3% 18.2% Adjusted earnings per share 30.00p 33.59p 36.30p 41.15p 42.11p Healthy cash generation £26.1M £31.3M £33.1M £33.2M £38.6M

Consistent LFL sales growth driving healthy cash generation for investment

FY19 H1

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Results highlights

Revenue £156.8M +8.8% Operating profit* £28.6M +2.9% PBT* £26.1M +4.8% EPS* 42.11p +2.3% Dividend 9.97p +6.0%

*Adjusted to exclude exceptional items

FY19 H1

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Steve Robinson

CFO

Financial review

FY19 H1

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Operating performance

Managed Houses* £35.7M +2.0% Ram Pub Co* £2.5M +4.2% Outlet profit* £38.2M +2.1% Operating profit* £28.6M +2.9%

*Adjusted to exclude exceptional items

FY19 H1

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Operating margin

30.0 31.0 32.0 33.0 34.0 35.0 36.0 37.0 FY18 H1 External factors LFL growth Investment FY19 H1

£35.0M £35.7M

+£2.7M

• £0.6M
• £1.4M

£M

35.7 35.0 31.5 29.8 27.3 FY19 H1 FY18 H1 FY17 H1 FY16 H1 FY15 H1 Operating margin %

24.8% 24.9% 24.5% 25.5% 23.8% £M

FY19 H1

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Managed LFL performance

AWT per pub £32.0K +5.2% EBITDA* £46.0M +3.1% Operating profit* £36.3M +3.7% Profit margin* 25.4% -0.3pts

*Adjusted to exclude exceptional items

Revenue £143.1M +5.2%

FY19 H1

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Free cash flow

EBITDA* 40.4 38.6 Working capital (1.1) (1.9) Maintenance capex (5.6) (6.5) Pension contributions (0.6) (0.7) Free cash flow 26.6 22.1 FY19 £M FY18 £M Interest/tax/other (6.5) (7.4)

* Adjusted to exclude exceptional items

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Net funds flow

Free cash flow 26.6 22.1 Share proceeds 0.2

• Dividends

(5.0) (4.7) Development capex (5.0) (3.2) Acquisitions* (1.7) (5.3) FY19 £M FY18 £M Net funds flow 15.1 8.9

*Including transfers and net of disposals

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Capex investment

FY19 FY18 Existing estate £10.5M £10.6M Acquisitions £2.9M £4.6M Other £0.1M £0.1M Total investment £13.5M £14.3M

• 5.0

10.0 15.0

FY18 FY19

Managed pubs Managed hotels Ram Pub Co Other

£M

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Freehold rich estate

Total

April 2018 181 74 255 Additions 1

• 1

Disposals

• (4)

(4) October 2018 182 70 252

• 194 freeholds and 17 long leases with peppercorn

rents – 84% of our estate

• Location is key – 81% of our pubs are within the M25

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Long term finance

FY19 H1

50 30 20 75

10 20 30 40 50 60 70 2019 2020 2021 2022 2023 2024 2025 Term Loans Revolving credit facility

£M

Gearing 22.1% Loan to Value 16.9% Net Debt to EBITDA 1.8 times

Current Net Debt £125.4M

Headroom £49.6M

Total Facility £175.0M

(with extension)

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Patrick Dardis Operational review

FY19 H1

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Managed highlights

• Total revenue up 9.0%
• LFL revenue up by 5.2%
• Operating profit up by 2.0% to £35.7M
• Invested £12.1M primarily on our LFL

estate

• Last year’s two hotel acquisitions have

driven room sales growth up by 18.3%

FY19 H1

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• England’s success at the World Cup helped boost

draught sales with lager up 6.8% and cider up 8.7%

• Summer drinks at the heart of our growth with

both Pimm’s and rosé wine up 27%

• Gin revolution shows no sign of slowing with

volume up by 35%

Managed drink sales

Drink sales Total +10.2% LFL +7.4% LFL draught sales up by 6.0%

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Managed food sales

• Food sales affected by the warm weather particularly

impacting on our Ultimate Sunday Roasts

• Number of Burger Shacks now stands at 36
• Monthly chef forums help create an inspirational

environmental for our head chefs Food sales Total +4.8% LFL +0.1% Burger Shack sales up by 20.8%

FY19 H1

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Hotel revenue

Room sales Total +18.3% LFL +3.3% Occupancy at 78.1%

£60.38 £63.79 £63.80 £68.01 £70.49 FY15 FY16 FY17 FY18 FY19 LFL RevPAR

• Two new hotels added last year increased our room

stock to 580 rooms, 255 of which are boutique

• Total average room rate of £85.42
• LFL RevPAR up to £70.49, an increase of 3.6%

£

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Project pipeline

• Continuing to develop our existing

estate

• Transformed the garden oasis at King’s Arms (Wandsworth)
• Added an outdoor mezzanine at Wheatsheaf (Borough Market)
• Created a new cocktail bar upstairs in the Marquess of Anglesey

…(Covent Garden)

• Maximising hotel opportunities
• Developments due to start at recent acquisitions Park

…(Teddington) and Bridge (Chertsey)

• Opportunity led acquisitions
• Due to open the Depot (Kidbrooke) in Spring 2019
• Exchanged contracts on the People’s Park Tavern (Victoria Park)
• Acquisitions remain an integral part of our strategy and our

…pipeline remains strong

FY19 H1

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Ram Pub Co

Beer sales Total +4.7% LFL +7.3% Barrelage Total +2.4% LFL +3.8%

• Total sales up by 3.1% and up by 4.8% on a LFL basis
• Invested in four Ram Pub Co pubs focussing on

improving outside trading space

• Good estate management; disposing of four sites at

the tail end of the estate for combined £0.3M profit

• Improved tenants’ digital presence in over 30 pubs

FY19 H1

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Outlook

• Solid trading for the past six weeks. Managed house

revenue up by 7.2% in total and 3.9% on a LFL basis

• Second half benefit from recent acquisitions will be
• ffset by temporary closure at the Park and Bridge
• Economic and political uncertainty remains, posing

challenges to recruitment and further cost pressures

• Grateful to the Chancellor for the welcome freeze to

beer duty… but hoped for more support

• Remain confident in our winning strategy to

withstand challenges ahead and our expectations remain unchanged

FY19 H1

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FY19 H1

Questions