Preliminary For the 52 weeks ended 30 th March 2020 results - PowerPoint PPT Presentation

Preliminary For the 52 weeks ended 30 th March 2020 results

Coronavirus update Patrick Dardis CEO Mike Owen CFO FY2020 1

Coronavirus Impact All managed houses and Ram Pub Company pubs closed 20 th March • • Estimated loss of revenue for March of £13.0m • Profits negatively impacted by approximately £7.7m Actions taken • Furloughed 99% of our team • Board of directors have taken a temporary 20 per cent pay cut • Suspended dividend payments • Postponed all development capex; prioritising essential maintenance • Four-month rent holiday given to majority of our tenants • Improved liquidity with £285.0m of committed facilities FY2020 2

Where we are now What we know • Business rates holiday; a cost saving of £14.5m in FY21 • Wasted beer to be replaced free of charge by our key suppliers • Small business grants of £25k for 13 managed pubs totalling £325k • Deferred Q1 VAT payments • Future arrangements of the Job Retention Scheme What remains uncertain Pubs will not be opening any earlier than 4 th July • • What social distancing requirements will remain in place • Customers attitudes and behaviours FY2020 3

What happens next • Planning to open with 1m social distancing 3 rd August reopening to ensure our staff and customers • are more confident to return to our pubs • Pubs with gardens and hotels may open sooner • Tablet service and order at table • Thorough cleaning and hygiene practices • Improved liquidity & replaced financial covenants FY2020 4

Liquidity and financing Short term • Partially accessed HM Treasury CCFF with £30.0m of commercial paper issued in May 2020 • Entered into a new £20.0m revolving credit facility with NatWest • Replaced our existing financial covenants with a monthly £20.0m liquidity test up until June 2021 Long term 50 30 30 • New £50.0m term loan with NatWest and HSBC with an original maturity date of May 2025 • Improved liquidity - now with £285.0m of committed funds and facilities FY2020 5

Finance facilities Total £285.0m : Current debt £223.0m : Headroom £62.0m £m 100 90 80 70 60 50 100.0 40 50 30.0 30 30 50.0 20 35.0 30.0 10 20.0 20.0 0 2021 2022 2023 2024 2025 2026 2027 2039 Term Loans Revolving credit facility Private placement CCFF FY2020 6

Financial results Mike Owen FY2020 7

Results FY20 ** FY19 Var % highlights Revenue £311.6m £303.7m +2.6% EBITDA * £71.8m £72.8m -1.4% Operating profit * £44.8m £48.5m -7.6% PBT * £38.5m £43.4m -11.3% EPS * 62.22p 72.13p -13.7% Dividend 10.57p 20.78p -49.1% *Adjusted to exclude non-underlying items **Presented on an illustrative basis to exclude the impact of IFRS 16 FY2020 8

Operating FY20 ** FY19 Var % performance Managed Houses * £58.4m £61.5m -5.0% Ram Pub Co * £4.2m £5.0m -16.0% Outlet profit * £62.6m £66.5m -5.9% Operating profit * £44.8m £48.5m -7.6% *Adjusted to exclude non-underlying items **Presented on an illustrative basis to exclude the impact of IFRS 16 FY2020 9

Free cash flow FY20 £m** FY19 £m EBITDA* 71.8 72.8 Working capital (2.0) (0.2) Maintenance capex (14.2) (13.4) Interest (6.1) (5.1) Tax/pensions/other (17.4) (9.8) Free cash flow 32.1 44.3 * Adjusted to exclude non-underlying items ** Presented on an illustrative basis to exclude the impact of IFRS 16 FY2020 10

Net funds flow FY20 £m** FY19 £m Free cash flow 32.1 44.3 Share proceeds - 0.3 Dividends (10.5) (9.9) Development capex (17.1) (14.7) Acquisitions * (39.6) (43.1) Net funds flow (35.1) (23.1) * Including transfers and net of disposals ** Presented on an illustrative basis to exclude the impact of IFRS 16 FY2020 11

Freehold rich Total estate April 2019 199 70 269 Additions 9 1 10 Transfers 1 (1) - Disposals (2) (1) (3) March 2020 207 69 276 • 206 freeholds and 24 long leases with peppercorn rents – 83% of our estate • Location is key – 80% of our pubs are within the M25 FY2020 12

IFRS 16 Leases • Changes to Income Statement for the year ended 30 th March 2020 • EBITDA increased by £7.8m as rent charge is eliminated • Adjusted operating profit increased by £1.7m • Adjusted PBT decreased by £0.8m • Changes to Balance Sheet as at date of adoption on 2 nd April 2019 • Introduction of new lease liabilities of £74.0m • Total assets increase by £73.0m to reflect the right-of-use assets • Changes to Cash Flow Statement • No effect on the group’s net cash flow • Separate disclosure of principal lease payments and interest, as rent no longer in operating activities FY2020 13

Results highlights Post Pre IFRS 16 IFRS 16 Change restated EBITDA * £79.6m £71.8m £7.8m Operating profit * £46.5m £44.8m £1.7m PBT * £37.7m £38.5m £(0.8)m Net debt £280.4m £198.7m £(81.7)m EPS * 60.18p 62.22p (2.04)p *Adjusted to exclude non-underlying items FY2020 14

Operational review Patrick Dardis FY2020 15

Managed LFL FY20 ** FY19 Var % performance Revenue £278.8m £285.6m -2.4% AWT per pub £29.8k £30.5k -2.4% EBITDA * £81.4m £83.8m -2.9% Operating profit * £59.3m £62.3m -4.8% Profit margin * 21.3% 22.8% -0.5pts * Adjusted to exclude non-underlying items ** Presented on an illustrative basis to exclude the impact of IFRS 16 FY2020 16

Managed Drink sales Food sales Room sales Total +2.0% Total +5.1% Total +5.3% highlights LFL -2.6% LFL -1.7% LFL -3.1% • Total managed revenue up by 3.0% to £299.1m • Re-branding of our much- loved Young’s beers, including the renamed Young’s Original • Hotel sales driven by room stock growth; total rooms: 687 - an increase of 107 rooms in the last two years Guinea (Mayfair) crowned 10 th Best Gastropub in UK • • Invested £27.3m in our LFL estate and spent £2.7m on the Redcomb pubs FY2020 17

Ram Pub Beer sales Barrelage Total -9.3% Company Total -12.3% LFL -6.1% LFL -9.6% • Revenue down by 6.9% and 4.1% on a LFL basis • Total profits down by £0.8m to £4.2m • Transferred the New Inn (Ealing) to managed houses • Sold the Bristol Ram for £0.9m and will exit the leases of two pubs at the tail of the estate in 2020 • Four month rent holiday given to majority of our tenants until July 2020 FY2020 18

Investment 70.0 £m 60.0 Total 50.0 investment 40.0 30.0 20.0 10.0 - FY16 FY17 FY18 FY19 FY20 Existing estate Acquisitions Other Existing estate £27.8m £25.7m £20.5m £25.0m £31.0m Acquisitions £16.7m £12.0m £32.1m £41.9m £39.6m Other £0.6m £0.6m £0.4m £0.2m £0.2m Total Investment £45.1m £38.3m £53.0m £67.1m £70.8m FY2020 19

Investment highlights Developing our existing estate - Multi-million pound project at the Dog & Fox hotel (Wimbledon Village) adding a further 11 boutique rooms and the new ‘Coach House’ function suite - Refurbished two Thame-side pubs; Boathouse (Putney) & Riverside (Vauxhall) - Exciting scheme underway to increase trading space at Green Man (Putney) Maximising hotel opportunities - Five new rooms added at City Gate (Exeter) as well as new rooms at Canford hotel and Bear (Esher) - Designated investment to meet long term vision of room quality Opportunity led acquisitions - Standout purchase of five of the finest pubs in south-west London & Surrey - Added the White Bear (Tunbridge Wells) and Depot (Kidbrooke Village) - Transfer of the New Inn (Ealing) to managed house division - Pipeline acquisitions of Constitution (Camden) and Enderby House (Greenwich) FY2020 20

Performance history Another period of healthy cash generation funding our ongoing investment FY16 FY17 FY18 FY19 FY20* Managed House LFL performance +5.6% +4.7% +4.2% +5.1% -2.4% Strong operating margins 16.8% 17.1% 16.8% 16.0% 14.4% Adjusted earnings per share 58.44p 66.43p 67.74p 72.13p 62.22p Healthy cash generation £60.4m £63.5m £61.4m £69.2m £64.7m Active investment strategy £45.1m £38.3m £53.0m £67.1m £70.8m *Presented on an illustrative basis to exclude the impact of IFRS 16 FY2020 21

Looking forward Pubs expected to be open for 3 rd August • • Turnover for FY21 materially below normal level • Second 4 months sales at an average of 55% • Final 4 months sales at an average of 70% • Turnover back to more normalised levels from FY22 • Margins not significantly impacted • Furlough scheme running until October provides flexibility • Reviewed all operating costs and operational efficiencies • Business rates holiday FY2020 22

Attractive long-term investment case • Benefit from the fantastic acquisitions and investments in our existing estate made in the previous year • Unique opportunity to review how we operate our business • Looking forward to reuniting our team and welcoming back our customers • We remain confident in our proven strategy of running premium, individual and differentiated pubs FY2020 23