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

Preliminary results

For the 52 weeks ended 30th March 2020

1

Coronavirus update

FY2020

Patrick Dardis

CEO

Mike Owen

CFO

2

Coronavirus

FY2020

Impact

• All managed houses and Ram Pub Company pubs closed 20th 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

3

Where we are now

FY2020

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 4th July
• What social distancing requirements will remain in place
• Customers attitudes and behaviours

4

What happens next

FY2020

• Planning to open with 1m social distancing
• 3rd 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

5 50 30

FY2020

30

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

• 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

6

Finance facilities

50 30

FY2020

Total £285.0m : Current debt £223.0m : Headroom £62.0m £m

30.0 20.0 50.0 20.0 100.0 35.0

10 20 30 40 50 60 70 80 90 100 2021 2022 2023 2024 2025 2026 2027 2039

Term Loans Revolving credit facility Private placement CCFF 30.0

7

Financial results

Mike Owen

FY2020

8

Results highlights

Revenue £311.6m £303.7m

+2.6%

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

FY20**

FY19 Var %

FY2020

EBITDA* £71.8m £72.8m

• 1.4%

9

Operating 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% FY20**

FY19 Var %

*Adjusted to exclude non-underlying items **Presented on an illustrative basis to exclude the impact of IFRS 16

FY2020

10

Free cash flow

EBITDA* 71.8 72.8 Working capital (2.0) (0.2) Maintenance capex (14.2) (13.4) Interest (6.1) (5.1) Free cash flow 32.1 44.3 FY20 £m** FY19 £m Tax/pensions/other (17.4) (9.8)

* Adjusted to exclude non-underlying items ** Presented on an illustrative basis to exclude the impact of IFRS 16

FY2020

11

Free cash flow 32.1 44.3 Share proceeds

• 0.3

Dividends (10.5) (9.9) Development capex (17.1) (14.7) Net funds flow (35.1) (23.1) FY20 £m** FY19 £m Acquisitions* (39.6) (43.1)

* Including transfers and net of disposals ** Presented on an illustrative basis to exclude the impact of IFRS 16

Net funds flow

FY2020

12

Freehold rich estate

Total

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

13

IFRS 16 Leases

• Changes to Income Statement for the year ended 30th 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 2nd 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

14

Results highlights restated

EBITDA* £79.6m £71.8m

£7.8m

Operating profit* £46.5m

£44.8m £1.7m

PBT* £37.7m

£38.5m £(0.8)m

EPS* 60.18p 62.22p

(2.04)p

Net debt £280.4m £198.7m

£(81.7)m

*Adjusted to exclude non-underlying items

Post Pre IFRS 16 IFRS 16 Change

FY2020

15

Operational review

Patrick Dardis

FY2020

16

Managed LFL performance

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

Revenue £278.8m £285.6m

• 2.4%

FY20**

FY19 Var %

FY2020

17

• 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 10th Best Gastropub in UK
• Invested £27.3m in our LFL estate and spent £2.7m on the

Redcomb pubs

Managed highlights

Drink sales Total +2.0% LFL -2.6% Food sales Total +5.1% LFL -1.7% Room sales Total +5.3% LFL -3.1%

FY2020

18

• 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
• f two pubs at the tail of the estate in 2020
• Four month rent holiday given to majority of our

tenants until July 2020

Ram Pub Company

Beer sales Total -9.3% LFL -6.1% Barrelage Total -12.3% LFL -9.6%

FY2020

19

Investment

• 10.0

20.0 30.0 40.0 50.0 60.0 70.0 FY16 FY17 FY18 FY19 FY20

Existing estate Acquisitions Other

£m Total investment

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

20

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

21

Performance history

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 Another period of healthy cash generation funding our ongoing investment

*Presented on an illustrative basis to exclude the impact of IFRS 16

FY2020

22

Looking forward

FY2020

• Pubs expected to be open for 3rd 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

23

Attractive long-term investment case

FY2020

• 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