Preliminary results For the 52 weeks ended 1 st April 2019 FY19 1 - - PowerPoint PPT Presentation

Preliminary results

For the 52 weeks ended 1st April 2019

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FY19

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Strategy and

• verview

FY19

Patrick Dardis

CEO

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Premium Individual Differentiated

FY19

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Results highlights

Revenue £303.7M +8.7% Operating profit* £48.5M +3.4% PBT* £43.4M +5.9% EPS* 72.13p +6.5% Dividend 20.78p +6.0%

*Adjusted to exclude exceptional items

FY19

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Performance history

FY15 FY16 FY17 FY18 FY19 Managed House LFL performance +6.5% +5.6% +4.7% +4.2% +5.1% Strong operating margins 16.6% 16.8% 17.1% 16.8% 16.0% Adjusted earnings per share 51.04p 58.44p 66.43p 67.74p 72.13p Healthy cash generation £50.6M £60.4M £63.5M £61.4M £69.2M Active investment strategy £50.9M £45.1M £38.3M £53.0M £67.1M

Consistent LFL sales growth and strong operating margins drive cash for investment

FY19

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Managed LFL performance

AWT per pub £30.6K +5.1% EBITDA* £83.1M +3.2% Operating profit* £63.3M +3.1% Profit margin* 23.1%

• 0.5pts

*Adjusted to exclude exceptional items

Revenue £273.7M +5.1%

FY19

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Financial review

FY19

Daniel Quint

Interim CFO

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Operating performance

Managed Houses* £61.5M +1.3% Ram Pub Co* £5.0M +13.6% Outlet profit* £66.5M +2.2% Operating profit* £48.5M +3.4%

*Adjusted to exclude exceptional items

FY19

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Free cash flow

EBITDA* 72.8 68.7 Working capital (0.2) (3.5) Maintenance capex (13.4) (13.7) Pension contributions (1.3) (1.2) Free cash flow 44.3 35.4 FY19 £M FY18 £M Interest/tax/other (13.6) (14.9)

* Adjusted to exclude exceptional items

FY19

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Net funds flow

Free cash flow 44.3 35.4 Share proceeds 0.3

• Dividends

(9.9) (9.3) Development capex (14.7) (7.2) Acquisitions* (43.1) (32.8) FY19 £M FY18 £M Net funds flow (23.1) (13.9)

*Including transfers and net of disposals

FY19

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Investment

FY19

• 20.0

40.0 60.0 FY15 FY16 FY17 FY18 FY19

Existing estate Acquisitions Other

Total investment £M

Existing estate £26.3M £27.8M £25.7M £20.5M £25.0M Acquisitions £24.3M £16.7M £12.0M £32.1M £41.9M Other £0.3M £0.6M £0.6M £0.4M £0.2M Total Investment £50.9M £45.1M £38.3M £53.0M £67.1M

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Freehold rich estate

Total

April 2018 181 74 255 Additions 18 1 19 Disposals

• (5)

(5) April 2019 199 70 269

• 200 freeholds and 22 long leases with peppercorn

rents – 83% of our estate

• Location is key – 80% of our pubs are within the M25

FY19

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Financial profile

FY19

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%

• 0.5

1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 FY15 FY16 FY17 FY18 FY19

Net debt to EBITDA LTV Gearing

Net debt to EBITDA Loan to Value & Gearing

Conservative financial profile designed to create and preserve long term value Net debt to EBITDA 2.2 times Gearing 27.6% Loan to value 20.3%

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Finance facilities

FY19

20 40 60 80 100 120 2019 2020 2021 2022 2023 2024 2039

Term Loans Revolving credit facility Private placement

£M

Current Total Facilities £200.0M

Current Net Debt £163.6M

£35.0M

• f loan notes

at 3.30% for 20 years*

50 30 100 20 35

Future Total Facilities £235.0M

*Following the end of the financial year, we secured additional long term debt financing through a private

• placement. This will see us raise £35.0M in July 2019.

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IFRS 16 Leases

FY19

• Primarily changes lease accounting for lessee

eliminating distinction between finance leases and

• perating leases
• Leases qualified under IFRS 16 will be captured on the

balance sheet from the effective date of 2nd April 2019 using the modified retrospective method

• Prior comparative periods will not be restated under

IFRS 16

• It will have no impact on the way Young’s does business
• And there will be no effect on banking covenants

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IFRS 16 Leases

FY19

Estimated impact:

• Changes to Income Statement for the year ending 30th March 2020
• EBITDA expected to increase by £7.0M - £9.0M as rent charge

is eliminated

• Adjusted operating profit to increase by £1.2M - £1.8M
• Adjusted PBT will decrease by between £0.7M - £1.3M
• Changes to Balance Sheet at opening date of 2nd April 2019
• Gross up of liabilities and assets of £78.0M - £82.0M
• This reflects the introduction of a right-of-use asset and new

lease liability

• 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

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Operational review

FY19

Patrick Dardis

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Managed highlights

• Profits increase despite cost headwinds
• Invested £22.7M on our LFL estate
• Acquired the Redcomb pub group consisting of

15 pubs including 4 hotels

• Well placed to capitalise on key trading periods
• Improved online presence with launch of new

pub websites

FY19

Revenue Total +9.0% LFL +5.1% Operating profit up 1.3% to £61.5M

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• Lager sales up 6.2% on the back of warm summer

and England’s World Cup success

• Keg ale sales up 22.9%, outselling cask ale for first

time

• Quality and perfectly served cocktails grow by 32.1%
• Premiumisation helping drive sales growth

Managed drink sales

Drink sales Total +9.6% LFL +6.5% Draught sales up by 5.4%

FY19

Gin sales up by 35.2%

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Managed food sales

• Food sales affected by the warm weather particularly

impacting on our Ultimate Sunday Roasts

• ‘Famous For’ food strategy encourages customer

association and menu individuality

• British, seasonal and fresh ingredients are at the heart of

every dish we produce Food sales Total +6.1% LFL +1.6% Burger Shack sales up by 29.1%

FY19

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Hotel revenue

Room sales Total +19.6% LFL +5.4% LFL Occupancy at 75.5%

£56.88 £60.01 £60.84 £63.15 £66.39 FY15 FY16 FY17 FY18 FY19 LFL RevPAR

• Five new hotels added; increased our room stock

to 668 rooms, 258 of which are boutique

• LFL average room rate up 4.0% to £87.88
• LFL RevPAR up to £66.39, an increase of 5.1%

£

FY19

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FY19

• Total of 15 pubs located in and around

Central London and the South West

• 7 freeholds and long leaseholds, 8 short

leaseholds

• Includes 4 hotels adding 80 rooms to
• ur total room stock
• Group generates run-rate EBITDA of

approximately £4.0M

Redcomb Pubs

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Investment highlights

Developing our existing estate

• Transformed the garden oasis at King’s Arms (Wandsworth)
• Added an outdoor mezzanine at Wheatsheaf (Borough Market)
• Increased trading space at Hand in Hand (Wimbledon Village)

Maximising hotel opportunities

• Transformed pub and dining areas at the Park (Teddington) and

the Bridge (Chertsey)

• Designated investment to meet long term vision of room quality

Opportunity led acquisitions

• Acquisition of the 15 Redcomb pubs
• Transferred the Bear (Cobham)
• Addition of People’s Park Tavern (Hackney) to the Ram Pub Co
• Acquisitions remain an integral part of our strategy

FY19

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Ram Pub Co

Beer sales Total +4.9% LFL +6.3% Barrelage Total +0.8% LFL +2.7%

• Total sales up by 3.2% and up by 5.0% on a LFL basis
• LFL operating profits up by £0.7M to £4.9M
• Invested £2.9M in existing estate with a focus on

external improvements and outside trading space

• Acquired the freehold of the People’s Park Tavern

(Hackney)

• Disposed of four sites at the end of the estate for £1.3M

FY19

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Outlook

• Managed house revenue for the last thirteen weeks is

up 9.4% in total and 2.6% on a LFL basis

• Tough short-term comparatives from amazing weather in

summer of 2018 and England’s World Cup success

• Full year benefit from the 15 Redcomb pubs and the other

four additions made in the previous year

• Since the period end the Depot (Kidbrooke Village) has
• pened and New Inn (Ealing) transferred from Ram Pub Co
• Confident in our winning strategy and our expectations

remain unchanged

FY19

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FY19

Questions