Roger Carr Roger Carr Chairman 1 December 2004
Karim Naffah Karim Naffah Finance Director Preliminary Results 1 December 2004
Financial Highlights � Turnover £1,560m up 3.7% � Operating profit* £285m up 3.6% � Profit before tax* £184m down 7.5% � EPS* 22.2p up 21% � Final dividend per share 6.65p up 18% * Adjusted to exclude exceptional items. 2003 comparative, proforma figures 3
FY 2004 Results - Summary FY 04 FY 03* £m £m EBITDA 393 374 + 5.1% Operating Profit 285 275 + 3.6% Interest (101) (76) PBT 184 199 (7.5)% Tax (60) (64) Earnings 124 135 (8.1)% EPS 22.2p 18.4p + 20.7% Average no. of shares 559m 735m (24)% Note: All numbers are stated pre-exceptional items * Proforma 4
Presentational Points to Note � First full financial year as independent PLC � Proforma comparative for 2003 � FRS 5 � Turnover recorded net of coupons and staff discounts � Sales comparative reduced by £9m – no profit impact � Reporting to Debt Investors � Covers securitised estate from 13 November 2003 5
Operating Performance FY 04 FY 03 £m £m Turnover Pubs & Bars 913 873 + 4.6% Retail Restaurants 641 614 + 4.4% +4.5% SCPD 6 17 1,560 1,504 + 3.7% Operating Profit* Retail Pubs & Bars 180 177 + 1.7% +4.0% Restaurants 104 96 + 8.3% SCPD 1 2 285 275 + 3.6% Note: 2003 turnover restated on the adoption of the Amendment to FRS 5 * Before exceptional items 6
Retail Sales Grow th FY 04 Total Sales Same Outlet* Pubs and Bars + 4.6% + 4.6% Restaurants + 4.4% + 7.0% Total Retail + 4.5% + 5.6% � Differences in growth rates due to: � Pub disposals and transfers to franchise � New sites acquired � Transfers from Restaurants to Pubs & Bars *Same outlet like for like includes all managed pubs trading for the 2 years being compared. C.90% of pubs All comparatives restated for the amendment to FRS 5 7
Like-for-Like Sales FY 04 Same Outlet (Invested + Uninvested) Residential + 6.6% High Street + 3.4% Total + 5.6% Uninvested Residential + 4.8% High Street + 1.5% Total + 3.8% H2 like for likes reflect wks 33-52 to exclude Easter from both periods. All figures restated for the amendment to FRS 5 8
Balancing Sales Grow th & Margin FY 04 H2 04 Uninvested LFL Sales + 3.8% + 4.3% Average Selling Price* < - 2% < - 1% Movement in Gross Margin (%) flat +ve Movement in LFL Gross Profit (£) + ve + ve Balance of price, margin and volume to maximise profit *Food & Drink 9
Key Operating Statistics* � Drink sales : up 3% � Food sales : up 7% � Food mix 29.8% sales : up 0.6% points � Outlet staff costs : constant at 23.8% of sales � Overhead savings of £5m Net operating margin: 18.3% *All figures MAB Retail; 2003 restated for FRS5 10
Operating Profit Movement +21 £285m* SCPD -1 +£10m £275m* 2003 2004 +5 Trading External Overhead Costs Savings -15 11
FY 2004 Expansionary Capital Residential Locals Pub Restaurants £15m £30m Drinks Food led led £5m - High Street Restaurants City Centre Note: Excludes Hollywood Bowl / Other: £7m 12
Returns by Segment Residential Locals Pub Restaurants Inc. ROI 17% Inc. ROI 16% Drinks Food led led Inc. ROI 14% Inc. ROI 10% High Street Restaurants City Centre Incremental ROI - 15% overall, up 1% on last year Note: UK only – excludes Hollywood Bowl Cumulative £1bn expansionary investment over the last 14 years 13
Strong Cash Returns £m 12 months to 25 September 2004 £m CROCCE NOPAT 285 EBIT 285 Depreciation/Amortisation 108 EBITDA 393 (75) Cash Tax (at 26% of EBIT)* (75) 210 Cash Return 318 3,463 Average Net Operating Assets 3,463 Accumulated Depreciation 285 10% 10% 7.5% 7.5% (731) Revaluations (731) 50 Goodwill written off 50 2,782 Cash Capital Employed 3,067 *Unleveraged tax rate 14
Cashflow (a) FY 04 £m EBITDA 393 Working capital / non cash items 30 Maintenance capex (93) Expansionary capex (57) Disposals 51 Additional pension contributions (40) Operating Cashflow after Net Capex 284 15
Cashflow (b) FY 04 £m Operating Cashflow after Net Capex 284 Net Interest paid (98) Tax paid (34) Normal dividends paid (44) Special dividend (501) Securitisation/separation costs* (27) Other items (3) Net Cashflow** (423) Closing Net Debt £1.63bn*** * Includes £4m exceptional operating expenditure ** Before £28m bond repayments 16 *** Net of £22m securitisation issue costs and £(3)m accrued interest
Financing � Net Debt : EBITDA 4.2x � Book Gearing* 50% � Interest Cover 2.8x Well within all securitisation covenants * Net Debt / (Net Assets + Net Debt) 17
Dividends and Share Repurchase � Progressive dividend policy � Final dividend of 6.65p � 2004 total regular dividend 9.5p � Share buy-back programme � Plan to spend £100m in FY05 � Maintain efficient balance sheet Cash returns to shareholders 18
Pensions � Actuarial Valuation at 31/3/04: deficit of £167m** Regular service contributions – up £3m p.a. � Tri-ennial review cycle going forward � � Additional cash contributions: £40m over 3 years In addition to £20m pledged at securitisation � Cash payments* - 2005: £30m; 2006: £20m; 2007: £10m � � FRS 17 Deficit*: £173m Down from £243m (Sep. 2003 ) and £201m (Apr. 2004) � Positive approach to reduce pension deficit * Excluding tax credit 19 ** On-going basis
2005 � Pensions Accounting Move from SSAP 24 to FRS 17 for FY05 � Impact on FY04 comparative: � SSAP 24 FRS 17 £m £m Operating Profit Charge (2) (14) Interest Income - 1 PBT (2) (13) Net Assets 105 (114) � IFRS update post Interims � 53 rd Week Adds c.£6m of operating profit, c.£4m PBT � 20
Summary � Sales-led strategy is working � Generating strong cashflow � High returns on investment � Efficient balance sheet � Redeploying cash resources � Preserving appropriate flexibility More value for shareholders 21
Tim Clarke Tim Clarke Chief Executive Preliminary Results 1 December 2004
Introduction � Strong trading results � Successful execution of strategy � Benefiting from repositioned estate � Momentum continuing into 2005 � High returns and increasing cash flow Clear strategy for delivering value to shareholders 23
Operational Levers � Delivering superior amenity, range, service and value � Growing food sales and capturing drinks share � Optimal balance of price, volume and mix � Pub and corporate level scale benefits of increasing volumes � High returns on brand and format investment Focus on profitable sales growth 24
Strong Like for Like Sales Growth 7.0% 6.0% 5.8% 6.0% 5.3% 5.0% 4.4% 4.3% 4.0% 3.4% 3.0% 2.0% 1.0% 0.0% H1* 04 H2 04 8 w ks 05 H1* 04 H2 04 8 w ks 05 Uninvested Uninvested Same Outlet Same Outlet * weeks 1 – 32 to include Easter in both years 25
Profitable Market Share Gains Product Category Same Outlet On-Trade* MAB Market vs LY vs LY Volume Volume Beer + 4% - 2% Wines, Spirits, Soft Drinks + 10% + 3% Food + 8% + 3% Sustainable sales growth from wider customer base & greater frequency *Source : ONS/BBPA/Neilsen MAB data: FY 04 Beer / soft drinks: MAT to Sept 04. Wine / spirits / food: MAT to June 04 26
The Role of Price � Most powerful when used with other activity � Significant evidence of rising price elasticities � Rigorous control trials to maximise gross profits � Extent of activity driven by elasticity evidence Varies across brand segments, product categories, time � slots and geographies � Like for like standard product deflation, offset by premium mix improvements A calculated, pragmatic approach 27
Benefits of Estate Repositioning Toby Carvery, Nottingham The Flask, Highgate � High takes – AWT’s up 8% to £15.2k � Asset scale in high volume locations � Brands and formats targeting growth segments 28
Estimated Industry Supply & Demand Segment % of MAB % Growth/Decline Key Factors and UK Pub in MAB Positioning Sales Supply Demand Residential Pub Restaurants 37% 2% 5% Eating-out growth. Well targeted brands Locals Pubs 33% -1% 2% Drinks share gains and food growth High St Circuit Venues 11% 0% -3% Systemic over-capacity. Out- performance by differentiation Town Pubs 8% 0% 2% Gains from site quality and value offers in buoyant service economy Central London 11% 0% 3% Prime sites and strong offers in recovering market Source: MAB estimates for 2004 29
30 Industry Expansionary Capex SOURCE: MAB Estimates £m
Residential Segments The Pine Marten, Harrogate Vintage Inns Crown Inn, Sutton Coldfield - Ember Drinks price -1% Uninvested Like for Like 4.8% Food price +1% Drink volume +6% Same outlet Like for Like 6.6% Food volume +9% *FY2004 31
Generating Profitable Volumes Toby Carvery, Snaresbrook Toby promotion in Saga magazine Toby Carvery, Eastbourne Targeted marketing and capacity management 32
Focus on Range Extension New Harvester menu Increased and improved cask ale range Range of fresh fruit juices Wider customer choice drives volumes and opportunities for yield management 33
Maintaining Amenity and Offer Evolution Dexter Hotel, Leeds - Ember Harvester, Eastbourne 34
Recommend
More recommend
