1 / 28

Preliminary Results December 2004

Detailed analysis of the preliminary results for 2004 of Wolverhampton & Dudley Breweries, including financial performance, dividend increase, integration strategies, and future development plans.

brownl
Download Presentation

Preliminary Results December 2004

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The Wolverhampton & Dudley Breweries, PLC Preliminary Results December 2004 www.wdb.co.uk www.pathfinderpubs.co.uk www.tupc.co.uk 1

  2. Preliminary results 2004 1. Strong results, developing momentum - good like-for-like sales in Pathfinder Pubs and UPC - margins and profit ahead in all three divisions - operating margin maintained despite rising costs 2. Earnings per share* +10.0% to 75.8 pence per share - profit before tax up 6.3% - share buy-backs £8.0 million 3. Dividend +10.0% to 35.32 pence per share - in line with earnings growth - average annual increase > 10% over 30 years * Before goodwill and exceptional items 2

  3. Preliminary results 2004 Financial Performance Paul Inglett Finance Director 3

  4. Preliminary results 2004 : profit and loss account 2004% change Turnover £m 513.7 +4.7 Operating profit* £m 112.9 +4.3 Operating margin* % 22.0 (0.1) Profit before tax* £m 77.7 +6.3 Earnings per share* p 75.8 +10.0 Dividend per share p 35.3 +10.0 * Before goodwill and exceptional items 4

  5. +9.9% +5.2% +4.3% +4.3% +3.5% % growth +3.0% -2.2% H1 H2 FY Beer Machine Rent Total sales income Union Pub Company : like-for-like sales growth • includes all pubs except acquisitions and M to T transfers during the last 2 years 5

  6. +7.8% +4.1% +3.4% +3.2% +3.2% +1.8% • H1 +2.8% • H2 +3.6% -4.3% +0.2% Wet Food Machines Total Community Food Town Total led centre 63% 22% 15% 100% Pathfinder Pubs : like-for-like sales growth • includes all pubs except acquisitions during the last two years • uninvested like-for-like sales +0.1% • Wizard like-for-like sales +3.0% 6

  7. 2004 vs 2000 • NMW +£16m • Insurance + £1m • Pensions + £3m • Sky TV costs + £1m • Leasehold rents + £2m • Total + £ 23m = 4.5% of margin Preliminary results 2004: consistent margin performance Group operating margin 2000 - 2004 22.1 22.0 21.6 20.3 Costs 17.6 % 2000 2001 2002 2003 2004 Our business model reduces and spreads risk 7

  8. Preliminary results 2004 : effective acquisition integration Integration of Wizard Inns 1. Integration completed August 2004 - synergies of £2.5m+ being realised - all systems transferred - office closed 2. Conversion opportunities - 9 pubs due to be refurbished during 2005 3. Independently valued at £85.8m - acquisition goodwill £9.1m - three freeholds being bought - three sites being sold for HAUV - profit £2.0m We see considerable development potential in the estate 8

  9. Preliminary results 2004 : free cashflow 9

  10. Preliminary results 2004 : financing • 1. Prudent financing ratios relative to the sector • Actual Bank • 2004covenants • - debt: EBITDA 3.7x <4.25x • - interest cover 3.3x >2.50x • - % fixed debt 93% • - gearing 86% • 2. Asset quality • - Freeholds/long leaseholds 96% by value • - Community >90% of estate • - Tangible fixed assets 2.1x net debt 10

  11. Preliminary results 2004 : estate revaluation 1. 75% of estate re-valued September 2004 PubRevaluation gain Nos.£m% change 363 Pathfinder Pubs 76.8 +22 863 Union Pub Company 78.0 +27 - WDB Brands 7.0 +29 - Unlicensed properties 7.7 +73 1,226 169.5 +25 2. Remaining 25% of pubs to be re-valued in 2005 11

  12. Preliminary results 2004 Business Development Ralph Findlay Chief Executive 12

  13. Preliminary results 2004 : business development Organic development plans announced 2003... 1. More resource devoted to new pub site acquisition 2. Targeted investment - value for money community locals (‘Bostin’ Local’) - growth in informal eating out market (‘Service That Suits’) - increasing pressure for new housing new pub building - acquisition of sustainable tenanted/leased pubs 3. Focus on beer supply opportunities - Pubco market - off trade 13

  14. UPC development (1) : organic 1. Volumes supplied to tenants/lessees +1% like-for-like - sustainable business, average barrels per pub >280 per year - wine, cider, minerals showing strong growth 2. Average rent per pub £24.2k +9.9% - over 500 Open House Leases agreed - food sales driving business for 55% of licensees 3. Greater support for tenants - 1,215 licensees from 897 pubs attended ‘skills pool’ modules - CD based guide to wines and spirits development launched - ‘Active Ingredients’ released : a guide to developing food offer - Group purchasing power made available to tenants 14

  15. UPC development (2) : capital investment 2004 Capital Investment £27.6m 20 pubs bought £9.3m Invested in estate £18.3m  average investment/pub = £465k average barrels/pub = 300 average ROC = 13%  70 refurbishments 130 ‘Fastrack’ capex investments  investment in lease preparation 2005F : £10m 2005F : 30 pubs £14m 2005 Capital Investment £24m 15

  16. UPC development (3) : Pubs acquired in 2004 The Lime Kiln, Port y Waen Rose & Crown, Severn Stoke New Elliston Coalville New Inn, Ross on Wye Moon Inn, Stoney Middleton 16

  17. Pathfinder development (1) : operating formats 1. Bostin’ Local development Now2006 - contemporary pub design - mid-market, value for money position - 30% food 100 120 2. Service That Suits- flexible, developed service style - higher price platform - 60% food 30 40 3. New build programme- exploits house building demand - ‘monopoly’ value of new sites 5 50 17

  18. Pathfinder development (2) : capital investment • More emphasis on new-build activity : 30 sites under negotiation 18

  19. Pathfinder development (3) : investment returns 1. Average sales per week £ 2. Return on capital - incremental cash return on refurbishments consistently >20% - refurbishment cost falling (£0.3m per pub) Organic development creates internal goodwill 19

  20. Pathfinder development (4) : value creation Organic development creates internal goodwill 20

  21. Pathfinder development (5) : refurbishments, new pubs Cobblers Hall, Newton Aycliffe Hilton Brook, Derby Voyager Guisborough Hilly House, Dudley Ye Olde White Hart, Kinver Prime locations, high quality amenities, outside trading areas 21

  22. WDB Brands development (1) 1. New distribution agreements - J D Wetherspoon - Mitchells & Butlers - significant market opportunity for the Marston’s brands 2. Bass contract - UK supply of Draught Bass - will also brew packaged Bass for UK market 3. Capacity utilisation - Burton: brewing 90%, bottling 90% - Wolverhampton: 80%+ - £2.3m brewhouse development complete January 2005 4. Marston’s Pedigree - new TV campaign launched October 2004 22

  23. WDB Brands development (2) Fresh ideas generate interest in a stale category…. 1. Marston’s Old Empire - authentic IPA 2. Marston’s FC - smooth beer with genuine taste 3. Red Brick Brewery beer - short shelf life ‘fresh’ beer - ‘fresh is best’ 4. Resolution - lowest carbohydrate beer on the market - re-launch of ‘Low C’ 23

  24. Pub performance 24

  25. WDB Brands : brand performance 1. Turnover £120.3m vs £122.3m last year - H2 growth +1.9% 2. Operating margin +0.4% to 17.8% 3. Operating profit +0.5% to £21.4m 4. Return on capital* +2.0% to 27.5% 5. Brand performance - premium ale UK market share +0.6% to 10.2% - standard ale UK market share remains 5.5% - off trade volume +3.4%, Pedigree +5.6% * excluding revaluation 25

  26. Regulations : key issues 1. White paper (smoking ‘ban’ timetable: end 2008) - ‘eating out’ remains a driver of growth - exclusion of wet-led pubs is positive - W&DB is well positioned to weather the changes 2. TISC (report expected December 2004) - UPC is at the forefront of best practice 3. Responsible retailing - BBPA initiatives, Crime and Disorder Partnerships, Portman Group - UPC: ‘Most Responsible Pub Company’ 4. Licensing reform (in place by end 2005) - First to support tenants, free trade operators - Opportunity for business development 26

  27. Preliminary results 2004 : summary 1. Strong results reflecting high quality pub estate - organic performance consistently amongst the best in sector 2. Business development has momentum - pub and site acquisition - beer brand distribution 3. Conservatively financed - reduces financing risk in uncertain market - provides flexibility for acquisitions 4. Current trading is strong* - Pathfinder Pubs like-for-like sales +3.2% - Union Pub Company like-for-like sales +4.2% - own brewed beer volumes +4.7% * figures for 8 weeks ended 27 November 2004 27

  28. The Wolverhampton & Dudley Breweries, PLC Preliminary Results December 2004 www.wdb.co.uk www.pathfinderpubs.co.uk www.tupc.co.uk 28

More Related