Interim Results
21 Maggio 2003 - 9:00AM
UK Regulatory
RNS Number:3436L
Enterprise Inns PLC
21 May 2003
21 May 2003
Unaudited Interim Results of Enterprise Inns plc
for the six months ended 31 March 2003
Enterprise Inns plc (Enterprise), the largest independent operator of leased and
tenanted pubs in the UK, today announces its interim results for the six months
ended 31 March 2003.
Interim results highlights
* Operating profit before exceptionals #142.6 million (2002: Up 82%
#78.5 million)
* Profit before tax #81.0 million (2002: #46.2 million) Up 75%
* Adjusted earnings per share 34.6* pence (2002: 26.5 pence) Up 31%*
* Interim dividend of 5.7 pence (2002: 4.7 pence) Up 21%
* Average operating profit per pub in core estate Up 7%
* The estate of 1,860 pubs acquired from Laurel Pub Holdings Limited in
2002 has been fully integrated into the business and has generated operating
profit close to #45 million, in line with expectations.
* The results include operating profit of #18.1 million in respect of
the Group's 16.8% share in the Unique Pub Company Limited.
* Adjusted earnings per share benefited from a one-off tax credit which has
arisen following settlement of prior years' tax returns. Adjusted for this tax
credit, underlying growth in adjusted earnings per share was 26%.
Commenting today, Hubert Reid, chairman said:
"These strong interim results, from both Enterprise and our associate Unique,
have been delivered in a testing economic environment and reflect our continuing
success in developing a high quality leased and tenanted estate. Our commitment
to fair rents and a full range of leading national, regional and local brands
continues to attract and motivate top quality licensees, the to our long-term
success.
Performance to date in the second half of the year has continued strongly and
the Board anticipates being able to report another year of solid progress."
Enquiries:
Enterprise Inns plc Ted Tuppen on the day 020 7554 1400
thereafter 0121 733 7700
Gavin Anderson & Company Deborah Walter 020 7554 1400
Chairman's Interim Statement
I am delighted to report our interim results for the six months to 31 March 2003
which benefited from solid growth in our core estate and from the two major
investments made in 2002. In March 2002 the Company invested #75 million to
acquire a 16.8% share in The Unique Pub Company Limited (Unique), and in May the
Company acquired an estate of 1,860 pubs from Laurel Pub Holdings Limited
(Laurel). The contributions from both of these investments are in line with our
expectations.
Total operating profit increased by 82 per cent to #142.6 million and profit
before tax rose by 75 per cent to #81.0 million. Earnings per share increased by
31% to 34.5 pence and adjusted earnings per share also increased by 31% to 34.6
pence. Adjusted earnings per share benefited from a one-off tax credit which has
arisen following settlement of prior years' tax returns. Adjusted for this tax
credit, underlying growth in adjusted earnings per share was 26%.
The Directors intend to pay an interim dividend of 5.7 pence per share on 4 July
2003 to shareholders on the register of members on 6 June 2003. This represents
an increase of 21% over prior year which is higher than annual increases applied
over recent years. The Directors consider that this increase is appropriate
given the Company's strong and stable cashflows, and is more closely aligned to
earnings growth. This dividend payment of 5.7 pence equates to a 50% increase on
prior year if the prior year payment of 4.7 pence is restated to 3.8 pence to
take account of the bonus element of the rights issue undertaken in May 2002.
On 3 March 2003, the Company issued #250 million of secured bonds with interest
payable at 6.5 per cent per annum until redemption in December 2018. This is the
fifth issue of long-term debt over recent years which now totals #835 million
with a weighted average interest rate payable of 6.5% and a weighted average
life of 20 years. This long-term debt combined with #550 million of existing
interest rate swaps results in fixed interest rates on a total amount of #1,385
million for a minimum term of nine years. This represents 95% of the Company's
debt at the period end.
Average operating profit per pub increased by 7 per cent over the prior year in
the core estate which averaged 3,477 pubs in the period. The core estate
excludes Laurel acquired in May 2002 which has contributed almost #45 million of
operating profit in this six month period.
At 31 March 2003, the total estate comprised 5,142 pubs compared to 5,266 at 30
September 2002. In the period 14 individual pubs were purchased at a cost of
#6.0 million and proceeds from the sale of 138 pubs together with some surplus
land amounted to #26.2 million.
The quality of the pub estate was further enhanced, with capital expenditure of
#12.7 million in the first half of the year. This compares with #5.3 million in
the first half of last year and is in line with our planned expenditure of #20
million for the full year (2002 - #16.5 million).
Cash generation after tax and dividend payments, capital expenditure and estate
churn amounted to #73.6 million, enabling the company to repay debt of #77.5
million.
These strong interim results, from both Enterprise and Unique, have been
delivered in a testing economic environment and reflect our continuing success
in developing a high quality leased and tenanted estate. Our commitment to fair
rents and a full range of leading national, regional and local brands continues
to attract and motivate top quality licensees, the key to our long term success.
Performance to date in the second half of the year has continued strongly and
the Board anticipates being able to report another year of solid progress.
Summarised Unaudited Unaudited
Consolidated
Profit and
Loss Account
Six months ended 31 March 2003 Six months ended 31 March 2002
Notes Continuing Share of Total Continuing Share of Total
Operations Associate Operations Associate
#m #m #m #m #m #m
Turnover 234.0 - 234.0 150.2 - 150.2
Operating profit
before exceptional
items 124.5 - 124.5 77.6 - 77.6
Exceptional
administrative
expenses:
Redundancy and
reorganisation costs - - - - - -
-------- ------- ------ -------- ------- ------
Group Operating profit 124.5 - 124.5 77.6 - 77.6
Share of operating
profit from associated
undertakings - 18.1 18.1 - 0.9 0.9
-------- ------- ------ -------- ------- ------
Total Operating Profit 124.5 18.1 142.6 77.6 0.9 78.5
Exceptional items:
Profit/(loss) on
disposal of fixed
assets (0.2) 0.3 0.1 (0.1) - (0.1)
-------- ------- ------ -------- ------- ------
124.3 18.4 142.7 77.5 0.9 78.4
Net interest payable (47.1) (14.4) (61.5) (31.4) (0.8) (32.2)
Exceptional interest
payable and similar
charges - (0.2) (0.2) - - -
-------- ------- ------ -------- ------- ------
Profit on ordinary
activities before
taxation 77.2 3.8 81.0 46.1 0.1 46.2
Taxation 3 (21.7) (1.1) (22.8) (14.5) - (14.5)
-------- ------- ------ -------- ------- ------
Profit
attributable
to members of
the parent
company 55.5 2.7 58.2 31.6 0.1 31.7
Dividend on
equity 4 (9.6) - (9.6) (4.5) - (4.5)
shares -------- ------- ------ -------- ------- ------
Retained
profit for the
period 45.9 2.7 48.6 27.1 0.1 27.2
Basic EPS 5 34.5 26.4
Adjusted EPS 34.6 26.5
(excluding exceptional
items)
Diluted EPS 34.2 26.1
Summarised Consolidated Profit Audited
and Loss Account - continued
Year ended 30 September 2002
Notes Continuing Share of Total
Operations Associate
#m #m #m
Turnover 368.9 - 368.9
Operating profit before
exceptional items 187.2 - 187.2
Exceptional administrative
expenses:
Redundancy and reorganisation (8.5) - (8.5)
costs ---------- ---------- ----------
Group Operating profit 178.7 - 178.7
Share of operating profit from - 16.8 16.8
associated undertakings ---------- ---------- ----------
Total Operating Profit 178.7 16.8 195.5
Exceptional items:
Profit/(loss) on disposal of (0.2) 0.2 -
fixed assets ---------- ---------- ----------
178.5 17.0 195.5
Net interest payable (75.1) (14.4) (89.5)
Exceptional interest payable and (7.6) (6.1) (13.7)
similar charges ---------- ---------- ----------
Profit on ordinary activities 95.8 (3.5) 92.3
before taxation
Taxation 3 (28.9) 0.7 (28.2)
---------- ---------- ----------
Profit attributable to members 66.9 (2.8) 64.1
of the parent company
Dividend on equity shares 4 (20.5) - (20.5)
---------- ---------- ----------
Retained profit for the period 46.4 (2.8) 43.6
Basic EPS 5 46.7p
Adjusted EPS (excluding 58.4p
exceptional items)
Diluted EPS 46.2p
Consolidated Statement of Total
Recognised Gains and Losses
Unaudited Unaudited Audited
six six
months ended months ended year ended
31 March 31 March 30 September
2003 2002 2002
#'m #'m #'m
Profit attributable to members of
the parent company excluding share
of associated undertaking 55.5 31.6 66.9
Share of profit/(loss) in
associated undertakings 2.7 0.1 (2.8)
Profit attributable to members of
the parent company 58.2 31.7 64.1
Unrealised surplus on revaluation
of licensed estate - - 13.7
Share of unrealised surplus on
revaluation of licensed estate in
associate - - 18.5
Total recognised gains and losses 58.2 31.7 96.3
Consolidated Balance Sheet
Unaudited as at Audited as at
31 March 31 March 30 September
2003 2002 2002
#'m #'m #'m
Fixed assets
Intangible fixed assets 47.6 - 48.8
Tangible fixed assets 2,230.1 1,327.1 2,243.4
Investments 102.3 76.9 96.0
-------- -------- ---------
2,380.0 1,404.0 2,388.2
Current assets
Assets held for resale 5.6 11.7 7.7
Debtors 49.8 34.1 51.3
Cash at bank and in hand - - 0.9
------- --------- ---------
55.4 45.8 59.9
Creditors: amounts falling due within
one year
- Bank overdraft and loans (63.2) (44.8) (63.8)
- Other (165.0) (113.6) (159.8)
-------- --------- ---------
(228.2) (158.4) (223.6)
-------- --------- ---------
Net current liabilities (172.8) (112.6) (163.7)
-------- --------- ---------
Total assets less current liabilities 2,207.2 1,291.4 2,224.5
Creditors: amounts falling due after
more than one year
- Bank loans & debentures (1,404.3) (902.2) (1,482.6)
Provision for liabilities and charges (61.2) (38.4) (48.4)
-------- --------- --------
741.7 350.8 693.5
======== ========= ========
Capital and reserves
Called up share capital 17.0 9.7 17.0
Share premium account 432.6 145.5 432.3
Revaluation reserve 104.2 65.2 101.6
Capital redemption reserve 7.6 7.6 7.6
Merger reserve 77.0 77.0 77.0
Profit and loss account 103.3 45.8 58.0
-------- --------- --------
Equity shareholders' funds 741.7 350.8 693.5
======== ========= ========
Consolidated Statement of Group Cash Flows
Unaudited Audited
six year
months ended ended
31 March 31 March 30 September
2003 2002 2002
#'m #'m #'m
Net cash inflow from operating activities 127.6 81.5 193.1
Return on investments and servicing of finance (37.8) (24.8) (99.4)
Taxation (7.5) (0.6) (8.3)
Capital expenditure and financial investment:
- Disposal of public houses, net of 20.2 1.5 7.3
acquisitions
- Capital expenditure on the pub estate and other (13.0) (6.6) (27.1)
assets
- Loans to associated undertakings - (75.0) (73.6)
Acquisitions and disposals - - (28.9)
Equity dividends paid (15.9) (7.9) (12.4)
------ ------- --------
Cash inflow/(outflow) before financing 73.6 (31.9) (49.3)
Financing
Issue of ordinary share capital 0.3 - 294.5
Repayment of loans, net of new loans (77.5) 21.9 (253.8)
------ ------- --------
Decrease in cash (3.6) (10.0) (8.6)
====== ======= ========
Reconciliation of net cashflow to movement in net debt
Unaudited Audited
six year
months ended ended
31 March 31 March 30 September
2003 2002 2002
#'m #'m #'m
Decrease in cash in the period (3.6) (10.0) (8.6)
Decrease/(increase) in debt and lease 77.5 (21.9) 253.8
financing
Issue costs of long-term loans 1.9 3.6 15.0
------ ------- -------
Change in net debt resulting from cash flows 75.8 (28.3) 260.2
Acquired with subsidiaries - - (877.3)
Amortisation and write off of issue costs of (1.2) (1.4) (11.1)
long term loans ------- ------ --------
Movement in net debt in the period 74.6 (29.7) (628.2)
Net debt at 1 October (1,545.5) (917.3) (917.3)
-------- ------- --------
Net debt at 31 March/30 September (1,470.9) (947.0) (1,545.5)
======== ======= ========
Reconciliation of operating profit to operating cash flows
Unaudited Audited
six year
months ended ended
31 March 31 March 30 September
2003 2002 2002
#'m #'m #'m
Operating profit 124.5 77.6 178.7
Depreciation and amortisation 1.9 0.9 2.5
Provision against fixed asset 0.4 0.2 1.2
investments
Decrease/(increase) in debtors 1.9 (6.0) (1.1)
(Decrease)/increase in creditors (3.1) 4.6 0.4
Decrease in assets held for resale 2.0 4.2 11.4
------ -------- -------
Net cash inflow from operating activities 127.6 81.5 193.1
====== ======== =======
Notes to the Unaudited Interim Results
1. Publication of non-statutory accounts
The financial information contained in this interim statement, which is
unaudited, does not constitute statutory accounts as defined in section 240 of
the Companies Act 1985. The financial information for the full preceding year is
based on the statutory accounts for the financial year ended 30 September 2002.
These accounts, upon which the auditors issued an unqualified opinion, have been
delivered to the Registrar of Companies.
2. Accounting policies and basis of preparation of interim financial
information
The unaudited interim financial information has been prepared on the basis of
the accounting policies set out in the Company's statutory accounts for the year
ended 30 September 2002. Fixed annual charges are apportioned to the interim
period on the basis of time elapsed. Other expenses are accrued in accordance
with the same principles as used in the annual accounts. The tax charge for the
period has been calculated at the effective rate expected to apply for the full
year.
3. Dividends
An interim dividend of 5.7 pence per Ordinary Share is proposed (2002: interim
4.7 pence; final 9.4 pence), which will be payable on 4 July 2003 to
Shareholders on the register of members on 6 June 2003.
4. Earnings per Ordinary Share
Earnings per Ordinary Share are calculated on the basis of the weighted average
of 168,752,927 (2002 six months: 119,793,184*; full year: 137,229,769) Ordinary
Shares in issue, excluding 943,735 Ordinary Shares held by trusts relating to
employee share options, and on the earnings available for Shareholders of #58.2
million (2002 six months: #31.7 million; full year: #64.1 million).
* adjusted for the impact of the 2002 rights issue
5. Taxation
The total taxation charge of #22.8m for the six months comprises corporation tax
of #10m and deferred tax of #12.8m. The total effective tax rate of 28% is in
line with the expected effective rate for the full year. The effective rate for
the full year is below the statutory rate of 30% due to the release of #4.9m of
prior years' tax provisions no longer required following the closure of prior
year computations. The current year corporation tax charge represents only 12%
of profits. This reflects a one-off tax deduction of #17m in respect of a write
down in value relating to interest rate swaps in subsidiary companies, which
will reverse over the 10 year life of the swaps.
6. Independent review report to Enterprise Inns plc
Introduction
We have been instructed by the company to review the financial information for
the six months ended 31 March 2003, which comprises the Summarised Consolidated
Profit and Loss Account, Consolidated Statement of Total Recognised Gains and
Losses, Consolidated Balance Sheet, Consolidated Statement of Group Cash Flows
and related notes 1 to 5. We have read the other information contained in the
interim report and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.
This report is made solely to the company in accordance with guidance contained
in Bulletin 1999/4 'Review of interim financial information' issued by the
Auditing Practices Board. To the fullest extent permitted by the law, we do not
accept or assume responsibility to anyone other than the company, for our work,
for this report, or for the conclusions we have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors are
responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
'Review of interim financial information' issued by the Auditing Practices Board
for use in the United Kingdom. A review consists principally of making enquiries
of group management and applying analytical procedures to the financial
information and underlying financial data, and based thereon, assessing whether
the accounting policies and presentation have been consistently applied, unless
otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with United
Kingdom Auditing Standards and therefore provides a lower level of assurance
than an audit. Accordingly, we do not express an audit opinion on the financial
information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 March 2003
Ernst & Young LLP
Birmingham
21 May 2003
This information is provided by RNS
The company news service from the London Stock Exchange
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