TIDMFSTA
RNS Number : 0399U
Fuller,Smith&Turner PLC
31 March 2021
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THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS FOR
INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER OF
SECURITIES IN ANY JURISDICTION. PLEASE SEE THE IMPORTANT NOTICES AT
THE OF THIS ANNOUNCEMENT.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
For immediate release
31 March 2021
Fuller, Smith & Turner P.L.C.
("Fuller, Smith & Turner", "Fuller's", the "Company" or the
"Group")
Financing Update and Covid-19 Trading Update
Fuller, Smith & Turner P.L.C. (LSE: FSTA.L), a premium pubs
and hotels business, today provides an update on trading and a
financing update, including announcing amended and extended banking
facilities and a proposed non-pre-emptive placing of up to
6,455,447 new 'A' Ordinary Shares of 40 pence each in the capital
of the Company, to be conducted by way of an accelerated bookbuild,
representing up to approximately 20 per cent. of the Company's
existing issued 'A' Ordinary Share capital (the "Placing") at a
price of 830 pence per Placing Share (the "Placing Price"). The
Company is also providing 'B' Ordinary Shareholders with the
opportunity to offer to purchase 'B' Ordinary Shares and has
received irrevocable undertakings from Directors who have also
committed to contribute GBP225,000 in total to subscribe for ' A '
Ordinary Shares and apply to acquire ' B ' Ordinary Shares in
conjunction with the Placing.
Background
-- The Group started 2020 in an excellent position pre-Covid
with a strong balance sheet, significant liquidity headroom and
trading in line with expectations
-- On average its pubs will have been open on only 27% of the
388 days between 20 March 2020 and 12 April 2021
-- Revenues in the Group's Managed Pubs and Hotels will be
impacted accordingly and are expected to be c.80% less than the
previous 12 months ended 28 March 2020
-- Despite this, management has made excellent use of the
enforced closure periods by continuing to innovate and invest in
its premium pubs and hotels portfolio , ensuring the estate is in
peak condition for reopening. In addition, it has continued to
provide financial support to its Tenants to enable them to rebuild
trade strongly, protect its incredible pub, hotel and office team
members and progress other projects essential to the future of the
business
-- Consumer confidence built quickly when the Group was
permitted to reopen last summer and sales momentum returned rapidly
with 79% of its pubs open by the end August which were trading at
78% of prior year levels, despite some restrictions remaining in
place
-- Trading from staycations in its rural hotels and pubs with
rooms was also particularly strong, with very high occupancy levels
across its rural estate, demonstrating the benefits of Fuller's
balanced portfolio
-- The Group is seeking to ensure the business reopens strongly
and in the best possible position to support execution of its
growth and recovery strategy
Revised Banking Facilities
-- The prolonged periods of lockdown and trading restrictions
have inevitably impacted the Group's liquidity position
-- Net debt (excluding the impact of leases under IFRS16) is
currently GBP216 million (February 2020: GBP152 million)
-- The Company is pleased to announce it has agreed an Amend and
Extend Refinancing of its Existing Debt Facilities with its
relationship banks, conditional on completion of the Placing,
extending the maturity to 19 February 2023 and amending the
financial covenants to a minimum liquidity level to 31 March
2022
Reasons for the Placing
-- Separately announced today is a proposed Placing of up to
6,455,447 new 'A' Ordinary Shares representing up to approximately
20 per cent. of the Group's existing issued 'A' Ordinary Share
capital, at a price of 830 pence per Placing Share, to be conducted
via an accelerated bookbuild and conditional upon certain
shareholder approvals at the Extraordinary General Meetings
-- The Group's long-term strategy remains unchanged despite the
short-term challenges presented by the pandemic
-- The Board wishes to ensure Fuller's is as well positioned as
possible to reopen strongly once trading restrictions are lifted,
capitalise on available opportunities and deliver long-term returns
to shareholders
-- The net proceeds from the Placing, together with the revised banking facilities, will:
o strengthen the Group's balance sheet so it has the flexibility
to take full advantage of the reopening of the UK economy and
enable the Company to explore growth opportunities in line with its
long-term strategy;
o provide additional liquidity, headroom, and resilience if the
stepped easing of restrictions under the Government Roadmap is
delayed for any reason or Covid-related Government restrictions are
re-introduced; and
o enable the Group to return to pre-pandemic debt and pro forma
leverage levels by early 2022, assuming restrictions continue to
ease in line with the Government Roadmap
'B' Share Offer
-- The Company is also providing 'B' Ordinary Shareholders with
the opportunity to offer to purchase 'B' Ordinary Shares held in
treasury pro-rata to their holding of 'B' Ordinary Shares as at 30
March 2021
-- The 'B' Share Offer is in addition to the funds raised in the
Placing, is not underwritten, and will be for up to 4,367,472 'B'
Ordinary Shares
Current Trading and Outlook
-- In the second half of FY21, the business will have been fully
closed for four months (and largely closed for the important
Christmas and New Year trading periods), with some sites closed for
longer
-- Monthly cash burn has averaged approximately between GBP4
million and GBP5 million during periods of full lockdown
-- Management has used the enforced closure periods wisely and
constructively, taking actions throughout to position the business
well for continued future success
-- The Group plans to take a phased approach to reopening with
82 sites opening initially and the remainder of its Managed Pubs
and Hotels largely trading by 17 May, while approximately 70% of
the Group's Tenanted Inns are expected to open on 12 April
-- Assuming the Government timetable for the easing of
restrictions is achieved, the Group can return to normalised
trading conditions on a sustained basis and become cashflow
positive (including Group overheads) again from mid-May 2021
onwards
-- Fuller's is well placed to reopen strongly as trading
restrictions are eased and to benefit from the expected significant
pent-up customer demand as the UK economy reopens
-- The Board remains confident in its proven, long-term strategy
and believes it is well positioned to capitalise on available
opportunities to create shareholder value
Board Recommendation
-- The Board has concluded the Placing is in the best interests
of shareholders and will promote the long-term success of
Fuller's
-- Accordingly, the Board intends to unanimously recommend that
Ordinary Shareholders vote in favour of the Resolutions at the
General Meetings required to implement the Placing, the 'B' Share
Offer and the Director Subscriptions, as they have undertaken to do
in respect of their own shareholdings
Simon Emeny, Chief Executive of Fuller, Smith & Turner
P.L.C, commented:
"The last year has been hugely demanding both for our business
and the wider hospitality sector but we have risen to the
challenges presented by the pandemic to emerge stronger, which is
the Fuller's way. We have used the time wisely, rightsizing our
teams, building our digital capabilities by continuing to innovate,
as well as investing in our properties, and we are confident that
we are in the best possible position to reopen.
"It was clear the demand for our premium pubs and hotels was as
strong as ever when we were allowed to trade last year, which gives
us confidence for the weeks and months ahead. Over half of the UK
adult population has now had its first vaccine and we have a great
team of people in place who are match fit and ready to welcome our
customers back into our wonderful pubs and hotels. The additional
financial flexibility we are seeking to put in place will enable us
to further capitalise on the opportunities open to us as we execute
our recovery plan and regain growth momentum."
This announcement includes inside information. The person
responsible for releasing this announcement is Rachel Spencer,
Company Secretary.
For further information, please contact:
Fuller, Smith & Turner P.L.C:
Simon Emeny, Chief Executive Officer +44 (0) 20 8996
2000
Adam Councell, Finance Director +44 (0) 20 8996 2000
Georgina Wald, Corporate Comms Manager +44 (0) 20 8996
2198
Instinctif Partners
Justine Warren +44 (0) 20 7457 2010
Expected Timetable of Principal Events
Launch of the Placing and Placing 31 March 2021
Announcement
Publication of the Circular 1 April 2021
Posting of the Circular, the Notice 1 April 2021
of Extraordinary General Meetings
and the relevant Form(s) of Proxy
Last date for 'B' Ordinary Shareholders 16 April 2021
to express interest in participating
in the 'B' Share Offer
The following dates and times are provided by way of indicative
guidance and are subject to change. If any of the following
dates and/or times change, the new dates and/or times will
be notified to Shareholders by an announcement through
a RIS.
Latest time and date for electronic 9.00 a.m. on 19 April
proxy appointments or receipt of Forms 2021
of Proxy
Extraordinary General Meetings 9:00 a.m. on 20 April
2021
Results of Extraordinary General Meetings By 6.00 p.m. on 20
announcement April 2021
Admission of Placing Shares 8.00 a.m. on 21 April
2021
Completion of the transfer of 'B' On or by 26 April 2021
Ordinary Shares pursuant to the 'B'
Share Offer
IMPORTANT NOTICES
This announcement is not an offer of securities for sale in the
United States. The securities referred to herein have not been and
will not be registered under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and may not be offered or sold in
the United States, except pursuant to an applicable exemption from
the registration requirements of the Securities Act and in
compliance with any applicable securities laws of any state or
other jurisdiction of the United States. No public offering of the
Placing Shares is being made in the United States.
Certain statements contained in this Announcement constitute
"forward-looking statements" with respect to the financial
condition, performance, strategic initiatives, objectives, results
of operations and business of the Company. All statements other
than statements of historical facts included in this Announcement
are, or may be deemed to be, forward-looking statements. Without
limitation, any statements preceded or followed by or that include
the words "targets", "plans", "believes", "expects", "aims",
"intends", "anticipates", "estimates", "projects", "will", "may",
"would", "could" or "should", or words or terms of similar
substance or the negative thereof, are forward-looking statements.
Forward-looking statements include statements relating to the
following: (i) future capital expenditures, expenses, revenues,
earnings, synergies, economic performance, indebtedness, financial
condition, dividend policy, losses and future prospects; and (ii)
business and management strategies and the expansion and growth of
the Company's operations. Such forward-looking statements involve
risks and uncertainties that could significantly affect expected
results and are based on certain key assumptions. Many factors
could cause actual results, performance or achievements to differ
materially from those projected or implied in any forward-looking
statements. The important factors that could cause the Company's
actual results, performance or achievements to differ materially
from those in the forward-looking statements include, among others,
the macroeconomic and other impacts of COVID-19, economic and
business cycles, the terms and conditions of the Company's
financing arrangements, foreign currency rate fluctuations,
competition in the Company's principal markets, acquisitions or
disposals of businesses or assets and trends in the Company's
principal industries. Due to such uncertainties and risks, you are
cautioned not to place undue reliance on such forward-looking
statements, which speak only as of the date hereof. In light of
these risks, uncertainties and assumptions, the events described in
the forward-looking statements in this Announcement may not occur.
The forward-looking statements contained in this Announcement speak
only as of the date of this Announcement. The Company, its
Directors, the Bank and their respective Affiliates and any person
acting on its or their behalf each expressly disclaim any
obligation or undertaking to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise, unless required to do so by applicable
law or regulation, the Listing Rules, UK MAR, the DTRs, the rules
of the London Stock Exchange or the FCA.
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Proposed Placing of up to 6,455,447 'A' Ordinary Shares
representing up to approximately 20% of 'A' Ordinary Share Capital,
at a price of 830 pence per Placing Share
and
Proposed Offer of up to 4,367,472 'B' Ordinary Shares to 'B'
Ordinary Shareholders
1. Introduction
Fuller's has today announced a proposed non-pre-emptive placing
of up to 6,455,447 new 'A' Ordinary Shares of 40 pence each in the
capital of the Company representing up to approximately 20 per
cent. of the Company's existing issued 'A' Ordinary Share capital
(the "Placing"), at a price of 830 pence per Placing Share (the
"Placing Price").
The Board recognises and is appreciative of the continued
support received from all Ordinary Shareholders at this
unprecedented time for the Company and therefore, in addition to
and separate from the Placing, the Company also proposes to give
all 'B' Ordinary Shareholders the opportunity to apply for 'B'
Ordinary Shares held in treasury as described below. The 'B' Share
Offer will be for the transfer of up to 4,367,472 'B' Ordinary
Shares at a reference price of 1/10(th) of the Placing Price.
The Company has also received irrevocable undertakings from
Directors who have committed to contribute GBP225,000 in total to
subscribe for ' A ' Ordinary Shares and apply to acquire ' B '
Ordinary Shares in conjunction with the Placing.
The Placing, the 'B' Share Offer and the Director Subscriptions
are conditional, amongst other things, upon Ordinary Shareholders
passing the Resolutions at the Extraordinary General Meetings. The
Placing and the 'A' Ordinary Shares to be subscribed for by
Directors pursuant to the Director Subscriptions are also
conditional upon Admission and the Placing Agreement becoming
unconditional in all respects and not having been terminated in
accordance with its terms. The 'B' Share Offer is also conditional
upon Completion of the Placing.
2. Background and Reason for the Placing, THE B SHARE OFFER AND THE DIRECTOR SUBSCRIPTIONS
Fuller's is a premium pubs and hotels business synonymous with a
high quality, well-invested, predominantly freehold estate of
iconic properties, primarily located in the affluent South of
England. The Group focuses on delivering memorable customer
experiences through outstanding service and hospitality and a clear
product offering consisting of fresh, local food prepared on site
by skilled chefs, supported by a portfolio of premium drinks brands
and boutique hotel accommodation.
The Group started 2020 in an excellent position with a strong
balance sheet, significant liquidity headroom and trading in line
with expectations. The sale of the Fuller's Beer Business to Asahi
Europe in 2019 for an enterprise value of GBP250 million had
supported a voluntary GBP24 million contribution to the Group's
defined benefit pension scheme, a GBP69 million return of capital
to Ordinary Shareholders and continued long-term investment in the
business, including the acquisition of Cotswold Inns &
Hotels.
The 12 months since March 2020 have been the most operationally
challenging in the Company's 175 year history. As a result of the
Covid pandemic and the Government restrictions imposed in response
to it, the Group's pubs and hotels will have been open for, on
average, only 27% of the days between the first lockdown, which
commenced on 20 March 2020, through to 12 April 2021 , when the
current third lockdown restrictions are expected to begin easing in
line with the Government Roadmap announced on 22 February 2021.
When the business has been able to operate during this period,
trading has been subject to severe Covid-related restrictions (such
as restrictions preventing customers from being served indoors). As
a result, revenues in the Group's Managed Pubs and Hotels have been
significantly impacted and are expected to be approximately 80%
below the previous 12 months ended 28 March 2020.
As previously announced in November 2020 at the Half Year
Results for the 26 weeks to 26 September 2020, consumer confidence
recovered quickly and there was clear customer demand for Fuller's
premium pubs and hotels when the Group was permitted to reopen its
sites from 4 July 2020. Sales momentum returned rapidly following
reopening and the Group performed well during this period with 79%
of its pubs open at the end of August which were trading at 78% of
the prior year levels, (despite some trading restrictions remaining
in place). The Group experienced particularly strong trading from
staycations in its rural hotels and pubs with rooms, with very high
occupancy levels across its rural estate, demonstrating the
benefits of Fuller's balanced portfolio.
Despite the short-term challenges presented by the pandemic, the
Group's long-term strategy remains unchanged. Throughout the
various stages of the pandemic, the Board has taken strong and
decisive actions with the intention of ensuring Fuller's is well
positioned to reopen strongly once trading restrictions are lifted,
capitalise on available opportunities and deliver long-term returns
to shareholders. Management has used the periods of enforced
closure constructively to continue to innovate (particularly
transforming the Group's digital capabilities); invest across the
Group (including continuing capital expenditure essential to the
long-term future of the business, such as the rollout of important
finance, IT and digital systems); and ensure it has the right
people in place ahead of reopening to welcome customers back into
its pubs and hotels when permitted to do so. During this time, the
Group has completed a number of transformational capital
expenditure plans earmarked for FY2021 to ensure its premium
portfolio of properties are in peak condition ahead of
reopening.
From the outset, the Group maintained strong engagement with its
tenant partners and took the decision early in the pandemic to
provide full support throughout the various periods of enforced
closure by suspending commercial rent from its Tenanted Inns. The
Group expects 100% occupancy of its 176-strong tenanted pub estate
from 17 May 2021 and is confident that, with the measures taken,
its tenants will be able to open strongly and rebuild trade once
restrictions are lifted.
As part of the Board's response to the pandemic, several
pre-emptive actions were undertaken to preserve cash, enhance
liquidity and reduce costs, including the following:
-- Fuller's is a business centred around its people and the
Board prioritised protecting the incredible team members who work
in its pubs, hotels and supporting office roles. The Group accessed
the Government's Coronavirus Job Retention Scheme and furloughed
approximately 98% of eligible employees, retaining only streamlined
central functions to support the business during this period.
Directors and members of the Group's executive team also
volunteered temporary pay cuts of 25% and 20% respectively.
-- The Board decided not to propose a final dividend be paid on
the Ordinary Shares in respect of the 52 weeks ended on 28 March
2020 and not to pay an interim dividend in respect of the 26 weeks
to 26 September 2020.
-- On 3 June 2020, the Company issued GBP100 million of
commercial paper under the CCFF to give it additional liquidity and
financial flexibility. Amendments to the Group's Existing Debt
Facilities were also agreed with the Company's relationship banks
to replace the Group's leverage cover and interest cover covenants
with a minimum liquidity covenant until 31 December 2020. The Group
has also utilised the business rates holiday for hospitality
businesses and the Eat Out To Help Out scheme that operated in
August 2020. It has also benefitted from the temporary reduction in
VAT for hospitality sales.
-- The Company has also executed c.GBP19 million of non core
property disposals over the last 14 months. These were largely
unlicensed properties and not central to the Managed Pubs and
Hotels business.
-- Where possible, supply arrangements to the closed pubs in the
estate were renegotiated and proactive discussions undertaken with
landlords.
These prompt actions enabled the business to be cashflow
positive (including Group overheads) when the estate was
substantially open between August and early November 2020. However,
as increasingly severe restrictions (such as restrictions on social
distancing and on social gatherings of more than six persons) were
introduced from September through to December 2020 and then into
2021, trading was once again adversely impacted such that the
entire estate has largely been closed since mid December 2020. The
associated partial and full closures of the estate have impacted
the business for significantly longer than anticipated . In the
second half of the current financial year, the business will have
been fully closed for four months and was largely closed for the
important Christmas and New Year trading periods, with some sites
closed for even longer periods. With limited revenue coming into
the business, the Group's cash burn has averaged between GBP4
million and GBP5 million per month during the periods of full
lockdown since March 2020.
Despite the Group's strong balance sheet and liquidity at the
start of 2020, the prolonged periods of lockdown and operating
restrictions throughout much of the last 12 months have had an
inevitable impact on the Group's liquidity position. As a result,
the Group's net debt (excluding the impact of leases under IFRS16)
is currently GBP216 million, up from GBP152 million in February
2020. The Group currently has undrawn debt facilities of GBP84
million out of GBP318 million in total debt facilities currently
available to the Group (including GBP26 million in debentures and
the GBP100 million in CCFF commercial paper due for repayment on 12
May 2021).
The success of the vaccine programme enabled the Government to
outline its roadmap for the stepped easing of Covid-related
restrictions in February 2021, together with a timetable for
reopening which has provided much-needed certainty for the
hospitality sector. Although it will take time for trading to
return to pre-pandemic levels, the Group's experience over the
summer last year, when it was able to trade with few restrictions,
underpins management's confidence in once again reopening the
estate strongly and a swift return to positive cash generation. The
Group plans to take a phased approach to reopening its Managed Pubs
and Hotels on 12 April 2021, when the "Step 2" easing of
restrictions is due to commence, with 82 sites opening initially.
Approximately 70% of the Group's Tenanted Inns are also expected to
open at this time. While the estate will remain subject to
operating restrictions during "Step 2", including restrictions
preventing customers being served indoors, Fuller's will benefit
from its investment over recent years in outside trading areas and
pub gardens. The Group intends to have the managed estate largely
open on 17 May 2021 under "Step 3" of the Government's Roadmap when
it is anticipated that trading will be permitted indoors, albeit
subject to continued restrictions on social gatherings of more than
six persons or more than two households. Importantly, the
Government Roadmap indicates that all trading restrictions will
fall away from 21 June 2021, when an expected return to normality
will be within sight.
With the easing of Government restrictions in the coming weeks
and months, the Board believes that the Group is well placed to
benefit from anticipated pent-up demand from customers eager to
return to pubs, hotels and other hospitality venues. The Board also
believes there will be buoyant demand for staycations (as
experienced last summer), as well as weddings and other event
custom. Management confidence has been encouraged by very strong
forward bookings in its hotels and pubs. As a result, and in line
with its experience operating under trading restrictions during
2020, the Board expects the Group to be cash generative (including
Group overheads) from mid-May 2021 when indoor trading will be
permitted. Clearly, this expected cashflow improvement would be
delayed if there is any material interruption to the Government's
stepped easing of restrictions.
Successful completion of the Placing will enable the Group to
complete its Amend and Extend Refinancing, facilitate repayment of
the GBP100 million in CCFF commercial paper due for repayment in
May 2021, strengthen the Group's balance sheet so it has the
financial flexibility to take full advantage of the reopening of
the UK economy and enable the Company to explore growth
opportunities in line with its long-term strategy. It will also
provide additional liquidity headroom and resilience if the stepped
easing of restrictions under the Government Roadmap is delayed for
any reason or if Covid-related Government restrictions are
re-introduced.
Looking forward, the Company has deliberately taken a highly
prudent approach in modelling its potential revenues, costs and
cashflow over the next 18 months in the "prudent base case" and
"stress case" scenarios. In the prudent base case, assumptions
reflect the stepped easing of restrictions in line with the
Government Roadmap and, in the stress case, assumptions reflect
restrictions and operating conditions similar to the last 12 months
(including the business being in full lockdown for six out of the
12 months to the end of March 2022 and similar severe operating
restrictions being in place between lockdowns). This modelling has
been undertaken to illustrate the potential outcomes to assist
management decision-making on its potential liquidity needs and
does not represent a forecast or reflect management's expectations
of future performance. The conclusions of this modelling are
included in a presentation entitled "Investor Presentation" on the
Company's website
(https://www.fullers.co.uk/corporate/investors/financial-reports).
Assuming successful completion of the Placing, the Amend and
Extend Refinancing will become effective and the Board expects the
Group to return to pre-pandemic debt and pro forma leverage levels
by early 2022 if restrictions continue to ease in line with the
Government Roadmap and the Group returns to normalised trading
conditions on a sustained basis.
If Shareholders do not pass the Resolutions at the Extraordinary
General Meetings and the Placing is not completed, the Amend and
Extend Refinancing will not become effective. In those
circumstances, GBP292 million of the Group's Existing Debt
Facilities (including the GBP100 million CCFF commercial paper
borrowings due in May 2021) will be due for repayment prior to the
end of August 2021 and the Group will need to consider other
options open to it. These could include raising additional cash in
the form of additional debt financing to refinance the Group's
Existing Debt Facilities and implementing a programme of selected
freehold pub disposals. Any additional debt financing the Group is
able to obtain may be on less favourable terms than the Group's
Existing Debt Facilities (as to price, security and / or covenants)
and the valuations the Group is able to obtain for its freehold pub
assets may be lower than expectations, and these actions may
therefore adversely impact achievement by the Company of its
long-term growth objectives.
3. Amendment and extension of GROUP'S EXISTING debt facilities
On 30 March 2021, the Company reached agreement with its
relationship banks on the Amend and Extend Refinancing of the
Group's Existing Debt Facilities to extend out facility maturities
until 19 February 2023, amend the financial covenants (in respect
of the period up to and including the quarter ending 31 March 2022)
to only require the Group to maintain a minimum liquidity level,
continue the waiver of material adverse change-based covenants and
events of default until 31 December 2021 (to clarify that
restrictions imposed on the business by the response to the Covid
pandemic do not constitute an event of default under the Group's
Existing Debt Facilities), and continue the amendment agreed in
April 2020 to require bank consent for any Ordinary Share
dividends. Under the terms of the Amend and Extend Refinancing,
from and including the quarter ending 30 June 2022, the financial
covenants will revert to substantially the same (debt cover and
interest cover) covenants as applied historically to the Group's
Existing Debt Facilities.
The Amend and Extend Refinancing is conditional on the receipt
by the Company of proceeds under the Placing.
Assuming the successful completion of the Placing, the Company
intends to seek a further refinancing of the Group's debt
facilities, within the next 12 months, to secure longer term debt
financing reflecting a return to normalised business trading
conditions and profitability on a sustained basis.
4. Dividend policy
In response to the impact of Covid, in April 2020, the Board
decided that a final dividend would not be proposed on the Ordinary
Shares in respect of the 52 weeks ended 28 March 2020 and, in
September 2020, the Board decided that no interim dividend would be
paid in respect of the 26 weeks ended 26 September 2020.
Taking account of the current exceptional circumstances, the
Board has also now decided that no final dividend will be proposed
on the Ordinary Shares in respect of the 52 weeks ended 27 March
2021. Under the terms of the Amend and Extend Refinancing, bank
consent is required for the declaration or payment of any Ordinary
Share dividends, however the Board recognises the importance of
dividends to Ordinary Shareholders and hopes to resume paying
dividends on the Ordinary Shares once the business is trading
profitably on a sustained basis.
The Board does however expect to continue paying the preference
dividends due on the Company's 6% first cumulative preference
shares of GBP1 each and 8% second cumulative preference shares of
GBP1 each in accordance with their terms.
5. Current Trading and OUTLOOK
Fuller's is a long-term business and the Board remains
optimistic about the future in the medium term and beyond.
Management has used lockdown wisely and strongly believes that the
actions taken during the pandemic have positioned the business well
for continued future success. The business has a well-invested and
well-balanced freehold estate, excellent and engaged people and a
clear and considered strategy to emerge strongly from the
pandemic.
In the short term, the estate has been largely closed since mid
December 2020 as a result of Government restrictions imposed in
response to Covid, resulting in the business currently generating
negligible revenue. Management has actioned pro-active measures to
preserve liquidity and reduce costs, however, the Group's cash burn
is currently between GBP4 million and GBP5 million per month whilst
the business is in full lockdown. Assuming the current Government
operating restrictions are gradually eased in line with the
Government Roadmap and the Group can return to normalised trading
conditions on a sustained basis, the Board believes that the
business will become cashflow positive (including Group overheads)
again from mid-May 2021 onwards. This expected improvement in
cashflow is naturally dependent on there being no material delay in
the easing of Covid-related restrictions in line with the
Government Roadmap.
Looking ahead, the Board believes that Fuller's is well placed
to reopen strongly as trading restrictions are eased and to benefit
from the expected significant pent-up customer demand as the UK
economy reopens. The Group has a proven strategy to rebuild trading
momentum and return to growth, as well as the drive and
determination to lead the way out of the pandemic. The Board
remains confident in its long-term strategy and believes it is well
positioned to capitalise on available opportunities to create
shareholder value and remains well placed for long-term
success.
6. ORDINARY SHAREHOLDER Commitments AND DIRECTOR SUBSCRIPTIONS
The Company has received irrevocable undertakings to vote in
favour of the Resolutions from Ordinary Shareholders who hold an
aggregate of 3,274,816 'A' Ordinary Shares, 58,931,612 'B' Ordinary
Shares and 9,862,162 'C' Ordinary Shares, respectively
(representing approximately 10.12 per cent. of the issued 'A'
Ordinary Shares, 69.75 per cent. of the issued 'B' Ordinary Shares
and 68.21 per cent. of the issued 'C' Ordinary Shares,
respectively, excluding Ordinary Shares held in treasury in each
case). These include irrevocable undertakings to vote in favour of
the Resolutions received from Directors who hold an aggregate of
426,305 'A' Ordinary Shares, 9,320,672 'B' Ordinary Shares and
750,417 'C' Ordinary Shares, respectively (representing
approximately 1.32 per cent. of the issued 'A' Ordinary Shares,
11.03 per cent. of the issued 'B' Ordinary Shares and 5.19 per
cent. of the issued 'C' Ordinary Shares, respectively, excluding
Ordinary Shares held in treasury in each case).
The Company has received irrevocable undertakings from Directors
who have also committed to contribute GBP225,000 in total in total
to subscribe for 'A' Ordinary Shares and apply to acquire 'B'
Ordinary Shares in conjunction with the Placing.
DEFINITIONS
The following definitions apply throughout this announcement
unless the context requires otherwise:
"A and C Ordinary Shareholder the special resolution of the
Resolution" 'A' Ordinary Shareholders and
the 'C' Ordinary Shareholders
(as a single class under the Articles)
to be proposed at the Extraordinary
'A' and 'C' Ordinary Shareholder
General Meeting to approve the
Placing, and to be set out in
the Notice of Extraordinary General
Meetings.
"A Ordinary Shareholders" the holders of 'A' Ordinary Shares
from time to time.
"A Ordinary Shares" the 'A' ordinary shares of 40
pence each in the capital of the
Company which are admitted to
trading on the London Stock Exchange.
"Admission" admission of the Placing Shares
and the 'A' Ordinary Shares to
be issued as part of the Director
Subscriptions to trading on the
Main Market becoming effective
in accordance with the Listing
Rules.
"Amend and Extend Refinancing" the amend and extend refinancing
of the Group's Existing Debt Facilities
described in section 3 of this
announcement.
"Articles" the articles of association of
the Company.
"B Ordinary Shareholder the special resolution of the
Resolution" 'B' Ordinary Shareholders to be
proposed at the Extraordinary
'B' Ordinary Shareholder General
Meeting to approve the Placing,
and to be set out in the Notice
of Extraordinary General Meetings.
"B Ordinary Shareholders" the holders of 'B' Ordinary Shares
from time to time.
"B Ordinary Shares" the 'B' ordinary shares of 4 pence
each in the capital of the Company.
"Board" the board of Directors of the
Company.
"B Share Offer" the offer to 'B' Ordinary Shareholders
to apply for up to 4,367,472 'B'
Ordinary Shares from the Company
to be set out in the Circular.
"CCFF" the GBP100 million in commercial
paper issued by the Group under
the Bank of England's Covid Corporate
Financing Facility and due for
repayment in May 2021.
"C Ordinary Shareholders" the holders of 'C' Ordinary Shares
from time to time.
"C Ordinary Shares" the 'C' ordinary shares of 40
pence each in the capital of the
Company.
"Company" or "Fuller's" Fuller, Smith & Turner P.L.C.
a public limited company incorporated
in England and Wales with registered
number 00241882 and whose registered
office is at Pier House, 86-93
Strand-on-the-Green, London, W4
3NN.
"Circular" the circular to shareholders to
be sent to Ordinary Shareholders
for the purpose of convening the
General Meetings, including the
Notice of Extraordinary General
Meetings.
"Directors" the Executive Directors and Non-Executive
Directors of the Company.
"Director Subscriptions" the A Ordinary Shares to be subscribed
for by Directors and / or the
B Ordinary Shares to be acquired
by Directors (as the case may
be) for a total contribution of
approximately GBP225,000.
"Extraordinary General the Extraordinary Ordinary Shareholder
Meetings" General Meeting, the Extraordinary
'A' and 'C' Ordinary Shareholder
General Meeting and / or the Extraordinary
'B' Ordinary Shareholder General
Meeting (as applicable).
"Extraordinary A and C the extraordinary general meeting
Ordinary Shareholder General of the 'A' Ordinary Shareholders
Meeting" and the 'C' Ordinary Shareholders
to be convened for 20 April 2021
(or any adjournment thereof),
notice of which is to be set out
in the Notice of Extraordinary
General Meetings.
"Extraordinary B Ordinary the extraordinary general meeting
Shareholder General Meeting" of the 'B' Ordinary Shareholders
to be convened for 20 April 2021
(or any adjournment thereof),
notice of which is to be set out
in the Notice of Extraordinary
General Meetings.
"Extraordinary Ordinary the extraordinary general meeting
Shareholder General Meeting" of the Ordinary Shareholders to
be convened for 20 April 2021
(or any adjournment thereof),
notice of which is to be set out
in the Notice of Extraordinary
General Meetings.
"FCA" the Financial Conduct Authority
of the UK, its predecessors or
its successors from time to time,
including, as applicable, in its
capacity as the competent authority
for the purposes of Part VI of
FSMA.
"Fuller's Shares" the 'A' Ordinary Shares of 40
pence each, the 'B' Ordinary Shares
of 4 pence each, the 'C' Ordinary
Shares of 40 pence each, the first
6 per cent. cumulative preference
shares of GBP1 each, and the second
8 per cent. cumulative preference
shares of GBP1 each in the capital
of the Company.
"Government Roadmap" the roadmap for the staged easing
of Covid-related government lockdown
restrictions on movement, travel
and gatherings in England announced
by the Prime Minister on 22 February
2021.
"Group" The Company and its subsidiaries.
"Group's Existing Debt the loan facilities available
Facilities" under each of:
(a) the GBP130,000,000 facility
agreement originally between,
among others, the Company and
Rabobank International as agent
dated 19 August 2014, as amended
from time to time;
(b) the GBP30,000,000 facility
agreement between the Company
and Lloyds Bank as lender dated
19 August 2014, as amended and
restated pursuant to an amendment
agreement dated 11 August 2017
and as amended from time to time;
(c) the GBP30,000,000 facility
agreement between the Company
and HSBC Bank plc as lender dated
27 January 2016, as amended from
time to time; and
(d) the GBP40,000,000 facility
agreement between the Company
and Mediobanca International (Luxembourg)
S.A. as lender dated 20 December
2019, as amended from time to
time.
"Listing Rules" the Listing Rules made by the
FCA for the purposes of Part VI
of FSMA.
"London Stock Exchange" London Stock Exchange P.L.C.,
of 10 Paternoster Square, London,
EC4M 7LS.
"Main Market" the main market for listed securities
of the London Stock Exchange.
"Non-Executive Directors" the non-executive directors of
the Company, currently being the
Chairman, Juliette Stacey, Richard
Fuller, Sir James Fuller Bt.,
Robin Rowland OBE and Helen Jones.
"Notice of Extraordinary the notice of the Extraordinary
General Meetings" General Meetings, as set out in
the Circular.
"Numis" Numis Securities Limited.
"Official List" the FCA's list of securities that
have been admitted to listing.
"Ordinary Shares" the 'A' Ordinary Shares of 40
pence each, the 'B' Ordinary Shares
of 4 pence each and the 'C' Ordinary
Shares of 40 pence each in the
capital of the Company.
"Ordinary Shareholders" the holders of the Ordinary Shares
from time to time.
"Ordinary Shareholder the ordinary and special resolutions
Resolutions" of the Ordinary Shareholders being
proposed at the Extraordinary
Ordinary Shareholder General Meeting
to approve the Placing, the 'B'
Share Offer and the Director Subscriptions,
as set out in the Notice of Extraordinary
General Meetings.
"Placees" persons procured by Numis on the
terms and subject to the conditions
of the Placing Agreement to subscribe
for the Placing Shares pursuant
to the Placing.
"Placing" the proposed placing by the Company
of up to 6,455,447 of the Company's
'A' Ordinary Shares to Placees
in accordance with the terms of
the Placing Agreement.
"Placing Agreement" the conditional agreement dated
31 March 2021 and made between
the Company and Numis in relation
to the Placing.
"Placing Price" the fixed price of 830 pence per
Placing Share
"Placing Shares" the up to 6,455,447 new 'A' Ordinary
Shares to be issued by the Company
pursuant to the Placing
"Resolutions" the Ordinary Shareholder Resolutions,
the 'A' and 'C' Ordinary Shareholder
Resolution and/or the 'B' Ordinary
Shareholder Resolution (as applicable).
"RIS" a Regulatory Information Service
that is approved by the FCA and
that is on the list of Regulatory
Information Services maintained
by the FCA.
"Shareholders" the holders of Fuller's Shares
from time to time.
"UK" the United Kingdom of Great Britain
and Northern Ireland.
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END
TSTFFFSFVTIIVIL
(END) Dow Jones Newswires
March 31, 2021 02:00 ET (06:00 GMT)
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