Interim results For the 26 weeks ended 1 st October 2018 FY19 H1 1 - PowerPoint PPT Presentation

Interim results For the 26 weeks ended 1 st October 2018 FY19 H1 1

Strategy and overview Patrick Dardis CEO FY19 H1 2

Premium Individual Differentiated FY19 H1 3

Performance history Consistent LFL sales growth driving healthy cash generation for investment FY15 FY16 FY17 FY18 FY19 Interim Interim Interim Interim Interim Managed House LFL performance +7.0% +5.5% +5.4% +4.6% +5.2% Strong operating margins 18.3% 18.5% 18.5% 19.3% 18.2% Adjusted earnings per share 30.00p 33.59p 36.30p 41.15p 42.11p Healthy cash generation £26.1M £31.3M £33.1M £33.2M £38.6M FY19 H1 4

Results Revenue £156.8M +8.8% highlights Operating profit* £28.6M +2.9% PBT* £26.1M +4.8% EPS* 42.11p +2.3% Dividend 9.97p +6.0% *Adjusted to exclude exceptional items FY19 H1 5

Financial review Steve Robinson CFO FY19 H1 6

Operating performance Managed Houses* £35.7M +2.0% Ram Pub Co* £2.5M +4.2% Outlet profit* £38.2M +2.1% Operating profit* £28.6M +2.9% *Adjusted to exclude exceptional items FY19 H1 7

Operating margin Operating £M £M margin % £35.7M £35.0M +£2.7M -£0.6M -£1.4M 37.0 24.8% FY15 H1 27.3 36.0 35.0 24.9% FY16 H1 29.8 34.0 24.5% FY17 H1 31.5 33.0 32.0 25.5% FY18 H1 35.0 31.0 30.0 FY19 H1 35.7 23.8% FY18 H1 External LFL growth Investment FY19 H1 factors FY19 H1 8

Managed LFL Revenue £143.1M +5.2% performance AWT per pub £32.0K +5.2% EBITDA* £46.0M +3.1% Operating profit* £36.3M +3.7% Profit margin* 25.4% -0.3pts *Adjusted to exclude exceptional items FY19 H1 9

Free cash flow FY19 £M FY18 £M EBITDA* 40.4 38.6 Working capital (1.1) (1.9) Maintenance capex (5.6) (6.5) Pension contributions (0.6) (0.7) Interest/tax/other (6.5) (7.4) Free cash flow 26.6 22.1 * Adjusted to exclude exceptional items FY19 H1 10

Net funds flow FY19 £M FY18 £M Free cash flow 26.6 22.1 Share proceeds 0.2 - Dividends (5.0) (4.7) Development capex (5.0) (3.2) Acquisitions* (1.7) (5.3) Net funds flow 15.1 8.9 *Including transfers and net of disposals FY19 H1 11

Capex investment FY19 FY18 FY19 Existing estate £10.5M £10.6M Acquisitions £2.9M £4.6M FY18 Other £0.1M £0.1M - 5.0 10.0 15.0 £M Total investment £13.5M £14.3M Managed pubs Managed hotels Ram Pub Co Other FY19 H1 12

Freehold Total rich estate April 2018 181 74 255 Additions 1 - 1 Disposals - (4) (4) October 2018 182 70 252 • 194 freeholds and 17 long leases with peppercorn rents – 84% of our estate • Location is key – 81% of our pubs are within the M25 FY19 H1 13

Long term Gearing Net Debt to Total Facility 22.1% EBITDA £175.0M Loan to Value finance 1.8 times 16.9% Current Net Debt £125.4M Headroom £49.6M 70 75 60 50 50 40 £M 30 30 20 20 10 0 2019 2020 2021 2022 2023 2024 2025 Term Loans Revolving credit facility (with extension) FY19 H1 14

Operational review Patrick Dardis FY19 H1 15

Managed • Total revenue up 9.0% highlights • LFL revenue up by 5.2% • Operating profit up by 2.0% to £35.7M • Invested £12.1M primarily on our LFL estate • Last year’s two hotel acquisitions have driven room sales growth up by 18.3% FY19 H1 16

Managed Drink sales LFL draught Total +10.2% sales up by drink sales LFL +7.4% 6.0% • England’s success at the World Cup helped boost draught sales with lager up 6.8% and cider up 8.7% • Summer drinks at the heart of our growth with both Pimm’s and rosé wine up 27% • Gin revolution shows no sign of slowing with volume up by 35% FY19 H1 17

Managed Food sales Burger Shack Total +4.8% sales up by food sales LFL +0.1% 20.8% • Food sales affected by the warm weather particularly impacting on our Ultimate Sunday Roasts • Number of Burger Shacks now stands at 36 • Monthly chef forums help create an inspirational environmental for our head chefs FY19 H1 18

Hotel Room sales Occupancy Total +18.3% at 78.1% revenue LFL +3.3% • Two new hotels added last year increased our room stock to 580 rooms, 255 of which are boutique • Total average room rate of £85.42 • LFL RevPAR up to £70.49, an increase of 3.6% £70.49 £68.01 £63.80 £ £63.79 £60.38 FY15 FY16 FY17 FY18 FY19 LFL RevPAR FY19 H1 19

Project • Continuing to develop our existing pipeline estate - Transformed the garden oasis at King’s Arms (Wandsworth) - Added an outdoor mezzanine at Wheatsheaf (Borough Market) - Created a new cocktail bar upstairs in the Marquess of Anglesey … (Covent Garden) • Maximising hotel opportunities - Developments due to start at recent acquisitions Park … (Teddington) and Bridge (Chertsey) • Opportunity led acquisitions - Due to open the Depot (Kidbrooke) in Spring 2019 - Exchanged contracts on the People’s Park Tavern (Victoria Park) - Acquisitions remain an integral part of our strategy and our … pipeline remains strong FY19 H1 20

Ram Pub Co Beer sales Barrelage Total +4.7% Total +2.4% LFL +7.3% LFL +3.8% • Total sales up by 3.1% and up by 4.8% on a LFL basis • Invested in four Ram Pub Co pubs focussing on improving outside trading space • Good estate management; disposing of four sites at the tail end of the estate for combined £0.3M profit • Improved tenants’ digital presence in over 30 pubs FY19 H1 21

Outlook • Solid trading for the past six weeks. Managed house revenue up by 7.2% in total and 3.9% on a LFL basis • Second half benefit from recent acquisitions will be offset by temporary closure at the Park and Bridge • Economic and political uncertainty remains, posing challenges to recruitment and further cost pressures • Grateful to the Chancellor for the welcome freeze to beer duty… but hoped for more support • Remain confident in our winning strategy to withstand challenges ahead and our expectations remain unchanged FY19 H1 22

Questions FY19 H1 23