Thwaites (Daniel) Plc Half-year Report
12 Novembre 2019 - 10:00AM
UK Regulatory
TIDMTHW
INTERIM RESULTS FOR THE SIX MONTHSED 30 SEPTEMBER 2019
CHAIRMAN'S STATEMENT
RESULTS
In a difficult retail environment, the company has benefited from the
investments made last year, a stronger UK leisure market and some improvement
in corporate hotel demand.
Turnover for the half year of GBP53.4m (2018: GBP49.9m) represents a 7%
increase, operating profit has increased by 9% to GBP8.7m (2018: GBP8.0m).
The current political and economic uncertainty has resulted in a current
expectation that interest rates will fall in the short to medium term and this
has had a negative impact on the fair value of our interest rate swaps. This
has required an increase in the provision of GBP4.0m at the half year (2018:
GBP0.6m reduction in the provision), and this negative movement is shown in our
profit and loss account.
Net debt at 30 September 2019 was GBP61.6m (2018: GBP70.2m); reduced by GBP8.6m
due to a reduced capital investment programme and the disposals of some
non-core properties.
PUBS AND INNS
Our tenanted pubs have had a good first half to the year despite mixed weather
compared to last year's summer heatwave. The investments we have made over
recent years mean that our pubs' balanced income streams provide resilience in
the face of the ups and downs of the British climate.
Turnover has risen by 2% on a like for like basis and operating profit is level
with last year. We have completed 12 investment schemes in the first half of
the year, investing GBP1.3m and continue to make good returns on our
investments.
Major refurbishments schemes have been carried out at Blue Bell, Carlton in
Lindrick; Boot & Shoe, Elswick and Malt Shovel, Barkby.
Our Inns have had an excellent summer, with turnover up by 19% and operating
profit up by 45%. They too are benefiting from investment and their premium
positioning puts them in an area of growth. The major investment made last year
at the Beverley Arms, and the year before at The Crown in Pooley Bridge have
contributed to this strong performance.
HOTELS & SPAS
In the hotels & spas sales for the first half of the year have grown by 5%,
with operating profits growing by 3%. The hotels have experienced a strong
leisure market from UK tourism over the summer as well as improvements in
corporate bedroom and meeting room demand.
The reorganisation of our hotel management structure that was completed in the
first half of last year is delivering the intended efficiency gains and renewed
focus of our operations teams. This has helped to drive the increase in sales
and improve operating margins which has helped to absorb previously highlighted
cost increases, in particular from wage costs associated with the national
living wage, auto-enrolment and natural market inflation from candidate
shortages in key positions.
The performance has also benefited from a reduced level of disruption from
lower levels of capital expenditure following the significant refurbishment
programme we completed last year, although we have spent GBP1.6m in the period.
CORE BEER RANGE
During the period we launched our new core beer range which is only available
in our own properties. The range consists of five cask beers, Original, Gold,
Amber, IPA and Mild, which have been very well received by our customers such
an extent that our new brewery at Mellor Brook is operating at full capacity.
FUNNY GIRLS
When we sold our Free Trade business to Marston's in 2015 we retained our
investment in one large free trade account in Blackpool. Over a number of
years, we had advanced loans to the business, secured over its freehold assets.
Funny Girls comprised a popular cabaret venue and a nightclub based in the
historic art deco Odeon cinema in the heart of the town, together with two
pubs.
In September 2018 administrators were appointed to the business, which was
marketed for sale, but as no buyer was found we assumed ownership of it in
January 2019 in settlement of our outstanding debt. The former owner of the
business approached us to buy part of the business back, and we sold the Odeon
cinema to him in August 2019. This alleviated significant distraction, whilst
retaining ownership of the pubs.
In addition to selling Funny Girls, we sold three pubs and a parcel of land
adjacent to one of our pubs for a total of GBP5.1m generating a profit of
GBP0.8m.
EARNINGS PER SHARE
The basic earnings per share for the period was 2.7p per share (2018: 8.5p).
This movement is largely due to the year on year non-cash movement in the fair
value of our interest rate swaps, which was negative this year against a
positive last year. The underlying earnings per share, excluding the impact of
the interest rate swap movement is 9.5p (2018: 7.5p).
DIVID
The Board recommends an interim dividend of 1.10p (2018: 1.10p) to be paid on 2
January 2020 to shareholders on the register on 6 December 2019.
BOARD CHANGES
As previously announced, Mark Fisher was appointed as an independent
non-executive director on 1 June 2019. Mark is currently Chief Development
Officer of Merlin Entertainments plc, where he has been a member of the senior
management team for over 18 years. We were delighted that he agreed to join us
and are excited by the new perspective that he brings.
SUMMARY
For the past few years our priority has been a large capital investment
programme to reposition our properties and improve the quality of our assets.
Our plan this year has been to drive sales, control costs and invest carefully
in order to fully understand how the business trades without the disruption it
absorbed during the recent investment programme.
The Company has posted a strong performance for the first half and the focus on
our core businesses, whilst disposing of those that were non-core has
strengthened its financial position.
We will continue to adopt the same approach for the rest of the year, being
ready to move forward once clarity on a new government and Brexit comes, and in
a strong position to be agile should opportunities to acquire new assets arise.
Richard Bailey
Chairman
12 November 2019
Profit and Loss Account for the six months ended 30 September 2019
Unaudited Unaudited Audited
6 months 6 months 12 months ended
ended ended 31 March
30 September 2019 30 September 2019
GBP'm 2018 GBP'm
GBP'm
Turnover 53.4 49.9 96.9
Operating profit 8.7 8.0 11.7
Property disposals 0.8 0.2 0.1
______ ______ ______
Profit before interest 9.5 8.2 11.8
Net interest payable (2.0) (1.9) (3.9)
(Loss) profit on interest rate swaps measured at fair
value (4.0) 0.6 (2.5)
Finance charge on pension liability (0.5) (0.5) (0.9)
______ ______ ______
Profit on ordinary activities 3.0 6.4 4.5
before taxation
Taxation (1.4) (1.4) (1.0)
______ ______ ______
Profit on ordinary activities after taxation 1.6 5.0 3.5
______ ______ ______
Earnings per share 2.7p 8.5p 5.9p
Balance Sheet as at 30 September 2019
Unaudited Unaudited Audited
30 September 30 September 31 March
2019 2018 2019
GBP'm GBP'm GBP'm
Fixed assets
Tangible assets 293.3 297.2 298.0
Investments 1.0 3.2 0.8
______ ______ ______
294.3 300.4 298.8
Current assets
Stocks 0.7 0.6 0.7
Trade and other debtors 10.8 12.8 9.8
Cash at bank and in hand 5.9 2.3 3.8
______ ______ ______
17.4 15.7 14.3
Creditors due within one year
Trade and other creditors (17.0) (15.5) (15.2)
Loan capital (22.5) - (28.5)
______ ______ _____
(39.5) (15.5) (43.7)
Net current (liabilities) assets (22.1) 0.2 (29.4)
______ ______ ______
Total assets less current liabilities 272.2 300.6 269.4
Creditors due after one year (67.0) (89.2) (63.9)
______ ______ ______
Net assets excluding pension liability 205.2 211.4 205.5
Pension liability (24.9) (34.2) (24.8)
______ ______ ______
Net assets including pension liability 180.3 177.2 180.7
______ ______ ______
Capital and reserves
Called up share capital 14.7 14.7 14.7
Capital redemption reserve 1.1 1.1 1.1
Revaluation reserve 73.8 77.3 74.1
Profit and loss account 90.7 84.1 90.8
______ ______ ______
Equity shareholders' funds 180.3 177.2 180.7
______ ______ ______
NOTES:-
1. Basis of preparation
The interim accounts, which have not been audited, have been prepared on the
basis of the accounting policies set out in the Annual Report and Accounts for
the year ended 31 March 2019.
2. Taxation
The taxation charge is based on the estimated tax rate for the year.
END
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