Financial highlights
Ø Further progress in like-for-like net income with growth of 0.5% in the final quarter resulting in an increase of 1.4% for the full year
Ø EBITDA* before exceptional items of £302 million (2013: £313 million), in line with expectations following the impact of planned asset disposals
Ø Profit before tax and exceptional items maintained at £121 million (2013: £121 million) as interest savings from reduced debt offsets reduction in EBITDA
Ø Profit after tax improved to £30 million (2013: £4 million loss) after net exceptional charges, principally relating to property matters, reduced to £65 million (2013: £99 million)
Ø Adjusted earnings per share# in line with prior year at 19.0p (2013: 19.0p)
Ø Strong cash generation from operations enables continued reduction in net debt, down to £2.4 billion (2013: £2.5 billion)
Ø Partial refinancing of 2018 corporate bonds and a new revolving bank facility completed on 7 October 2014 provides a smoother and extended debt maturity profile with a reduced overall cost of borrowing, improving flexibility and optionality
Operational highlights
Ø Net proceeds from disposals of £73 million (2013: £150 million). The asset disposal programme materially reduced to focus primarily on under-performing assets with proceeds re-invested for higher returns
Ø Capital investment of £66 million (2013: £62 million) across the estate of which 41% was focused on growth driving initiatives, up from 32% achieved last year
Ø Operational focus aimed at improving publican profitability which has helped deliver a 16% reduction in business failures
* Earnings before interest, tax, depreciation and amortisation
# Excludes exceptional items
Commenting on the results, Simon Townsend, Chief Executive Officer said:
"We are pleased to report like-for-like net income growth for the full year with each quarter delivering improvements on the prior year. This represents significant progress and has been achieved through our continued focus on the implementation of actions that drive sales and profit for our publicans and as a result enhance our income.
We continue to enhance the quality of our pub estate, and while we have materially reduced the scale of our asset disposal programme, we have sold under-performing assets to fund increased investment in the retained estate, with a growing proportion of capital investment directed toward income enhancing opportunities. Our teams remain focused on providing exceptional local support and value creating opportunities to our publicans to enable them to grow their businesses.
The successful partial refinancing of the 2018 corporate bonds and replacement of our bank facilities provides the business with increased flexibility and optionality with which we aim to sustain our operational progress, further reduce our debts and generate value for shareholders.
While our performance this year has benefited from a UK economy which has shown some signs of strengthening, including improving employment prospects, we view the consumer recovery as fragile and remain cautious in the near-term.
Our focus for the current year is to continue to implement initiatives which assist publican profitability whilst increasing capital investment in relevant and innovative retail offers. We are pleased that, for the first seven weeks of the new financial year, we have continued to deliver like-for-like net income growth in line with our objectives for the year."
