Interim Results

Fuller,Smith&Turner PLC 25 November 2005 STRICTLY EMBARGOED UNTIL 7AM FRIDAY 25 NOVEMBER 2005 PRESS RELEASE FULLER, SMITH & TURNER P.L.C. Financial results for the six months ended 1 October 2005 Reported and restated under International Financial Reporting Standards (IFRS) Financial Highlights • Turnover up 4% to £67.4 million (2004: £64.5 million) • Normalised profit before tax1 up 5% to £8.4 million (2004: £8.0 million) • Profit before tax down 1% to £8.4 million (2004: £8.5 million) • Normalised earnings per share3 up 7% to 25.29p (2004: 23.67p) • Basic earnings per share2 were up 0.5% at 25.29p (2004: 25.17p) • Interim dividend per share2 increased 5% to 5.63p (2004: 5.36p) Corporate Progress • Beer Company profits up 6% • A good performance from Managed Pubs with profits up 10% and like for like sales up 4.4% • Good City trading with like for like sales up 7% • A solid first half for Hotels with profits up 7% • Tenanted Inns profits up 9% • Recommended cash offers for George Gale and Company Limited post the period end valuing the fully diluted share capital of Gales at approximately £82.7 million and represents an enterprise value of £91.8 million. 1 Profit before tax for the 26 weeks to 1 October 2005 now includes the cost of preference dividends. In accordance with the option available on first time adoption of IAS 32 and IAS 39 (which is explained further in Note 1), the comparative numbers have not been restated. Normalised profit is the profit before tax excluding exceptional gains of £nil (2004: £0.5 million), and preference dividends. 2 Calculated on the £1 'A' ordinary share and using the results of continuing and total operations. 3 Calculated using pre-exceptional earnings of £5.6 million (2004: £5.3 million) and the same weighted average number of shares as for the basic earnings per share. Commenting on the results, Anthony Fuller, Chairman of Fuller's, said: "It has been a good first half with turnover up 4% and normalised pre-tax profits up 5%. All areas of the business are performing well. Our focus on providing a premium retail experience is proving successful and delivering excellent sales and bottom line growth across our managed and tenanted pub estates and hotels. London Pride continues to grow market share and achieve new listings while our other key brands are showing good growth. " We look forward to welcoming Gales' 111 high quality pubs into the Fuller's Group and enhancing our ale portfolio with their well respected brands. The next step will be to conduct a strategic review of the business and to commence the process of integration in order to achieve the expected synergies. These will clearly be areas of focus for us over the next few months and we will report in more detail on the longer term prospects and exciting opportunities for the combined business once the review has been completed. The acquisition of Gales will give us benefits of scale that will help us continue to deliver improved value to our shareholders." - Ends - For further information, please contact: Fuller Smith & Turner P.L.C. Press Office 020 8996 2175/2198/2048 Mobile 07831 299801/ 07748 657854 E-mail: pr@fullers.co.uk Michael Turner, Chief Executive: Press 020 8996 2048 Paul Clarke, Finance Director: Analysts 020 8996 2048 Merlin 020 7653 6620 Paul Downes 07900 244 888 Vanessa Maydon 07802 961 902 (mobile) Rebecca Penney 07950 419 408 (mobile) Notes to Editors For an official photo please e-mail photo@fullers.co.uk and one will automatically be sent by return on receipt of your e-mail. Copies of this statement, the Interim Statement and press presentation will be available on the Company's web site, www.fullers.co.uk. Attached: Chairman's Statement Financial Highlights Unaudited Group Income Statement Unaudited Group Balance Sheet Unaudited Group Cash Flow Statement Other Unaudited Group Primary Statements Notes to the Accounts FULLER, SMITH & TURNER P.L.C. INTERIM RESULTS FOR THE SIX MONTHS TO 1 OCTOBER 2005 CHAIRMAN'S STATEMENT Whatever You Do, Take Pride It has been a good first half with normalised profits up 5% to £8.4 million (2004: £8.0 million) on a 4% increase in turnover to £67.4 million (2004: £64.5 million). With no profits on disposal of properties in the first six months of the current financial year, against a surplus of £0.5million last year, post exceptional pre-tax profits were £8.4 million compared to £8.5 million in the comparable period last year. Normalised earnings per share, which is our key measure, increased 7% to 25.29p (2004: 23.67p). Basic earnings per share was slightly higher than last year at 25.29p (2004: 25.17p). Tax has been provided for at the expected effective rate for the full year of 32.3% on normalised profits (2004: 32.7%). Earnings before interest, tax, depreciation and amortisation (EBITDA) were up 7% to £13.8 million (2004: £13.0 million). Since the beginning of the financial year, we acquired seven new pubs, completed the construction of another and sold two. Total capital expenditure for the half-year was £19.7 million (2004: £6.5 million) of which £13.5 million (2004: £1.1 million) was on the seven pubs acquired and one pub built during the year. Since the end of the period, we have contracted to purchase two further pubs. In addition, we have announced a recommended offer for Gales for an enterprise value of £91.8 million. The current financial year is the first where we will be required to report our accounts under International Financial Reporting Standards (IFRS). The impact of IFRS on profits has been in the area of pension charges and share based payments which reduced last year's reported normalised profits by £0.2 million to £8.0 million. The impact on September 2004 net assets has been a reduction £15.8 million to £147.5 million, a result of recognising the net deficit of the final salary pension schemes and deferred tax on past property revaluations in the balance sheet. A detailed restatement document is available on our website www.fullers.co.uk . We shall be increasing the interim dividend by 5% to 5.63p per £1 'A' and 'C' ordinary share and 0.563p per 10p 'B' ordinary share, which will be paid on Friday 6 January 2006 to shareholders on the Share Register as at Friday 9 December 2005. Fuller's Inns It has been a good first half for Fuller's Inns with profits up 10% to £8.4 million on turnover up 5% to £51.4 million. EBITDA at £11.8 million was up 9% (2004: £10.8 million). Managed Pubs The better trading seen in the second half of last year has continued into this year and turnover was up 4% in the first half. On an uninvested like for like basis turnover across the managed estate was up 4.4%. It was particularly pleasing to see continued buoyant trading in the City which, up to a year ago, had been suffering the effects of a sluggish economy. Sales in the City were up 6.6% on a like for like basis. Since the start of the financial year, we acquired six new managed pubs, five of which are freeholds. In September 2005, we also opened The Paper Mill our newest development built on the Grand Union Canal in Apsley, Hertfordshire. In line with our investment strategy, these are all high quality assets presenting good opportunities to grow our food, cask ale and wine sales. All sites are performing well and are excellent additions to the managed estate. In April 2005 we sold two bars and transferred three pubs to tenancy and at the end of the first half had 120 pubs under management. We continue to invest in the existing estate and, in addition to the acquisitions during the period, there were 13 major projects undertaken in the first half compared to 16 in the same period last year. All of our investment is aimed at maintaining the quality and longevity of the estate underpinning our strategy to deliver a premium retail experience. This emphasis on quality has translated into food sales up 9%, cask ale sales up 10% and wine sales up 5% despite the sale of two of our leasehold bars. Tenanted Inns The tenanted estate continues to perform well with profits up 9%. Average profits per pub were up 3% compared to last year while average turnover per pub was level. As with all areas of the business, we target our acquisitions carefully and are pleased to report that the four tenanted pubs bought last year are all performing well. We made one further acquisition in September 2005 which, combined with three transfers from the managed estate, means the total number of tenanted pubs at the end of the first half was 122. Since the period end we have acquired a further pub, the Carpenter's Arms in Bransgore, near Bournemouth. Fuller's Hotels Fuller's Hotels has made a good start to the year with turnover up 12% and profits up 7%. The average room rate was up 5% to £68.82 and occupancy up 7% which delivered an overall revpar of £45.60, an increase of 9% over last year. In order to maintain the quality of our hotels in this niche market we continue to invest in our estate. Room refurbishments were completed at the Mad Hatter Hotel during the first half. We are also pleased to report that the Red Lion Hotel in Hillingdon Village, which opened in May 2004, continues to grow its customer base and performed very well in the period. The Fuller's Beer Company Despite the challenging conditions in the cask ale market, Fuller's Beer Company has continued to perform well. Profits were up 6% to £3.6 million (2004: £3.4 million), on turnover up 2% to £23.3 million (2004: £22.9 million). EBITDA increased 5% to £4.4 million from £4.2 million last year. Overall total beer sales were down 1% to 134,000 barrels. During the first half we lost a large pub company customer after they were re-tied following a takeover and, primarily as a result of this, own beer sales fell 2% to 94,000 barrels. We are confident, however, that the development of recent new on and off trade listings will replace much of this lost volume by the end of the financial year. It has been particularly pleasing to see the growth of own beer sales to our tied estate, up 4% on last year. This is evidence of the close working relationship between The Beer Company and Fuller's Inns to ensure the quality of our cask ales and that our pubs deliver a unique range of great cask ales in the best condition. London Pride remains the UK's top selling premium cask ale and, despite the difficult trading environment, has increased market share in all trade sectors. We continue to support the brand through creative marketing and have already gained new listings in the autumn. Our newest beer, Discovery Blonde Beer, was launched in May. Designed to be served cooler and add incremental volume by attracting lager drinkers, it has been supported by a comprehensive marketing campaign including various promotional activities, radio, taxi and poster advertising together with bespoke glassware. Sales have far exceeded our initial expectations and in addition we have already achieved listings in three major supermarkets. ESB, the Champion Ale, has also had a good year following its relaunch last autumn. The Wine Division continues to make a valuable contribution to the business with profits up 11% in the first half of the year. Our agency business now includes wines from Chile, New Zealand, Australia, South Africa and Spain as well as an excellent Champagne. These have further enhanced the quality and range of our wines and recognition of this outside our tied estate can be seen in the 7% wine volume growth to our free trade accounts. During the first six months we completed the £2.1 million development of the kegging line. This project has further automated the kegging process leading to increased efficiency in the Brewery and reducing costs in the long term. Recommended cash offers for Gales Following the period end on 8 November 2005, Fuller's made recommended cash offers for George Gale and Company Limited ("Gales"), the Hampshire-based brewer and operator of 111 pubs located throughout the South and South East of England. Their retail estate comprises 69 tenanted and 42 managed pubs. The offers value the fully diluted share capital of Gales at £82.7 million and represent an enterprise value of £91.8 million. The proposed acquisition of Gales is consistent with Fuller's strategy of seeking acquisitions with an excellent geographic fit and a high quality, largely freehold estate that provides cost savings through economies of scale and that will generate value for Fuller's Shareholders. In addition, Gales is a family-owned company with a strong history and tradition and a reputation for quality. It has a similar operating model to Fuller's and can be integrated with our model with little adaptation. It has an excellent estate of well run and well maintained estate of pubs and it brews a number of well respected ale brands, including 'HSB' which will complement Fuller's existing brand portfolio. We anticipate that the acquisition will be earnings enhancing in the first full financial year* and we have identified annualised synergy benefits of circa £3 million**. Prospects All areas of the business are performing well. London Pride continues to grow market share and achieve new listings while our other key brands are in good growth. Our focus on providing a premium retail experience is proving successful and delivering excellent sales and bottom line growth across our managed and tenanted pub estates and hotels. We continue to invest in the business to maintain high standards and to ensure the quality of our assets for the long term. In line with our targeted acquisition strategy, we bought seven and built one new pub in the first six months of the financial year. A further pub was purchased in November 2005 and contracts have been exchanged on another due to complete in January 2006. The Tenanted Division continues to deliver good profit growth and has benefited from acquisitions and transfers from the managed estate. We are confident that this steady growth will continue. The Red Lion Hotel is now in its second year of operation and has established a solid customer base which continues to grow. This has helped to deliver good growth from the Hotels' Division which we expect to continue in the second half. Our beer brands are performing well in a competitive market. The development of recent new listings should recover much of the volume shortfall seen in the first. Our brands remain second to none in terms of quality, and supported by creative marketing and an increasingly efficient brewery, we are well placed for future growth. We look forward to welcoming Gales' 111 high quality pubs into the Fuller's Group and enhancing our ale portfolio with their well respected brands. The next step will be to conduct a strategic review of the business and to commence the process of integration in order to achieve the expected synergies. These will clearly be areas of focus for us over the next few months and we will report in more detail on the longer term prospects and exciting opportunities for the combined business once the review has been completed. The acquisition of Gales will give us benefits of scale that will help us continue to deliver improved value to our shareholders. A.G.F. Fuller CBE Chairman 25 November 2005 * This statement regarding earnings enhancement is not a profit forecast and should not be interpreted to mean that Fuller's future earnings per share will necessarily match or exceed the historical published earnings per share of Fuller's or Gales. ** This statement of estimated cost savings relates to future actions and circumstances which, by their nature, involve risks, uncertainties and other factors. Accordingly, the cost savings referred to may not be achieved, or those achieved could be materially different from those estimated. FULLER SMITH & TURNER P.L.C. FINANCIAL HIGHLIGHTS FOR THE 26 WEEKS ENDED 1 OCTOBER 2005 1 Restated Restated 26 weeks to 26 weeks to 53 weeks to 1 October 25 September Change 2 April 2005 2004 2005/2004 2005 £000 £000 £000 ______________________________ ___________ ___________ ___________ ___________ Revenue 67,356 64,504 4.4% 129,492 Profit before tax 2 8,368 8,474 (1.3)% 17,620 Normalised profits 3 8,428 7,993 5.4% 17,388 EBITDA 4 13,817 12,970 6.5% 27,799 Basic earnings per share 5 25.29 p 25.17 p 0.5% 52.41 p Normalised earnings per share 6 25.29 p 23.67 p 6.8% 51.68 p Dividend per share 5 5.63 p 5.36 p 5.0% 18.46 p Net assets per share 5 £6.91 £6.60 4.7% £6.81 Gearing ratio 21.0% 13.6% N/A 14.7% ______________________________ ___________ ___________ ___________ ___________ 1 The 25 September 2004 and 2 April 2005 results have been restated due to the adoption of International Financial Reporting Standards ("IFRS") - see Note 1. 2 Profit before tax for the 26 weeks to 1 October 2005 now includes the cost of preference dividends. In accordance with the option available on first time adoption of IAS 32 and IAS 39 (which is explained further in Note 1), the comparative numbers have not been restated. 3 Normalised profit is the profit before tax excluding exceptional gains of £nil (2004: £0.5m), and preference dividends. 4 Earnings before interest, tax, depreciation and amortisation. 5 Calculated on the £1 'A' ordinary share, and using the results of continuing and total operations. 6 Calculated using normalised profits after tax and the same weighted average number of shares as for the basic earnings per share. FULLER SMITH & TURNER P.L.C. UNAUDITED GROUP INCOME STATEMENT FOR THE 26 WEEKS ENDED 1 OCTOBER 2005 26 weeks to 26 weeks to 53 weeks to 1 October 25 September 2 April 2005 2004 2005 £000 £000 £000 Restated Restated REVENUE 67,356 64,504 129,492 Operating costs (57,903) (55,642) (110,241) ----------------- ----------------- ----------------- OPERATING PROFIT 9,453 8,862 19,251 Profit on disposal of properties - 481 232 Interest receivable 85 229 336 Finance costs (1,170) (1,098) (2,199) ------------------ ------------------ ------------------ PROFIT BEFORE TAX 8,368 8,474 17,620 Income tax expense (2,722) (2,758) (5,755) ----------------- ----------------- ----------------- PROFIT AFTER TAXATION 5,646 5,716 11,865 Preference dividends - (60) (120) ----------------- ----------------- ----------------- ATTRIBUTABLE TO EQUITY SHAREHOLDERS 5,646 5,656 11,745 ======== ======== ======== EARNINGS PER SHARE PER £1 'A' ORDINARY SHARE OR UNQUOTED £1 'C' ORDINARY SHARE Basic 25.29 p 25.17 p 52.41 p Diluted 25.03 p 25.03 p 51.94 p Normalised basis 25.29 p 23.67 p 51.68 p EARNINGS PER SHARE PER UNQUOTED 10P 'B' ORDINARY SHARE Basic 2.53 p 2.52 p 5.24 p Diluted 2.50 p 2.50 p 5.19 p Normalised basis 2.53 p 2.37 p 5.17 p The Directors have declared an interim dividend of 5.63p for the £1 'A' ordinary shares and unquoted 'C' shares, and 0.563p for the unquoted 10 pence 'B' shares, with a total estimated cost to the Group of £1,257,000 (2004: £1,202,000) The results and EPS measures above are all in respect of continuing and total operations of the Company. The 25 September 2004 and 2 April 2005 results have been restated due to the adoption of International Financial Reporting Standards ("IFRS") - see Note 1. FULLER SMITH & TURNER P.L.C. UNAUDITED GROUP BALANCE SHEET 1 OCTOBER 2005 At At At 1 October 25 September 2 April 2005 2004 2005 £000 £000 £000 Restated Restated NON-CURRENT ASSETS Property, plant and equipment 216,558 196,359 201,226 Investment properties 1,623 1,627 1,625 Other non-current assets 737 994 737 ----------------- ----------------- ----------------- 218,918 198,980 203,588 CURRENT ASSETS Inventories 4,691 4,064 4,426 Trade and other receivables 12,668 12,804 13,698 Investments - 2,033 - Cash and cash equivalents 1,773 4,848 4,610 ----------------- ----------------- ----------------- 19,132 23,749 22,734 CURRENT LIABILITIES Overdraft 7,096 - - Trade and other payables 25,352 24,693 23,476 Current tax payable 2,991 2,456 2,306 ----------------- ----------------- ----------------- 35,439 27,149 25,782 NON-CURRENT LIABILITIES Debenture stock 27,011 27,001 27,006 Preference shares 1,600 - - Retirement benefit obligations 11,624 13,378 13,337 Deferred tax liabilities 8,073 7,729 7,914 ----------------- ----------------- ----------------- 48,308 48,108 48,257 ----------------- ----------------- ----------------- NET ASSETS 154,303 147,472 152,283 ======== ======== ======== CAPITAL AND RESERVES Share capital 22,857 22,792 22,831 Preference shares - 1,600 1,600 Share premium account 4,248 3,991 4,150 Capital redemption reserve 2,902 2,902 2,902 Treasury shares (4,238) (2,860) (3,530) Retained earnings 128,534 119,047 124,330 ----------------- ----------------- ----------------- TOTAL EQUITY 154,303 147,472 152,283 ======== ======== ======== The 25 September 2004 and 2 April 2005 balance sheets have been restated due to the adoption of International Financial Reporting Standards ("IFRS") - see Note 1. FULLER SMITH & TURNER P.L.C. UNAUDITED GROUP CASH FLOW STATEMENT FOR THE 26 WEEKS ENDED 1 OCTOBER 2005 26 weeks to 26 weeks to 53 weeks to 1 October 25 September 2 April 2005 2004 2005 £000 £000 £000 Restated Restated CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax 8,368 8,474 17,620 Adjustments for: Depreciation 4,263 4,099 8,486 Loss / (profit) on disposal of fixed assets 101 (472) (170) Interest receivable (85) (229) (336) Finance costs 1,170 1,098 2,199 Difference between pension charge and cash paid (209) (221) (448) Share based payment charges 462 432 839 ----------------- ---------------- ---------------- Operating profit before working capital changes 14,070 13,181 28,190 Change in trade and other receivables (594) (1,733) (1,352) Change in inventories (265) 205 (157) Change in trade and other payables 2,125 488 (677) ----------------- ---------------- ---------------- Cash generated from operations 15,336 12,141 26,004 Interest received 85 229 336 Income tax paid (2,091) (2,712) (5,413) ----------------- ---------------- ---------------- Net cash inflow from operating activities 13,330 9,658 20,927 ----------------- ---------------- ---------------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (19,900) (7,526) (18,503) Proceeds from sale of property, plant and equipment 1,650 321 674 Cash (inflow)/outflow from movement in current asset - (1,021) 1,012 investments ----------------- ---------------- ---------------- Net cash used in investing activities (18,250) (8,226) (16,817) ----------------- ---------------- ---------------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of Share Capital 124 215 413 Purchase of own shares (1,234) (2,001) (2,751) Sale of treasury shares 256 146 141 Interest paid (1,176) (1,092) (2,188) Preference dividends paid (60) (60) (120) Equity dividends paid (2,923) (2,753) (3,956) ----------------- ---------------- ---------------- Net cash used in Financing activities (5,013) (5,545) (8,461) ----------------- ---------------- ---------------- Net decrease in cash and cash equivalents (9,933) (4,113) (4,351) Cash and cash equivalents at beginning of period 4,610 8,961 8,961 ----------------- ---------------- ---------------- Cash and cash equivalents at end of period (5,323) 4,848 4,610 ======== ======== ======== The 25 September 2004 and 2 April 2005 figures have been restated due to the adoption of International Financial Reporting Standards ("IFRS") - see Note 1. FULLER SMITH & TURNER P.L.C. UNAUDITED STATEMENT OF RECOGNISED INCOME AND EXPENSE FOR THE 26 WEEKS ENDED 1 OCTOBER 2005 26 weeks to 26 weeks to 53 weeks to 1 October 25 September 2 April 2005 2004 2005 £000 £000 £000 Reversal of deferred tax liability due to indexation 237 332 537 Net actuarial gains and losses on pension schemes 1,053 (1,541) (1,671) ----------------- --------------- ----------------- Income and expense recognised directly in equity 1,290 (1,209) (1,134) ----------------- --------------- ----------------- Profit attributable to ordinary shareholders 5,646 5,656 11,745 ----------------- --------------- ----------------- Total recognised income and expense for the period 6,936 4,447 10,611 ======== ======= ======== FULLER SMITH & TURNER P.L.C. NOTES TO THE ACCOUNTS FOR THE 26 WEEKS ENDED 1 OCTOBER 2005 1. INTERIM STATEMENT The interim statement does not constitute full accounts as defined by S.240 of the Companies Act 1985. Full accounts for the year ended 2 April 2005, including an unqualified auditors' report, have been delivered to the Registrar of Companies. Change in Accounting policies In accordance with the directive of the Council of the European Union, Fuller Smith & Turner P.L.C. ('Fullers') have adopted International Financial Reporting Standards ('IFRS') this year, having previously applied UK accounting standards. These interim statements are the first that Fullers has prepared under IFRS and they have been prepared in accordance with the IFRS accounting policies that management expects to apply in the 2006 IFRS-compliant full year financial statements. These accounting policies are consistent with those adopted for the restatement of the 2005 financial information. Both the restatement and a summary of significant accounting policies are available as separate documents on the Company's website, www.fullers.co.uk, and are also available on request from the Company Secretariat on 020 8996 2115. Fullers have adopted all existing IFRS with the exception of IAS 34 'Interim Financial Reporting' which is not mandatory for UK Groups. It is anticipated that the amendments to IAS 19 'Actuarial Gains and Losses, Group Plans and Disclosure' and to IAS 39 'The Fair Value Option', which have yet to be formally adopted for use in the EU, will be so adopted in time to be applicable to the next annual financial statements. Accordingly, we have adopted these amendments in these interim statements. The Group has taken the option to only apply IAS 32 'Financial Instruments: Disclosure & Presentation', and IAS 39 'Financial Instruments: Recognition & Measurement' prospectively, with effect from 3 April 2005. The comparative periods have therefore not been restated for IAS 32 or 39. The effect of IAS 32 is to reduce equity by £1.6 million as at 3 April 2005, by reclassifying preference shares as non-current liabilities, and to move the presentation of preference dividends of £60,000 on the face of the income statement. Preference shares were previously shown as part of equity. IAS 32 has also had an effect on preference dividends. Preference dividends were previously shown as a deduction from profit after tax, but under IAS 32 they are now included within finance costs. IAS 39 has had no effect on amounts recognised in the income statement or balance sheet. Neither IAS 32 nor IAS 39 have had any effect on basic or diluted earnings per share. Restatement of revenue and profit before tax for the comparative periods As noted above, the 25 September 2004 and 2 April 2005 results have been restated, and the full details of the restatement are available in a separate document. To aid understanding of this document, the main effects of the restatement on revenue and on profit before tax are presented below. 26 weeks to 53 weeks to 25 September 2004 2 April 2005 £'000 £'000 Revenue as previously reported 72,961 147,483 Excise duty (IAS 18) (8,457) (17,991) Revenue as reported under IFRS 64,504 129,492 Profit before tax as previously reported 8,686 18,046 Retirement benefits (IAS 19) (170) (341) Share-based payments (IFRS 2) (42) (85) Profit before tax as reported under IFRS 8,474 17,620 Under IFRS revenue, previously known as turnover, includes only the gross inflows of economic benefits received and receivable by the enterprise on its own account. Amounts collected on behalf of third parties such as excise duty are not economic benefits which flow to the enterprise and do not result in increases in equity. Therefore, they are excluded from revenue. This change does not apply to retailers who buy their goods duty paid and do not have to account to the government for duty. Excise duty has therefore been removed from all revenue except for sales by the Inns division directly to its own retail customers. 2. SEGMENTAL ANALYSIS 26 weeks to 1 October 2005 Fuller's Inns Beer Company Total £000 £000 £000 TOTAL REVENUES 51,366 23,265 74,631 Inter-segment revenues - (7,275) (7,275) ----------- ----------- ----------- Revenues from third parties 51,366 15,990 67,356 ----------- ----------- ----------- DIVISIONAL PROFIT 8,359 3,643 12,002 ----------- ----------- Net central costs (2,549) ----------- Operating profit 9,453 Profit on disposal of properties - Interest receivable 85 Finance costs (1,170) ----------- ----------- ----------- Profit before tax 8,359 3,643 8,368 ----------- ----------- ----------- ASSETS EMPLOYED ----------- ----------- ----------- Divisional assets 181,220 19,521 200,741 ----------- ----------- Unallocated net liabilities* (46,438) ----------- Total net assets 154,303 ----------- * Unallocated net liabilities represent the net of pension liabilities, debentures, income tax, cash and cash equivalents and assets held under central management. 26 weeks to 25 September 2004 Fuller's Inns Beer Company Total £000 £000 £000 TOTAL REVENUES 48,694 22,853 71,547 Inter-segment revenues - (7,043) (7,043) ----------- ----------- ----------- Revenues from third parties 48,694 15,810 64,504 ----------- ----------- ----------- DIVISIONAL PROFIT 7,627 3,447 11,074 ----------- ----------- Net central costs (2,212) ----------- Operating profit 8,862 Profit on disposal of properties 481 481 Interest receivable 229 Finance costs (1,098) ----------- ----------- ----------- Profit before tax 8,108 3,447 8,474 ----------- ----------- ----------- ASSETS EMPLOYED ----------- ----------- ----------- Divisional assets 159,879 17,059 176,938 ----------- ----------- Unallocated net liabilities* (29,466) ----------- Total net assets 147,472 ----------- 52 weeks to 2 April 2005 Fuller's Inns Beer Company Total £000 £000 £000 TOTAL REVENUES 98,651 46,040 144,691 Inter-segment revenues - (15,199) (15,199) ----------- ----------- ----------- Revenues from third parties 98,651 30,841 129,492 ----------- ----------- ----------- DIVISIONAL PROFIT 15,779 8,031 23,810 ----------- ----------- Net central costs (4,559) ----------- Operating profit 19,251 Profit on disposal of properties 232 232 Interest receivable 336 Finance costs (2,199) ----------- ----------- ----------- Profit before tax 16,011 8,031 17,620 ----------- ----------- ----------- ASSETS EMPLOYED ----------- ----------- ----------- Divisional assets 166,334 17,802 184,136 ----------- ----------- Unallocated net liabilities* (31,853) ----------- Total net assets 152,283 ----------- 3. TAXATION Corporation tax and deferred tax has been provided as follows: 26 weeks to 26 weeks to 53 weeks to 1 October 25 September 2 April 2005 2004 2005 £000 £000 £000 Restated Restated TAX ON NORMALISED PROFITS Current tax 2,454 2,510 5,061 Deferred tax 268 104 624 --------------- ----------------- -------------- Total tax 2,722 2,614 5,685 --------------- ----------------- -------------- TAX ON PROPERTY DISPOSALS Current tax - - 68 Deferred tax - 144 2 --------------- ----------------- -------------- Total tax - 144 70 --------------- ----------------- -------------- TOTAL TAX ON PROFITS Total current tax 2,454 2,510 5,129 Total deferred tax 268 248 626 --------------- ----------------- -------------- Total tax 2,722 2,758 5,755 --------------- ----------------- -------------- Effective tax rate 32.5% 32.5% 32.7% Effective tax rate on normalised profits 32.3% 32.7% 32.7% Normalised profit is the profit before tax excluding exceptional gains and preference dividends. 4. ORDINARY DIVIDENDS The Directors have declared an interim dividend of 5.63p for the £1 'A' ordinary shares and unquoted £1 'C' ordinary shares, and 0.563p for the unquoted 10 pence 'B' shares payable on 6 January 2006. 26 weeks to 26 weeks to 53 weeks to 1 October 25 September 2 April 2005 2004 2005 pence pence pence Interim 5.63 5.36 5.36 Final - - 13.10 --------------- ----------------- -------------- 5.63 5.36 18.46 --------------- ----------------- -------------- The pence figures above are for the £1 'A' ordinary shares and unquoted £1 'C' ordinary shares. The unquoted 10p 'B' share carry dividend rights of 1/10 of those applicable to the £1 'A' ordinary shares. Own shares held in the Fuller, Smith & Turner P.L.C. Employee Share Trust 1998 do not qualify for dividends as the trustees have waived their rights. Dividends are also not paid on shares held as treasury shares. 5. EARNINGS PER SHARE 26 weeks to 26 weeks to 53 weeks to 1 October 25 September 2 April 2005 2004 2005 £000 £000 £000 Restated Restated Profit attributable to equity shareholders 5,646 5,656 11,745 Profit on disposal of properties net of tax (337) (162) --------------- --------------- --------------- Normalised earnings attributable to equity shareholders 5,646 5,319 11,583 --------------- --------------- --------------- Number Number Number Weighted average share capital 22,328,000 22,469,000 22,411,000 Dilutive outstanding options 232,000 127,000 202,000 --------------- --------------- --------------- Adjusted weighted average share capital 22,560,000 22,596,000 22,613,000 --------------- --------------- --------------- £1 'A' ordinary shares or unquoted £1 'C' ordinary shares Pence Pence Pence Basic earnings per share 25.29 25.17 52.41 Diluted earnings per share 25.03 25.03 51.94 Normalised earnings per share 25.29 23.67 51.68 Unquoted 10p 'B' ordinary shares Pence Pence Pence Basic earnings per share 2.53 2.52 5.24 Diluted earnings per share 2.50 2.50 5.19 Normalised earnings per share 2.53 2.37 5.17 The calculation is based on earnings from continuing total operations (after deducting preference dividends) and on the weighted average ordinary share capital. Normalised earnings exclude all post-tax property impairments and disposals as they can often distort the underlying performance of the Company. 6. RECONCILIATION OF MOVEMENTS IN TOTAL EQUITY 26 weeks to 26 weeks to 53 weeks to 1 October 25 September 2 April 2005 2004 2005 £000 £000 £000 Restated Restated Opening total equity 152,283 146,986 146,986 Adjustments relating to the adoption of IAS 32 & 39 (1,600) - - --------------- --------------- -------------- Opening equity restated 150,683 146,986 146,986 --------------- --------------- -------------- Net actuarial gain/(loss) on pension schemes 1,053 (1,541) (1,671) Reversal of deferred tax liability due to indexation 237 332 537 --------------- --------------- -------------- Net gains and losses not recognised in Income Statement 1,290 (1,209) (1,134) --------------- --------------- -------------- Net profit for the period 5,646 5,656 11,745 Dividends declared and paid (2,923) (2,753) (3,956) Issue of ordinary share capital 124 215 413 Cost of share based payments 462 432 839 Own shares purchased including treasury shares (1,234) (2,001) (2,751) Shares released including treasury shares 255 146 141 Net other movements in the period 2,330 1,695 6,431 -------------- -------------- -------------- Closing total equity 154,303 147,472 152,283 ======= ======= =======- 7. SHAREHOLDERS' INFORMATION Shareholders who converted their £1 'A' ordinary shares to £1 'C' ordinary shares are reminded that they have 30 days from 25 November 2005 should they wish to reconvert those 'C' shares back to 'A' shares. The next available opportunity after that will be June 2006. For further details please contact the Company Secretariat on 020 8996 2115. 8. INTERIM REPORT Copies of the interim report are being sent to shareholders and will be available from the Company's registered office: Griffin Brewery, Chiswick, London W4 2QB and the Company's website www.fullers.co.uk. This information is provided by RNS The company news service from the London Stock Exchange

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Fuller Smith & Turner (FSTA)
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