Annual Report and Accounts 2022
At Fuller’s, we create experiences that
nourish the soul, and throughout this
report we will show how we do that
through a commitment to excellence
and a clear, long-term strategy
Celebrating
our Tenants
WHAT’S INSIDE
Strategic Report
Highlights
At a Glance
Where we Operate
Chairman’s Statement
Investment Case
Celebrating Our People
Chief Executive’s Review
Celebrating Our Communities
Business Model
Strategy
Key Performance Indicators
Celebrating our Tenants
Financial Review
Celebrating Our Suppliers
Risk Management
Principal Risks and Uncertainties
Sustainability Report
Task Force on Climate Related
Financial Disclosures
Stakeholder Engagement
Section 172 Statement
Non-Financial Information Statement
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Governance
Chairman’s Introduction
Board of Directors
Corporate Governance Report
Audit Committee Report
Directors’ Remuneration Report
Directors’ Report
Directors’ Responsibilities Statement
Financial Statements
Independent Auditor’s Report
Group Income Statement
Group Statement of
Comprehensive Income
Group Balance Sheet
Company Balance Sheet
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Group Statement of Changes in Equity
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Company Statement of Changes in Equity 101
Group Cash Flow Statement
Company Cash Flow Statement
Notes to the Financial Statements
Additional Information
Shareholder Information
Glossary
Five Years’ Progress
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154
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highlights
See how we support
our people in our
Sustainability Report
Financial and Operational Summary
• Revenues recovered to £253.8 million (2021: £73.2 million) despite being significantly
impacted during the year by coronavirus related closures, restrictions and working
from home guidance
• Adjusted profit before tax returning to growth at £7.2 million (2021: loss £48.7 million)
• Net debt excluding leases reduced to £131.9 million and headroom for future growth in
place with new four-year £200 million bank facilities
• New Directors’ valuation of the total property portfolio at £995.6 million, approximately
£400 million above our current book value, which implies an adjusted net asset value per
share of £13.80, demonstrating the underlying Balance Sheet strength of the business
• Return to progressive dividend policy with a proposed final dividend of 7.41p in addition
to the interim dividend of 3.90p paid earlier in the year.
Strategic Update
• Digital Transformation project delivered, improving the customer experience and
enhancing our analytical capabilities to target new and existing customers
• Successfully implemented our new central finance system, which has enhanced the
quality and timeliness of business information
• Launched new recruitment platform and employer brand to help attract and retain
outstanding people
• Deployed our ESG strategy and honed our Life is too good to waste programme
• Continued to maintain capital investment in the estate, with £26 million invested in the
year to enhance capital values and drive growth
• Secured new four-year bank facilities to provide headroom for future growth
1
• Strengthened and refined our long-term strategy to ensure we are evolving and
responding to changes in consumer behaviour and market dynamics.
Revenue
EBITDA1
Group statutory profit/(loss) before tax
Basic earnings/(loss) per share2
Adjusted profit/(loss) before tax3
Adjusted earnings/(loss) per share4
Dividend per share2
Net debt excluding lease liabilities5
Learn about
our strategy
FY 2022
£m
253.8
44.3
11.5
FY 2021
£m
73.2
(13.1)
(59.2)
11.59p
(87.31)p
7.2
(48.7)
9.79p
(72.09)p
11.31p
131.9
nil
218.1
All figures above are from continuing operations except for Group statutory profit/(loss)
before tax which includes discontinued operations in the prior year.
1 Earnings before separately disclosed items, interest, tax, depreciation and amortisation.
2 Calculated on 40p ordinary share.
3 Adjusted profit/(loss) before tax is the profit/(loss) before tax excluding separately
disclosed items.
4 Calculated using adjusted profit/(loss) after tax and the same weighted average number of
shares as for the basic earnings per share and using a 40p ordinary share.
5 Net debt comprises cash and short-term deposits, bank overdraft, bank loans, CCFF,
debenture stock and preference shares.
FULLER’S ANNUAL REPORT AND ACCOUNTS 2022STRATEGIC REPORT At a Glance
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Who we are
We are the premium pubs and hotels
business that is famous for beautiful
and inviting venues with delicious
fresh food, a vibrant and interesting
range of drinks, beautiful bedrooms
and engaging service from
passionate people
Our Purpose
We create experiences that nourish
the soul
Our Mission
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We’re crafting a family of distinctive
pubs and hotels where people feel
they belong
M A N A G E D P U B S A N D T E N A N T E D I N N S ( % )
Fuller’s Managed within M25
Fuller’s Tenanted within M25
Fuller’s Managed outside M25
Fuller’s Tenanted outside M25
R E V E N U E B Y D I V I S I O N ( % )
Our values
• Doing things the right way
• Being part of the family
• Celebrating Individuality
• Always asking what’s next?
Managed
Tenanted
The Still & West, Old Portsmouth
A N A L Y S I S O F M A N A G E D R E V E N U E –
U R B A N / S U B U R B A N / R U R A L ( % )
Urban
Suburban
Rural
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31%
13%
24%
32%
90%
10%
37%
42%
21%
O L I V E R R O S E V E A R
D O I N G T H I N G S T H E R I G H T W A Y
In today’s world, the right way has to be good for the
environment – and that’s why we’ve hired our first ever
Sustainability Director. You can find out more about
Ollie’s work in our Sustainability Report on page 40.
S T U A R T G R E E N
C E L E B R A T I N G I N D I V I D U A L I T Y
We love individuals – and Stuart Green at The Cabbage Patch,
as well as running the UK’s most famous rugby pub, has
changed the lives of more individuals than most. Read his
amazing story on page 45.
S O L Y E P E S
B E I N G P A R T O F T H E F A M I LY
We welcome a diverse range of
individuals from all over the world into
the Fuller’s Family – including Sol from
Colombia, who couldn’t speak a word
of English when she joined Fuller’s. You
can read her story on page 10.
S I M O N E M E N Y
A L W A Y S A S K I N G W H A T ’ S N E X T ?
Fuller’s has always been, and will always be, a business with
a long-term view and a long-term strategy. We never stand
still though – and the Executive Team has worked hard to
ensure we remain relevant to our customers by evolving our
strategy. Read more in Simon’s review on page 12.
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urban
suburban
RURAL
Where we Operate
The Hydrant, Monument
At the foot of The Monument,
this aptly named venue is
famous for its wide range of
craft beers and is a popular
hangout with City workers
and tourists alike.
Number of properties
76
Number of bedrooms
205
The Ship, Langstone
A popular pub with locals
and those travelling over
the bridge to Hayling Island,
this wonderful suburban
pub has views to die for
across the bay.
Number of properties
96
Number of bedrooms
410
The Bear of Rodborough
It doesn’t get much more
rural than cows in the front
garden, and there’s plenty of
them at this idyllic hotel in
the heart of the Cotswolds.
Number of properties
39
Number of bedrooms
415
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M A N A G E D
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B E L & T H E
D R A G O N
C O T S W O L D I N N S
& H O T E L S
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operational
highlights
Number of employees
4,724
Pints of London Pride
sold during the year
1.8m
Number of followers
across social platforms
Year on year growth
in cocktail sales
72K
41%
Number of people
on our database
2.9m
Number of roasts sold
during the year
423k
Number of weddings
during the year
% of meals accompanied
by a pudding
708
33%
LONDON
5
our brands
Bel & The Dragon
Fuller’s acquired Bel & The Dragon in June 2018
– six stunning country inns, across the Home
Counties. Since then, we have added number
seven, The Red Lion in Wendover, and are about
to open number eight, The George & Dragon in
Westerham. Bel & The Dragon offers
outstanding hospitality, in characterful buildings,
with a focus on world-class wines – including
many sold by the glass – and high quality, fresh,
seasonal dishes that are both visually stunning
and delicious.
Cotswold Inns & Hotels
Fuller’s acquired Cotswold Inns & Hotels in
October 2019 – a collection of seven beautiful
hotels, with a total of 201 bedrooms, in the heart
of the Cotswolds – one of the most beautiful
parts of Great Britain.
Specialising in traditional hospitality and
incredibly popular for weddings, the hotels offer
the chance to get away from the hustle and bustle
of daily life in venues offering outstanding service,
the heartiest of breakfasts, the most delicate of
afternoon teas and a fantastic array of fresh food
and excellent wines, beers and spirits.
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Chairman’s Statement
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Michael Turner
Chairman
Once again, the spectre of coronavirus has left its mark on
our financial performance. However, when we were allowed to
trade fully, our customers came back, and our teams delivered
the Fuller’s experience we are famous for. The contribution of
our team members across our estate is a real source of pride.
Their resilience in dealing with the constant highs and lows of
the last two years is outstanding and I pay tribute to each and
every one of them.
During the year, we welcomed Neil Smith to the Board as
Finance Director. Neil joined us in November 2021, replacing
Adam Councell, and comes with a wealth of relevant experience,
having previously held positions at Domino’s Pizza and Ei Group.
Neil is already making an impact – as well as excellent financial
acumen, he has a clear head, thoughtful insight, empathy and
good judgement, all of which add further depth to both our
Board and the Executive Team.
From the gradual reopening of the hospitality sector on
12 April 2021, when we could only open for groups of six
and only outside, through 17 May 2021, when we could allow
that group of six inside, to the high of the so-called Freedom
Day last July, it was a delight to see our customers return.
As we headed towards Christmas, everything was looking
increasingly positive. I cannot express strongly enough my
disappointment at the Government’s handling of the Omicron
variant. Despite all the information from South Africa, the
decision to effectively close our businesses down at the busiest
time of the year disproportionally impacted hospitality and,
over and above the financial cost, set consumer confidence
back six months at the precise moment it was beginning to
return to normal. The subsequent total removal of restrictions
showed how unnecessary they had been.
At Fuller’s, under Simon Emeny’s leadership, the Executive Team
has used these strange times to focus on high level, strategic
projects, which will be covered in the Chief Executive’s Review.
These projects will deliver financial returns in the coming months
and years, and put Fuller’s in a great place for the new financial
year. We have refined our brand identity, there is a new buzz
that comes from the open plan and collaborative layout of
our support centre at Pier House, and the energy that has been
sucked from us throughout the pandemic has returned.
Over the years we have acquired, developed and continually
invested in our wonderful iconic pubs. While others cut their
investment programme during the pandemic, Fuller’s did the
opposite. This has proved to be the right decision and with
pubs, people and systems aligned, we look forward to seeing
the fruits of our labours in the next financial year and beyond.
Our Tenanted Inns division is in a strong position, and I am
delighted to see a number of joint investments in this key
part of our business. Our Tenants are well funded, with debt
at a very low level and there is an energy and positivity that
is delivering good results. Our entrepreneurial Tenants are a
constant source of inspiration and the symbiotic relationship,
with both parts of our business learning from the other,
continues to deliver mutual benefit.
Dividend
Finally, the Board is pleased to announce a final dividend of 7.41p
(2021: nil) per 40p ‘A’ and ‘C’ ordinary share and 0.74p (2021: nil)
per 4p ‘B’ ordinary share. This will be paid on 27 July 2022 to
shareholders on the share register as at 8 July 2022. The total
dividend of 11.31p per 40p ‘A’ and ‘C’ ordinary share and 1.13p per
4p ‘B’ ordinary share is over 50% of the 2019 dividend and marks
a return to a progressive dividend policy.
M I C H A E L T U R N E R
C H A I R M A N
8 June 2022
Dividend per share
£11.31p
Capital expenditure
£25.8m
“ The contribution of our team
members across our estate is
a real source of pride”
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Investment Case
W E O P E R A T E I N A M A R K E T
W I T H O P P O R T U N I T I E S
Demographic strengths
• In our heartland of London and the
South of England, incomes are
traditionally more resilient. Hospitality
spend in our regions is 21% greater
than the UK average, and incomes are
c.19% higher. Our wide demographic
also attracts mature customers,
many of whom have greater
disposable incomes.
Customers are attracted by our
premium offer
• Every week we welcome thousands
of people to our pubs and hotels,
many being returning guests.
Our customers look for a great
experience and, while they seek
value for money, they appreciate
the benefit of our premium offer.
Leveraging digital opportunities
• An increasing digital awareness
among our customers allows us to
get even closer to them, and provide
a tailored experience which is smooth
and seamless. We have developed
our CRM capabilities to utilise robust
user data and help enhance the
effectiveness of our targeted
marketing. We have also enhanced
our online presence, from booking
tables, rooms or events through to
ordering and paying.
+ R E A D M O R E P 2 0
W E H A V E A C L E A R S T R A T E G Y
We operate a family of characterful
pubs and hotels in the South of England
• Our estate encompasses some 385
pubs and hotels across London and
the South of England.
• We operate in the premium segment
while offering excellent value for money.
We source and create experiences
that nourish the soul
• Most of our pubs are deeply
entrenched in their local communities
with generations of goodwill behind
them. We are a regular part of our
customers’ lives, and we strive to
earn the right to welcome them
back again and again.
• Our pubs are operated locally, with
managers given the freedom to
optimise the décor and the offer
according to local characteristics.
This extends to creating engaging
experiences, from open-air
Shakespeare to stand-up comedy
and open mic nights.
Our teams are customer-centric,
focused on delivering outstanding
quality and service
• Memorable hospitality demands great
people behind the bar and stars in the
kitchen. Our focus on quality and
service helps turn our customers into
powerful ambassadors.
+ R E A D M O R E P 2 2
W E A R E F A M I L Y ,
I N S I D E A N D O U T
Our multi-generation family business
extends a sense of belonging to all
our stakeholders
• For customers, we maintain the
cherished ethos of ‘the local’.
• Our people are also family. We create
meaningful career paths and invest
in their development. This shows in
our senior leadership where around
60% of our general managers joined
us at entry level and have developed
within the business.
• Much of our kitchen talent is also
home-grown and at our Chefs’ Guild
we set a clear pathway that can take
kitchen assistants right up to executive
chef level. We welcome over 100
apprentice chefs each year, giving
them an inspirational start to careers
in hospitality.
Great family businesses think
and act long term
• We are custodians of the Company,
with the clear goal of passing it
on in even better health than we
found it. This means managing our
assets carefully, with the collective
strength of our portfolio delivering
increasing value.
+ R E A D M O R E P 2 1
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W E A C T I V E L Y M A N A G E
O U R A S S E T P O R T F O L I O
The Company has a high quality portfolio
• We own the freeholds of over 92%
of our estate. Following the latest
valuation, this represents an asset
value of £995.6 million.
We deliver capital appreciation as well
as earnings growth
• As custodians of the portfolio,
we protect and enhance its quality
with maintenance investment and
look for opportunities to enhance
trade and grow income through
investment. Each year we expect
to invest in the region of
£20–30 million improving the estate.
Our strong Balance Sheet provides
us with access to capital
• We have recently agreed a new four
year £200 million bank facility. This
also provides significant headroom to
continue our M&A strategy, building on
the successful Cotswold Inns & Hotels
and Bel & The Dragon transactions.
We actively manage the property
portfolio to optimise returns
• We continually gauge the performance
of assets, considering fresh pub
propositions, or the option of disposals.
+ R E A D M O R E P 2 8
W E H A V E A C L E A R A N D
C O N S I S T E N T C A P I T A L
A L L O C A T I O N F R A M E W O R K
T O E N H A N C E L O N G - T E R M
V A L U E C R E A T I O N
We invest in the long-term organic
growth of the business
• We invest annually to grow capital
value, and to drive returns.
A sustainable and progressive dividend
• With a planned cover range of 2.5-3.0x,
and growth in line with EPS growth to
drive dividend yield.
M&A opportunities
• With a disciplined approach to inorganic
investment and a view to increasing
long-term returns.
Leverage
• With a target of up to c.3x net debt/
EBITDA. If achieved, surplus cash may
be returned to shareholders.
+ R E A D M O R E P 2 8
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W E O W N O U R I M P A C T
B E C A U S E L I F E I S T O O
G O O D T O W A S T E
Our environment and our planet
demand that we take meaningful
action to protect them
• We aim to be Net Zero by 2030
(operational) and 2040 (supply chain).
• We will continue to source 100%
renewable energy.
• We will reduce energy consumption
by 25% and halve our gas usage.
We create spaces where communities
are welcomed, supported and can
come together
• Each site encouraged to support at
least one local group each year.
• We donate 1% of our profits to good
causes every year.
• We create good job opportunities for
people with additional needs.
Our governance is designed to build
trust and ensure equal opportunities
for everyone
• A diverse place to work with no
barriers to entry and with clear
development paths.
• A place where everyone has a voice
• A place free from modern slavery
and discrimination of any kind.
+ R E A D M O R E P 4 0
Celebrating Our People
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Our people are the key to our success and we
love home-grown talent. Sol Yepes is a great
example of the Fuller’s academy and now runs
a wonderful Fuller’s hotel – The White Swan at
Stratford-upon-Avon.
Q & A
Sol Yepes
General Manager
The White Swan, Stratford-upon-Avon
How did you arrive in the UK?
What happened next?
I was born in Medellin, Colombia, and when I was 22,
I decided to come to the UK even though I couldn’t
speak any English. Part of me wanted to prove that
I could leave my parents, especially as my Dad was
telling me not to go, so I did – and I said I would be
back in three years, but 21 years later, I’m still here.
How did those early years go?
I used to get lost all the time in the early days and
never knew which way to go on the tube. I moved into
a flat in Brixton and was doing two cleaning jobs –
one at 4am and one at 6am – and studying at school.
To help my English, I used to buy a paper, sit in a park,
and highlight words to help me learn.
So when did you get involved with Fuller’s?
The two jobs were either side of The Sanctuary
House and there was a Brazilian girl who ran
breakfast. I used to talk to her, and she said The
Sanctuary House was looking for housekeepers
– so I joined the team. I still couldn’t speak any
English, but a position came up on breakfast and
she suggested I go for it. I only knew the words for
tea and coffee – if anyone asked for butter, I was in
trouble! But I took the job, I started doing more hours
at school, and my English improved. I moved to the
bar, then the kitchen (even though I could only cook
chicken and rice), and then on to reception.
I can’t thank Fuller’s enough. My confidence and career
grew. I was promoted to head receptionist, deputy
manager and then assistant manager. My manager
was leaving to run another hotel and said I should go
for the job. I thought, who is going to hire a manager
that can’t speak good English? But I went for it and the
interview with Simon Emeny was the most nerve-
racking day of my life. But I had only got as far as the
underpass by the Brewery when I had a call to say the
job was mine. I’d been in the country for just six years
and now I was a hotel manager. The investment in my
training and development that Fuller’s put in me was
incredible and I am just so pleased to be repaying that.
The theme of this Annual Report is celebration –
it sounds like you’ve got lots to celebrate
I have – through Fuller’s I have had an amazing
career and met my fiancé. He was a customer at
The Sanctuary House and asked if I would have coffee
with him, but we couldn’t find a date and I moved to
Stratford-upon-Avon in 2016. He tracked me down
– and we did have coffee and he became a firm
favourite with my son Ryan. The rest is history. When
I came to The White Swan, I thought I was the only
Colombian in the town – but now I have a gang of eight
that remind me of home. I still pinch myself sometimes
– little Sol from Medellin, arriving with no English and
now running this beautiful hotel in the heart of the
most English of towns. Who would have thought it?
123
Internally appointed general managers
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Chief Executive’s Review
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Simon Emeny
Chief Executive
While we are once again reporting on a year that has seen
the devastating impact of coronavirus, and the Government’s
over-zealous response, the future is looking more positive.
We didn’t trade unfettered until July last year, from which point
customers were returning and success was impeded more by
the widely reported labour shortages than a lack of customers.
Advice to work from home returned in December, destroying
the Christmas trade, but despite the impact of Omicron, we
ended the year where we expected to be financially, having
effectively only traded fully for around six months.
During the year, the Company generated revenues of
£253.8 million (2021: £73.2 million), with an adjusted profit
before tax of £7.2 million (2021: loss of £48.7 million). We have
also reduced our net debt1 to £131.9 million (2021: £218.1 million).
It is testament to the dedication and resilience of our team,
across the business, that we have managed to deliver so
much under such difficult circumstances.
As a company, we have used the last two years wisely –
undertaking a number of projects that will deliver benefits
over the coming years – and I will cover these in more detail
further on in this report. In short, we have successfully honed
our offer, completed a digital transformation project, rolled out
a new central finance system, and delivered an employer brand
and new recruitment platform.
From a financial perspective, we have completed a refinancing,
on more favourable terms, giving us £200 million of bank
facilities, which provides a great platform for future growth. We
have also reviewed our capital allocation strategy and completed
a Directors’ revaluation of our estate. The latter, which has not
been done since 1999, has highlighted the intrinsic value – just
shy of £1 billion – of our predominately freehold estate, around
£400 million above our current book value. It is this solid financial
foundation that provides the base for Fuller’s current and future
success and moves our net asset value from £7.27 per share to
£13.80 per share.
We have also refined our branding. Having sold the Fuller’s Beer
Business in 2019, we need our look and feel to reflect our position
as a leading, premium pubs and hotels business. While the
continued use of the Griffin reflects the pride we have in our
heritage and experience, the new look is cleaner, clearer and
more concise – a great representation of our business as a whole.
Finally, we have also reviewed our long-term strategy. Like any
company, we are cognisant that we need to evolve to meet the
changing consumer environment and ensure we remain relevant
to both existing and potential customers. Much remains the
same, but we have tightened our focus on ensuring we continue
that evolution and further increased our commitments around
the ESG agenda.
This work has been undertaken by the Executive Team as a whole
and is based around our existing values – which have not changed.
We have a clear purpose, to deliver experiences that nourish the
soul, and to do that we are crafting a family of distinctive pubs and
hotels where people feel they belong. Underpinning this are five
strategic pillars and I look forward to reporting on the delivery of
this strategy both in this report and in the future.
While there are still some major external issues to deal with –
particularly around recruitment, inflation and energy – I am
pleased and confident that we have taken all the actions we can
as a company to put us in the best possible place to clear these
hurdles and take Fuller’s forward on the next leg of our journey.
1 Pre IFRS 16
Strategic and Business Review
Delight our customers
The first pillar of our strategy is to surprise and delight our
customers with the quality of our offer and distinctive service.
One of our values is to celebrate individuality and that allows our
team members to tailor the experience for our customers in every
one of our pubs and hotels. In order for a trip to a Fuller’s pub to
truly nourish the soul, it must match and exceed the expectations
of the customer – and those expectations will be very different
from a business lunch in the City to a romantic weekend in the
Cotswolds. Whatever the occasion, our team will be ready and
waiting to deliver the right experience at the right time.
Food is a key part of that customer experience, and our chefs,
trained in-house through our Chefs’ Guild academy, continue
to deliver interesting, inspired and delicious dishes for our
customers. Our focus on seasonal ingredients, and a supply
chain that is founded on mutual trust and support with British-
based suppliers and primarily local produce, is built on true
partnerships, and this has also helped us to mitigate some of
the worst of the well-documented supply chain issues across
the wider industry.
Our connection with the Bocuse d’Or – the world’s largest cooking
contest – has further helped us to delight our customers with a
range of dishes, available Only at Fuller’s, and created by chefs
including Simon Rogan and former Fat Duck head chef, Ashley
Palmer-Watts. We are also delighted to have just agreed to work
in partnership with Made in Hackney, a wonderful social enterprise
focused on plant-based food. We will be working together to
improve our plant-based choices – further underpinning our
commitment to ensuring we can also delight those customers
on a vegetarian or vegan diet, or just looking for a meat-free day.
Inspire our people
It is, without doubt, our people that make the real difference –
and it will be no surprise that this is a pillar of our strategy.
The widely-reported recruitment shortages faced across the
industry have highlighted the benefits of excellent training and
development – allowing us to retain our best people, which in
turn helps to recruit new talent.
In order to inspire our people, we need to understand how they
feel – to ensure they feel part of the Fuller’s family and have a
voice within that family. Consequently, during the year we ran
our first employee engagement survey for some years and this
has shaped the people programme going forward.
In addition, we reviewed our benefits package across the
business – driven by feedback from team members regarding
elements that would be of genuine benefit and a feeling that
loyalty could be better recognised. As a result, we now have an
industry-leading healthcare cash plan, a portal of benefits across
a range of retail and leisure providers, an improved discount in
our Managed Pubs and Hotels that increases with tenure of
service, and a range of other benefits such as access to mental
health and wellbeing programmes.
We continue to grow and invest in our team members’
development and in our award-winning apprenticeship
programme – with another 100 apprentices being recruited this
year. We have also aligned our internal development programmes
with the apprenticeship framework so that completion results
in a nationally recognised qualification. Our success is reflected
in the fact that 123 of the general managers in our Managed Pubs
and Hotels business are internal appointments.
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Chief Executive’s Review
Continued
Finally, all of this work is supported by a clear, identifiable
employer brand and a compelling employee proposition around
reward and development. Through this, we can use all our other
channels to tell our stories and recruit the best talent to shape
through our development programme and, underpinned with a
new recruitment system which was launched at the start of this
financial year, we maintain our strong position to recruit, retain
and develop the best people.
Enhance our estate
The secure financial foundations of our business lie in our
predominately freehold estate of iconic sites across the South
of England – and this is reinforced by the recent Directors’
valuation to the tune of £1 billion.
Throughout the pandemic, we have continued to invest in our
capex programme, spending £26 million during the year on a
range of projects including transformational refurbishments
at The White Star Hotel in Southampton, The Jack Horner –
an Ale & Pie site in Tottenham Court Road, The Kingswood near
Banstead, an upgrade of the rooms at The Fox & Goose Hotel in
Ealing, and a total repositioning of The Saint (formerly The Fine
Line) at Bow Churchyard – the latter demonstrating our continued
commitment to the City.
We acquired one new site during the year – The Carpenter’s Arms
in Sunninghill – and disposed of two leases. In addition, one site
– The Plough at East Sheen – transferred from our Tenanted Inns
estate to our Managed Pubs and Hotels business. Post the year
end, four sites have gone the other way – into our Tenanted
estate, reflecting the benefit of running both Managed and
Tenanted pubs. We will continue to flex our estate in this way
while also looking for suitable opportunities to grow both
organically and through acquisition and we currently have
four sites in advanced stages of negotiation.
Evolve our business
While our strategy may be designed for the long term, like all
great businesses it is imperative that we continue to evolve over
time. We must innovate to excite and attract future customers
and grow our profitability through encouraging more customers
to visit our premium pubs and hotels more often.
The key elements of this strategic pillar will be delivered through
our digital transformation project – the benefits of which will start
to be realised in the coming year. We know the value of data and
the work we have undertaken will vastly improve our connectivity
across our various digital touchpoints and, more importantly,
create a seamless digital customer journey.
A fantastic example of a great Fuller’s pub, The Mayfly is located on the banks on the River Test, near Stockbridge in Hampshire
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Finally, the system integration and the move to a new CRM system
– Acteol Atreemo – perfectly combines these initiatives. This new
system will act as a gateway for all our digital communications
across the Company and will improve the ability and methods of
communication and marketing to our customers. The increased
visibility of data will allow us to cross sell between our brands,
deliver personalised communications and capture a wider set of
data about customers through the insight we will gain from their
behaviour and spending patterns. For our customers, the benefit
is that they will receive relevant marketing, tailored to them, which
will drive frequency of spend and loyalty. The first targeted emails
under this system went out in April and we are very excited by the
possibilities this system will bring in the coming years.
Own our impact – because Life is too good to waste
The final pillar of our strategy – and the one that underpins all the
others – is our commitment to ESG and the work that has been
carried out through our Life is too good to waste campaign.
Focused on our planet, our people, and our communities, we are
already seeing a broad range of initiatives implemented under the
stewardship of our first Sustainability Director, Oliver Rosevear.
While these will be covered in greater detail on page 40, I would
like to focus on a couple of the areas around carbon footprint.
We have ambitious targets and are aiming to have Net Zero
carbon emissions for our operations by 2030, and within our
supply chain by 2040. In October 2021 we committed to ensuring
all Company-owned sites used 100% certified green electricity,
primarily wind and hydroelectricity.
We have also taken additional steps to tackle our energy
consumption – which is often hindered by the nature of our
estate. We have many wonderful and iconic pubs – but they are
often old and listed buildings, which makes for an interesting
challenge and means they tend to be heated by natural gas or
oil. Before we can move to greener systems such as heat pumps,
electric fryers and induction hobs, we need to reduce our current
electrical demand within these sites through the use of LED
lights, energy audits and monitoring systems, cellar heat recovery
units and educating our team members to ensure they take
responsibility for lowering our energy usage.
Finally, we have also undertaken a number of other steps to
reduce our carbon footprint and reduce waste. By 2025, we aim
to recycle at least 75% of our operational waste and divert 100%
from landfill and by 2030, we aim to eliminate all unnecessary
plastic from our operation. Steps already taken include glass-
only bottles for water, working with our toiletry suppliers across
our accommodation businesses to introduce refillable bottles,
trialling a new reusable plastic cup system at certain pubs
where plastic glasses are used for big sporting occasions, and
improving our recycling through a new partnership with Veolia,
the waste management and recycling solutions business.
Tenanted Inns
Our Tenanted Inns remain a key part of our strategy and
complement our strategic framework and, as such, it seems
fitting to add some further colour on the performance of this
part of the business. The Tenanted division has remained
consistently profitable when open, regardless of restrictions,
with EBITDA margins of 51.6%, delivering operating profit of
£11.1 million. We ended the year strongly with an increase in
the number of Tenants on longer agreements and very low
levels of debt – substantially ahead of the industry average.
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The Saint in Bow Churchyard, in the heart of the City of London is a recent
transformational refurbishment and offers a great range of cocktails for
thirsty City workers
This completed project opens the door to better understanding
of our customers and their habits, better communication with
them, and increases our ability to identify and target like-minded
potential customers. We expect this to grow our contactable
database by over 10%. Finally, the project will improve our
conversion rates – turning browsers into buyers, thus increasing
our hotel bookings, table reservations and function sales.
There are four workstreams to this digital transformation project
– websites, bookings, system integration and CRM – with each
area bringing its own range of benefits to the Company. Our new
websites will be easier to maintain and update, deliver a tailored
customer journey through increased personalisation and bespoke
offers, which will drive loyalty. These new websites have already
gone live.
The new booking engine will allow customers to book all of their
requirements in one place, rather than booking a room and then
having to book a table for dinner separately. All the data will be
held centrally – building on our already successful single
customer view database. The key benefit to building a great
booking engine – with strong marketing capabilities – is that it
will further increase direct bookings, reducing the commission
fees paid to online travel agents. This booking engine will run
across Fuller’s, Bel & The Dragon and Cotswold Inns and Hotels,
further strengthening our data. The new booking journey is going
live this month.
Managed Pubs and Hotels revenue
£228.8m
Group operating profit
£18.5M
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Chief Executive’s Review
Continued
Current Trading and Outlook
While the last financial year has adversely affected Fuller’s – with
some of our key sites being the most impacted by the pandemic,
we have built a balanced business which positions us well to
navigate the continued evolution in consumer trends and
behaviour. The current year has started well. We welcome the
gradual return of workers to the City and tourists to Central
London, which is now underway, and we are seeing steady
growth in our total weekly sales, which will have a positive
impact in FY2023. Momentum in the City and Central London
continues to build, and we are confident that we will see the
benefits of our estate’s composition come into play
In the first 10 weeks of the new financial year total sales are up
4% on pre pandemic levels and are up 130% on the same period
last year. On a like for like basis, excluding closed periods, sales
in the first 10 weeks of the year are up 21.4% on last year.
Furthermore, the investments we have made in the last two
years are not yet comparable and the return on our capex
projects will benefit the current year’s results.
Market conditions remain challenging with fragile consumer
confidence and well-documented high inflationary pressures.
Our premium offering provides some protection from inflation,
however we are certainly not immune from its effects. In
common with our peers, we have seen significant increases in
food and utility costs and we are proactively working with our
suppliers and actively managing our offering to mitigate the
effects of inflation without impairing the customer experience.
We remain confident that, despite the current market challenges,
we will maintain our growth trajectory for revenues and profits
and as such were pleased to announce a final dividend of 7.41p,
which means a total dividend return to shareholders of
£7.0 million in for the year.
In conclusion, we are looking back on a volatile year of highs
and lows with many moving parts – but we are starting the
new financial year on a high. We may be facing some bracing
headwinds, especially around energy and inflation, but we
are well placed to tackle the issues with clear measures and
solutions in place.
The work we have undertaken in the last year implementing our
digital transformation project, launching a new recruitment
platform, undertaking a Directors’ revaluation of the estate and
completing the refinancing of our bank facilities really puts us
in a great place to tackle the future.
The strategic framework, driven by our purpose to create
experiences that nourish the soul, and the pillars that underpin it
will give everyone in the Company clear direction and ensure we
work cohesively as a team, from our kitchens to our boardroom,
to deliver excellent results for all our stakeholders.
The great British pub has always been, and will always be, an
affordable treat and has proved its resilience over time with its
position at the very heart of the communities we serve. With an
amazing team of people, great pubs and a clear strategy, we look
forward to the future with confidence and excitement.
S I M O N E M E N Y
C H I E F E X E C U T I V E
8 June 2022
The Crabtree in Shoreham, just one of the recent
investments we’ve made with our Tenants
The commitment we showed to our Tenants throughout the
pandemic continued during this year. Our approach, which saw
us sharing the financial pain, led to all those Tenants that had a
garden opening as soon as they were allowed (from 12 April 2021)
and the remaining pubs following suit and opening at the earliest
opportunity. Our Tenants started this year in a strong financial
position, and this is reflected in the investments they have
made, both independently and jointly with Fuller’s, in their
pubs and businesses.
Our focus on five-year agreements – both on a traditional and
turnover basis – has continued to prove popular with our Tenants.
To help grow sales in our turnover pubs, we appointed a sales
development manager to work with them, ensuring standards
remain high and there is a portfolio of customer-building activity.
This has been further supported across the estate with the
relaunch of our regular Tenant’s Magazine, which has proved
popular as a way of sharing ideas, generating interest for new
products and helping to build trade.
In the coming year, there will be a sharp focus on utility costs –
with many Tenants being forced to pay vastly inflated rates to
renew their energy contracts. In light of this, we are currently
undertaking a trial project whereby Tenants can acquire their
utilities through Fuller’s. The project is in its infancy but will also
further enhance Fuller’s buying power making it a win-win for both
entities. It is early days, but the move is yet another example of the
symbiotic relationship that exists between Fuller’s and its Tenants.
Q&A
with
Neil Smith
Finance Director
(left) and
Simon Emeny
Chief Executive
(right)
Simon has been at Fuller’s for over 25 years, and Neil just
seven months – what does this balance of tenure bring
to the Company?
Simon: Any business needs new ideas and fresh thinking –
and I’m excited by Neil’s arrival. He has been a great help in the
refinement of our long-term strategic planning and his industry
experience ensures he has a good understanding of which ideas
will and won’t work. I’ve been with Fuller’s through good times
and bad, boom times and recessions. I know how we develop and
react, and what makes Fuller’s tick – which, combined with new
thinking from Neil, will ensure we make the right decisions for the
business at the right time.
Neil: I think anyone who works in licensed retail would love to
work for Fuller’s. It has such a high quality estate, a great heritage
and is very well respected. What I hope to bring to Fuller’s is a
new perspective and a fresh approach, to constantly ask why and
to ensure we optimise the returns from our fantastic asset base.
Working with Simon over the last few months has highlighted
that I have a lot to learn from him and I am genuinely excited by
the potential that our partnership could unlock.
How do you think you will work as a team?
Neil: Simon has an excellent reputation in the industry, and I think
we make a very strong team. He is a fantastic retailer with great
financial acumen – the best combination from a finance
director’s point of view. I think the key element in any relationship
is respect and trust and, having worked closely with Simon over
the last seven months, I believe that is already in place.
Simon: While our relationship is important, the effectiveness of
the whole Executive Team is critical for us to successfully lead
the business and I am delighted that the team has immediately
welcomed Neil into the fold. It is quite a young team, so Neil’s
experience adds a great balance. I knew Neil well during his
tenure at Enterprise and really liked his style – I always thought
he would be a good person to work with, and I’m delighted to be
proved right!
How do you think the future looks for Fuller’s?
Neil: The last few years have been unbelievably challenging for
the whole pub industry, and the team has done a fantastic job to
navigate the business through these difficulties. As I considered
my career options last year, I saw the potential offered by Fuller’s.
It was a great opportunity to help lead an amazing business. While
we are currently facing some significant inflationary headwinds, the
strongest businesses will prevail, and I am really positive about the
future for Fuller’s.
Simon: We’ve been through a lot in the last two to three years,
but this business has a 175 year history and I realise that our
predecessors have been through worse before. The experience
the team has been through, especially with London being at
the epicentre of the coronavirus impact, prepares us well for
what’s next. I look back on the last recession and remember
how Fuller’s won, by remaining true to our values and strategy.
Now, with our customers returning, I feel confident we can face
a fresh set of challenges.
What are your top priorities for this financial year and beyond?
Simon: I want to focus on delivering our strategy, but also on our
people. We are a people business and they have been through
a very turbulent time. I love spending time in our pubs, talking
to our teams, and I intend to do even more of that. Everyone is
struggling with recruitment and the best way to recruit is through
your existing team. The success of our strategy ultimately rests
on the in-pub experience and as that’s delivered by our people,
they are my key focus.
Neil: I intend to spend a large part of this year getting
under the skin of the Company, not just within Pier House
but out-and about in our Managed Pubs and Hotels and our
Tenanted Inns. I also want to ensure we make the most of our
investments, whether that is investment in our estate, our IT or
infrastructure. Our new finance system will improve the quality
of the information provided to the business and I have already
aligned the finance team to focus more on analysis and insight.
I’m excited to be here. Challenging times, with lots to do, but I’m
looking forward to it.
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Celebrating Our Communities
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Lily Mills exemplifies the impact sport can
have for those with an intellectual disability
– pictured here after her match with Fuller’s
Chief Executive Simon Emeny (which Lily won)
and with her mum, Tallulah.
Q & A
Lily Mills
Gold medal-winning Special Olympics tennis player
What made you want to take up tennis?
My brother George was a keen tennis player. I used to
watch him and I really wanted to play too. As someone
with a disability, it can be harder to get into sport – but
Special Olympics has really helped me. My disability
stopped being a barrier – and has instead helped me
to achieve amazing sporting success.
What are you most proud of?
That’s easy. It would be my gold medals from the
World Games in Abu Dhabi in 2019. I won the Ladies
Singles and the Mixed Doubles. My medals come
everywhere with me and I feel really proud and
important when I’ve got my Great Britain tennis strip
on and my medals round my neck. My next big
challenge is the World Games in Berlin in 2023 and
the money being raised by Fuller’s will help to get me,
and other Special Olympics athletes, there. I want to
add some more gold medals to my collection.
It must have been hard for you during lockdown
when you couldn’t play tennis – what did you do?
My Special Olympics family is very supportive, and
I have friends, through tennis, all over the country.
We would get together on Zoom and do tennis
exercises, and sports quizzes and music nights.
It kept me occupied and connected. I also spent a
lot of time hitting a tennis ball against the wall of
Arsenal’s Emirates Stadium – it’s very near my
house. I am very pleased to be back on the court,
training with my coach and playing matches.
And now a quick question for your mum, Tallulah.
What difference does Special Olympics make to
Lily’s life?
Lily has a rare genetic disorder called Galactosaemia,
which causes learning disabilities, and she also
caught Meningitis when she was only four days old.
I was told there was only a 50/50 chance of survival.
But Lily is made of strong stuff and she wanted to
play tennis like her older brother. Most coaches just
weren’t interested and they wouldn’t teach her, but
thankfully we found Special Olympics. You cannot
imagine the difference it has made. Her life would be
so small without her tennis – but instead of living a
life in a very small world, she is on the global stage.
She’s amazing and every day I look at this beautiful,
confident young woman who has sporting prowess
and is working for an inclusive modelling agency,
and my heart just wants to burst with pride. This
is all down to Special Olympics – it is the most
amazing organisation.
Finally, back to Lily. The theme of this report is
celebration – what would be your ideal celebration?
Definitely with a game of tennis. I’d love to play my
idol, Rafael Nadal, or Novak Djokovic. I don’t think I’d
be able to beat them. I’d also like to play Chris Martin
from Coldplay. I reckon I could definitely beat him.
1.5m
Number of people in the UK
with an intellectual disability
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Business Model
Description
How we create value
CUSTOMER OFFER
We are famous for delicious, fresh, seasonal
food and an extensive range of beers, wines,
spirits and soft drinks, as well as over 1,000 boutique
bedrooms. We have a clear vision to deliver
memorable experiences that ensure our
customers leave happier than when they arrived.
ICONIC PROPERTIES
Our predominantly freehold estate is mainly located
in the South and South East of England. It is a great
balance, with rural, suburban and urban sites.
It includes some truly iconic sites such as The Still &
West in Old Portsmouth and The Churchill Arms in
Notting Hill.
TENANTED INNS
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Our Tenanted estate, run by entrepreneurial Tenants,
is an important part of our balanced business and is
highly cash generative.
PEOPLE
Our people make the real difference to our business.
Whether dealing with consumers or colleagues, they
deliver outstanding service from bar to boardroom.
Our purpose is to create experiences that nourish the
soul – and we strive to ensure that everyone knows
the key role they play in delivering that purpose,
vision and strategy.
DIGITAL TECHNOLOGY
This encompasses a myriad of digital touch points
for the consumer in both pubs and hotels that,
to achieve optimal efficiency and a frictionless
journey, all need to be seamlessly interlinked.
In addition, continued development of our digital
technologies and systems further enhance our
customer knowledge and understanding and create
efficiencies in our internal processes.
FINANCIAL STRENGTH
Our strong Balance Sheet and prudent
approach to cash management ensure that we are
well placed to grow both organically and through
acquisition.
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MANAGED
ESTATE
The purchases made by the customer are the majority contribution
to our revenue and profit.
TENANTED
INNS
The revenue streams from this part of the business include rent and
income from the sale of beers, wines and spirits to our Tenants.
SUPPLIER
COLLABORATION
We work with our suppliers for mutual benefit, creating distinctive
products that can only be enjoyed at Fuller’s. This includes bespoke
food like our London Porter Smoked Salmon and ice creams from
Laverstoke Park Farm. It also includes beers and wines that are
unique to our pubs – both through the Long-Term Supply Agreement
with Asahi, and through small supplier collaborations.
Impacted by
Outputs
The value
we share
CONSUMER
BEHAVIOUR
We constantly monitor
consumer behaviour to identify
trends. For instance people are
choosing more premium offers
such as cocktails and the
preference for plant-based
food is still growing.
+ S E E P A G E 1 3
DIGITAL
TECHNOLOGY
Today, both our customers and
our team members live their
lives far more in the digital
space. We have invested in a
digital transformation project
and recruitment platforms to
enhance our customer journey
and provide an easy way to
communicate with potential
job applicants.
+ S E E P A G E 1 4
EXPERIENCE
SEEKERS
Consumers are looking for
more than just a pie and a pint
and expect a first-class
experience in return for their
money. Whether that’s
outstanding customer service
or a Shakespeare production in
the garden, we always strive to
exceed expectations.
+ S E E P A G E 5 0
ETHICS AND
WELFARE
It’s not just what you do, but
how you do it that matters. The
climate crisis is a current, not a
future, threat which is why we
have sharpened our focus on
relevant actions.
+ S E E P A G E 4 0
REVENUES
We generate revenues from
the day to day operations in
our Managed Pubs and Hotels,
as well as from our Tenanted
Inns estate. In addition, we
generate some rental revenue
from unlicensed properties.
Another source of income
is rebates from third party
suppliers, which we receive by
achieving purchasing targets
through higher sales in our
Managed and Tenanted pubs.
CASH FLOW
We have a highly cash-
generative business and
a careful approach to our
financial management.
By ensuring that we always
produce more than enough
revenue to cover our costs,
we maintain our liquidity,
which allows us to expand
both organically and through
acquisitions.
REINVESTMENT
AND
REFURBISHMENT
By maintaining high standards
in terms of both structure
and décor, we protect our
assets. We also regularly invest
in upgrading our properties
with transformational schemes
that reflect changing markets
and customer behaviour. In
addition, we invest in new
properties – both single and,
if appropriate, group
acquisitions in line with our
strategy (see pages 22 and 23).
CUSTOMERS
Our customers leave happier
than they arrived, following a
memorable, premium experience
(see our purpose and mission
on page 2).
SHAREHOLDERS
Prior to the recent pandemic,
our progressive dividend policy
had shown increasing returns
for over seven decades. As the
Group returned to profitability
in the current year, we have
resumed paying a dividend.
PEOPLE
Our team members tell us that
they enjoy being part of the
Fuller’s family and that they
appreciate our investment in
their wellbeing. We provide
best-in-class training and
development programmes and
genuine opportunities to
develop through internal career
progression. Our policies ensure
that we have a respectful and
inclusive working environment
and a consistent approach to
supporting our people.
COMMUNITIES
We strive to play a key role
in the communities and
neighbourhoods in which we
operate with support for local
events and groups. We support
a number of charities, including
Special Olympics GB
at a corporate level and, where
possible, offer matched
funding for our team members
where they are undertaking
fundraising activities.
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Strategy
Purpose
Why we exist
We create experiences that nourish the soul
Mission
Where we are heading
We’re crafting a family of distinctive pubs
and hotels where people feel they belong
Values
How we do it
Doing things
the right way
Being part
of the family
Celebrating
individuality
Always asking
what’s next?
Strategy
What we will do to achieve it
Delight our
customers
Inspire
our people
Enhance
our estate
Evolve our
business
Own our
impact
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Delight our
customers
Inspire
our people
Enhance
our estate
Surprise and delight with
distinctive service
• Every venue will be an
individual experience
Every team member trained in service
•
• An inspirational service coach at
every site
• Reward and recognition for
great service
• Measured through NPS
Tailor the experience in every
pub and hotel
• Empower our leaders to deliver a
high quality, flexible offering that
fits local customer needs
• Indulgent, great British pub classics
with a modern twist, using seasonal
ingredients on the menu
Create a workplace where
everyone feels they belong
• Launch and deliver inclusion
action plan
• Train and develop our people
in inclusive leadership
• Create an inclusive culture
through events
• Create a network of 150 mental health
first aiders across the business
Appreciate and value our colleagues
• Develop our listening culture using a
range of tools including The Happiness
Index survey, Fuller’s Forum, My Voice,
and Employee Resource Groups
• Fully embed our transparent pay
structure to attract, retain and
encourage development
Care for our estate
• Continue to look after the fabric
of our estate
• Utilise skills within the team and our
pool of designers to enhance our offer
• Continue to uphold the highest
standards in the industry
• Ensure the estate and capital value
are protected for future generations
Evolve through transformational
investment
• Maximise the potential of our estate by
evolving our pubs through investment
• Optimise our portfolio through active
asset management
• Constantly assess optimal operating
model for each site
• Work with and invest alongside our
• Broad selection of beers, wines and
• Evolve our distinctive benefits package
Tenants to drive returns
spirits, plus artisan drinks ranges, served
by knowledgeable team members
• Beautiful bedrooms, individually styled
with the highest quality standards
• Delivering sector-leading like for like
sales growth
Create a smoother customer journey
• Optimise customers’ digital journey
for seamless interaction
• Continually evolve our bookings
process to integrate and
improve functionality
• Improve digital methods of
communication and marketing
through a multi-channel approach
• Measure by increase in traffic
to micro sites and associated
conversion to sales
Attract new customers and increase
visit frequency
• Refresh brand communications
• Extend our appeal to a broader
customer base
• Deliver experience-led events
to drive frequency and spend
• Drive a culture to maximise sales
from event spaces.
Support and encourage
career development
• Focus on internal promotions,
Invest in growing the estate
• Invest in markets where we
already excel
particularly at general manager level
• Provide at least 100 apprentices with
• Add scale to our core premium
pub and hotel estate
• Complement the existing business in
high income, premium demographic
areas, with predominately freehold
assets, and in-filling geographical gaps
Own our
impact
because Life
is too good
to waste
Take action to protect
and respect our planet
•
Our planet is too good to waste
Create spaces for communities
to connect and feel welcome
•
Our communities are too good
to waste
Care for our people and foster
a sense of belonging
• Our people are too good to waste
For full details of our ESG strategy
and our Life is too good to waste
campaign, see page 40.
career opportunities every year
• Develop our chefs through the
Fuller’s Chefs’ Guild
Attract the best talent
• Grow our True to You employer brand
• Utilise Brilliant Recruitment, our new
recruitment system and practices
• Recruit for personality and train for skill
Evolve our
business
Innovate to excite future consumers
• Evolve and innovate our proposition to
adapt to changes in consumer behaviour
•
Grow our profitability
•
Ensure our strategy is executed
across the business to achieve our
like for like sales growth ambition
Grow EBITDA margins by growing
sales, effective labour management
and scheduling, and agile product
portfolio management
Mitigate central costs by improving
the efficiency of processes
• Leverage the full benefits of
our investment in systems
to maximise efficiency
•
Enhance our supplier partnerships
•
•
Build genuine long-term partnerships
Source authentic food and drink
products, focusing around the seasons
Continue our positive relationship
with Asahi
Leverage the appeal of our customer
base and geographic position of
our estate to retain and attract the
best suppliers
•
•
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Key Performance Indicators
We use financial indicators to monitor our progress
in delivering against our strategy to create long-term
sustainable value for all stakeholders.
R E V E N U E A N D O T H E R I N C O M E
A D J U S T E D P R O F I T
B E F O R E I N C O M E T A X
£253.8m
253.8
2022
2021
2020
73.4
(48.7)
319.7
£7.2m
2022
7.2
2021
2020
19.4
Definition
Revenue and other income comprises sales of goods and
services, accommodation income and rental income. We have
two main revenue segments: Managed Pubs and Hotels and
Tenanted Inns.
Definition
Adjusted profit before tax is profit before tax excluding separately
disclosed items as shown in the Income Statement.
Why is it important for Fuller’s?
Revenue and other income drives the overall business, resulting
in cash generation, which allows for investment in our estate, our
people, rewards to our stakeholders and acquisitions.
Why is it important for Fuller’s?
The Directors believe that this measurement of profitability allows
stakeholders to analyse trends and performance without being
impacted by separately disclosed items.
Performance in 2022
Revenue and other income increased by 246% compared with
FY2021, with a 258% increase in Managed Pubs and Hotels
revenue and an increase of 172% in Tenanted Inns revenue. This
increase is driven by the improved ability to trade in FY2022, as
while there were still lockdowns and restrictions due to the
pandemic, there were fewer than FY2021.
Performance in 2022
Adjusted profit increased by 115% compared to FY2021. Again
the increase is driven by the improved ability to trade in FY2022
compared with FY2021.
The Saint, Bow Churchyard, City of London
The garden at The White Buck in Burley, New Forest
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A D J U S T E D E A R N I N G S
P E R S H A R E ( " E P S " )
(72.09)
9.79P
N E T D E B T E X C L U D I N G
L E A S E L I A B I L I T I E S
£131.9m
2022
9.79
2021
2020
22.13
2022
2021
2020
131.9
218.1
178.9
Definition
Adjusted earnings per share is profit after tax excluding
separately disclosed items attributable to equity holders of the
Group divided by the weighted average number of ordinary
shares in issue during the year and using a 40p ordinary share.
Definition
Net debt comprises cash and short-term deposits, bank
overdraft, bank loans, Covid Corporate Financing Facility
("CCFF"), debenture stock and preference shares. Net debt
is pre IFRS 16 and therefore does not include lease liabilities.
Why is it important for Fuller’s?
This measure shows how much money the Group is generating
for its shareholders. It takes into consideration changes in profit
and loss and the effects of new shares issued but excludes the
impact of separately disclosed items. It is an important variable
in determining our share price.
Performance in 2022
Adjusted earnings per share increased by 114% compared
with FY2021 in line with growth in adjusted profit before tax.
Why is it important for Fuller’s?
This measure helps shareholders to determine the level of debt
and the overall financial stability of the Group.
Performance in 2022
Net debt reduced by 40% compared with FY2021. The reduction
in net debt is primarily due to the equity placing in April 2021
but also due to the improved cash flows in the year as the
Group returned to profitability.
The Bear of Burton, Christchurch, Dorset
Pints and peanuts at The Harp, Covent Garden
Celebrating our Tenants
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Manu Bhatt receives the coveted Griffin Trophy,
awarded to Fuller’s Pub of the Year, from
Chairman Michael Turner
Q & A
Manu Bhatt
Fuller’s Lessee at The Queen’s Head Dorking
How did you end up in the pub business?
Where do you see your journey taking you next?
I had been working all over the globe and when
I came to the UK, my first stop was Manchester.
I was running hospitality for Lancashire Cricket Club
at Old Trafford. It was amazing – I loved the fact that
you would start with nothing, set up all the marquees,
tables, kitchens and bars, and promptly sell over
£200,000 of beer in a day. From there, my career
took me through several other places to London,
and when I was managing a pub in North London
called The Albion, I met Iain Rippon, Fuller’s Director
of Tenanted Operations. I knew I wanted to run pubs
for myself – so when Iain suggested The Queen’s
Head, it seemed like the perfect opportunity.
Tell us about The Queen’s Head
To be honest, I didn’t even know where Dorking was.
I went to have a look and walked down a street that
was full of antique shops, and I just loved it. The pub
was tired and the garden unloved – but I just knew it
was for me. We worked so hard to get everything right
before we opened – which we did two weeks before
the first lockdown! The reception from the locals was
quite unfriendly when I first took over – but we won
them round and now they are good friends.
How is the relationship with Fuller’s?
Fuller’s has really made me feel like part of the family
– we have a very open and honest dialogue and while
there will always be some tension around financial
discussions, I’ve found Fuller’s very fair and easy to
deal with. The support during the pandemic was
great and, of course, the recognition from winning
The Griffin Trophy was fantastic. My motto is if you
don’t ask, you don’t get, and that helps keep the
relationship fresh and interesting!
I get bored very easily and I’m always asking what’s
next? I believe in keeping the offer fresh, so I’m always
changing and tweaking things, making them better.
That might be putting a fabric installation in the tepee
at the pub or changing the menu, but I have to be doing
something. I’ve also got a two-month-old daughter,
Gilly, who keeps my wife Gabrielle and I very busy.
I’ve also taken on two more pubs since The Queen’s
Head and, like everyone in hospitality, I am finding
recruitment an issue. I need to focus on building a
really good senior team to ensure my standards and
personality thrive across the pubs. I think I’d like to try
and get to six pubs – any more than that and I would
be worried that I would become too removed from
the customers in each one – and that relationship is
really important to me.
The theme of this report is celebration –
what would be your ideal celebration?
Somewhere nice and hot – or the garden at
The Queen’s Head on a sunny day – with Gabrielle,
my friend Saddy from Qatar and Richie who works
with me now. That would be perfect.
174
Number of Tenanted pubs
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Neil Smith
Finance Director
Financial position and performance
Separately disclosed items
All figures below are for the continuing operations of the Group.
The results for this financial year continued to be severely
impacted by the pandemic. The year began with the entire estate
closed, from 12 April 2021 trading outdoors was allowed, indoor
space opened from 17 May 2021 before all restrictions were lifted
and the entire estate reopened on 19 July 2021. The Group began
to build trading momentum as workers started to return to offices
and visiting tourist numbers began to increase.
In the run up to Christmas our bookings were in good shape, and
we were confident that December would be a strong month as
customers could finally celebrate unencumbered. However, on
8 December 2021, the Government announced Plan B guidance
following the rapid spread of the Omicron variant. This had a severe
impact on sales as it meant Christmas parties were cancelled and
people were once again advised to work from home. Fortunately,
Omicron was short-lived and by the end of January we started to
see sales build week on week, with like for like sales at 96% of
pre-pandemic levels for the last week of the financial year.
Group revenue and other income was £253.8 million for the
financial year which was a 246% increase on FY2021, this reflects
the steady momentum in sales post restrictions. Adjusted profit
before tax increased substantially from a loss of £48.7 million in
FY2021 to a profit of £7.2 million in the current financial year.
The increase was largely due to our ability to open the estate and
trade for more of the year. Both financial years were bolstered by
support from the Government through the Coronavirus Job
Retention Scheme ("CJRS"), and the business rates holiday, as well
as property grants. In FY2022, the Group received £9.7 million, net
of operating costs (2021: £45.9 million), through such support.
In FY2022, costs were impacted by the sharp increase in utility
costs, predominately in the second half of the year. We were able to
mitigate some of that increase through the energy agreements we
had in place from the beginning of FY2022 which hedged 94% of
our gas and 76% of our electricity pricing for the entirety of FY2022.
We have continued to hedge in FY2023 and have locked in our
pricing for Q1 FY2023 for both electricity and gas, and 50%/75%
respectively for the remainder of the year. Despite this, we still
anticipate utilities cost to increase by c.£4 million in FY2023.
In April 2021, the Group completed an equity placing which raised
net proceeds of £51.8 million. The proceeds of the equity raise,
along with the Group’s existing facilities, were used to repay the
£100 million of commercial paper drawn under the CCFF on
12 May 2021. At the same time as the equity placing, the Group
also agreed an Amend and Extend Refinancing of its existing
debt facilities with its relationship banks, extending the maturity
of the £192 million facilities to 19 February 2023.
Since year end, the Group has refinanced all banking facilities
with a new unsecured £200 million facilities agreement for a
tenure of four years, split between a revolving credit facility of
£110 million and a term loan of £90 million.
The Group has also completed a Directors’ valuation of the entire
property estate. The outcome of the valuation was a total value of
£995.6 million, which is c.£400 million higher than the net book value
of £592.7 million included with the accounts. This would imply an
increase in the current Net Asset Value per share from £7.27 to
£13.80. We have not changed our accounting policies with regard to
asset valuations but thought it useful to all stakeholders to provide a
current assessment of the valuation of the Group’s property portfolio.
Finance costs
Total net finance costs (before separately disclosed items) have
increased by £2.9 million to £11.3 million. The increase is largely
due to higher interest rate margins on the banking facilities. In the
prior year, the Group utilised the Covid Corporate Financing Facility
("CCFF"), which had an interest rate margin of 64bps compared to
an increased interest rate margin agreed as part of the Amend and
Extend in April 2021. The CCFF was repaid in May 2021. This meant
that the average cost of borrowing was 4.2% in the current financial
year compared to 2.5% in the prior year.
The net position on separately disclosed items of £4.3 million
profit (2021: £9.1 million expense) comprises £6.3 million
of profits on the disposal of 12, predominately unlicensed
properties, impairments of £3.3 million on six properties,
reorganisation costs of £0.8 million incurred as a result
of corporate reorganisation and the implementation of new
infrastructure offset by a £2.1 million credit on the release
of a provision relating to the sale of the Fuller’s Beer Business.
Tax
A full analysis of the tax charge for the year is set out in note 7 to the
financial statements. Tax has been provided for at an effective rate of
16.7% (2021: 18.3%) on adjusted profits from continuing operations.
The overall effective tax rate of 38.3% (2021: 16.6%) is due to the
change in corporation tax rate which is expected to come into effect
from April 2023. This has resulted in deferred tax liabilities increasing
by £3.3 million and the movement has been shown in tax on
separately disclosed items as it is unrelated to underlying trade.
During the year, the significant tax revenues the Group generates
for the Government rose by 196.8%. During the 52 weeks ended
26 March 2022, the total tax contribution of the Group to the UK
Exchequer was £47.2 million (2021: £15.9 million) in taxes borne
and taxes collected on behalf of colleagues, customers and
suppliers. This significant increase comprises an increase in VAT
payments of £14.5 million and an increase in business rates of
£10.6 million due to the business rates holiday ending during the
52 weeks ended 26 March 2022.
Total tax collected £m
100
80
60
40
20
0
-20
14.7
15.9
11.0
7.2
0.9
-2.5
0.2
12.2
0.4
5.5
1.0
-3.4
FY2021
FY2022
VAT
PAYE and employee’s NI
Business rates
Employer’s NI
Other taxes and apprenticeship levy
Corporation tax
Pension
The defined benefit pension scheme deficit has decreased
by £17.8 million to a £14.3 million accounting surplus
(2021: £3.5 million deficit) as the fair value of scheme assets
stayed largely in line with prior year but the present value
of pension obligations decreased substantially. The present
value of pension obligations decreased by £17.7 million to
£129.6 million, which was driven by an increase in the discount
rate from 1.95% to 3.00%. As the Group has an unconditional
right to a refund under the pension trust deed, an asset can
be recognised. Standard deficit recovery payments of
£2.3 million were also made during the financial year.
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Shareholders’ return
With the Group returning to profitability in the year and basic
earnings per share at 11.59p (2021: loss per share 87.31p), the
estate fully opened and net debt reducing, the Board decided
it was the appropriate time to resume paying a dividend. The
proposed final dividend of 7.41p per ‘A’ and ‘C’ ordinary share
(2021: nil), together with the interim dividend of 3.90p per share
already paid makes a total of 11.31p per share and marks a step
towards returning to a progressive dividend policy.
The middle-market quotation of the Company’s ordinary
shares at the end of the financial year was 620p. The highest
price during the year was 954p, while the lowest was 574p.
The Company’s market capitalisation at 26 March 2022
was £382.9 million (2021: £474.8 million).
Capital allocation framework
The Group’s capital allocation framework aims to enhance
shareholder value whilst targeting leverage at no more
than 3x net debt/EBITDA. The table below summarises the
framework in which the Group will do this.
Policy
Targets and
Philosophy
Outlook
Invest in
long-term
organic growth
Returns-based
approach to
capital investment
0
3
Sustainable &
progressive
dividend
Normalised
dividend cover
range of 2.5-3x
Invest in
additional
growth
opportunities
Targeting
leverage of
c.3x Net Debt/
EBITDA
Disciplined
approach to
assessing
investment
opportunities
Strong Balance
Sheet maintained
– target leverage
at no more than
c.3x Net Debt /
EBITDA
• Annual investment of
£10-15m on maintenance
capex and £10-15m on
trade enhancing capex
• Progressive dividend
growth in line with EPS
growth to drive dividend
yield for investors
• IRR used to measure
the merits of one-off
investments in assets
or M&A
• Recent refinancing provides
certainty of funding
then surplus cash may
enable additional
shareholder returns
including share buybacks
Directors’ Valuation
The property portfolio included in the Balance Sheet has not been
valued since 1999 and therefore, coming out of the pandemic,
the Group thought it would be an appropriate time to undertake
a Directors’ valuation of the entire estate. A standard valuation
methodology was used, assessing future cashflows and applying
a suitable multiple as well as taking into account comparable
market transactions. On the 211 pubs that make up the Managed
estate, an average multiple of 11.8x was applied to freehold
assets and 3.3x applied to leasehold assets. For the 174 pubs
that comprise the Tenanted estate the Directors applied an
average multiple of 10.9x to earnings which is comparable
to recent market transactions of leased and tenanted assets.
To provide independent assurance to the Directors, Fleurets was
engaged to provide a valuation for 20% of the Managed estate,
amounting to 40 sites, of which three were long leasehold and
37 were freehold.
Revenue and other income
£253.8m
Net debt excluding lease liabilities
£131.9m
value of £592.7 million included with the accounts. This would
imply an increase in the current Net Asset Value per share from
£7.27 to £13.80.
Cash flow and net debt
Overall net debt at 26 March 2022 had decreased by £86.2 million to
£131.9 million, excluding leases, which was largely due to the equity
placing in April 2021 which raised net proceeds of £51.8 million, but
also the improvement in EBITDA in the year. Including leases, net
debt has decreased by £95.4 million to £212.6 million reflecting a
reduction in lease liabilities of £9.2 million mainly driven by the
unwind of the liabilities but also partially due to some further
rent concessions received in the first quarter of FY2022.
The significant balance in working capital is one-off in quantum
as it is flattered by the fact the Group was closed at the beginning
of the financial year.
Cash flow
EBITDA
Interest
Tax
Working capital and share transactions
Cash available for discretionary spend
Capital expenditure
Separately disclosed items
Property disposals including lease surrenders
Dividends and share transactions
Net proceeds of equity placing
Cash flow
Non-cash movement
Net debt movement
Sources of finance
Bank debt
Other debt
Cash
Net debt before lease liabilities
2022
44.3
(7.2)
2.5
28.7
(2.3)
66.0
(25.8)
(1.9)
8.1
(2.5)
51.8
95.7
(0.3)
95.4
120.0
27.5
(15.6)
131.9
80.7
212.6
The outcome of the valuation was a total value of £995.6 million,
which is some £400 million higher than the historical net book
Lease liabilities
Total net debt
• If within our leverage target,
Pension contributions
Sources of finance
In April 2021, the Group completed an equity placing which raised
net proceeds of £51.8 million. The proceeds of the equity raise,
along with the Group’s existing facilities, were used to repay the
£100 million of commercial paper drawn under the CCFF on
12 May 2021. At the same time as the equity placing, the Group
also agreed an Amend and Extend Refinancing of its existing
debt facilities with its relationship banks, extending the maturity
of the £192 million facilities to 19 February 2023.
Since year end, the Group has refinanced all its banking facilities
with a new unsecured £200 million facilities agreement for a
tenure of four years, split between a revolving credit facility of
£110 million and a term loan of £90 million.
This three year plan is supported by the forecasts that are
presented and approved by the Board. It takes into consideration
the Group’s current position, the potential impact of the principal
risks documented on pages 36 to 39 in the Strategic Report as
well as the uncertainty over the UK economy.
The most significant risks impacting the forecasts are the
recovery of the UK economy post pandemic and cost inflation
specifically food, utilities and wage costs. These factors will also
have an impact on consumer behaviour and consequentially
sales volumes. The forecasts also take into account the
continued impact of the pandemic and the ability of the UK to
recover from it, which in turn will impact the long-term success
of the Group.
At 26 March 2022, £20 million of borrowings were hedged using
swaps at a blended interest rate of 2.34% (excluding bank
margin). The interest rate swap agreements in place allow us to
continue to borrow a portion of our bank debt at a fixed interest
rate until August 2022.
At 26 March 2022, the Group had a strong Balance Sheet,
with 92% of the estate being freehold properties and available
headroom on facilities of £72.0 million and £15.6 million of cash
and resulting net debt excluding leases of £131.9 million. At year
end, the Group had existing facilities of £192 million.
The Group’s financing is a mix of bank debt, debentures,
cumulative preference shares, overdraft, cash and short-term
deposits as disclosed in notes 22, 24 and 26. Other financial
assets and liabilities such as trade receivables and payables
arise through the Group’s operating activities. The Group does
not trade in financial instruments.
Financial risks and treasury policies
The Group operates a centralised treasury function, which
controls cash management and borrowings and the Group’s
financial risks. The objectives of the function are to manage
the Group’s financial risk, to secure cost effective funding for
the Group’s operations, and to minimise the adverse effects of
fluctuations in the financial markets on the value of the Group’s
financial assets and liabilities, on reported profitability, and on
the cash flows of the Group.
Transactions of a speculative nature are prohibited. The Group’s
treasury activities are governed by policies approved and
monitored by the Board.
Going concern statement
The Group’s business activities, together with the factors likely to
affect its future development, performance and position are set
out in the Strategic Report on pages 1 to 54. The financial
position of the Company, its cash flows, net debt and borrowing
facilities and the maturity of those facilities are set out above on
pages 139 to 144.
In addition, there are further details in the financial statements on
the Group’s financial risk management, objectives and policies in
note 26. The Directors have outlined the assessment approach
for going concern in the accounting policy disclosure in note 1 of
the consolidated financial statements. Following that review the
Directors have concluded it appropriate for the Group to adopt
the going concern basis in preparing its financial statements.
Viability statement
The Corporate Governance Code requires that the Directors have
considered the viability of the Group over an appropriate period of
time selected by them. The Directors have chosen to assess this
over three financial years through to March 2025 as this aligns
with the Group’s strategic planning which was reviewed and
approved as part of the refinancing process.
Since year end, the Group has secured a new facility of
£200 million, split between a revolving credit facility of
£110 million and a term loan of £90 million, for a tenure of four
years to May 2026. Under the new agreement, the minimum
liquidity covenant of £10 million tested monthly remains until
November 2022. From December 2022 (and tested quarterly
thereafter) the covenant suite will consist of net debt to EBITDA
(leverage) and EBITDA to net finance charges. See further details
in note 26.
Management has prepared, and the Board has considered two
key scenarios:
A "base case", whereby there will still be some impact felt from the
pandemic with sales steadily recovering to pre-pandemic levels and
like for like sales to be broadly in line with prior year -2 (i.e. FY20) in the
City and exceed them in the rural and suburban estate. The base
case also assumes cost inflation of c.5% with the most impacted
areas being food, utilities and wages. The base case scenario
indicates that the Group will have significant resources and operate
well within its covenants for the duration of the viability period.
A "downside case" assumes sales drop by c.7% from that
assumed in the base case and inflation continues at an even
higher rate than in the base case, specifically utilities (10%
increase from the base case), total staff costs (increase by 2%
despite sales volumes decreasing) and food inflation (peaking
3% higher than in the base case). Under this scenario the Group
will still have sufficient resources and headroom on its
covenants through the duration of the viability period.
Taking account of the Company’s current position, principal risks
facing the business and the sensitivity analysis discussed above,
as well as the potential mitigating actions that the Company
could take, the Board expects that the Company will be able to
continue in operation and meet its liabilities as they fall due over
the three year period of assessment.
Further details on the forecast process and assumptions can be
found in note 1 to the accounts.
N E I L S M I T H
F I N A N C E D I R E C T O R
8 June 2022
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Celebrating Our Suppliers
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Q & A
Jason Tanner
Co-Founder – The Menu Partners
How did you end up running The Menu Partners?
What’s next for The Menu Partners?
My career in fresh produce started 23 years ago
when we set up Premier Fruits operating out of a
small unit in New Covent Garden Market. Over the
years, we grew in size and added additional units
selling veg, salad, and exotic fruits like bananas. Fast
forward 10 years, and we decided to expand further
– supplying peeled vegetables and other smaller
wholesalers. We purchased four or five catering
businesses before finally merging them into Premier
Food Service Provider and, following this, we began
working with Fuller’s. Fast forward to March 2020, we
teamed up with Nigel Harris, former owner of Fresh
Direct, and realised that by consolidating people’s
food and drinks suppliers to just one, we could
massively reduce the number of deliveries pubs and
hotels were receiving – and thus, The Menu Partners
was created. The result is better for Fuller’s, better for
suppliers, and far better for the environment.
Why do you like working with Fuller’s?
There is lots of synergy between Fuller’s and The
Menu Partners – we are both family businesses for a
start, and that means that we share common values.
Sharing a desire to do the right thing for the planet
has motivated us to work hard and take deliveries off
the road to make our operation more efficient.
Fuller’s is really good at forecasting consumption and
that allows us to make life easier for our suppliers
– they know what they need to produce, we know
what we need to supply Fuller’s, and the pubs order
on a day one for day three delivery basis. Therefore,
we are not filling our vans at 5pm the night before
– but rather can plan the deliveries and route our
vehicles to make us as energy-efficient as possible.
Everyone’s a winner.
We are currently working on moving away from
cardboard so we can further reduce our carbon
footprint, with the end goal being reusable crates. By
working more closely with farmers, we hope we give
them greater confidence to grow the produce we
know we can sell. For instance, we have just partnered
with Featherbed Fruits in Northamptonshire to grow
strawberries. Working with forward-thinking
companies like Fuller’s allows us to do this. The
ordering schedule we have in place means that we
know in advance how many strawberries we need to
deliver to Fuller’s in two days’ time, so the farmers
know what they need to pick and, by extending the
supply chain in this way, we further reduce food
waste. Fuller’s has led the way in this regard and
other companies are now following suit.
Finally,the theme of this report is celebration –
what are we going to be celebrating with this year?
Probably tomatoes! There is a huge rise in the
popularity of Isle of Wight tomatoes – in all different
shapes, sizes and colours – and as a result of this
there are more than ever being grown. It’s good news
for anyone who loves a tomato quiche or even a
Bloody Mary!
87
Plant-based dishes currently live on our menu bank
We always try to work with British suppliers
wherever possible and Jason Tanner of The
Menu Partners, a family-run fruit and veg
supplier in New Covent Garden Market, is a
great example.
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Risk Management
Managing risks effectively is key to ensuring that we achieve our strategic
objectives in the long term. and continue to deliver the high standard our
customers, our people and our shareholders expect. Risk arises both as a
natural consequence of doing business and in the pursuit of our strategy.
Our risk management approach is governed through a robust framework
and we follow a consistent process for the identification and review of risk.
The Board reviews these risks in the knowledge that currently unknown,
non-existent or immaterial risks could turn out to be significant in the future,
and confirms that a robust assessment has been performed.
Risk Management Governance Framework
The risk management process is operated by the Executive Team, supported by the Head of Risk and is overseen by the Audit
Committee and the Board, which is further supported by the external audit process.
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Board
• Oversees the risk management and internal controls
• Final approval
processes
• Defines the Group’s risk appetite and assesses the
principal risks
Audit
Committee
Executive
Team
• Provides guidance and direction and supports the
• Audit and Board reports
Board in the management of risk
• Reviews the effectiveness of the risk management
strategy and internal controls process
• Responsible for day to day operational implementation
of the risk management strategy
• Provides advice and guidance to the business areas
• Considers emerging risks
• Accountable to the Audit Committee and Board
• Group risk register
• Principal risk reviews
• Audit and Board report
Business Risk
Management
• Implement and maintain risk management procedures
• Maintain risk registers including identification of risk,
mitigating controls and actions
• Division and
Department risk
registers
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Role of the Board
The Board plays an important role in effective risk management
and oversees a governance model that incorporates an integrated
assurance model. It also formally articulates the Group’s
overarching appetite and tolerance for risk.
Through our risk governance structures, frameworks, processes
and reporting mechanisms, Directors are provided with the
information and insight needed to make a robust assessment of
the Group’s most material risks and understand how they are being
mitigated and managed in line with the Board’s stated risk appetite
and tolerance. The Board is responsible for monitoring the Group’s
culture to ensure it encourages openness and transparency across
the business, which directly supports effective risk management.
• Principal risk reviews also support the Board in monitoring
and reviewing the effectiveness of the Group’s internal
control framework.
Risk Assessment
We rate risks by considering their potential financial and
non-financial impacts and the likelihood that they will happen,
using a consistent rating grid to compare and prioritise risks.
The risk rating takes into account the controls and mitigations
in place to reduce the likelihood and/or impact of the risk, its
implementation status and effectiveness. Risk ratings are
regularly reviewed to consider whether the external or internal
context, strategy, business objectives or resources available
to manage the risk have changed.
Risk Appetite
The Group’s approach is to take a long-term view of its business
and to assess all risks accordingly, while ensuring we take
opportunities to deliver economic reward in line with the Group’s
strategy, as follows:
• Risks should be managed consistently and in line with the
Group’s strategy, financial objectives and guiding principles
• Opportunities should only be pursued where the scope for
appropriate reward is supported by an informed assessment
of risk
• Risks should be actively managed and monitored through the
appropriate allocation of management and other resources.
Risk Management Process
The Executive Team follows a clear, simple and robust process to
identify the Group’s most significant risks, incorporating both top
down and bottom up assessments:
• Both the Managed and Tenanted businesses as well as
the support centre functions prepare their material risks in
registers which are reviewed on a half yearly basis by the
Executive Team
• We use a risk categorisation framework to analyse these
risk registers
• The risks identified through this mechanism that are
considered most significant, in terms of their materiality
to the Group, are recorded on the Group risk register
• Emerging risks are discussed regularly by the Executive Team
and escalated to the Audit Committee as required.
• In addition, the Audit Committee conducts a deep dive on
specific risk areas based on the judgement of the Committee
looking at: changes in risk likelihood; changes in the materiality
of the impact; any changes to the mitigation; and controls that
are in place
• The most significant risks on our Group risk register are identified
as our principal risks for better insight and management.
• Every principal risk is assessed to see whether it could have a
material strategic or commercial impact, either on its own or
as part of a multiple risk scenario.
• The Executive Team ensures principal risks are understood,
managed appropriately, monitored and reported internally and
externally.
• At each half year review, the Executive Team consider and
challenge whether the risk is being managed to the tolerance
approved by the Board, using principal risk reports to monitor
how far material financial, operational and compliance controls
and mitigations have been implemented, their effectiveness,
and how close the current net risk rating is to our risk tolerance.
• The outcomes of half yearly reviews considered by the
Executive Team are reported to the Audit Committee and the
Board, with particular focus on risks that are outside tolerance
and actions are agreed.
The suitability of the controls and mitigations are reviewed
through robust reporting and monitoring which creates a
feedback loop enabling a continuous improvement process to
be in place regarding risk management. This includes reviewing
ownership and accountability of risks and controls across the
Executive and Management teams.
Assessment of Emerging Risks
As well as assessing ongoing risks, we continue to consider
how the business could be affected by emerging risks. It is often
possible to predict the potential impacts of emerging risks, but it
is more challenging to predict their likelihood, timing and velocity.
Changes to Risk Scores Versus Prior Year
Cost inflation
Inflationary pressures following the pandemic along with
the impact of the war in Ukraine have seen input cost inflation,
particularly across food and energy.
We have increased the price monitoring and inflationary actions
within the Group to respond to the fast moving situation. Where
possible, we have fixed prices in place and have forward bought
supplies. The premium nature of our business allows us to pass
on some increases to our customers.
Wage inflation
The risk of further pressure on wage inflation has increased
during the year, with UK unemployment at historically low levels.
The shortage in the labour market is leading to upward pressure on
wage rates in addition to the increases in the national living wage.
Supply chain
The supply chain risk facing the Group has increased in the
past 12 months. The pandemic has stretched and tested supply
chains, highlighting the need to respond to change at pace while
continuing to deliver customer service. Heavily publicised global
material shortages, shipping disruption and haulage driver
shortages were all impacting prior to the war in Ukraine. The war
has further increased the risk of shortages, with the impact of
fertiliser, sunflower oil and wheat shortages still emerging.
In response, the Group has increased its forward buying where
appropriate, and has been able to activate plans for supplier
issues, including using alternative suppliers.
Coronavirus
We have seen an improving risk outlook on the impact of
Covid-19 and future pandemics as the UK has fully opened up
and vaccine programmes have been shown to be effective.
Financing
The successful completion of the refinancing of all banking
facilities has reduced risks around financing.
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Principal Risks and Uncertainties
The following heatmap sets out the impact and likelihood scores for our principal risks and further detail of these risks and emerging risks
is set out in the table below. The analysis is not intended to be a comprehensive list of all risks actively managed by the business. The key
financial risks are detailed in note 26 to the financial statements.
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Annual impact to profit before tax.
Emerging risks
Global Economic Uncertainty
R I S K S
1 Covid-19 & Future Pandemic
2 Consumer Demand Shifts
3 Information Technology/Cyber Security
4 Financing
5 Cost Inflation
6 Supply Chain
7 Wage Cost Inflation
8 Recruitment & Retention
9 Health & Safety
10 Sustainability & Environment
D E S C R I P T I O N
C O N T R O L A N D R I S K M I T I G A T I O N
The global economic uncertainty created by the impact of Covid-19
and subsequently the impact of the ongoing war in Ukraine dominate
the changing and emerging risks we face as a business. These are
impacting many of our identified principal risks, including increased
inflationary pressure, supply chain uncertainty and emerging and
continuing changes to consumer demand.
The risk is kept under review as we implement our strategy.
It informs the level of liquidity we target for the business, the
way in which we invest in our diversified estate to manage
fluctuations in different parts of the economy and the flexibility
we look for in future leasing arrangements.
Principal risks
1. Coronavirus (Covid-19) & Future Pandemic
M O V E M E N T
O W N E R
D E S C R I P T I O N
C O N T R O L A N D R I S K M I T I G A T I O N
Chief Executive
The Covid-19 outbreak had a seismic
impact on our industry, most
obviously through the closure of all
our pubs and hotels followed by the
enforced social distancing and other
restrictions. There is a risk of
subsequent pandemics, either entirely
new strains of a virus or evolutions of
the current strain, and the government
strategy in response to this.
We closely monitor our cash flow to ensure we maintain an appropriate
level of liquidity, continue to keep a diversified estate and review the
composition in the light of recent events, negotiating more flexibility into
leases going forward, keeping strong ties with government, building on
our pandemic response plan, and maintaining and enhancing our
flexibility in our customer offering and operational procedures.
We have successfully emerged from the initial variants of Covid-19
which gives us confidence that we could do so again.
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2. Consumer Demand Shifts
M O V E M E N T
O W N E R
D E S C R I P T I O N
C O N T R O L A N D R I S K M I T I G A T I O N
Marketing Director
The Group’s success is attributable to
its ability to anticipate and react to
consumer demand.
Management monitor and research consumer trends and run trials of
new technologies.
There have been accelerated changes
caused by the impact of Covid-19,
including but not limited to working
from home, the demand shift in city
venues vs rural and food delivery
services. There is a continued trend
towards healthy and lifestyle choices
which could impact demand.
In addition, inflationary pressures will
impact consumer demand.
We gather consumer feedback through Net Promoter Score surveys,
online and social media reviews, and customer complaints.
We analyse retail pricing and market share data to ensure we are
competitive but still premium. Our core customer group are typically
at higher income levels, which may help mitigate the effects of
inflationary pressures on our business.
The business has become more flexible in dealing with changes in
operational measures, product and service offerings.
The balance of our estate across both city and rural locations allows
us to manage demand shifts.
We have largely completed our digital transformation which will
enable us to increase frequency and spend from existing customers,
and to target new potential customers.
3. Information Technology/Cyber Security
M O V E M E N T
O W N E R
D E S C R I P T I O N
C O N T R O L A N D R I S K M I T I G A T I O N
Finance Director
The Group is increasingly reliant on
its information systems to operate,
and trading would be affected by any
significant or prolonged failures and/
or data loss. In addition, the
sophistication of cyber attacks
continues to increase.
Our IT function has a range of facilities and controls in place to
ensure that in the event of an issue normal operation would be
restored quickly. These include a formal IT Recovery Plan, online
replication of systems and backup datacentres, and external support
for hardware and software. We continue to introduce more preventive
measures to reflect the increased risk. These include external reviews
of our IT controls and a range of assessment and training for all team
members who have access to our network.
4. Financing
M O V E M E N T
O W N E R
D E S C R I P T I O N
C O N T R O L A N D R I S K M I T I G A T I O N
Finance Director
Interest rates may increase, adversely
impacting profit, and/or there could be
a risk of breaching financial covenants.
There is a risk that we are unable to
find suitable financing when required.
We agreed a new financing facility on 27 May 2022. We maintain
good relationships with our current bankers and, given the
predominantly freehold nature of our business, we have the ability to
offer more certainty than many in our sector when raising finance.
Alternative financing approaches are available, including equity,
as evidenced by the recent equity placing.
We closely monitor our cash flow and control of investments to
ensure we maintain appropriate levels of debt cover.
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Principal Risks and Uncertainties
Continued
5. Cost Inflation
M O V E M E N T
O W N E R
D E S C R I P T I O N
C O N T R O L A N D R I S K M I T I G A T I O N
Finance Director
There is a risk of rising input costs
across all areas, including food and
drink, utilities and staff costs. This
has been accelerated by the current
global economic environment and the
war in Ukraine.
We regularly monitor prices using relevant commodity databases,
review forward looking inflation and all key contracts are competitively
tendered. We have increased the frequency of our margin monitoring
internally and our retail price monitoring compared with our
competitors. This allows us to act quickly if there are significant
changes in input costs.
Our property management platform allows us to control property costs.
Our preference is to have long term agreements in place with our
suppliers linking any price rises to CPI. We have a Long-Term Supply
Agreement ("LTSA") in place with Asahi Europe Ltd for the supply of
beer, cider and other beverages to 2029, which caps the increase to CPI.
We have the majority of our energy use covered by fixed term prices and
currently have some protection for the 2023 financial year and continue
to look at options to manage utility price inflation. For the 2023 financial
year, electricity is hedged at 62% and gas is hedged at 82%.
6. Supply Chain
M O V E M E N T
O W N E R
D E S C R I P T I O N
C O N T R O L A N D R I S K M I T I G A T I O N
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There is a risk that failure in our
supply chain may damage customer
satisfaction and could impact the
profitability of the Group. Any large
scale issue with out of stock items
could have an impact on trade in
our businesses.
The LTSA in place with Asahi Europe Ltd for the supply of beer, cider
and other beverages ensures that products will meet certain brand
performance metrics, and the supply service is subject to key
performance indicators ("KPIs").
All other key suppliers are subject to service and quality KPIs which
are monitored on a monthly basis. In addition, the supply chain has
successfully survived the Covid-19 crisis, which gives us confidence
in its ongoing robustness.
Our preference is for long-term agreements which enable strong
relationships, and we work with smaller suppliers to ensure that they grow
healthy sustainable businesses outside of their agreement with Fuller’s.
We have a reputation of honesty, trust and fairness, and our long term
collaborative approach has meant our suppliers continue to fulfil our
needs. Given the continued difficulties in supply, these relationships,
coupled with our ability to replace and adapt our customer offering,
helps us to mitigate supply chain challenges.
7. Wage Cost Inflation
M O V E M E N T
O W N E R
D E S C R I P T I O N
C O N T R O L A N D R I S K M I T I G A T I O N
People and Talent
Director
Future labour cost increases may
impact the profitability of the
business. The principal drivers of
such increases are projections for
future increases in the national living
wage coupled with a tightening of
labour supply, and the demand
for higher wages due to the cost
of living increases driven by
continued inflation.
We aim to mitigate the risk of such increases through a combination
of improved operational efficiency and passing the cost on through
the prices we charge. Operational efficiency measures include use
of technology (e.g. web-based Order & Pay system) and modelling
labour per time of day to optimise staffing levels. The introduction of
pay banding as part of the reward review will help mitigate the knock
on impact to all roles from rises in the national living wage.
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8. Recruitment & Retention
M O V E M E N T
O W N E R
D E S C R I P T I O N
C O N T R O L A N D R I S K M I T I G A T I O N
People and Talent
Director
The recruitment and retention of high
calibre employees is fundamental
to our ability to deliver a distinctive
experience for our customers, and
to support our growth agenda.
The challenging recruitment market
for hospitality is likely to continue for
roles held by support office staff, who
may view a career within hospitality
as less attractive than other parts of
the economy currently.
We have succession plans in place for key Senior Management roles
and have drawn upon these when selecting an Executive Team to
deliver the Board’s strategy for our pubs and hotels focused business.
We invest heavily in our people, offering them real career paths. We are
able to differentiate ourselves from the competition and ensure that we
remain an employer of choice in a challenging market. The opportunity
to join at a junior level, e.g. as an apprentice, go through our Chefs’ Guild
Scholarship and progress to either Head Chef or General Manager is
very appealing. We have increased support for our outstanding
development programs (e.g. we have 130 pupils on our Chefs’ Guild
Scholarship) and have amended our pay and rewards structure,
parental leave, incentives and launched a new recruitment system.
9. Health & Safety
M O V E M E N T
O W N E R
D E S C R I P T I O N
C O N T R O L A N D R I S K M I T I G A T I O N
Retail Director
The health and safety of our
employees and customers, and the
general public when on our estate,
is a key priority for us.
There is a risk that we do not adhere
to the highest health and safety
standards, further increased by the
large number of sites we operate.
We have a comprehensive training programme in place for our
employees covering all aspects of health and safety.
All sites complete a risk assessment and are required to undertake
detailed weekly and monthly compliance checks which are then
subject to review by our in-house health and safety team. The
allergen procedures we have implemented to manage the risks are
continuously reviewed to ensure controls remain appropriate.
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There is a risk of a customer suffering
from our staff failing to deliver our
allergens policies and procedures.
We continue to utilise the services of expert third party health and
safety consultants to undertake annual audits covering food, fire and
general health and safety risks on all our sites and perform detailed
investigations in instances where an incident does occur.
10. Sustainability & Environment
M O V E M E N T
O W N E R
D E S C R I P T I O N
C O N T R O L A N D R I S K M I T I G A T I O N
Chief Executive
Climate change risk could impact
our supply chain. Uncertainties
over how these risks will evolve
could reduce revenues and profit.
This could also impact trust and
reputation among customers,
investors and other stakeholders.
The Group is contributing to the Net Zero Carbon Roadmap to Net
Zero by 2030 for Scope 1 & 2 and 2040 for Scope 3. We are already
working on energy usage and supplier engagement to mitigate
carbon emissions.
Our TCFD reporting helps us to identify and assess key risks and
opportunities and impacts of climate change to our business.
We have implemented our Life is too good to waste programme which
is across our people, plant and community.
Our Sustainability Director has identified a programme of changes
and initiatives in our pubs, hotels and support office to help us grow
in a sustainable way.
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Sustainability Report
We are committed to always
doing things the right way for
our people, our communities,
and the planet, and we
plan to be around for a long
time to come. We know Life
is too good to waste. And
that means we protect and
respect the things that matter
to us and our customers.
Q&A: Chief Executive Simon Emeny and
Oliver Rosevear, Sustainability Director
Why is sustainability so important to Fuller’s?
Simon: Working with our communities has always been a central
part of Fuller’s strategy – but today, all businesses must have a
more holistic approach to environmental and social responsibility.
That’s why we decided to appoint a Sustainability Director to
manage the programme and build on our Life is too good to waste
initiative to deliver for the planet, our people and our communities.
Ollie: I agree with Simon. It’s not that Fuller’s has just woken
up to the idea of sustainability – it’s about bringing all the great
elements that are happening throughout the business into a
central programme. When you combine all three elements of
ESG, you can clearly see how Fuller’s is a force for good.
What are the quick wins?
Simon: The beauty of pubs is their individuality – but this can
be a challenge as you can’t apply the same solutions across the
estate. Through better reporting and understanding of energy
usage, we can help our teams understand how they can make
a difference in reducing energy and cut our carbon footprint.
Ollie: One of the first opportunities identified was to increase
the recycling of operational waste. We are working with Veolia
to change the way we collect waste from our pubs and hotels,
and I think this will help us to considerably increase the amount
of waste we recycle. Our teams are keen to ensure they can
contribute to reducing our impact on the planet, so we have
had a great response to the changes we have made so far.
What is the overarching priority for this financial year?
Ollie: We are aiming to achieve Net Zero in our operations by
2030, and to do that, we’ve got to make sure that everyone, right
through the Company, is on board. My priority is to encourage
personal accountability across the organisation with regular
updates, tips and information – to keep sustainability high on
the agenda for our teams and suppliers.
Simon: We won’t achieve targets just by hiring a Sustainability
Director. It’s got to be embedded right across the organisation and
to do that, I need to ensure that my Executive Team helps support
Ollie to drive action across the business. Delivering for our planet,
our people, and our communities is everyone’s responsibility.
Why Ollie and why Fuller’s?
Simon: I wanted someone with a proven track record in embedding
sustainability and helping teams understand how they can play their
part in the journey. Ollie delivered some innovative programmes
during his time at Costa, and we hope he can deliver the same for
Fuller’s. He’s got all the credentials we need and I’m really excited
to see how quickly he moves us along the road to Net Zero.
Ollie: I’ve always liked the way Fuller’s approached business –
always doing things the right way. The opportunity to work for a
company with such a family-focused ethos and that celebrates
individuality really appealed to me. I just love working with our
teams and suppliers to roll out sustainability initiatives in our
pubs and hotels and hopefully influence the wider industry to
take action across the various social and environmental
challenges we face.
Over the past year we have undertaken a strategic review of our
sustainability programme, Life is too good to waste. We have
clearly identified three areas of focus in regard to our teams,
communities and our responsibility to the planet. As a business
which is all about people, we felt it was important to focus on
the tangible actions that we, our teams, suppliers, customer
and wider communities can take to drive positive change.
Our Life is too good to waste commitments are driven across
the organisation through our new sustainability governance
structure. From our Chief Executive to our teams across our
estate, we want everyone to realise that they have a responsibility
to act, to feel their voice is being heard, and to know that what
they contribute will have a positive impact for our teams, our
communities and our planet.
Our Planet
At Fuller’s we know that small things make a big difference
and that a healthy planet is essential to the future of our
business, people and communities. When it comes to
protecting the planet, we’re realists and know there’s a lot to
do, but we’re also optimists and know we can and will do it.
We work on the principle that when we start with small
actions – reduce, reuse, recycle, renew – it adds up to make
a big difference. We know we can all make better choices –
from behind the bar, in the kitchen, or sitting at a desk.
Our Journey towards Net Zero
The latest United Nations Intergovernmental Panel on Climate
Change ("IPCC") report, published in April 2022, highlighted
that the world must cut emissions by 43%, by 2030, to keep
temperature rises well below 2˚ Celsius to avoid the most
significant impacts of climate change. Fuller’s recognises its
responsibility to contributing to this reduction and the risk
climate change poses to our people, customer and communities.
In October 2021, we joined 27 other hospitality businesses
though the Zero Carbon Forum in aiming to achieve Net Zero
carbon emissions for our operations by 2030 and within our
supply chain by 2040. We understand the need to collaborate
to tackle what is a common threat to all of our businesses.
We are now working to develop specific carbon reduction
targets for Fuller’s in line with the Science Based Targets
initiative and hope to have this validated by the end of 2022.
We are currently developing our carbon footprint to identify where we
need to focus our efforts. However, we are not waiting for targets to
be set before acting and, over the last year, we have taken significant
strides to reduce our direct and indirect carbon emissions.
Energy
As part of our ambition to be Net Zero in our operations by 2030,
we need to dramatically reduce the carbon intensity of the energy
used to heat and power our buildings. By 2030 we aim to reduce
our overall energy usage by at least 25% and eliminate the use
of natural gas, oil and liquid petroleum gas ("LPG") where feasible.
In October 2021, Fuller’s began sourcing all its electricity for
Company-owned sites from 100% certified green electricity
via our supplier Scottish Southern Electricity. This energy is
primarily sourced from wind and hydroelectricity. We are now
looking at how we can secure more direct renewable electricity
though agreements with renewable generators. Cotswold
Petroleum, which supplies heating oil for our Cotswold properties,
has partnered with Carbon Footprint to offset emissions from the
oil used at our sites.
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CASE STUDY –
THE ROYAL SOCIETY
FOR BLIND CHILDREN
Fuller’s has proudly supported the Royal Society for Blind
Children for several years and today the contribution helps
the charity’s Families First service.
Having a vision impairment can be a challenge for young
people and their families. Whether a condition is diagnosed
at birth or develops during childhood or adolescence, the
implications are significant, and many families will want or
need some help to manage these.
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RSBC Families First is a service that supports young
people and their families across England and Wales.
Experienced, professional, family practitioners offer a
range of support using evidence-based interventions.
This support is focused on the family’s emotional needs,
particularly at times of difficulty such as diagnosis,
deterioration of vision and life events such as school
transitions or family difficulties. Support is tailored to the
needs of the young person (aged 0-25) and their family.
It may be short or long-term, face to face, over the phone
or online, at home or in school or college.
Anna (pictured) is a one in a million child. She has the
incredibly rare oculofaciocardiodental syndrome, one of
just 20 in the world, which involves 16 different conditions
including premature cataracts and glaucoma.
Anna’s mum, Magda, says: “It’s a lifelong process and
it’s going to be a learning process for everyone. RSBC
helped us to deal with our initial grief, with the support
and contact of family therapy – even in the middle of
the coronavirus pandemic we received frequent calls to
check on our wellbeing.”
Magda says that she has gained so much to improve Anna’s
life, not only from RSBC’s specialists but from the other
parents who the charity put her in touch with through its
Connecting Families group, whose support she says is vital.
To support children like Anna, and their families, please
visit: www.rsbc.org.uk.
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Turning Waste into Resource
At Fuller’s we work on the principle that everything we use has a
value and we aim to reduce, reuse and recycle the things that we
need to operate our business. We are keen to find ways to reduce
our use of valuable material resources where possible and ensure
what we do use stays within the circular economy for as long as is
possible. By 2025 we aim to recycle at least 75% of our operational
waste and divert 100% from landfill. Having already removed a
number of single use plastic items from our business, by 2030
we aim to eliminate all unnecessary plastics from our operations.
CASE STUDY –
SUPPORTING YOUNG PEOPLE IN
OUR WEST LONDON HEARTLAND
Fuller’s is a Founder Patron of WEST Youth Zone, with a
contribution of £150,000 over four years.
Currently under construction, WEST will be a state-of-the-
art youth centre, developed by national charity OnSide,
where all young people from Hammersmith and Fulham
can reach their full potential, achieve their goals and have
a chance to shine. It will be located close to the White City
Estate and is due for completion in 2023.
WEST Youth Zone will be an incredible place filled with
energy, inspiration and highly skilled youth workers who
truly believe in young people. More than 20 activities will be
on offer every day, including music, sport, cooking, dance,
wellbeing, mentoring and employability seven days a week,
52 weeks a year and at a cost of just 50p.
WEST will enable young people to raise their aspirations and
confidence to create a happier and healthier generation. For
more details, visit westyouthzone.org
Due to the nature of our estate, which includes many historic and
listed buildings, a number of our sites are heated by natural gas or
oil, both of which have a high carbon footprint. In addition, many
of our kitchens use mains gas and LPG to prepare fresh dishes
for our customers. In order to reduce our reliance on these high
carbon fuels, we need to consider ways to transition to greener
systems such as heat pumps, electric fryers and induction hobs.
However, this transition will impact our electrical capacity, so in
order to achieve this goal, we need to consider how we can
reduce our current electrical demand within our sites through
energy efficiency measures. We are undertaking a review of
our estate to understand where we can transition from gas
and oil to zero carbon electricity and looking for opportunities
to decarbonise our operations. There are a number of initiatives
which are helping to support this transition:
• LED lights are now standard in all our managed hotels
and pubs, reducing energy usage from lighting by up to 75%.
• We have engaged energy consultants to undertake site
audits on all our managed properties over the next three
years to help identify energy waste and optimise controls
to reduce energy usage.
• We are using cellar heat recovery units to produce hot water
at a growing number of sites, such as The Head of the River
in Oxford, where most of the hot water is produced using
waste heat from the cellar cooling equipment.
• We are trialling new building monitoring systems which help
us to track energy usage and identify where specific pieces
of equipment are not running optimally. This allows us to
take action to reduce energy through maintenance visits
and changes in operational process.
In addition to these physical changes, we are focusing our teams
on energy reduction through behavioural change. From previous
research we know that behavioural change can drive up to 20%
reduction in energy usage in our pubs and hotels.
In 2021, we introduced energy management reports from our
smart meter data to allow our teams to view how they are using
energy through the day on a manager’s dashboard. To support
this, we also rolled out new training materials to help our teams
understand what action they could take to help reduce energy
usage within their sites. This included new opening and closing
procedures for our kitchen and other operational areas, and
learning resources to help them understand the costs of
taking these actions in a fun and engaging way.
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Greenhouse Gas (“GHG”) Emissions and Energy consumption
This report details our GHG emissions and energy use for
FY2022 under the Streamlined Energy and Carbon Reporting
(“SERC”) requirements.
Methodology:
We have collated data relating to our Scope 1 and Scope 2
emissions and energy use for activities over which we have
financial control. All of our emissions and energy use relate
to UK activities. Our GHG emissions were calculated in line
with HM Government Environmental Reporting and the GHG
Protocol methodology.
The table below summaries emissions and energy use for FY2022:
Scope 1 Energy
Consumption
kWh
Scope 2 Energy
Consumption
kWh
Total Energy
Consumption
kWh
Scope 1
emissions tCO2e
Scope 2
emissions tCO2e
Gross Scope 1
& 2 emissions
tCO2e
Net Scope 1 & 2
emissions
tCO2e1
Turnover £m
Gross Intensity
Ratio: tCO2e /
turnover £m
Net Intensity
Ratio: tCO2e /
turnover £m1
9,122
5,114
8,436
6,506
4,314
8,902
15,628
9,428
17,338
12,028
9,428
17,338
253.8
61.6
73.2
128.8
342.0
50.7
47.4
128.8
50.7
1 From October 2021, we have purchased 100% renewable electricity
and therefore associated emissions can be deducted from the
gross total to give net Scope 1 and 2 emissions as stated above.
The largest single element is electricity consumption in
the managed estate, which is predominately used for HVAC
systems, kitchen equipment, refrigeration and lighting. When
compared to electricity, gas will often have higher emissions,
but will be significantly lower in cost.
Year on year comparison is distorted due to the impact of
Covid-19 on trading in FY2021 and FY2022, resulting in reduced
energy consumption.
FY2022
FY2021
FY2020
42,334,133
23,792,793
30,636,694
18,503,251
–
–
72,970,827
42,296,044 83,555,406
Our planet is too good to waste – so prior to the roll out of our new waste
and recycling partnership with Veolia, we used a fun exercise to get the
message across.
Reduce
With 1,030 bedrooms across our pub and hotel estate, our
guests use a large volume of toiletries and in room drinks.
To reduce the volume of single use plastics within our estate,
we have introduced a policy of only using glass water bottles –
both for single use and for refilling. The Swan Hotel at Bibury
even bottles its own water from the natural spring in the
grounds of the hotel. We are also working with our toiletry
suppliers to introduce refillable bottles in our hotel rooms,
offering high quality shampoos and body washes without
the waste of single use packaging.
In October 2021 we made the decision to move to till receipts on
request. While this was only a small change, it saved a staggering
20 tonnes of paper, equivalent to 235 trees. Proof that small
things really do make a big difference.
Reuse
Fuller’s is well known for its association with sporting venues,
and The Cabbage Patch is possibly the most famous pre-
match rugby pub in the UK. Historically, during match days,
the pub would have to use thousands of single use plastic
cups to replace glassware on busy occasions. Following a
successful trial during the recent Six Nations campaign, the
team is working with Green Goblet to provide reusable cups
on match days, saving many tonnes of non-recyclable plastics
every year. The used cups are returned to Green Goblet’s facility
in Gatwick where they are washed, dried and returned for the
next match. We are looking to introduce this solution to more
of our sporting and event pubs over the next year.
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Recycle
Our Suppliers and the Supply Chain
In FY2022, the recycling rate across our Managed estate
was 39%. This was a reduction from the previous year due to
coronavirus restrictions. 100% of our residual waste was sent to
energy from waste facilities, with no waste being sent to landfill.
From April 2022, we began services with our new waste
management partner, Veolia. As part of the new services, all our
sites will have access to four waste streams – glass, food, mixed
recycling, and general waste. 100% of all our general waste will
continue to be diverted from landfill to energy from waste sites,
where it will help fuel the production of heat and renewable
electricity. Our food waste will be sent to an anaerobic digestion
site, which will produce green gas, while our mixed recycling and
glass will be sent to a mixed recycling facility, where the various
materials will be segregated. In addition, we have introduced an
online training platform for our teams to help them understand the
importance of correctly segregating waste at their sites. The
platform also offers site specific waste and recycling reports to
help our teams understand how they are performing. We have
introduced new internal bin signage to help our teams ensure waste
is disposed of correctly and sorted to allow for it to be recycled.
Through these new services, we hope to significantly increase
our rates of recycling and ensure as much waste is recycled
and reused as possible.
In addition to the general recycling services, we are also looking
at ways to recycle more challenging materials:
• Our sites now recycle coffee pods using the nationwide
PodBack post back scheme, ensuring both the aluminium
capsules and coffee grounds are recovered and recycled.
We also encourage our teams to offer used coffee grounds
to local gardeners as its makes an ideal growing medium
for plants and flowers. Any residual coffee can be placed
in our food waste collection bins.
• Used cooking oil is collected by Olleco. Once collected the
oil is used to create high quality biofuels for transportation.
• A number of our key suppliers offer take back services for
used packaging. Owtons and The Menu Partners currently
backhaul cardboard from our sites for recycling and Direct
Seafood recovers the insulated polystyrene boxes. We are
always looking for new opportunities to recover waste via
our supply chain partners.
• Our new partnership with Any Junk ensures that our sites
are able to easily remove any unwanted furniture, point of
sale equipment and old equipment. The team at Any Junk
then ensures that these products are recycled or reused
where feasible.
According to a recent report by the Net Zero Carbon Forum, 83%
of pub groups, greenhouse gas emissions relate to their supply
chains (Scope 3). It’s therefore essential that our suppliers come
on the journey with us. Many of our suppliers are already setting
their own targets to reach Net Zero and embedding science-
based targets within their own businesses. We intend to support
and encourage more of our suppliers to take the same action.
Our fish supplier is an active member of the UK’s Sustainable
Seafood Coalition and only sources Marine Stewardship Council
Certified fish. We ensure fish is only selected from species not
considered to be at risk from either a sustainable or social ethics
perspective. We only use wild fish which is traceable back to
vessels which have assurances that the catch is within quota
and sustainably caught.
Opportunities to reduce waste can come from all parts of the
business. This year we partnered with Stone 360 to ensure
that all of our IT equipment was either reused or recycled at
end of life. Stone 360 has been supporting IT Schools Africa,
a charitable organisation which is transforming lives through
access to e-Learning.
Investing in our people has always been a key tenet of Fuller’s strategy
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Our People
Our people are what makes Fuller’s special. That’s why we’re
focused on looking after them, ensuring they have a sense of
belonging and a belief that we truly care about their wellbeing,
and have opportunities to grow. We’re committed to creating
inclusive workplaces, so our people feel confident to bring their
whole selves to work.
During the pandemic, looking after our people was our
number one priority and, when the business was locked down,
we undertook a range of activities using our Fuse learning and
communications platform. From regular videos from the Chief
Executive to maintain contact, to webinars and bite-sized learning
packages on everything from wellbeing to presentation skills,
we worked hard to maintain engagement and keep our teams
involved and occupied. We also provided shopping vouchers to
all our junior team members as we were acutely aware of the
financial hardship that many were facing.
Our relationship with the Licensed Trade Charity ("LTC") also
came into play during this time and the resources provided
by the LTC – whether that be emotional or financial – cannot
be underestimated. We are very grateful for its continued
generous support.
As the business reopened, we have returned to focusing on the
development and training of our teams across the business,
rolling out new career paths and broadening the spread of
learning opportunities to our support teams too. Testament to
this success is the fact that over 60% of our general managers
are internal promotions – and we will continue to focus on this
area, with an ambition to raise that number to 70%. We are also
committed to continuing with our apprenticeship programme and
we will be recruiting another 100 apprentices in the coming year.
During the last financial year, we reviewed our benefits
package across the business – driven by feedback from
team members and a feeling that loyalty was under-
recognised. As a result, we launched our employee
benefits program, My Fuller’s. Benefits include:
• an industry-leading healthcare cash plan for team members
with more than one year’s service
• mental and physical wellbeing programmes to support
our team members
• up to 40% discount in Fuller’s Managed Pubs and Hotels,
linked to length of service.
CASE STUDY –
BUILDING AN INCLUSIVE
WORKFORCE AT THE
CABBAGE PATCH
At Fuller’s, we aim to create an environment where everyone
feels they belong. And few do that better than Stuart Green,
general manager at The Cabbage Patch.
Stuart (pictured above right), is involved with various charities
and organisations to not only open The Cabbage Patch up to
support those in the community with intellectual disabilities
("ID") and special educational needs ("SEN"), but he also helps
find work for people with an ID or SEN in his pub.
Stuart currently has two autistic team members who are
very much part of the Fuller’s Family, Jonathan (pictured
above centre) who works front of house and Eddie (pictured
above left) who works in the kitchen.
Stuart has been at The Cabbage Patch for 25 years and in
his first year he was introduced to the learning difficulties
department at Richmond College. He was appalled that
the students weren’t able to gain any work experience.
“I decided that I wanted to make a difference, so I set up a
whole work experience programme for them with the goal that
at the end of the programme, they would be able to leave with
a skill. I realised very quickly that the skill could be very basic
but as long as it was something, I felt I’d made a difference."
"25 years on we have at least one person in our team every
single day with an ID or an SEN and the goal is to get more
into employment because they absolutely love it. I think we
can make ourselves more accessible, we’ve got loads to learn
as an industry and I get frustrated that the industry is so slow
to see how much people with an ID can bring to it.”
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Sustainability Report
Continued
E X E C U T I V E T E A M A N D T H E I R D I R E C T R E P O R T S
During the year, we have continued to work to ensure Fuller’s
is a place where everyone can belong. Throughout the year,
we have run several workshops and webinars to help raise
awareness on subjects including developing women in
leadership, mental and physical wellbeing, awareness of
intellectual disability and race equality.
In the year ahead, we will train our leadership team to recognise
and take action to encourage a diverse and inclusive workplace.
One member of the Executive Team has already participated in
reverse mentoring, and we have put forward a delegate to
participate in the Ethnic Future Leaders programme run by
Women in Hospitality, Travel & Leisure.
We are delighted that our gender pay gap is minimal – but we
still have work to do and we are starting to bridge this gap further
through total transparency in our pay practices to ensure salaries
are calculated primarily by the role and not the person. We no
longer have any team members on National Minimum Wage,
having raised our entry level pay rates, and we have introduced
clear bandings for all roles to ensure fairness and clarity.
We recognise the need to ensure higher levels of diversity within
our senior leadership group. Currently 48% of our leaders and
22% of our Board identify as female. We have also identified that
we need to increase the percentage of leaders from ethnic
minorities and those openly identifying as being part of the
LGBTQ+ community.
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E M P L O Y E E S
( E X C L U D I N G S E N I O R M A N A G E M E N T
A N D D I R E C T O R S )
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2,585
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The final piece of this year’s people strategy was the undertaking
of our first employee happiness and engagement survey for
some time. In partnership with The Happiness Index, we engaged
with 3,868 team members and we had a response rate of 40%.
As we build trust with our team members, we expect to see a rise
in this response rate.
One of the themes that came through from the happiness and
engagement survey was a need to listen more and give our teams
a voice, so they have the opportunity to be heard and provide
regular feedback. To address this, we launched My Voice – which
gives our colleagues the tools to be able to share how they are
feeling at any point in time. This online survey is there for all team
members, at all levels, and asks for a score out of 10 for how they
feel and a comments box to ask why the score was given.
The results are regularly reviewed by the Executive Team, and
actions have already been taken as a result. Sometimes the
simplest things are overlooked – for instance one of the
comments was asking for a physical noticeboard in the support
centre rather than all notices only coming digitally. This small
change has led to team members feeling more connected to
the business when in our support centre.
Following on from the happiness and engagement survey,
we are also conducting targeted pulse surveys to allow us to
temperature check our business on topics where we are seeing
lower than anticipated scores.
Pulled together, the themes above improve our two-way
communication, ensure our team members feel valued, and give
us a clear framework to build and grow our people proposition.
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KEY TAKEOUTS FROM THE
HAPPINESS INDEX SURVEY
• Females in our business are slightly
happier and more engaged
• We scored highly for relationships –
there is real camaraderie among our
teams and people feel part of the family
• We scored highly on clarity – people are
clear on what they need to do in their role
and when they need to do it
• We need to get better at listening – and
have launched My Voice in response
• Our team members like our learning
and development, and feel we offer real
progress at pace.
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Our Communities
At Fuller’s we care about our communities. They have always
been at the heart of Fuller’s and through our charity links and
community initiatives we want to continue to help them thrive.
Our pubs and hotels have never just been bricks and mortar –
they are places where communities meet, everyone can feel
welcome, and where experiences are created.
We have a stated aim to give 1% of our profit to good causes
and, during the year, we have paid charitable donations of
£134,436 to our charity partners via our Charities Aid Foundation
account. This included £33,051 from donations on our kids
meals and Ale & Pie Tasting Boards. In addition, our customers
have donated an incredible £123,502 through Pennies – the
digital charity box that allows customers to round up to the
nearest pound when settling their bills.
During the year, we widened our Give as you Earn matched
funding scheme to make it available to all team members and
we will continue to encourage team members to take advantage
of this opportunity.
As a business which is keen to support both our local and global
communities, many of our team members were keen to support
the people of Ukraine. We had a number of pubs which wanted
to raise money to help those trapped in very difficult conditions
– so we were quick to add a button to the tills across our
estate allowing an easy way to collect funds, pay them into
our Charities Aid account, and we matched the sums raised.
We are delighted that Special Olympics GB remains our charity
partner and this year, combining the Pennies donations with
money raised in our estate, we have contributed over £86,000
to this amazing charity.
While the pandemic impacted our fundraising activities, in
October 2021 we held a football tournament for Special Olympics
GB with 20 teams participating – 18 from Fuller’s and two from
Special Olympics GB. The event, which is an annual fixture,
raised £13,000.
Since year end, we held a sponsored walk from Pier House, our
support centre in Kew, to The Sail Loft in Greenwich. Over 80
walkers took place and the event raised over £25,000. As well
as delivering an amazing contribution for Special Olympics GB,
it was a great way for our team to come together, get some
healthy exercise and boost morale.
Finally, we continue to support WEST – the Hammersmith &
Fulham Youth Zone project run by OnSide – with a donation
of £25,000. This is our third year of involvement, and we are
committed to donating £150,000 over a four year period. Work is
well underway and further details can be seen in the case study
on page 42.
During the coming year, we will continue to develop the
community element of our ESG strategy, with a focus on local
activity at pub level. We will be encouraging all our pubs to look
for opportunities to ensure they remain well and truly at the heart
of their communities.
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CASE STUDY –
SPECIAL OLYMPICS
This summer, for the first time in almost two and a half years,
Special Olympics GB returns to full-scale competition with
the largest celebration of intellectual disability sport in Great
Britain – with a brand-new format called The Special Olympics
GB Summer Series of Sport.
Running between June and September 2022, The Special
Olympics GB Summer Series of Sport will feature 17 single
and multi-sport events, providing competition in a minimum
of 12 sports. These will include athletics, swimming and
basketball, across Great Britain, and will offer the opportunity
for at least 1,500 Special Olympics GB athletes, supported by
dedicated volunteers, to compete for the first time since
February 2020 when sporting activities were curtailed due
to the consequences of coronavirus.
The pandemic has had a devastating impact on those with
intellectual disabilities ("ID"), who have been disproportionately
negatively affected throughout. A recent major study in
America concluded that people with an ID are 2.75 times
more likely to die following a diagnosis of Covid-19, rising
to 10 times for those with Down syndrome.
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The ongoing commitment and generous support Fuller’s has
given to Special Olympics GB during this unprecedented time
has allowed it to invest in the development of this major new
format, delivering a brilliant summer of sport for its athletes
while solidifying and enhancing the competition pathway.
Special Olympics athletes have missed taking part in sport,
competing and meeting their friends, so to be able to offer
this new competition format to the widest possible number
of athletes is a huge positive step forward.
Money donated to Special Olympics GB through Fuller’s
£86.7k
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Task Force on Climate Related Financial Disclosures
Introduction
We have aligned our sustainability reporting activities with the Task Force on Climate Related Financial Disclosures ("TCFD") framework,
and we are pleased to report for the first time in line with the TCFD recommended disclosures for the year ended 26 March 2022. As a
business, we are yet to complete formal climate related scenario analysis and have further work to do to assess climate risk and its
impact on our strategy, as described by the TCFD. We have however developed a roadmap for full alignment with the recommended
disclosures, with the objective of improving our reporting and disclosures in respect of how we are addressing the risk of climate change.
Recommended
disclosure
Governance
Disclose the
company’s
governance relating
to climate related
risk and opportunity
Overview
Approach
The Board has overall responsibility and accountability
for all risks and opportunities, including all climate
related matters.
The Audit Committee supports the Board in the
oversight of an integrated risk management assurance
model as outlined on page 34 and monitors the impact
and materiality of climate related risk as part of ongoing
risk management.
The Chief Executive is the designated Board member
for sustainability matters (including climate change)
and is assisted by the Sustainability Director and the
Sustainability Committee in developing the Group’s
Life is too good to waste sustainability strategy.
Material climate issues are considered by the Board
when reviewing key strategic projects and business
objectives to understand associated impacts on day
to day operations and to ensure our ability to perform
in both the short and long term.
The Sustainability Committee is responsible for
assisting in the identification of climate related risks
and opportunities across the business. The Committee
establishes targets and objectives, and provides
oversight and monitors progress against key
sustainability initiatives in collaboration with relevant
departments, such as property and purchasing
functions, to ensure progress against and achievement
of climate related targets and objectives.
Climate change and its associated risks and opportunities
form part of our strategic decision-making processes.
As a business, we are yet to complete a formal climate
related scenario analysis as described by the TCFD. The
TCFD recognises that a scenario analysis is a complex
process where a qualitative approach that progresses
and deepens over time may be appropriate.
Strategy
Describe climate
related risk across
the short, medium
and long term
Describe the impact
of climate related
risk on the business
strategy and
financial planning
Briefings on the activities of the Sustainability
Committee are provided to the Audit Committee and
to the Board by the Chief Executive and periodically
by the Sustainability Director to update on risks and
opportunities, the sustainability strategy and progress
against targets and objectives. The Board is kept
informed of emerging climate related issues by the
Chief Executive and the Sustainability Director, who
engages with third party experts and industry bodies
such as the Zero Carbon Forum.
A range of climate related risks and opportunities have
been identified that are considered material to our ability
to deliver our strategy. These risks and opportunities are
considered across the physical impacts of climate
change and the transition of business operations to a
low carbon operating model.
We recognise the need to identify risks early and
implement actions to mitigate the impact to our
business and on the planet. By acting early, we can also
convert potential risks into opportunities so that we can
benefit from changes in consumer trends such as
moving towards climate friendly diets.
We are in the early stages of establishing the process
for assessing climate related risks and opportunities.
We intend to develop both areas of our sustainability
strategy by the end of 2022. As this process matures
year on year, we are confident of our ability to disclose in
greater detail the risks and opportunities identified, and
our actions in relation to these. Early initiatives driven by
this process include the provision of funds for energy
efficiency auditing, employee training and capital
expenditure for the implementation of more sustainable
technologies as described on pages 40 to 47.
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Recommended
disclosure
Overview
Risk Management
Describe how the
company identifies,
assesses and
manages climate
related risk
Our processes for identifying, assessing and managing
the impact of climate change on our principal risks is
part of our integrated risk assessment approach as
described on page 34. We do not treat our climate risks
any differently and have recently taken significant steps
to ensure these are assessed alongside other aspects.
The responsibility for responding appropriately to the
climate related risks and opportunities identified
ultimately falls to the Board. The Sustainability
Committee, Executive Team, Sustainability Director and
property team also retain responsibility for setting out
and delivering the correct actions. This approach allows
us to ensure there is a top-down understanding
of climate related risks and opportunities across the
business, reinforced by bottom-up systems to support
the Board’s oversight of such risks.
Metric & Targets
Disclose the metrics
and targets used to
assess and manage
climate related risks
and opportunities
We track our performance across a number of metrics.
We aim to continually improve the accuracy and
reliability of the data collected internally and externally,
working alongside our strategic partners and suppliers,
to best interpret the data collected.
Over the last 12 months we have focused on the
collation and interpretation of data across the full range
of emissions sources to establish our Scope 1, 2, and 3
GHG emissions baseline. The financial year 2019/20 has
been selected as the most appropriate baseline period
for these calculations due to disruptions relating to
Covid-19 and structural changes to the business in
recent years. The culmination of this work will be a
verified Science Based Target for GHG emissions
reduction which we aim to achieve during the course
of FY2023.
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Approach
As climate related issues often manifest themselves
over the medium to long term, we have assessed our
risks across three clear time frames which relate to the
time required to transition physical assets or business
models. We define these as:
• Short term risk: <5 years
Medium term: 5-10 year
•
Long term: >10 years
•
We have worked with our strategic partners, key suppliers
and our teams to implement a number of initiatives
designed to increase operational efficiencies within our
Managed estate and to mitigate our environmental impact,
outlined on pages 41 to 44. As we develop the program,
we will continue to review existing risks and consider
emerging risks and their potential impact on our business
to allow us to adjust our program accordingly.
Although we have begun the analysis, we have further
work to do in assessing climate risk and its impact on
our strategy as described by the TCFD. We intend to
complete this assessment before the end of 2022 and
will publish the outcomes in next year’s report.
Metrics
From 2023 we intend to disclose the following metrics in
our Annual Report:
• Full breakdown of Scope 1 & 2 GHG emissions including:
• Energy consumption (electricity and gas) and
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information relating to energy sourcing
• Employee business mileage
• Fugitive emissions from refrigerants
• Outline of Scope 3 GHG emissions (full breakdown to be
published no later than 2024 once the Science Based
Targets baseline data collection process is complete)
• Waste management and recycling performance
We will also internally track:
• Packaging waste output
• Waste processing and destination
• Water consumption
We measure our performance across these metrics
using a set of short, medium and long-term targets and
objectives, aligned with our Life is too good to waste
strategy. These targets and objectives guide our efforts
to reduce our environmental impact and positively
contribute towards the UN Sustainable Development
Goals, including SDG 13: Climate Action.
Targets
• Secure 100% renewable electricity supply long term
• By 2025 we aim to recycle at least 75% of our
operational waste and divert 100% from landfill
• By 2030 we aim to reduce our overall energy usage
by at least 25%
• By 2030 we aim to eliminate the use of natural gas,
oil and LPG where feasible
• By 2030 we aim to eliminate all unnecessary plastics
from our operation.
Once we have completed our climate related scenario
analysis, we will look to expand our metrics to include
those related to the risk identified such as sites exposure
to flood risk and the financial impact of implementing
sustainable initiates into the business.
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Stakeholder Engagement
CUSTOMERS
PEOPLE
TENANTS
We welcome thousands of people
to our pubs and hotels each week
and strive to deliver positive and
memorable experiences where
everyone leaves happier than
when they arrived.
What matters
• Vibrant and well-maintained
venues
• Outstanding customer service
• Fresh seasonal food and
extensive drinks range
• Value for money
How we engage and respond
During the year we have made
significant investment in our
digital capabilities to enable
us to better understand our
customers and their habits
and to improve our
communications with them.
We regularly review and act
on customer feedback from
across a range of channels.
We undertake regular audits of
our pubs and hotels to ensure
high operational standards
are maintained and have a
programme of continuous
investment across our estate.
Read more about our
engagement with our
customers on page 21
We have 4,724 colleagues across
211 Managed Pubs and Hotels and
support centre roles. Our people are
what makes Fuller’s special, and
they each play a critical role in the
success of the business. They make
the experience for our customers
and deliver our business strategy
at every level.
What matters
• Fair and equitable pay
and benefits
• An inclusive, diverse,
and respectful working
environment
• Open and transparent
communication and
being heard
• Opportunities for personal
and career development
How we engage and respond
Our people are our biggest
asset, and we continually
strive to engage, develop and
retain them. During the year we
reviewed and enhanced our
benefits package, introduced
My Voice – a continuous
feedback channel – and
Fuller’s Forum quarterly listing
groups, relaunched our
employee engagement
surveys, continued to develop
our diversity and inclusion
programme, and focused on
increasing development and
training opportunities for our
pub and support centre teams.
Read more about how we
engage with our people on
page 10
We support 174 Tenanted
businesses. Our Tenants are an
extension of the Fuller’s team,
although they have autonomy
in running their own business.
We aim to recruit Tenants who
share our values and philosophy.
What matters
• Affordable rents and
mutually beneficial contracts
• Well-maintained buildings
and facilities
• Open communication
and engagement
• Business support
and development
How we engage and respond
We have a team of Business
Development Managers led
by an experienced Director
of Tenanted Operations, who
ensure that our Tenants are
in the best place to operate
a successful business that
delivers a good return for
both parties. During the
year we appointed a Sales
Development Manager to
support our Tenants in
growing sales and turnover
and we are exploring
opportunities to partner with
our Tenants in responding to
increasing utility costs.
Read more about how we
engage with our Tenants on
page 26
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Shareholders
supplierS
COMMUNITIES
Our shareholders range from
founding family members to retail
shareholders and large institutional
investors. They own our business
and provide us with the capital that
enables us to progress our strategy.
An excellent supply chain is a key
tenet of our business and we look
for genuine partnerships that
provide a real point of difference.
What matters
• Robust operating and financial
performance supported by
a strong strategy
• Sustainable income and
capital growth
• Progressive dividend policy
• ESG performance
• Directors' remuneration
What matters
• Prompt and fair payments
• Ethical and fair dealings
that protect human rights
and health and safety
• Open communication
and transparency
How we engage and respond
How we engage and respond
We maintain a regular dialogue
with all our shareholders. We
actively engage with them as
part of our investor roadshows
following our half year and
full year results presentations,
and we are easily accessible
to respond to questions and
feedback throughout the year.
All shareholders are
encouraged to attend our
AGM, and relevant Company
announcements, reports and
documentation are readily
available via a dedicated
section of our website.
Read more about how we
engage with our shareholders
on page 21
We aim to develop long-term
relationships with our key
suppliers and build a solid
relationship with them that
allows for mutually beneficial
collaboration. This results in
a range that is available Only
at Fuller’s. We work with our
suppliers to monitor consumer
trends and changing tastes.
This allows us to evolve and
adapt our offer and menus to
reflect these macro trends.
Read more about our
engagement with our suppliers
on page 32
The Great British pub has always been
at the heart of the community and we
strive to have a positive and lasting
impact on the communities in which
we operate by being a responsible
business, and a good neighbour,
supporting worthy causes, providing
employment and minimising our
environmental impact.
What matters
• Engaging with industry bodies
and national policy makers
• Acting fairly and ethically
• Providing employment
opportunities
• Supporting community
and charitable causes
• Reducing the environmental
impacts of our activities
including carbon emissions,
energy and water
• Complying with legislation
How we engage and respond
We regularly meet with both our
local MPs and other legislative
stakeholders, including through
membership of both the British
Beer and Pub Association and
UKHospitality, and contribute to
consultations on issues that
impact our sector. We launched
our sustainability strategy Life
is too good to waste as a key
tenet of our overall business
strategy and to outline our
approach to engaging with our
communities, the environment,
and our people.
Read more on how we engage
with our community and
environmental matters on
pages 40 to 47
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Section 172 Statement
This statement has been prepared in compliance with The Companies (Miscellaneous Reporting) Regulations 2018.
Section 172 of the Companies Act 2006 (the “Act”) requires Directors to act in a way they consider, in good faith, promotes the success
of the Company for the benefit of its members as a whole while having regard to the matters set out in Section 172(1)(a) to (f).
The Board strives to ensure that its decision making is consistent and aligned to our purpose, values and strategy. During the year, the
Directors consider that, in complying with their statutory duties, they had regard to:
The likely consequences of any decision in the long term
For Fuller’s and the Board, this has always been an integral part of our culture. As a long-established family business, the long-
term for Fuller’s means much more than normal business modelling entails. It is at the heart of all decisions taken by the Board.
The interest of the Company’s employees
Our people are what makes Fuller’s special and they each play a key role in the success of the Company. Details of the normal
engagement process with employees can be found in the Stakeholder Engagement section on page 50, the Sustainability
Report on pages 45 and 46 and the Corporate Governance Report on page 59.
The need to foster the Company’s business relationship with suppliers, customers and others
The Board believes that successfully delivering our strategy requires strong mutually beneficial relationships with our Tenants,
suppliers and customers, and with industry bodies that further the interests of the sector as a whole. More details of
engagement can be found in the Sustainability Report and Stakeholder Engagement on pages 44 and 50.
The impact of the Company’s operations on the community and the environment
We are committed to always doing the right thing for our communities and the environment through our sustainability
strategy Life is too good to waste, which has been further developed during the course of the year. Details can be found from
page 40.
The desirability of the Company maintaining a reputation for high standards of business conduct
Fuller’s is well regarded as a business because it has a consistent record of doing the right thing – one of the most enduring
key values of the business. This is integral to our culture.
The need to act fairly as between members of the Company
The unique capital structure of Fuller’s as a partly listed company has always required the Board to balance the interests of
a diverse shareholder base. The focus on the long term is well understood by the Company’s shareholders themselves.
The Board recognises the value of engaging with all its stakeholders and building strong relationships with them, to understand
what matters to them and their changing needs, which helps inform strategic decision making and ensures our long-term success.
More information about our key stakeholders and how we engage with them can be found on pages 50 and 51.
Principal Decisions Taken During the Year
1) Decisions related to the Covid-19 pandemic
2) Refinancing of Group facilities
Factors considered:
Factors considered:
There continued to be significant disruption to the business and the
wider hospitality sector during the year, with the gradual reopening
of the estate from April 2021 before the reintroduction of
restrictions in response to the Omicron variant in December 2021.
The Board received regular updates from the Executive Directors
regarding the impact of restrictions on the business and its
employees, and was able to act quickly with critical decisions
required in the period. Decisions have included effective cost
management during periods when trade was restricted, approving
reinvestment opportunities in the estate and reviewing reopening
plans and changes to operational standards to ensure the safety of
our employees and customers, while driving consumer confidence
and sales. The activities taken throughout the crisis illustrate that
the Board continues to pay due regard to all stakeholders and
ensured the business is well positioned for long-term growth.
In April 2021, the Group agreed an Amended and Extended
Refinancing of its existing debt facilities with its relationship
banks, extending the facilities to February 2023. Since the year
end, the Group has subsequently refinanced its banking facilities
with a new unsecured £200 million facilities agreement, split
between a revolving credit facility of £110 million and a
£90 million term loan for a tenure of at least four years.
The Board considered carefully the need to maintain financial
flexibility while managing the Group’s ability to service its banking
facilities over the longer term. The new facilities were agreed at
borrowing costs which were significantly improved on the
previous facilities and the initial drawing of the facilities was
£119 million leaving £81 million available to support the long-term
sustainable success of the Company.
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Section 172 Statement
Continued
3) Dividend
Factors considered:
4) Investment in our sustainability strategy
Factors considered:
During the year, the Board recommended an interim dividend of
3.90p per ‘A’ and ‘C’ ordinary share and 0.39p per ‘B’ ordinary
share, and is also recommending a final dividend of 7.41p per ‘A’
and ‘C’ ordinary share and 0.74p per ‘B’ ordinary share.
The Board considered if declaring an interim and final dividend
supported the long-term sustainable success of the Company.
With the Group returning to profitability in the year, the estate fully
reopened and net debt reducing, the Board decided it was the
appropriate time to resume paying a dividend.
The Board considers good sustainable, social and environmental
practice critical to the long-term success of the company.
During the year, the Board approved further investment into the
Company’s sustainability strategy launched in 2021 and to Fuller’s
joining with 27 other hospitality businesses through the Zero
Carbon Forum in aiming to achieve Net Zero carbon emissions
for our operations by 2030.
Non-Financial Information Statement
The table below constitutes the Company’s non-financial information statement, in compliance with Sections 414CA and 414CB of the
Companies Act 2006.
Reporting requirement
Key policies/standards/frameworks
For additional information
At a Glance on pages 2 and 3
Business Model on pages 20 and 21
Strategy on pages 22 and 23
Risk Management on pages 34 to 39
Strategic Report on pages 22 and 23
5
3
Sustainability Report from page 40
Climate related disclosures on page 43
Sustainability Report from page 40
Stakeholder Engagement on pages 50 and 51
Corporate Governance Report on page 59
Business model
Principal risks and impact
on business
Non-financial Key
Performance Indicators
Environmental matters
Sustainability strategy – Our environment
Employees
Social matters
Human rights
Sustainability strategy – Our people
Bullying and Harassment Policy
Disciplinary Policy
Employee Privacy Policy
Family friendly policies, including Maternity Policy
Flexible Working Policy
Grievance Policy
Managing Diversity Policy
Mental Wellbeing Policy
Performance Excellence Policy
Recruitment, Selection and Engagement Policy
Right to Work Policy
Whistleblowing Policy
Sustainability strategy – Our communities
Gender Pay Gap reporting
Modern Slavery Statement
Managing Diversity Policy
Whistleblowing Policy
Sustainability Report from page 47
Sustainability Report on page 47
Directors’ Report on page 86
Anti-corruption and
anti-bribery matters
Anti-Bribery Policy (covering gifts and hospitality),
Whistleblowing Policy
Audit Committee Report on page 65
The Group’s Strategic Report, encompassing pages 1 to 53 was approved by the Board and signed on its behalf by:
S I M O N E M E N Y
C H I E F E X E C U T I V E
8 June 2022
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Chairman’s Introduction
Michael Turner
Chairman
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Dear Shareholder,
I am pleased to present our Corporate Governance Report for the
year ended 26 March 2022.
Executive Team, and you can read more about his views on
joining in the Q&A section on page 17. This appointment was
subject to a formal and rigorous process and details of his
induction programme is described on page 62.
As a business – from the Board through to the Executive and
every team member – we all have a role to play in delivering
our purpose, vision and strategy. I am immensely proud of the
contribution from our people who, together with the Board, live
the values which underpin our business. As described in my
Chairman’s Statement, we have continued to face the impact of
coronavirus and therefore maintaining good and appropriate
governance has been more critical than ever to enable delivery
of our strategy for the long-term benefit of all our stakeholders.
Details of our well-established corporate governance framework
and compliance with the UK Corporate Governance Code are set
out in the following pages.
To support the Executive Team and the business, we have
scheduled additional meetings with these being held remotely at
the start of the year but now, following the easing of restrictions,
we have returned to meeting in person. Our Board Committees
have also been busy during the year and helped us navigate
through the continually changing environment in which we have
been operating. Further detail of their work is reported on pages
58 to 84. I would like to thank my fellow Board members for their
ongoing flexibility and for their significant contribution during the
year. Special recognition also goes to the Executive Team for its
work in ensuring the smooth reopening of our estate.
From a Board perspective, we have a group of Directors with
the skills required to run this business and who have responded
well to the ongoing challenges of operating during the pandemic.
The year saw the departure of Adam Councell in September 2021
and the appointment of Neil Smith as Finance Director on
30 November 2021. We are delighted to have welcomed Neil to
the Fuller’s team – he has a breadth of financial and industry
experience which has added depth to the Board and the
Kingsley is in charge of cocktails at The Saint in Bow Churchyard
As advised in my statement last year, we had intended to conduct
an externally facilitated Board evaluation in 2021, but in light of
the disruption caused by the Covid-19 pandemic, we agreed to
defer it until such time that the Directors could meet in person.
The externally facilitated evaluation was completed during April
and May this year by Fidelio Partners – who were appointed,
following a selection process with potential firms led by myself
and our Senior Independent Director, Juliette Stacey. I am
pleased to report that the Board and its Committees were
considered to be working effectively. Further details of the
evaluation and its outcomes can be found on page 64.
Following the disruption to our AGM in 2020, I was pleased to
welcome shareholders back to our AGM in person in September
2021. Our AGM this year will again be held at The George IV in
Chiswick on 21 July 2022 and, along with my Board colleagues,
I look forward to meeting you on the day and answering any
questions you may have about the business.
M I C H A E L T U R N E R
C H A I R M A N
8 June 2022
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Board of Directors
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1 MICHAEL TURNER
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NON-EXECUTIVE CHAIRMAN
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SIMON EMENY
CHIEF EXECUTIVE
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NEIL SMITH
FINANCE DIRECTOR
Date appointed to the Board: January 1985
Date appointed to the Board: May 1998
Date appointed to the Board: November 2021
Experience: Michael brings an in-depth
understanding and knowledge of this
long-established family business and
extensive experience in leadership and
executive management. A Chartered
Accountant with international experience,
Michael joined Fuller’s in 1978, initially
running the Wine Division as Wine Director.
Appointed Marketing Director in 1988,
Managing Director in 1992, Chief Executive
in 2002 and Chairman in 2007. Chairman
of the British Beer and Pub Association
2008-2010. Master of the Worshipful
Company of Vintners 2011-2012.
Key external appointments: None
Experience: Simon has a detailed
knowledge of Fuller’s operations gained
through his 25 year experience with the
Group and valuable commercial expertise in
consumer-focused businesses. Joined in
1996 from Bass plc where he held a variety
of senior operational and strategic planning
roles. Appointed to the Board as Retail
Director in May 1998, Managing Director,
Fuller’s Inns in July 2006, Group Managing
Director in November 2010 and Chief
Executive in July 2013. Previously Senior
Independent Director and Chair of the
Remuneration Committee of Dunelm
Group plc. An economics graduate and
alumnus of Harvard Business School.
Key external appointments: Non-Executive
Director of The National Gallery Company
Limited and Senior Independent Director of
WH Smith PLC.
Experience: Neil has in-depth corporate
finance experience in hospitality and
consumer-focused businesses and high level
commercial expertise, including business
and strategy development. Former Chief
Financial Officer of Domino’s Pizza Group
PLC. Previously Chief Financial Officer of Ei
Group plc (formerly Enterprise Inns plc) and
has held senior financial roles at Compass
Group plc, Virgin Media, Telewest Global Inc.
and Somerfield plc. Qualified as a Chartered
Accountant with PwC.
Key external appointments: None
Key to Committee membership:
A Audit Committee N Nomination Committee R Remuneration Committee Committee Chair
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FRED TURNER
RETAIL DIRECTOR
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SIR JAMES FULLER, BT
NON-EXECUTIVE DIRECTOR
10 RACHEL SPENCER
COMPANY SECRETARY
Date appointed to the Board: June 2019
Date appointed to the Board: June 2010
Date appointed to the Board: January 2021
Experience: Fred has a strong financial
background and a deep understanding of
Fuller’s operations having worked in a
number of roles in the business. Joined
the Company in 2013 as an Operations
Manager for Fuller’s Inns. Appointed Head
of Tenanted Operations in 2015 and
Tenanted Director in 2018. Qualified as a
Chartered Accountant with Grant Thornton
UK LLP. Civil engineering graduate.
Key external appointments: None
5
JULIETTE STACEY
SENIOR INDEPENDENT
NON-EXECUTIVE DIRECTOR
A N R
Experience: James has a deep
understanding of the Fuller’s business and
provides a key link with family shareholders.
Served in The Life Guards from 1991 to
1998. Employed by the Company from 1998
to 2003, working in the Tied and Managed
Pub estate, and has since been running his
own business.
Key external appointments: None
Experience: Rachel is an experienced
company secretary and has significant
corporate governance, regulatory and
compliance expertise. Previously held
positions at a number of other listed
companies, including Invensys PLC,
Aldermore Group PLC (both the listed entity
and the regulated bank) and, most recently,
Clarkson PLC. Fellow of the Institute of
Chartered Secretaries and Administrators.
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RICHARD FULLER
NON-EXECUTIVE DIRECTOR
B O A R D C O M P O S I T I O N
Date appointed to the Board: March 2018
Date appointed to the Board: December 2009
Experience: Juliette has over 30 years’
leadership experience with a strong finance
background. She brings extensive knowledge
of business and strategic (including M&A)
development, listed company experience and
risk management. She is an experienced
audit committee chair. Former Chief
Executive of Mabey Holdings Limited. Former
Chief Operating Officer (UK and Europe) and
previously Finance Director (Commercial UK)
of Savills plc. Qualified as a Chartered
Accountant with Ernst & Young.
Key external appointments: Non-Executive
Director and Chair of the Audit Committees
of Renishaw PLC and Sanderson Design
Group plc.
Experience: Richard has a deep
understanding of the Fuller’s business and
operations, having worked for the Company
for 36 years. He joined the Company in
1984. Appointed a Divisional Director in
1992 and to the Board in December 2009,
with responsibility initially for sales then,
additionally, personnel, corporate affairs
and government relations. Became
Non-Executive Director in February 2020. A
GMP graduate of Harvard Business School.
Key external appointments: Non-Executive
Chairman of both the Cotswold Cider
Company and Kempton Park Racecourse,
and Master of the Worshipful Company
of Brewers.
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HELEN JONES
INDEPENDENT NON-
EXECUTIVE DIRECTOR
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ROBIN ROWLAND OBE A N R
INDEPENDENT
NON-EXECUTIVE DIRECTOR
Date appointed to the Board: March 2019
Date appointed to the Board: March 2020
Experience: Helen has 35 years of
commercial and general management
experience in consumer-focused
businesses. She brings valuable operations,
marketing and branding expertise, and also
remuneration committee chair experience
in other plcs. Formerly Group Executive
Director of Caffè Nero and Managing
Director of Zizzi, the Italian casual dining
chain, and Non-Executive Director of
international fast-dining restaurant group
Vapiano SE.
Key external appointments: Senior
Independent Director and Chair of the
Environmental, Social and Governance
Committee of Halfords Group plc,
Non-Executive Director and Chair of the
Remuneration Committee of Virgin Wines
UK Plc and Non-Executive Director of
Premier Foods Plc.
Experience: Robin brings over 35 years’
experience in the restaurant and food and
beverage sectors, and has strong financial,
commercial expertise, and business and
strategy development experience. Previously
Chairman and Chief Executive of YO! Sushi,
and Non-Executive Director of Marstons PLC
and Tortilla. Awarded an OBE in 2015 for
outstanding services to hospitality.
Key external appointments: European
Partner of TriSpan Private Equity with
Chairman and Non-Executive Director roles
with four portfolio companies: Rosa Thai,
Pho, Thunderbird and Rosa Mexicano
(USA). Independent Non-Executive Director
at Caffè Nero and UKHospitality.
Chairman
Executive Directors
Non-Executive Directors
Independent Non-Executive
Directors
11%
34%
22%
33%
B O A R D G E N D E R B A L A N C E
Male
Female
78%
22%
B O A R D T E N U R E
0-3 years
4-6 years
9+ years
34%
22%
44%
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Corporate Governance Report
Statement of Compliance with the UK Corporate Governance
Code 2018 ("the Code")
The Board is committed to maintaining effective corporate
governance and integrity, enabling us to deliver our strategy for
the long-term benefit of all our stakeholders. With this in mind,
the Company has applied the main principles of the Code
throughout the year. However, given the structure of the
Group – we are a listed public company but still very much
a family-controlled concern – there are some provisions of
the Code where we do not comply but where we do consider
our governance framework remains appropriate. These are
summarised in the table below.
Further information on the Code can be found on the Financial
Reporting Council’s website at www.frc.org.uk
Code Provision
Detail of non-compliance
Further information
PRINCIPLE 2: DIVISION OF RESPONSIBILITIES
11
At least half of the Board, excluding
the Chairman, are not independent
Non-Executive Directors.
The Board considers that membership is well balanced with the right
mix of skills and experience. The presence of Non-Executive Directors
who are long-standing family shareholders is important in this
professionally run family business.
PRINCIPLE 3: COMPOSITION, SUCCESSION AND EVALUATION
18
Directors are not subject to annual re-election.
19
The Chairman has been in post for more than
nine years.
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PRINCIPLE 5: REMUNERATION
33
The pension contribution rates for the Chief
Executive and Retail Director are not aligned
with those available to the workforce.
In accordance with the Company’s Articles of Association (“Articles”),
all Directors are subject to election by shareholders at the first AGM
after their appointment and to re-election at three yearly intervals. As
part of the annual Board effectiveness review, the performance of the
Directors is evaluated and forms the recommendation in the Notice of
AGM as to why the Company believes an individual Director should be
re-elected. In view of the Company’s size, its ownership structure and
its history, the Board is not minded to move to annual re-election of
Directors but will keep this requirement under review.
The Board considers that the Chairman’s knowledge and
understanding of this long-established family business and its
requirements is extremely valuable.
The pension rate for these two Executive Directors represents an
existing contractual commitment. The Board does not consider it
appropriate to make a reduction at this stage. Under the Remuneration
Policy approved by shareholders in 2021, the pension opportunity for
new Directors is in line with the policy for the majority of the workforce.
BOARD LEADERSHIP AND COMPANY PURPOSE
Role of the Board
Led by the Chairman, the Board is collectively responsible to the
shareholders for the performance and long-term success of the
Group, as well as to other stakeholders for the wider impact we
have. Its role includes the establishment, review and monitoring
of the Company’s strategy, approval of major acquisitions,
disposals and capital expenditure, setting the Company’s
purpose and values, overseeing the Group’s systems of internal
controls, governance and risk management, and ensuring that
the appropriate resources are in place to deliver these.
The Board delegates all operational matters and execution of the
strategy to the Chief Executive, who is supported by the Executive
Team (which comprises the Executive Directors, the Marketing
Director, the People and Talent Director, and the Property Director)
who collectively make up the Executive Committee. As set out
in the governance framework, the Executive Committee has
established two sub-committees to introduce greater control
and scrutiny on costs, and one sub-committee to help drive
and monitor the Life is too good to waste strategy.
The Board has an established governance framework which
ensures we meet our responsibilities and enables effective
decision making. An overview of the governance framework
is set out on page 61.
Board meetings enjoy open dialogue and constructive challenge
on all issues is encouraged. With a good information flow
between and prior to Board meetings, decisions are made in
a timely manner after appropriate questions are dealt with.
A formal schedule of matters reserved for the Board is in place.
The Board has delegated some of its responsibilities to mandated
Committees, each of which operates under written terms of
reference approved by the Board. Committee Chairs report on
the proceedings of their Committees at the next meeting of the
Board, and the minutes of the meetings of all Board Committees
(with some exceptions on remuneration matters) are provided to
Board members.
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Purpose, values and culture
The Board is responsible for establishing the Company’s purpose,
values and strategy and for defining, monitoring and overseeing
the Company’s culture to ensure that they are aligned. Our
purpose of creating experiences that nourish the soul underpins
our values of doing things the right way, being part of the family,
celebrating individuality and always asking what’s next, and
defines our culture and everything that we do.
The Board, through the Executive Directors, strives to ensure
that everyone understands the key role they play in delivering our
purpose, vision and strategy. In March 2022, senior team members
from across the business came together for the day for the relaunch
of our Senior Managers conference, Fuller’s Future. The day provided
an opportunity for the Executive Team to re-articulate our purpose
and values after two years of significant disruption, and to outline
the key strategic priorities for the year ahead.
The Board monitors the values and culture of the business
through a number of channels, including regular updates to
the Board on operational performance and health and safety
reporting, the results of employee engagement surveys and action
plans, and the approval of key policies. Directors also regularly
visit our pubs and hotels in a personal capacity, outside of formal
Board visits, which gives them a true insight into how our values
and culture are embedded across the business and the guest
experience our teams deliver.
Engagement with employees
The Board receives regular updates on employee matters
throughout the year from the Executive Directors and through
briefings on key employee matters provided by the People and
Talent Director. The Chief Executive has continued to deliver
regular vlogs to the business, first introduced in 2020 in response
to the Covid-19 pandemic, to keep everyone informed of key
events and activity across the business and key decisions taken
by the Board or Executive Committee.
In March 2022, the Board approved the appointment of Helen
Jones as the designated Non-Executive Director responsible for
workforce engagement. The purpose and key accountabilities of
the role will be further developed during the year, but will include:
• providing advice and guidance to the People and Talent
Director on employee engagement initiatives
• attending listening groups and being regularly appraised of
feedback received from employees via various listening channels
• reviewing and monitoring feedback and insights from
employee engagement surveys
• providing regular updates to the Board on any relevant matters
and concerns that may arise through the role.
The Board recognises the benefits of encouraging employee
share ownership. The Company offers an annual sharesave plan,
which gives employees the opportunity to purchase shares in the
Company at a discounted price, and also operates a share
incentive plan. The Company Secretary and the Executive
Directors keep all employees, including employee shareholders,
informed of publicly available financial updates and governance
changes such as new Director appointments.
The Non-Executive Directors from time to time meet with
members of the Senior Management team and also spend days
out in the trade with individual members of that team. This helps
to keep Non-Executive Directors up to date with the operations of
the Group and provides them with an opportunity to meet with a
broad range of our team members. It also provides the Executive
Directors and Senior Management with valuable feedback about
the Group’s people and its operations.
Engagement with shareholders
The Company has an ongoing programme of individual meetings
with institutional shareholders, allowing it to update shareholders
on the performance of the business and the strategy for the
future, and to give them an opportunity to discuss corporate
governance matters. The Company’s brokers also contact key
shareholders to establish if they would like to see the Chief
Executive and Finance Director in the days following the
presentation of the preliminary and half year results.
The Chairman, Richard Fuller and Sir James Fuller are the
key contacts with the Company’s family shareholders and
Sir James Fuller has a specific role to keep in touch with those
shareholders.
The Senior Independent Director and the other Non-Executive
Directors are all willing to attend meetings with shareholders or
to be contacted by shareholders should they have any concerns
which have not been resolved through the normal channels. All
Board members receive feedback from the results presentations
and meetings with shareholders, enabling them to keep in touch
with shareholder opinion.
The Board supports the use of the AGM to communicate, in
particular, with private investors, and the Chairman and Chief
Executive make a detailed presentation to shareholders updating
them on the Company’s performance and progress. The Board is
keen to encourage institutional investors to attend the meeting,
in line with the duties set out in the Stewardship Code for
institutional shareholders. Should they have concerns over any
issues being voted upon at the AGM, they can then meet the
Directors and discuss them in person. The Chairman arranges
for the Committee Chairs to answer relevant questions at the
meeting and encourages all Directors to be present.
Following the easing of restrictions, the 2021 AGM was once
again held in person in September. Shareholders were given
the opportunity to ask questions ahead of the meeting, using a
dedicated email address if they were unable to attend in person.
To enable all shareholders to vote on all resolutions in proportion
to their shareholding, voting at the 2021 AGM was, in line with
best practice, conducted by way of a poll.
During the year, the Board reviewed its communication with
shareholders. Shareholders can now opt to receive Company
communications such as the Annual Report electronically in
PDF format, either via email or from our website, or continue
to receive a hard copy in the post. Annual Reports and other
key communications are also made available on request from
the Company Secretary, should beneficial shareholders have
difficulties receiving documentation via their nominee providers.
Engagement with stakeholders
Our Section 172 statement outlined on pages 52 and 53
explains how Section 172 matters, including engaging with key
stakeholders, are taken into consideration by the Board in its
decision making. The Board actively encourages and carries out
engagement with its key stakeholders to understand their views,
predominately through the Executive Directors, who ensure that
the Board is kept informed of any key issues or changes.
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Corporate Governance Report
Continued
Board activity
Key strategic matters considered by the Board in the year under review and to date included:
STANDING AGENDA ITEMS
• Reports from the Executive Directors and Company Secretary
• Reports from the Audit, Remuneration and Nomination
covering operational, financial and governance matters in the period
• The impact of Covid-19 on operational and financial performance
Committees
• Monthly management accounts
Q1 FY2022
• Equity placing
• FY2021 Board evaluation feedback and agreed areas of focus
• FY2021 Results Announcement and Annual Report & Accounts,
• Appointment of Neil Smith as Finance Director
• Group’s sustainability strategy Life is too good to waste
• Overarching strategy
including risk review
Q2 FY2022
• Update on the Group’s Tenanted business
• Schedule of Matters reserved to the Board and Matrix of
• Updated Whistleblowing Policy
Delegated Authorities
Q3 FY2022
• Deep dive into cyber security across the business
• FY2022 Interim Results, including risk review
• Interim dividend payment
Q4 FY2022
• Modern Slavery Statement
• Impact of Covid-19 on key trading periods.
• Operational plans and food strategy underlying the Nourish the
Soul purpose
• Rollout of Life is too good to waste and Fuller’s Net Zero
commitments
• Employee engagement survey outcomes and action plans
• Digital transformation project
• Updated Division of Responsibilities of the Chairman, Chief
Executive and Senior Independent Director, and terms of
reference for the Audit Committee and Remuneration Committee
• Tax Strategy Statement
• FY2023 budget
Q1 FY2023
• FY2022 Board evaluation report
• Group refinancing of banking facilities
• Directors' valuation of the estate
Normally the Board meets formally at least six times a year, but
additional meetings were scheduled during the course of the year
as the business continued to be disrupted by the impact of the
coronavirus pandemic. Meetings were initially held online, but as
restrictions lifted, the Board has returned to in-person meetings
held at the Group’s support centre, Pier House, and also within
the retail estate.
At Board meetings, agendas cover projects, analysis of the
market in which the Group operates and performance. Each of
the Executive Directors and the Company Secretary also provide
updates to the Board on matters for which they are responsible.
The Board is responsible for approving the annual budget and
the full year and half year results.
There is an annual programme of presentations from members
of the Executive Team and Senior Management. The programme
gives the Board exposure to talent in the business while also
providing an opportunity to engage in the key areas being worked
on and agreed strategic projects. Presentations have included
information about further developing our people and ESG
strategies, our food and drink proposition, our Tenanted Inns
Division, the digital transformation project, utilities risk strategy
and cyber security. These sessions also enable the Board to
provide feedback and guidance to the individual presenting.
In addition to scheduled meetings, the Board also meets every
year for an in-depth review of the Group’s strategy, which
includes, among other things, discussions about market trends,
consumer market, competitor landscape and capital structure.
This year the strategy day was held at The Hare and Hounds
Hotel, part of the Group’s Cotswold Inns & Hotels. The Board was
joined by members of the Executive Team to provide their views
on the strategy, together with external speakers who provided
input on the economic forecast for the UK, the future of the digital
and technology landscape, and investor considerations.
As well as the dialogue within the boardroom, the independent
Non-Executive Directors meet privately, under the leadership of
the Senior Independent Director, without the Executive Directors
and other Non-Executives present. All Non-Executive Directors
also meet with the Chairman and the Chief Executive on a regular
basis. These meetings allow for the review of issues faced by the
business, the continuation of dialogue on strategic issues, the
discussion of Board appointments when appropriate, succession
planning, and the provision of support to the Chairman and the
Chief Executive in their roles.
DIVISION OF RESPONSIBILITIES
Board balance and independence
The Board currently comprises the Chairman, three Executive
Directors, and five Non-Executive Directors, of which two, Sir James
Fuller and Richard Fuller, and the Chairman Michael Turner, are
family members. The other three Non-Executive Directors, all of
whom are deemed independent under the Code, are experienced
business leaders, and collectively all of the Non-Executives bring a
wide range of skills and experience to the Board. Although at least
half of the Board (excluding the Chairman) does not comprise
independent Non-Executive Directors, the Board considers it is well
balanced as it has the right number of members for the size of the
Group with representation of the founding families on the Board
being considered very important in a company with a high
proportion of family shareholders. The Directors agree that no one
individual dominates discussions and that each makes a full and
positive contribution.
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Board and Committee structure
The Board has overall responsibility for governance across the Group and set out below is the Company’s governance framework. There
is clear differentiation between the roles of Chairman, Chief Executive and Senior Independent Director, and particular responsibilities of
Board members are also set out below. The responsibilities of the Chairman, Chief Executive and Senior Independent Director and the
terms of reference of the Board Committees are set out in writing and are available on the Company’s website.
Governance framework
The Board
Chairman
Is responsible for:
Chief Executive
Is responsible for:
Executive Directors
Are responsible for:
Leading the Board and maintaining
a culture of openness, debate and
constructive challenge
Setting the agenda, style and tone of
Board meetings
Monitoring the Board’s effectiveness
Day to day management of the
business of the Group
Developing and implementing the
Group’s strategy agreed by the Board
Delivering the Group’s sustainability
strategy
Ensuring effective communication
with the Group’s shareholders and
other stakeholders
Ensuring effective communication
with the Group’s shareholders and
other stakeholders
Managing the Group’s financial and
operational affairs and supporting
the Chief Executive in the
management of the Group
Overseeing the implementation
of strategy and monitoring the
performance of the business
Providing regular updates to the
Board on all operational matters
of significance
Senior Independent Director
Is responsible for:
Non-Executive Directors
Are responsible for:
Company Secretary
Is responsible for:
Acting as a sounding board to the
Chairman and an intermediary for
Non-Executive Directors when
necessary
Being available to shareholders if they
wish to raise concerns outside of the
usual communication channels
Evaluating the Chairman’s
performance as part of the annual
Board evaluation process
Providing independent judgement,
knowledge and commercial
experience to discussions and
decision making
Providing oversight of the Group's
strategy
Providing constructive challenge to
the Executive Directors and
scrutinising their performance against
agreed performance objectives
Advising the Board on all governance
matters and ensuring that Board
procedures are followed
All Directors have access to the
advice of the Company Secretary
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Audit Committee
Monitors the integrity of the financial
reporting for the Group, manages the
relationship with the external auditors,
and oversees the effectiveness of
the risk management and internal
control systems
Board Committees
Nomination Committee
Responsible for leading the process
for appointment of Directors, for
approval by the Board
Remuneration Committee
Sets the Remuneration Policy for
the Chairman and the Executive
Directors, and also reviews the
remuneration framework for other
Senior Management
Executive Committee
The Chief Executive is supported by the Executive Team consisting of the Executive Directors,
the Marketing Director, People and Talent Director and Property Director
Investment Committee
Responsible for reviewing and
approving capital related projects and
investments
Approvals Committee
Responsible for reviewing and
approving central costs, Support
Centre staffing changes and material
procurement contracts
Sustainability Committee
Responsible for developing the Group’s
sustainability strategy and providing
oversight of key sustainability initiatives,
targets and objectives
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Corporate Governance Report
Continued
Board and Committee meetings
The table below shows the attendance of Directors at Board and Committee meetings held during the year under review.
Director
Michael Turner
Simon Emeny
Adam Councell1
Neil Smith2
Fred Turner
Sir James Fuller
Richard Fuller
Helen Jones
Robin Rowland
Juliette Stacey
1 Resigned 30 September 2021.
2 Appointed 30 November 2021.
Board
10/10
10/10
4/4
5/5
10/10
10/10
10/10
10/10
10/10
10/10
Audit
Committee
Nomination
Committee
Remuneration
Committee
–
–
–
–
–
–
–
6/6
6/6
6/6
3/3
–
–
–
–
–
–
3/3
3/3
3/3
–
–
–
–
–
–
–
7/7
7/7
7/7
Time commitment
Induction and professional development
The Board believes that all of its members have sufficient time to
discharge their duties effectively. Non-Executive Directors are
required to devote sufficient time to their role and responsibilities
as a member of the Board and its Committees. The Nomination
Committee considers the time commitments of proposed
candidates prior to appointment to ensure that they are able to
dedicate sufficient time to the role. All Directors are required to
seek permission before accepting any external appointments,
therefore Board members are kept fully aware of their colleagues’
other commitments.
Conflicts of interest
The Board has adopted a procedure, in accordance with the
Company’s Articles, to consider and, if it sees fit, to authorise
situations were a Director to have an interest that conflicts, or
may possibly conflict, with the interests of the Company. The
Company maintains a register of authorised conflicts of interest.
Advice for the Board
There is a procedure in place under which Directors can obtain
independent professional advice. The Directors also have access
to the advice and services of the Company Secretary, whose
appointment and removal is a matter for the whole Board. The
Company Secretary is responsible to the Board for ensuring that
Board procedures are complied with. The Directors are satisfied
that any concerns they raise at Board meetings are recorded in
the minutes. The Company maintains appropriate insurance
cover in respect of legal action against its Directors and officers.
COMPOSITION, SUCCESSION AND EVALUATION
Composition
Details of the Directors, including their qualifications, experience
and other commitments, are set out on pages 56 and 57. During
the period, Adam Councell stepped down from the Board on
30 September 2021 and Neil Smith was appointed to the Board
as Finance Director on 30 November 2021.
The Chairman continually assesses the composition of the Board
and Board Committees to ensure there is the right balance of
skills and experience. The composition of the Board and its
Committees is also considered as part of the annual Board
effectiveness evaluation.
On appointment, the Chairman and Company Secretary ensure
that new Directors undertake a tailored induction programme.
It consists of an introduction to the Board and the Executive
Team, visits to pubs and hotels, an induction pack, briefings on
governance requirements and legal and regulatory obligations
as a Director, and access to independent advisors.
Following Neil’s appointment as Finance Director in November
2021, his induction programme included:
One-to-one meetings with members of the Executive
Team and key operational leads in the business
Meetings and briefing sessions with key advisors
including the Company’s brokers and legal advisors
and the external auditors
Meetings with the Company’s largest institutional shareholders
Days out in trade with key team members, including
meeting with on-site teams, across the Fuller’s estate
including our Cotswold Inns & Hotels and Bel & The
Dragon venues
Access to reference materials and Board briefing materials
"My induction demonstrated clearly
the authenticity of our values and
provided an excellent introduction
to the business."
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Directors are encouraged to attend training courses, industry
forums and specialist briefings relevant to their role throughout
the year. The Company Secretary, in consultation with the
Chairman, arranges for external speakers and specialists, such
as the Company’s brokers and legal advisors, to join Board
meetings to brief the Board on a particular topic as appropriate.
Executive Directors are permitted to hold one other paid
directorship, with the Board’s consent, as the Board believes
that experience of how other boards work enhances the
Directors’ contribution to Fuller’s.
N O M I N A T I O N C O M M I T T E E A T A G L A N C E
M E M B E R S
Michael Turner (Chair), Helen Jones, Robin Rowland,
Juliette Stacey
M E E T I N G S H E L D I N 2 0 2 1/ 2 2
Michael Turner (Chair)
Helen Jones
Robin Rowland
Juliette Stacey
Number of
meetings
held
Number of
meetings
attended
3
3
3
3
3
3
3
3
K E Y D U T Y O F T H E C O M M I T T E E
• Responsible for leading the process for appointment of
Directors, for approval by the Board
K E Y A C T I V I T I E S D U R I N G T H E Y E A R
• Leading the search process for the new Finance Director,
and subsequently recommending the appointment of
Neil Smith
• Considered the re-appointment of Non-Executive
Directors Richard Fuller and Sir James Fuller at the
expiry of their terms
Succession Planning
Succession planning is a key issue for a business that has very
low turnover amongst its Senior Management and is still very
much a family-controlled concern whilst also being a public
listed company.
Succession planning and the development of talent is an ongoing
activity regularly discussed by the Board and the Executive Team,
and there is a clear plan in place for the succession of key roles.
Talented and “critical to retain” individuals are identified, and
each individual has their own development plan, owned by the
individual and supported and overseen by their leader and the
People & Talent team. Development plans are grounded in data
from assessments and feedback, and external partners and
experts are engaged to support development where required.
The Chairman has been in post beyond the nine years stipulated
in the Code. However, the Board considers that the Chairman’s
knowledge and understanding of this long-established family
business and its requirements are extremely valuable.
Election and Re-election
The Nomination Committee is responsible for recommending to
the Board the appointment of new Directors. As outlined in last
year’s report, the Committee recommended the appointment of
Neil Smith as Finance Director in June 2021 and subsequently
he was appointed to the Board on 30 November 2021.
The Nomination Committee considered the re-appointment of
Richard Fuller whose three year term expired during the year, and
Sir James Fuller, whose three year term expired following the year
end, and recommended that their terms be renewed for a further
three years to February 2025 and May 2025 respectively. The
Board also agreed to renew the appointment of the Chairman,
Michael Turner, for a further three years to June 2025.
At every AGM, one-third of the Directors are subject to retirement
by rotation. In addition, if any Director has, at the start of the AGM,
been in office for more than three years since their appointment
or re-appointment, they shall retire at that AGM and offer
themselves for re-election. At the AGM in July 2022, Simon
Emeny, who last stood for re-election in 2019, will retire and
offer himself for re-election. Neil Smith, who was appointed
in November 2021, will stand for election and Sir James Fuller,
Richard Fuller and Michael Turner will offer themselves for
re-election following their re-appointment by the Board. The
Board is of the opinion that each Director standing for election
or re-election makes an effective and valuable contribution to
the Company towards its long-term sustainable success.
The Nomination Committee considered the Code requirement for
Directors to be subject to annual re-election in the year. In view of
the Company’s size, its ownership structure and its history, the
Board agreed with the Nomination Committee not to move to
annual re-election of Directors but will keep this requirement
under review.
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Diversity and Inclusion
The Board is committed to diversity and inclusion at both the
Board level and across the business. Whilst the Board is alert to
the need to ensure diversity in all its forms is promoted, it believes
appointments should be made on merit and does not want to
adopt targets that may affect its ability to make the right decision
for the business and all its stakeholders. As and when Board
vacancies arise and, should the support of an executive search
firm be required, the Board and the Nomination Committee will
ensure that it only uses firms that have signed up to their
industry’s Voluntary Code of Conduct.
The Board is aware of the new listing rule changes introduced by
the Financial Conduct Authority (“FCA”) setting targets in relation
to Board diversity and the disclosure of diversity and inclusion
metrics at the Board and Executive Committee level going
forward. Currently the Board does not meet the target of having
women make up at least 40% of the Board or having at least one
Board member from a non-white ethnic minority background.
Juliette Stacey is our Senior Independent Director and therefore
there is at least one woman in a senior Board position, as defined
in the rules. The Nomination Committee will further consider
the disclosure requirements and our approach to collecting
numerical data regarding ethnic background, gender identity
and sex at the Board and Executive Committee level during
the coming year.
Further information on gender diversity across the business can
be found in the Sustainability Report on page 46.
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Corporate Governance Report
Continued
Update on FY2021 evaluation recommendations
Following the Board evaluation completed at the end of FY2021,
the areas below were highlighted for enhancement:
• Continuing with more frequent informal contact between
Board meetings established in response to the coronavirus
pandemic
• During the year, monthly briefings were introduced into the
Board schedule to provide Board members with updates on
the business, in between the formal Board meetings.
• Re-establishing regular formal and informal Board visits to the
wider business as restrictions ease and increasing the contact
between Board members and employees
• In June 2021, the Board spent the day in trade, visiting a
number of pubs in the city of London, Greenwich and Canary
Wharf, and the strategy day in September 2021 was held at
The Hare and Hounds Hotel, part of the Group’s Cotswold
Inns & Hotels. The return to in-person Board and Committee
meetings at Pier House has also provided the Board with
further opportunities to engage with employees across
the business.
• Supporting succession planning below Board level and
developing a strong, diverse talent pipeline
• Continues to be an area of focus which will be supported by
the Nomination Committee over the next year.
Board Evaluation
The annual Board and Committee effectiveness reviews continue
to provide a valuable opportunity for the Board to reflect on how
it operates, enabling it to improve its effectiveness and that of its
Committees. The Board committed to completing an externally
facilitated evaluation in FY2021. However, the decision was
made to delay it, due to the disruption caused by the Covid-19
pandemic, until such time that it could be completed in person.
Following a selection process, Fidelio Partners LLP was
appointed to conduct the evaluation based on its extensive
experience with other evaluations and its practical focus on
effectiveness and value. Fidelio has no other connection with
the Company or individual Directors.
The process was completed between April and May this year,
facilitated by Gillian Karran-Cumberlege, Head of Chair Advisory
at Fidelio.
The scope and objectives of the review, which was to be forward-
looking, were agreed with Fidelio following consultation with the
Chairman, Senior Independent Director and the Company
Secretary. In-person, one to one interviews were held with each of
the Directors, the Executive Team and the Company Secretary.
Board members and the Company Secretary were also required
to complete a quantitative survey to provide feedback on the
performance of the Board. Fidelio were invited to observe the
Directors in action and attended a meeting of the Board, the
Remuneration Committee and the Nomination Committee, and
also analysed and reviewed Board and Committee papers and
governance documents.
Outcomes and recommendations from FY2022 evaluation
The findings of the evaluation were presented to the Board at its
meeting in June 2022. Overall, Fidelio concluded that the Board
and its Committees were considered to be working effectively.
Further, the Board was considered to comprise relevant skills and
experience, and all Directors were committed to the success of
the Company.
As would be expected, there were some opportunities identified
by Fidelio to increase effectiveness to ensure that the Company
benefits from the combined expertise and insight of the Board.
These recommendations were reviewed by the Board and a
tracker is being developed to monitor progress. Areas for focus
include continuing to provide further opportunities for Board
members to connect with the business; broadening the role of the
Nomination Committee; reviewing the approach to Board learning;
and developing the Board’s oversight of people and ESG matters.
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Audit, Risk and Internal Control
Audit Committee Report
Audit Committee
at a glance
Juliette Stacey
Chair of the Audit Committee
“ During the year, the impacts of
Covid-19 have continued to be an
area of focus for the Committee.
In particular, we have reviewed
and robustly challenged
management’s assessment of
various trading scenarios and
management of risks as the UK
economy recovers from the
pandemic.”
M E M B E R S
Juliette Stacey (Chair), Helen Jones, Robin Rowland
M E E T I N G S H E L D I N 2 0 2 1/ 2 2
Juliette Stacey (Chair)
Helen Jones
Robin Rowland
Number of
meetings
held
Number of
meetings
attended
6
6
6
6
6
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K E Y D U T I E S O F T H E C O M M I T T E E
• Monitors the integrity of the financial reporting for
the Group
• Manages the relationship with the external auditors
• Oversees the effectiveness of the risk management
and internal control systems
A C T I V I T I E S D U R I N G T H E Y E A R
• Reviewed the effectiveness of the Group’s internal
•
•
controls and risk management systems and the need for
an internal audit function
Reviewed the Group’s principal risks register ahead of
the announcement of the full year and half year results
Reviewed all matters relating to the half year and full
year results announcements, including reports
presented by the external auditor (EY) and assessment
of key judgements and accounting policies, and
assessed whether taken as a whole the Annual Report
was fair, balanced and understandable
•
•
• Conducted a review of the effectiveness of the external
audit process and external auditor, and recommended
EY’s appointment
Reviewed updated Delegated Authorities and
recommended approval by the Board
Considered reports on key areas of compliance,
including GDPR, changes in allergen legislation,
employee relations, health and safety and cyber security,
and reviewed the Group’s Whistleblowing Policy
Conducted an annual review of the Committee’s terms
of reference
Reviewed reports on the rollout of the new central
finance system across the business
Considered communications received from the Financial
Reporting Council (“FRC”) following a review of the 2021
Annual Report
Reviewed EY’s plan for the FY2022 audit, terms of
engagement and proposed fee
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Audit Committee Report
Continued
Dear Shareholder,
Committee Membership
I am pleased to present the Audit Committee Report for the year
ended 26 March 2022.
During the year, the impacts of Covid-19 have continued to be an
area of focus for the Committee. In particular, we have reviewed
and robustly challenged management’s assessment of various
trading scenarios and management of risks as the UK economy
recovers from the Covid-19 pandemic. The Committee is
satisfied that the factors considered and assumptions used are
appropriate to support the going concern and viability of the
business going forward.
This year the Committee has overseen the rollout of our new
central finance system with regular updates being provided from
management. I am delighted to report that the system was
implemented in November 2021 with no material issues, and we
now have a simplified and more automated accounting process
which has improved efficiencies and is enhancing the control
environment. We have also formalised our existing delegated
authorities and completed comprehensive reviews of our risks,
including emerging risks. This has enabled us to assess our
resilience to threats we face as a business. In addition, the
compliance updates that we receive from management regarding
people, data protection and health & safety matters provides the
Committee with real insight into the maintenance of proper and
appropriate systems and controls.
Ernst & Young LLP ("EY") are conducting their second audit
following their appointment in 2021 and we have been pleased to
welcome them onsite to perform their audit work, following last
year’s largely remote working environment. Both the Committee
and management have an open and transparent relationship with
EY. We welcome the fresh perspective and robust challenge they
have provided to the Committee’s deliberations, and we are
supportive of their reappointment which shareholders will be
asked to vote on at the 2022 AGM.
Looking ahead to the next year, we will assess the draft
recommendations from the Government’s long-awaited review
of the UK’s corporate reporting and audit regime and, ahead of
legislative changes, plan to develop our own roadmap for any
changes we consider appropriate to enhance our internal controls.
I will be attending the AGM on 21 July 2022 and I look forward
to answering any questions about the work of the Audit
Committee then.
J U L I E T T E S TA C E Y
C H A I R O F T H E A U D I T C O M M I T T E E
8 June 2022
The Committee comprises three independent Non-Executive
Directors and has a good balance of skills, with competence and
experience in the sector in which Fuller’s operates. The Chair of
the Committee is a Chartered Accountant and has a broad range
of experience in senior finance roles, and is therefore considered
to meet the requirement under the Code that at least one
member should have recent and relevant financial experience.
The Committee is advised internally by the Company Secretary,
Rachel Spencer, who also acts as secretary to the Committee.
Meeting Attendance
All meetings are attended by the external auditors and the
Company Secretary, and regular attendees include the Chairman,
Chief Executive, Finance Director and Head of Risk. Members of
the finance team also attend relevant meetings at the Committee
Chair’s request, and reports are received on occasion from other
members of the management team as required by the agenda.
The Audit Committee meets at least once a year with the external
auditors, without management present, to discuss any matters
they may wish to raise. The Audit Committee Chair also meets
separately with the Finance Director and auditors outside of the
formal meeting programme which helps to identify key areas of
focus and emerging issues that may need to be added to the
Audit Committee’s agenda.
Key Activities
The Audit Committee has a detailed meeting planner which sets
out the key items to be covered at its scheduled meetings which
includes reviewing the financial statements and announcements,
monitoring changes in accounting practices and policies, and
reviewing decisions with a significant element of judgement.
At each scheduled meeting an update on risk management is
presented, together with reports on compliance with anti-bribery
procedures, data protection, health and safety, and employee
relations. In light of the impact of Covid-19 on trading during part
of the year, there has continued to be focus around potential risks
arising from any ongoing uncertainty. The Audit Committee
keeps abreast of regulatory and governance developments as
part of ongoing reporting from the auditors. At the beginning
of the year EY's Regulatory & Public Policy team gave a
presentation to the Committee on the BEIS governance
and audit reform consultation.
The effectiveness of the Audit Committee formed part of the
Board evaluation process described in the Corporate Governance
Report on page 64.
Financial Reporting and Significant Judgement
The Audit Committee monitors the integrity of the financial
information published in the interim and annual financial
statements and considers the extent to which suitable
accounting policies have been adopted, presented and disclosed.
During its review of the Group’s financial statements for the
period to 26 March 2022, the Audit Committee has reviewed the
key judgements applied in the preparation of the consolidated
financial statements, including those communicated by the
auditors during their reporting. These are described in the
accounting policies detailed in note 1 to the financial statements.
The Board was made fully aware of any significant financial
reporting issues and judgements made in connection with the
preparation of the financial statements.
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The key issues and judgements considered by the Audit Committee are detailed in the table below:
Key accounting judgement
How the issue was addressed
Going concern
The Audit Committee considered the appropriateness of the decision to adopt the going concern basis of
reporting in the preparation of the financial statements after having identified a material uncertainty at
half year. The Audit Committee reviewed two scenarios – the base case and the downside “severe but
plausible” case, as well as the reverse stress test and the mitigations available to the Group, as disclosed
in note 1. The Audit Committee has challenged the assumptions used in each scenario and is satisfied
that, even under a severe but plausible scenario, the Group has adequate resources for the going concern
assessment period and supports the Group adopting the going concern basis.
Impairment testing of
property assets
The Audit Committee considered the proposed impairment of property assets for both the Half Year
Report and the Annual Report.
Separately disclosed items
Pension accounting
The Audit Committee challenged management's approach, in particular the methodology used to
estimate both value in use and fair value less costs of disposal for site level impairment reviews. The
Audit Committee also reviewed the disclosures in the Annual Report to ensure their appropriateness.
The Audit Committee was satisfied with the approach presented by management, the judgements
made for those properties at risk of impairment and the related disclosures in the 2022 Annual Report
and Accounts.
The Audit Committee considered the nature of items classified as “separately disclosed items” in the
financial statements. The Audit Committee was satisfied that the items management proposed to be
shown as separately disclosed items were not linked to the underlying trading of the Group. Separately
disclosed items include:
• costs relating to the corporate reorganisation of the Group
• profit or loss on property disposals
•
• a release of a provision net of the final settlement amount on the sale of the Fuller’s Beer Business.
impairment on properties
In addition, the Audit Committee reviewed these disclosures within the 2022 Annual Report and Accounts
to ensure they clearly identified and reconciled to the relevant GAAP measure.
The pension liability is sensitive to the actuarial assumptions applied in measuring future cash outflows.
The use of assumptions such as discount rate and inflation, which have an impact on the valuation of the
defined benefit pension scheme, was assessed by the Audit Committee. The Audit Committee was
satisfied with the proposed accounting treatment and disclosures of the Group’s defined benefit plan in
the financial statements.
Going Concern and Viability Statement
Internal Control and Risk Management
The Board has overall responsibility for the Group’s system
of internal control and management of risks and for reviewing its
effectiveness. The system was designed to provide reasonable
but not absolute assurance of:
• the mitigation of risks which might cause the failure of
business objectives
• no material misstatements or losses
• the safeguarding of assets against unauthorised use or disposal
• the maintenance of proper accounting records
and the reliability of financial information used within the
business or for publication
• compliance with applicable laws and regulations.
The Audit Committee assessed in detail the going concern and
viability reviews undertaken by management, as detailed in the
Financial Review on page 31. This involved looking at potential
revenues, costs and cash flow modelling on both a prudent base
case and downside case scenario where there was much greater
uncertainty. The Committee was satisfied with the approach
presented by management, including the judgements made in the
estimation of future cash flows and the Group’s financing, and
considering the high proportion of freehold property that
underpins the estate.
In addition, the Audit Committee has reviewed the Group’s
assessment of viability over a period greater than 12 months.
The Audit Committee also considered the Group’s refinancing
that was completed after year end and is for a tenure of four
years as well as the three year plan recently approved by the
Board. The Committee considered the potential financial
impact of the Group’s principal risks and uncertainties,
including the impact of climate change and climate change
legislation on the Group’s operations. The Committee has
concluded that the factors considered and assumptions
used are appropriate in assessing the Group’s viability.
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Audit Committee Report
Continued
The Directors’ statement on the Company’s system of internal
controls is set out below.
At the start of the year, the Committee discussed the Company’s
risk management process and, on behalf of the Board, reviewed
the risk register, which had been fully refreshed in the prior year to
revise or reconfirm risk ownership and update mitigating actions
and controls. Any significant changes to risks were discussed in
each subsequent Committee meeting.
During the year, a selection of key risks were presented to either
the Audit Committee or the Board. This has included risks around
increasing focus on ESG issues including climate change risk,
allergens, and IT security and cyber security.
The Group maintains business continuity plans and normally
tests the resilience of these plans on an annual basis. A crisis
management exercise event was completed in February 2022.
The outcomes of the exercise were increased confidence and
competence of the key crisis response teams, an assessment
and update of relevant documentation and processes, and
identification of actions to improve future resilience and
capabilities. The Board and Audit Committee consider the rapid
and thorough response to the pandemic by the Executive Team,
and the broader management team over the last two years,
as solid evidence of the effectiveness of existing disaster
recovery and business continuity plans.
8
6
Management within the Finance Department are responsible for
the appropriate maintenance of financial records and processes
that ensure all financial information is relevant, reliable, in
accordance with the applicable laws and regulations, and
distributed both internally and externally in a timely manner.
The new central finance system went live in November 2021 and
the delegation of authorities was updated and implemented
alongside the launch. The new finance system has simplified the
accounting process and control framework. It has improved
controls on expenditure and has enabled more insightful
reporting to be used by both finance and operational
management. The Executive Team has also established two
sub-committees to further strengthen control and scrutiny
of costs across the business below Board level authority.
The Investment Committee is responsible for reviewing and
approving capital related projects and investments and for
completing post-investment appraisals. The Approvals
Committee is responsible for reviewing and approving central
costs, support centre staffing changes and material procurement
contracts. The Finance Director sits on both committees and
provides updates to the Audit Committee and Board as required.
Throughout the period, the Executive Directors provided relevant
and timely financial commentary to supplement the financial
reporting, ensuring the Board and the Audit Committee were
informed of the financial position and results of the Group.
The Audit Committee and Board have considered the
effectiveness of the Group’s system of internal controls, taking
account of material changes in the operations of the Group
following the coronavirus pandemic, the continued use of the
Coronavirus Job Retention Scheme and the Group’s reopening
plans that have been required at various points over the last
two years.
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Key elements of the system of internal control designed to
address significant risks and uncertainties, as documented on
pages 34 to 35, include:
• clearly defined levels of responsibility and delegation
throughout the Group, together with well-structured reporting
lines up to the Board, the preparation of annual budgets for
each division, including commentary on key business
opportunities and risks, approved by the Executive Team
and further reviewed by the Board on a consolidated basis
• the reviews by the Executive Team of actual monthly results
against budget, together with commentary on significant
variances and updates of both profit and cash flow
expectations for the year
• a detailed investment approval process requiring Board
authorisation for all major projects
• post-implementation appraisals of major capital
expenditure projects
• regular reporting of legal and accounting developments to
the Board
• regular review of the Group’s risk register and discussion of
significant risks by the Audit Committee and Board, which
among other things take account of the significance of
environmental, social and governance matters to the business
• regular reporting of compliance with anti-bribery procedures,
data protection and health and safety, and the monitoring of
accident statistics and the results of health and safety audits.
The Group does not have a formal internal audit function. The
Group employs a team of retail business auditors who monitor,
in particular, the controls over stock and cash in the Managed
Pub estate, Bel & The Dragon sites, and Cotswold Inns & Hotels.
Relevant management attend meetings of the Audit Committee
to discuss the issues being addressed. Management may from
time to time augment the internal audit resource with specialist
external resources. External expertise is also used if assurance is
required on any areas of risk or controls where the Committee
considers the business may be exposed. This year this included
external expertise used to support an assessment of our cyber
security arrangements. The Committee received regular
reports covering third party audits on health and safety and
food safety matters.
For 2021/22, the Audit Committee confirmed that the existing
arrangements of internal audit, retail business auditors and use
of external expertise remained appropriate. This was coupled
with the implementation of the new central finance system.
Whistleblowing
The Audit Committee is responsible for reviewing the adequacy
and security of the Company’s arrangements for employees and
contractors to raise concerns about any suspected wrongdoing.
The Committee reviewed and updated the Company’s
Whistleblowing Policy in June 2021. To complement the internal
processes already in place, a mechanism for concerns to be
raised anonymously, rather than just in confidence, was
implemented through the appointment of an independent
whistleblowing service operated by Safecall.
Any whistleblowing reports are reported to the Audit Committee
and, at least annually, to the Board. A standing report is tabled at
each Committee meeting providing an update on employee
relation matters in the period and the opportunity for the
Committee to identify any trends.
FRC Letter
The Company received a letter from the FRC in January 2022,
following its review of the Group’s Annual Report and Accounts for
the year ended 27 March 2021. Based on its review, there were no
questions or queries that the FRC wished to raise with the Company,
but it noted a number of matters where readers of the report may
benefit from improvements to existing disclosures. The Audit
Committee considered the recommendations as part of its review of
this year’s Annual Report and, for those areas which were still relevant
this year, we have made a number of changes to enhance reporting
so that it is clearer and more concise, and are satisfied that the
recommendations have been addressed.
The FRC states that its letter provides no assurance that the
Annual Report and Accounts are correct in all material respects,
and it is not the FRC’s role to verify the information provided by
the Company. The FRC accepts no liability for reliance on the
letter by the Company or any third party, including but not limited
to investors and shareholders.
External Audit
Ernst & Young LLP was first appointed in 2021, following a tender
process, to conduct the audit of the Group’s financial statements
for the financial year to 27 March 2021, and this is the second
year auditing the Group’s Annual Report. In accordance with
best practice and professional standards, the external auditor
is required to adhere to a rotation policy whereby the audit
engagement partner is rotated at least every five years.
The FY2022 audit is the second year of Rachel Savage’s
tenure as lead audit engagement partner.
The auditors are invited to attend all meetings of the Audit
Committee and report on the plan and approach for the full year
audit and half year review.
The Audit Committee Chair meets the auditors on a regular basis
during the year and the Audit Committee meets with the external
auditors, without management present, at least annually in order
to allow both Audit Committee members and the auditors to raise
any issues directly and to discuss the auditors’ remit.
The Audit Committee reviewed the effectiveness of EY’s
performance of the external audit process, taking into account:
• the quality and scope of the audit plan, and evaluation of
delivery and performance against the plan
• qualifications, efficiency and performance of the audit team
• the communication between the Company and EY
• EY’s understanding of the Group’s business and industry sector
• the results of the FRC’s Audit Quality Inspection Report on EY.
After considering these matters, the Audit Committee was
satisfied with the effectiveness of the year end audit process
and recommended to the Board that EY be re-appointed at the
Company’s AGM on 21 July 2022.
During the year, the Company complied with the provisions
of the Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender Process
and Audit Committee Responsibilities) Order 2014.
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Auditor Independence and Non-Audit Services
Auditor independence and objectivity are safeguarded by a
number of control measures and a formal written policy was
approved in January 2021. The Policy sets out processes for
assessing independence and objectivity, including disclosure
requirements of the auditors, restrictions on the employment of
the auditors’ former employees and the circumstances in which
the auditors may be permitted to undertake non-audit services.
The Policy is in line with the recommendations set out in the
FRC’s Guidance on Audit Committees and the requirements of
the FRC’s Revised Ethical Standard 2019 (the “Standard”). In
respect of non-audit services, only a very short list of non-audit
services is now permitted under the Standard, which are detailed
in the Policy and all spend has to be approved by the Audit
Committee, which ensures full visibility.
In FY2022, the fees paid to EY for audit services were
£366,500 including £55,000 for non-recurring audit services
(2021: £405,000 including £95,000 for non-recurring audit
services). During the year, fees paid to EY for non-audit services
included £35,000 for the review of the FY2022 half year results
announcement and £5,000 for the completion of the auditor’s
compliance certificate required under the terms of the 6.875%
Debenture Stock 2018 Trust Deed.
Fair, Balanced and Understandable
The Audit Committee reviewed whether the 2022 Annual Report,
taken as a whole, was fair, balanced and understandable and also
whether it provided the information necessary for shareholders to
assess the Company’s position and performance, business
model and strategy. In making its assessment, the Audit
Committee took the following into account:
6
9
• A timetable for the production of the 2022 Annual Report was
agreed by the finance team and the auditors, with overall
co-ordination of the report being overseen by the Finance Director.
• Each section of the report was prepared by a member of
management with appropriate knowledge and experience,
including representatives from finance, communications,
company secretariat and risk.
• Management’s views on each of the key judgements, which
were then discussed by the Audit Committee.
• Reports and feedback from the auditors which were presented
to the Audit Committee.
• Board members received drafts of the report for review which
provided an opportunity to provide comments and ensure
messaging was cohesive.
Following its review, the Audit Committee confirmed to the Board
that the 2022 Annual Report was fair, balanced and understandable,
and the Board’s statement is set out on page 88.
J U L I E T T E S TA C E Y
C H A I R O F T H E A U D I T C O M M I T T E E
8 June 2022
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Remuneration
Directors’ Remuneration Report
Remuneration Committee
at a glance
Helen Jones
Chair of the Remuneration
Committee
“ Our remuneration philosophy is
to incentivise management to
drive business performance to
deliver sustained and profitable
growth.”
M E M B E R S
Helen Jones (Chair), Robin Rowland, Juliette Stacey
M E E T I N G S H E L D I N 2 0 2 1/ 2 2
Helen Jones (Chair)
Robin Rowland
Juliette Stacey
Number of
meetings
held
Number of
meetings
attended
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7
7
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K E Y D U T I E S O F T H E C O M M I T T E E
• Sets the Remuneration Policy for the Chairman,
Executive Directors, Executive Team members and
Divisional Directors
• Determines the total remuneration package (including
pensions, service agreements and termination
payments) of the Chairman and Executive Directors and,
in consultation with the Chief Executive, determines the
total remuneration package of the members of the
Executive Team and Divisional Directors
• Reviews workforce remuneration and related policies
K E Y A C T I V I T I E S D U R I N G T H E Y E A R
• Agreeing the remuneration package for the incoming
Finance Director, Neil Smith
• Updating the Directors’ Remuneration Policy to
introduce the Recovery LTIP, and consulting with
shareholders ahead of seeking approval at the AGM in
September 2021
• Reviewing performance under the Long-Term Incentive
Plan (“LTIP”) and Executive Share Option Scheme
(“ESOS”) awards granted in 2019 and consideration of
vesting outcomes
• Setting Executive Director objectives and bonus targets for
FY2022 and approving proposals for the Executive Team
and Divisional Directors
• Setting the targets for the annual LTIP awards, Recovery
LTIP awards and ESOS awards
• Setting Executive Director pay increases and approving
proposals for the Executive Team and the wider
workforce for FY2022
• Through the Board, receiving regular reports on
Group-wide remuneration for FY2022 and wider
workforce remuneration arrangements and issues
• Approving the Group’s Gender Pay Gap Report
for FY2021
• Approving plans for awards under the Group’s all
employee share schemes for FY2022
• Reviewing the Chairman’s fee including completion of
a benchmarking process
• Approving proposals for the wider workforce for FY2023
(which were implemented earlier than normal with effect
from 1 April 2022. Pay increases for the Executive
Directors continued to be from 1 June 2022)
• Reviewing the independence and effectiveness of the
Remuneration Committee advisor, Deloitte
• Reviewing the Remuneration Committee Terms of
Reference
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Dear Shareholder,
On behalf of the Board, I am pleased to present the Remuneration
Report for the year ended 26 March 2022.
Following shareholder approval of the Policy at the 2021 AGM,
Recovery LTIP awards were granted in September 2021.
Recovery LTIP awards vest based on the achievement of
stretching EBITDA performance targets for FY2024.
Following two years significant disruption to the business, the Group
has returned to profitability, with revenues of £253.8 million and
adjusted profit before tax of £7.2 million. The Executive Directors
have ensured that periods of closure have been used wisely to
complete a number of strategic projects that will deliver benefits over
the coming years and have taken steps to strengthen the Balance
Sheet, whilst steering the business through the challenging trading
conditions. The current year has started well, with a steady growth in
total weekly sales, and there is confidence the growth of revenues
and profits will be maintained as we move through the year.
Directors’ Remuneration Policy ("Policy")
Our remuneration philosophy is to incentivise management to
drive business performance to deliver sustained and profitable
growth. We presented our revised Policy to shareholders at the
AGM in 2021, where we received strong support with a vote in
favour of 86.15%. The main change to the Policy was to introduce
the Recovery LTIP. The Policy is intended to cover the three year
period to the AGM in 2024 and it was applied consistently during
the year ended 26 March 2022. The Committee did not exercise
any discretion to adjust remuneration outcomes in the year.
No changes are proposed to the Policy for FY2023.
Incentive Outcomes for FY2022
The annual bonus for FY2022 was based 70% on Group EBITDA
performance and 30% on individual strategic performance. Group
adjusted EBITDA (excluding IFRS 16) was £35.1 million, which
resulted in an award of 54.8% of maximum for the financial
element. Performance against individual strategic objectives,
including the delivery of key infrastructure projects, the
completion of the bank refinancing, the successful reopening
of the estate and progression of the sustainability agenda, was
assessed, resulting in an award of 76.25% of maximum for
personal objectives. The formulaic outcome is therefore an overall
bonus pay-out of 61% of the maximum award. The Committee
considered the level of the annual bonus award and, taking into
account the incredible efforts of the Executive Team during the
enforced closure to drive a number of strategic projects to put
the Company in the best place and given their importance in
rebuilding the business and profit levels, decided it was
appropriate to pay the bonus.
The performance targets for the LTIP and ESOS awards granted in
2019 which were based on Group adjusted EPS performance for
FY2022 were not met and, therefore, the awards will lapse in full.
Board Changes
As shareholders will be aware, Adam Councell stepped down from the
Board and from the role of Finance Director on 30 September 2021.
As outlined in last year’s report, Adam did not receive any payment
in lieu of notice and was not entitled to participate in the incentive
arrangements granted in respect of FY2022. All his outstanding LTIP
and ESOS awards also lapsed on 30 September 2021.
As reported last year, Neil Smith was appointed to the Board as
Finance Director on 30 November 2021 and his remuneration terms
are in line with our Policy. His salary for the remainder of FY2022
was set at £352,500 per annum. Neil receives a pension of 5% of
base salary in line with the pension received by the majority of our
wider workforce. Following his appointment, awards were made to
Neil under the Company’s LTIP on a pro-rata basis in respect of
FY2022 and the Recovery LTIP on 13 December 2021, being the
earliest practicable date following his appointment.
Non-Executive Director Fees
Non-Executive Director fees were reviewed by the Board in
November 2021. From January 2022, the basic fee was increased
from £45,000 to £50,000 per annum and the additional fee for
chairing the Remuneration Committee was increased from
£7,000 to £10,000 per annum, in line with the fee paid for chairing
the Audit Committee. The Chairman’s fee was reviewed by the
Remuneration Committee and, as detailed on page 78, it was
concluded that the fee remained appropriate taking into account
his role and the time commitment to the business.
Employee Engagement
The Remuneration Committee receives updates on workforce
pay and benefits throughout the Group and considers workforce
remuneration as part of the review of executive remuneration.
The Board approves the proposed average annual pay increase for
all employees and the Remuneration Committee takes this into
account when agreeing pay reviews for the Executive Directors,
Executive Team and Divisional Directors.
We have taken a number of steps to help our employees through
both the impact of the pandemic and the current cost of living crisis.
These include a shift in our pay structures to ensure that no employee
is on the National Minimum Wage, and the implementation of the
Wagestream App, which gives all employees the chance to take salary
ahead of payday, negating the need for expensive payday loans.
Executive Director Remuneration for FY2023
Shareholder Engagement
Base salaries for Executive Directors have been increased by 3%
in line with the increase for the wider workforce. In light of the
increasing pressures on the cost of living, the implementation of
pay increases across the wider business was brought forward to
take effect from 1 April 2022, although the normal review date of
1 June was retained for the Executive Directors, Executive Team
and Divisional Directors.
For FY2023, the maximum annual bonus will continue to be 100%
of base salary, based 80% on Group adjusted profit before tax (pre
IFRS 16) performance and 20% on personal business objectives.
For FY2023, the maximum LTIP award will continue to be 125% of
base salary for the Chief Executive and Retail Director and 100%
for the Finance Director, based on the achievement of EPS
performance for FY2025.
Recovery LTIP
As outlined in last year’s Directors’ Remuneration Report, in light
of the challenges the business faced, the Board was concerned
about the motivation and retention of the Executive Directors and
therefore introduced a one-off Recovery LTIP award of 250% of
base salary in addition to the normal LTIP award to incentivise
management to rebuild the business and profit levels.
The Remuneration Committee welcomes ongoing shareholder
dialogue. Our intention is that shareholder views will be sought
when there is any significant change to Directors’ remuneration.
Should shareholders have any concerns about the Policy,
the Committee Chair will endeavour to meet with them, as
appropriate, to understand and respond to any issues they
may have. Ahead of the 2021 AGM, myself and the Company
Chairman engaged extensively with shareholders to hear their
views with regard to the introduction of the Recovery LTIP and
associated updates to the Policy and LTIP rules, and we thank
our shareholders for approving these.
I hope that you find the report clear and comprehensive and that
it helps demonstrate how Directors’ remuneration is linked to the
performance of the Company. On behalf of the Remuneration
Committee, I would like to thank shareholders for your continued
support and feedback over the year and I hope that you are able
to support the resolution on the Annual Report on Remuneration
being presented at this year’s AGM on 21 July 2022.
H E L E N J O N E S
C H A I R O F T H E R E M U N E R AT I O N C O M M I T T E E
8 June 2022
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Directors’ Remuneration Report
Continued
A N N U A L R E P O R T O N R E M U N E R A T I O N
This Annual Report on Remuneration from pages 70 to 84 will be put to an advisory shareholder vote at the Company’s AGM on 21 July 2022.
Directors’ Remuneration Policy
We presented our Policy to shareholders at the AGM in 2021, where we received strong support with a vote in favour of 86.15%. This Policy
covers the three year period until the AGM in 2024 and it was applied consistently during the year ended 26 March 2022. The full Policy can
be found on pages 58 to 68 of the 2021 Annual Report and is available in the Investor section of our website (www.fullers.co.uk). The table
below provides a summary of the main elements of the Policy for Executive Directors:
FIXED
VARIABLE
SALARY
BENEFITS
PENSION
+
ANNUAL
BONUS
LTIP
&
RECOVERY
LTIP
ESOS
=
TOTAL
REMUNERATION
Remuneration Philosophy and Principles
In developing our Policy, the Committee considered the key principles set out in Provision 40 of the UK Corporate Governance Code.
The Committee believes that our Policy is clear and transparent and aligned with our culture. In normal years we operate a simple
incentive framework of an annual bonus, an LTIP award, and an ESOS award subject to maximum award levels set by HMRC. Award levels
are capped with pay-out linked to performance against a limited number of measures which are well linked to our strategy. Stretching but
fair targets are set. This ensures that potential reward outcomes are clear and aligned with performance achieved, with the Committee
having the discretion to adjust pay-outs where this is not considered to be the case.
Pay levels are set taking into account external market levels as well as internal practice to ensure pay remains competitive while being
equitable within the Company. Malus and clawback and discretion provisions, LTIP holding periods and shareholding guidelines, including
post-employment, are in place to mitigate reputational and other risks.
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Remuneration arrangements are determined throughout the Group based on the same principle; that the remuneration policies and
practices should be aligned to the Company’s purpose and values, support the delivery of the strategy and promote long-term
sustainable success.
Key features
Implementation FY2022
FIXED
Reviewed annually with
increases normally effective
from 1 June
Increased by 2% from 1 June 2021 in line with the
wider workforce
Increases will normally be in line
with increases across the Group
Retail Director – £204,000
Chief Executive – £510,000
The Company offers Executive
Directors a range of benefits
consistent with the role
The Finance Director’s salary was set at £352,500
from his appointment on 30 November 2021
Taxable benefits included:
• a car allowance
• private medical insurance
• optional cash vouchers for use in Fuller’s pubs
and hotels
Non-taxable benefits included:
•
• Group-wide employee benefits, such as an
life assurance and permanent health insurance
employee discount linked to length of service and
all-employee share plans
The Chief Executive and Retail Director received an
annual cash allowance in lieu of pension of 17.5% of
base salary
The Finance Director received an annual cash
allowance in lieu of pension of 5% of base salary in
line with the policy for the majority of the workforce
Implementation in FY2023
Will be increased by 3% in line
with the wider workforce
increase, from 1 June 2022
Chief Executive – £525,300
Finance Director – £363,000
Retail Director – £210,000
No changes proposed
No changes proposed
For any new Executive Director
appointed to the Board, the
pension opportunity will be in
line with the policy for the
majority of the workforce
Pension
Provides an
appropriate level
of retirement
benefits
Executive Directors are either
deferred members of the
Company’s defined benefit
pension plan (closed to future
accruals), the defined
contribution plan or receive a
cash allowance in lieu of pension
Base Salary
Reflects the
importance of
the role to the
business and
the experience
the individual
brings to it
Benefits
Provides
competitive
benefits which
also protect the
individual and
provides
preventative
care for them
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Annual Bonus
Incentivises
achievement of
annual financial
objectives and
delivery of the
business
strategy
LTIP
Incentivises the
delivery of
long-term
sustainable
returns for all
shareholders
VARIABLE
Key features
Implementation FY2022
Implementation in FY2023
Maximum opportunity of 100%
of salary based on annual
performance targets
The maximum bonus award for Executive Directors
was 100% of base salary based 70% on Group
EBITDA performance and 30% on individual
strategic objectives
Executive Directors will have a
maximum opportunity of 100%
of salary for FY2023
Any bonus earned in excess
of 75% of salary will normally
be deferred into shares for
three years
Bonus pay-out:
Chief Executive – 61%
Retail Director – 61%
Finance Director1 – 61%
The maximum annual award in
respect of a financial year is
125% of base salary
LTIP – The Chief Executive and Retail Director
were granted awards of 125% of salary and the
Finance Director was granted an award of 100% of
base salary1
Awards vest based on
performance over three
financial years
Awards will vest based on pre-tax adjusted EPS
performance for FY2024:
Normally 25% of awards vest for
threshold levels of performance
Threshold – EPS of 44.89p
Maximum – EPS of 54.68p
Recovery LTIP awards (granted
on a one-off basis) have a
maximum opportunity of 250%
of base salary
Recovery LTIP – Executive Directors, including the
Finance Director1, were granted awards of 250% of
base salary
The annual bonus will be based
80% on Group adjusted profit
before tax and 20% on personal
business objectives
Awards will be granted at 125%
of base salary to the Chief
Executive and the Retail Director
and 100% of base salary to the
Finance Director
Awards will be based on pre-tax
adjusted EPS performance for
FY2025 of:
Threshold – EPS of 49.93p
Maximum – EPS of 60.15p
Awards will vest based on adjusted EBITDA
(excluding IFRS 16) targets for FY2024:
Threshold – Adjusted EBITDA of £55 million
Maximum – Adjusted EBITDA of £73 million
ESOS
Aligns interests
of Executive
Directors with
those of
shareholders
and incentivises
delivery of
long-term
sustainable
returns
Executive Directors may be
granted market value options
up to a maximum total value
set by HMRC
No awards made in FY2022 as both the Chief
Executive and Retail Director held options equal
to the maximum total value set by HMRC
(currently £30,000)
Awards will be granted to
Executive Directors, to the extent
they are eligible, up to the
maximum value set by HMRC
Awards granted to the Retail Director for the three
year period to FY2022 will lapse
Awards will be based on pre-tax
adjusted EPS performance for
FY2025 of 49.93p
Options vest based on
performance over three
financial years
Once vested, options must be
exercised before the tenth
anniversary of grant
1 Pro-rated from date of appointment on 30 November 2021.
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Directors’ Remuneration Report
Continued
S T A T E M E N T O F I M P L E M E N T A T I O N O F R E M U N E R A T I O N P O L I C Y F O R F Y 2 0 2 3
This part of the Directors’ Remuneration Report sets out how the Policy will be operated in the coming year.
Base Salaries
The Executive Directors’ base salaries have been increased by 3% in line with the increase received across the wider workforce. In light
of the increasing pressures on the cost of living, the implementation of pay increases across the wider business was brought forward to
take effect from 1 April 2022, although the normal review date of 1 June was retained for the Executive Directors, other members of the
Executive Team and Divisional Directors. Salary increases for the Executive Directors from 1 June 2022 are therefore as follows:
Chief Executive – £525,300
Finance Director – £363,000
Retail Director – £210,000
Benefits
No changes to Executive Directors’ benefits are proposed for FY2023.
Annual Bonus
For FY2023, we intend to operate an annual bonus in line with our normal Policy. The maximum annual bonus will be 100% of base salary
for all Directors. The annual bonus will be based 80% on Group adjusted profit before tax performance and 20% on individual strategic
performance.
Targets are considered to be commercially sensitive and have therefore not been disclosed. Our intention is to disclose targets in the
FY2023 Directors’ Remuneration Report, provided that these are no longer considered to be commercially sensitive at that time.
LTIP
The Committee intends to continue to grant LTIP awards for FY2023 to ensure that management are aligned with shareholders and
incentivised to deliver long-term performance. Awards will be granted at the Policy level of 125% of base salary to the Chief Executive and
the Retail Director and 100% of base salary to the Finance Director. The Committee is aware of shareholder guidance regarding reviewing
award levels where there has been a fall in share price. We are not planning to reduce grant sizes given the significant need to continue to
motivate and retain management. However, the Committee retains discretion to adjust vesting outcomes if it considers that there have
been any “windfall” gains.
4
7
The LTIP will be based on pre-tax adjusted EPS performance as the Committee considers that this provides a clear objective for
management and supports our strategy. The portion of the LTIP award that vests for threshold performance will be 25% of maximum.
For FY2023 LTIP awards, EPS targets have been set as absolute pence targets for FY2025 as set out below.
We want to measure the performance of our Executive Directors against a criterion that aligns the Executive Directors’ interest with the
long-term interests of our shareholders. We believe that an earnings per share measure is more appropriate than a simple profit measure
as the latter could be improved by, for example, the issuance of shares to raise cash or to finance an acquisition, having a consequent
diluting effect on existing shareholders’ interests. Additionally, given the aim of encouraging long-term performance, we believe that the
earnings per share figure should not reflect short-term non-trading impacts on profit, whether positive or negative, for example, profits or
losses on the sale of freehold properties, and such items should be adjusted for. Lastly, given that changes in tax rates are unrelated to
Executive Directors’ performance, we believe that any earnings per share measure for the LTIP should be based on pre-tax earnings.
The awards will be subject to clawback provisions and a two year post-vesting holding period.
Pre-tax adjusted EPS targets for the FY2023 awards are proposed as follows:
Pre-tax adjusted EPS pence in FY20251
1 Vesting increases on a straight-line basis between Threshold and Maximum.
Threshold
(25%
vesting)
Maximum
(100%
vesting)
49.93p
60.15p
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As outlined in last year’s Directors’ Remuneration Report, in light of the challenges the business faces, the Board was concerned about the
motivation and retention of the Executive Directors and it therefore introduced a one-off Recovery LTIP award of 250% of base salary in
addition to the normal LTIP award to incentivise management to rebuild the business and profit levels.
Following shareholder approval of the Policy at the 2021 AGM, Recovery LTIP awards were granted in September 2021. Recovery LTIP
awards will only vest based on the achievement of stretching EBITDA performance targets for FY2024.
ESOS
The Committee intends to grant ESOS awards to Executive Directors, to the extent they are eligible, up to the maximum limit set by HMRC.
Pension and Benefits
No changes are proposed to the pension and benefits provision for Executive Directors for FY2023.
The Chief Executive and Retail Director receive an annual cash allowance in lieu of pension of 17.5% of base salary. The Committee is
aware of shareholder guidance that pensions for Executive Directors should be aligned with the wider workforce. However, given the
current rate represents an existing contractual commitment, the Committee does not consider it appropriate to make a reduction at this
stage. The Committee will keep this approach under review.
As previously advised, the pension opportunity for new Executive Directors appointed to the Board will be in line with the maximum
employer contribution available for the majority of the workforce. Accordingly, the Finance Director, appointed in November 2021,
receives an annual cash allowance in lieu of pension of 5% of base salary.
I M P L E M E N T A T I O N O F R E M U N E R A T I O N P O L I C Y F O R F Y 2 0 2 2
This part of the Directors’ Remuneration Report sets out the Directors’ remuneration paid in respect of FY2022. Sections in the report
not specifically stated as audited are not subject to audit.
Single Total Figure of Remuneration Table (audited)
Salary/Fees1
Taxable
benefits2
Annual bonus3 LTIP/Options4
Pension
Total variable
Total fixed
Total
2022
£000
2021
£000
2022
£000
2021
£000
2022
£000
2021
£000
2022
£000
2021
£000
2022
£000
2021
£000
2022
£000
2021
£000
2022
£000
2021
£000
2022
£000
2021
£000
7
5
Simon Emeny
Adam Councell5
Neil Smith6
Fred Turner
Michael Turner
Sir James Fuller
Richard Fuller
Helen Jones
Robin Rowland
Juliette Stacey
509
163
119
203
250
51
46
64
56
76
469
296
–
187
235
47
42
58
52
70
25
12
7
23
27
–
–
–
–
–
25
23
–
23
26
–
1
–
–
–
312
–
69
125
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
9
5
–
9
–
–
1
–
–
–
89
28
6
36
–
–
–
–
–
–
87
55
–
35
–
–
–
–
–
–
312
–
69
125
–
–
–
–
–
–
9
5
–
9
–
–
1
–
–
–
623
203
132
262
277
51
46
64
56
76
581
374
–
245
261
47
43
58
52
70
935
203
201
387
277
51
46
64
56
76
590
379
–
254
261
47
44
58
52
70
1 Salary/Fees for FY2021 include the Board members’ voluntary 25% reduction in salary and fees from 1 April 2020 until 30 June 2020.
2 Taxable benefits include a car allowance, family private medical insurance and cash vouchers for use in Fuller’s pubs and hotels.
3 The annual bonus in respect to FY2022 was paid in cash.
4 LTIP/Options includes the value transferred to Directors from the LTIP, ESOS and SAYE Schemes. For LTIP and ESOS benefit is calculated as the
share price at the year end less the exercise price multiplied by the number of vested options. For SAYE the benefit is calculated as the share price
at the grant date less the exercise price, multiplied by the number of shares under option being purchased.
5 Until his resignation on 30 September 2021.
6 From his appointment on 30 November 2021.
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Directors’ Remuneration Report
Continued
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Base salary
Executive Directors’ base salaries were increased by 2% in line with the increase received across the wider workforce, effective 1 June 2021.
Benefits
Executive Directors received taxable benefits which include a car allowance, private medical insurance and optional cash vouchers for use in
Fuller’s pubs and hotels. Executive Directors also received other non-taxable benefits including life assurance and permanent health insurance
and other Group-wide employee benefits, such as an employee discount linked to length of service and all-employee share plans.
Annual bonus (audited)
The annual bonus for the year was based 70% on Group adjusted EBITDA (excluding IFRS 16) performance and 30% on individual
strategic performance linked to key objectives for the successful recovery of the business.
The following sets out details of actual performance against the targets set:
Financial targets (70%)
Threshold
Target
Maximum
Measure
% of bonus
Required
performance
% of bonus
Required
performance
% of bonus
Required
performance
Actual
performance
Pay-out as %
of max
Group EBITDA
10%
£31.14m
50%
£34.60m
100%
£39.79m
£35.08m
54.8%
Individual strategic performance (30%)
The non-financial element of the bonus for FY2022 was dependent on personal performance against non-financial strategic objectives
approved by the Remuneration Committee. The table below summarises the achievements against each of those objectives. The
Committee agreed a pay-out of 76.25% of maximum for this element.
Strategic performance measure
Key achievements
1. Delivery of key infrastructure upgrades including finance and
property management systems and digital platforms
6
7
2. Completion of bank refinancing on improved terms
3. Reopening of the estate and re-engagement of all employees
across the business
4. Progression of the ESG agenda and implementation of key
actions across the business
The new central finance system and property management systems
successfully implemented during the course of the year and
significant progress made in the deployment of the new digital
platforms across the business.
Successful completion of the refinancing of all banking facilities for
a tenure of four years on improved terms.
Estate reopened in its entirety. Initiatives including partnering with
the Happiness Index successfully launched across the business to
enhance relationships with colleagues and clear action plans
developed to improve engagement.
Life is too good to waste sustainability programme rebranded and
relaunched to the business with clear commitments to our people,
planet and communities. Appointment of a new Sustainability
Director, implementation of new governance structure for
sustainability and partnered with the Net Zero Carbon initiative.
Transitioned to 100% renewable electricity sources for managed
houses and engaged a new waste services provider to divert all
waste from landfill. My Fuller’s new benefits platform launched to
support physical and mental wellbeing of team members.
The Committee discussed the formulaic outturns of the financial targets and strategic performance measures in the context of the
Group’s overall performance, shareholder return performance and government support received in the period. The Committee considered
the level of the annual bonus award and, taking into account the incredible efforts of the Executive during the enforced closure to drive a
number of strategic projects to put the Company in the best place and given their importance in rebuilding the business and profit levels,
decided it was appropriate to pay the bonus.
As a result, the Committee agreed to award the following bonuses:
Director
Simon Emeny
Neil Smith
Fred Turner
1 Pro-rated from date of appointment on 30 November 2021.
Bonus
opportunity
(% of salary)
FY2022
outcome
(% of max)
100%
100%
100%
61%
61%
61%
FY2022
outcome
£312,299
£69,3811
£124,919
Salary
£510,000
£352,500
£204,000
2
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LTIP (audited)
LTIP awards granted in 2019 were based on Group adjusted EPS performance for the financial year FY2022. The EPS targets were not
met and therefore these awards will lapse. The Committee did not exercise any discretion in relation to the LTIP outcome. The following
sets out details of performance against targets set:
Target set
Performance
measure
EPS vs RPI
Minimum
(40% vesting)
Maximum (100%
vesting)
EPS exceeds RPI
by +9%
EPS exceeds RPI
by +24%
Value of award Actual performance
Value of award
Percentage vest
of original grant:
Minimum – 40%
Maximum
– 100%
nil growth nil% of maximum
award
LTIP
ESOS
The ESOS award granted to Fred Turner in 2019 was based on Group adjusted EPS performance for the financial year FY2022 exceeding
the percentage increase in RPI by 9%. The EPS target, as outlined above, was not met and therefore this award will lapse.
Total pension entitlements
Michael Turner and Richard Fuller are pensioners of the defined benefit Company pension plan, which is closed to future accrual, under
the Directors’ section.
Simon Emeny became a deferred member of the defined benefit Company pension plan, under the main section when the plan closed to
future accruals on 1 January 2015. Prior to closure, he received a salary supplement of 17.5% of the excess of his base salary over the
earnings cap for use as part of his retirement planning. Following closure of the pension plan, Simon Emeny is paid an annual salary
supplement of 17.5% of his salary by the Company.
During the year, Neil Smith was paid an annual cash allowance of 5%, in line with our Policy. Fred Turner was paid an annual cash
allowance of 17.5%, in line with his existing contractual arrangements.
7
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Executive Directors are required to use the supplement as part of their overall retirement planning. They are also normally expected to
contribute 8% of their salary to their pension or another investment vehicle. The Committee considers that the Policy operated as intended
during the year.
Scheme Interests Awarded During the Financial Year (audited)
In respect of the 52 week period ended 26 March 2022, the following share awards were granted:
Director
Simon Emeny
Total
Neil Smith2
Total
Fred Turner
Total
Type of
award
LTIP
Recovery LTIP
LTIP
Recovery LTIP
LTIP
Recovery LTIP
Number of ‘A’
shares
Number of ‘B’
shares
Face value at
grant £0001
Date of grant
Performance
period end3,4
69,577
173,942
637
29/09/2021
31/03/2024
139,154
208,731
29,817
74,543
104,360
27,830
55,661
83,491
347,885
521,827
74,543
186,359
260,902
69,577
139,154
208,731
1,275
29/09/2021
31/03/2024
1,912
273
683
956
255
510
765
13/12/2021
31/03/2024
13/12/2021
31/03/2024
29/09/2021
31/03/2024
29/09/2021
31/03/2024
% of award
grant vesting at
minimum
threshold
25%
25%
25%
25%
25%
25%
1 Face values have been calculated using the actual grant price of £7.33 per ‘A’ share and an assumed share price of £0.73 per ‘B’ share, being the
average share price during the five dealing days ending immediately before the date of grant.
2 Neil Smith’s awards were granted as soon as practicable following his date of appointment and pro-rated for his period of service.
3 The LTIP awards are subject to a pre-tax adjusted EPS performance condition, with the targets set on an absolute basis and measured over a
period of three years. 25% of the awards vest for pre-tax adjusted EPS of 44.89p in FY2024, with 100% vesting for pre-tax adjusted EPS of
54.68p (straight-line vesting in-between). Further details of the actual targets are set out in the 2021 Annual Report.
4 The Recovery LTIP awards are subject to a Group EBITDA (excluding IFRS 16) performance condition for FY2024, with targets set on an
absolute basis. 25% of the awards vest for a Group EBITDA of £55.0 million, 50% vests for a Group EBITDA of £62.6 million, 75% vests for a
Group EBITDA of £67.6 million and 100% vests for a Group EBITDA of £73.0 million (straight-line vesting in-between each point). Further details
of the actual targets are set out in the 2021 Annual Report.
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Directors’ Remuneration Report
Continued
Non-Executive Directors’ Fee
Non-Executive Directors, excluding the Chairman, receive a basic fee and additional fees for further duties.
A review of the Non-Executive Director fee structure was conducted by the Board (excluding the conflicted Non-Executive Directors) in
November 2021. Based on the output and taking into account that there had been no increase in fees for three years, it was agreed that,
with effect from 1 January 2022, the basic fee would be increased from £45,000 to £50,000 per annum and the additional fee for chairing
the Remuneration Committee would be increased from £7,000 to £10,000 per annum, in line with the Audit Committee Chair fee. The
Committee considered the fee received by the Chairman and, following a benchmarking process and a review of market data, agreed that
the Chairman’s fee remained appropriate taking into account his role and the time commitment. All other fees remain unchanged.
A summary of the revised fee structure for the Non-Executive Directors, including the Chairman, is set out below:
Michael Turner
Sir James Fuller
Richard Fuller
Helen Jones
Robin Rowland
Juliette Stacey
Senior
Independent
Director
Committee
Chair
Committee
member
(Audit and
Remuneration)
–
–
–
£10,000
–
–
–
–
–
£10,000
£10,000
–
–
–
£10,000
£10,000
£10,000
Family
Shareholder
Liaison
Total effective
1 Jan 2022
–
£250,000
£5,000
–
–
–
–
£55,000
£50,000
£70,000
£60,000
£80,000
Base fee
£250,000
£50,000
£50,000
£50,000
£50,000
£50,000
Payments to Past Directors (audited)
There were no payments made to past Directors in the period.
Payments on Loss of Office in Prior Year (audited)
8
7
No payments were made in respect of loss of office in respect of the financial year ended 26 March 2022.
Leaving arrangements for Adam Councell
As outlined in last year’s report, Adam Councell, the former Finance Director, did not receive any payment in lieu of notice and was not
entitled to participate in the incentive arrangements granted in respect of FY2022. All outstanding LTIP and ESOS awards also lapsed on
the date he stepped down from the Board, being 30 September 2021.
Executive Share Ownership
The Company has Share Ownership Guidelines for Directors which state that Executives should hold shares worth at least 200% of their
salary. Accordingly, until their guideline is met, Executives are expected to retain:
• all shares they hold in the Share Incentive Plan ("SIP")
• all shares they acquire as a result of exercising SAYE options
• all shares that they acquire as a result of exercising options under the tax-advantaged ESOS net of the cost of those options
• at least 50% of any post-tax and National Insurance (“NI”) vested shares under the LTIP and the Bonus and Deferred Bonus Plan (“BDBP”).
Based on the share price on 26 March 2022 of £6.20, Simon Emeny held shares with a value of 281% of salary, Fred Turner held shares
with a value of 448% of salary and Neil Smith held shares with a value of 10% of salary. All of the Executive Directors’ shareholdings
therefore already meet the guideline with the exception of Neil Smith, who only joined the Company on 30 November 2021.
Executive Directors will normally be expected to maintain a minimum shareholding of 200% of base salary (or actual shareholding if lower)
for the first 12 months following departure from the Board and 100% of base salary (or actual shareholding if lower) for the subsequent
12 months. The Committee retains discretion to waive this guideline if it is not considered appropriate in the specific circumstances.
2
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Directors’ Shareholdings (audited)
Directors’ share interests
Simon Emeny
‘A’ ordinary 40p shares
‘B’ ordinary 4p shares
‘C’ ordinary 40p shares
Neil Smith1
‘A’ ordinary 40p shares
Adam Councell2
‘A’ ordinary 40p shares
Fred Turner
‘A’ ordinary 40p shares
‘B’ ordinary 4p shares
‘C’ ordinary 40p shares
2nd preference £1 shares
Michael Turner
‘A’ ordinary 40p shares
‘B’ ordinary 4p shares
‘C’ ordinary 40p shares
2nd preference £1 shares
Sir James Fuller
‘A’ ordinary 40p shares
‘B’ ordinary 4p shares
‘C’ ordinary 40p shares
Richard Fuller
‘A’ ordinary 40p shares
‘B’ ordinary 4p shares
‘C’ ordinary 40p shares
2nd preference £1 shares
Helen Jones
‘A’ ordinary 40p shares
Robin Rowland
‘A’ ordinary 40p shares
Juliette Stacey
‘A’ ordinary 40p shares
Beneficial
interest at
7 June
2022
Non-beneficial
interest at
7 June
2022
Beneficial
interest at
26 March
2022
Non-beneficial
interest at
26 March
2022
Beneficial
interest at
27 March
2021
Non-beneficial
interest at
27 March
2021
130,472
1,055,684
2,000
6,000
–
1,471
502,400
100,819
4,342
271,378
3,050,243
624,260
71
88,942
10,486,379
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
130,472
1,055,684
2,000
6,000
5,800
1,471
496,050
100,819
4,324
271,378
3,050,243
624,260
71
88,942
10,486,379
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
124,448
1,055,684
2,000
–
5,800
1,471
452,667
100,819
4,324
271,378
2,988,394
624,260
71
88,942
10,438,187
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,702,003
621,050
2,702,003
621,050
2,702,003
621,050
13,267
872,937
13,267
872,937
11,460
500,000
3,065,726
10,935,015
3,065,726
10,935,015
3,065,726
10,935,015
20,000
303
–
7,499
20,000
303
–
7,499
20,000
303
2,970
7,165
2,454
–
–
–
2,970
7,165
2,454
–
–
–
1,766
3,551
1,250
–
–
–
–
–
1 Neil Smith was appointed on 30 November 2021.
2 Adam Councell resigned on 30 September 2021.
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Directors’ Remuneration Report
Continued
Scheme Interests Outstanding at the Year-End (audited)
Executive Directors’ share options
Director
Scheme1,2
March 21 Granted Exercised
Lapsed
As at 27
As at 26
March 22
Exercise
price
Date of
grant
Performance
period end
Exercisable
from Expiry date
Simon Emeny
Total
Fred Turner
Total
Adam Councell3
Total
ESOS
SAYE
3,296
6,896
10,192
ESOS
ESOS
2,590
520
SAYE
6,896
10,006
ESOS
SAYE
3,121
4,137
7,258
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
£9.10
01/07/13
31/03/16
01/07/16
30/06/23
£4.35
30/09/20
n/a
01/12/25
01/06/26
3,296
6,896
10,192
2,590
£9.65
30/06/14
31/03/17
30/06/17
29/06/24
520
£9.61
15/01/20
31/03/22
15/01/23
14/01/30
6,896
£4.35
30/09/20
n/a
01/12/25
01/06/26
– 10,006
–
(3,121)
–
£9.61
15/01/20
31/03/22
15/01/23
14/01/30
–
–
(4,137)
(7,258)
–
–
£4.35
30/09/20
n/a
01/12/23
01/06/24
1 The ESOS and SAYE are both tax-advantaged share option schemes.
2 SAYE options are normally exercisable for a period of six months from the maturity date at an option price that is discounted by 20% of the
average market price for the three days prior to grant.
3 On his resignation as a Director on 30 September 2021, all outstanding awards lapsed.
Vested but unexercised options
Executive Directors’ Long-Term Incentive Plan
Director
Simon Emeny
‘A’ ordinary shares
‘B’ ordinary shares
Neil Smith
‘A’ ordinary shares
‘B’ ordinary shares
Fred Turner
‘A’ ordinary shares
‘B’ ordinary shares
Adam Councell1
‘A’ ordinary shares
‘B’ ordinary shares
Total held at 27
March 2021
Awarded
Vested
Lapsed
Total held at 26
March 2022
173,780
434,452
208,731
521,827
–
–
104,360
260,902
52,520
131,303
83,491
208,731
81,344
203,362
–
–
–
–
–
–
–
–
–
–
(44,662)
(111,655)
337,849
844,624
–
–
104,360
260,902
(5,452)
(13,631)
130,559
326,403
(81,344)
(203,362)
–
–
1 On his resignation as a Director on 30 September 2021, all outstanding awards lapsed.
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Directors’ Service Contracts and Letters of Appointment
Executive Directors have rolling service contracts terminable on no more than one year’s notice served by the Company or Director. In the
event of early termination, Executive Directors are entitled to a payment equal to the salary due for the unexpired period of their notice,
payable in monthly instalments, subject to mitigation. Simon Emeny’s contract has been in place for a number of years. In the event of
early termination, he would be entitled to a payment equal to his base salary and the value of all benefits for the unexpired period of his
notice, without any reduction for mitigation.
The Chairman and Non-Executive Directors serve the Company on the basis of renewable letters of appointment which can be terminated
by written notice by either party. No compensation is awarded on termination.
The following sets out the date of Directors' service contracts and letters of appointment:
Executive Directors
Simon Emeny
Neil Smith
Fred Turner
Date of contract
13 January 1999
16 June 2021
23 May 2019
Non-Executive Directors
Date of letter of appointment
Michael Turner1
Sir James Fuller
Juliette Stacey
Helen Jones
Richard Fuller2
Robin Rowland
1 July 2013
1 June 2010
24 March 2018
12 March 2019
1 February 2020
23 March 2020
Notice period
12 months
12 months
12 months
Term expires
June 2025
May 2025
July 2024
March 2023
February 2025
March 2024
1 Michael Turner was first appointed to the Board as an Executive Director in January 1985 and became Non-Executive Chairman on 1 July 2013.
2 Richard Fuller was first appointed to the Board as an Executive Director in December 2009 and was appointed as a Non-Executive Director on
1 February 2020.
Service contracts and letters of appointment are available for inspection at the AGM and at the Company’s registered office.
External Directorship Fees
The Board may give approval for Executives to have one paid non-executive role and to retain any related fees paid.
Simon Emeny is the Senior Independent Director of WH Smith PLC, for which he receives and retains an annual fee of £75,000.
Performance Graph and Table
The graph below shows a comparison of the Total Shareholder Return (“TSR”) for the Company’s listed ‘A’ ordinary shares for the last 10
financial years against the TSR for the companies in the FTSE All Share. The Company is a constituent of this Index and therefore it is an
appropriate choice for this report.
Fuller, Smith & Turner P.L.C. 9,229
FTSE All Share 16,295
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
Mar 12
Mar 13
Mar 14
Mar 15
Mar 16
Mar 17
Mar 18
Mar 19
Mar 20
Mar 21
Mar 22
Fuller, Smith & Turner P.L.C.
FTSE All Share
Source: Thomson Data stream
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Directors’ Remuneration Report
Continued
The table below shows the total remuneration figure for the Chief Executive over the last 10 financial years and the annual bonus and LTIP
pay-out for each year as a percentage of the maximum available:
Single figure total
remuneration (£000)
Annual bonus4
LTIP
2013
20141
2015
2016
2017
2018
2019
20202
20213
2022
911
41%
56%
977
77%
64%
1,244
76%
96%
1,418
85%
100%
1,097
1,089
41%
100%
48%
56%
687
48%
nil
600
590
nil
nil
nil
nil
935
61%
nil
1 Simon Emeny was appointed as Group Chief Executive in July 2013. This single total figure comprises the remuneration received by him in the
financial year, hence includes remuneration for the three months prior to this promotion.
2 One-third of the annual bonus was due to pay out, reflecting the Company’s strong like for like sales performance vs the Peach Tracker.
However, in light of the broader business circumstances following the outbreak of coronavirus in 2020, the Committee and the Executive
Directors agreed that it was not appropriate to pay this portion of the annual bonus.
3 Total remuneration includes the Chief Executive’s voluntary 25% reduction in salary from 1 April 2020 to 30 June 2020.
4 Annual bonus as a percentage of the maximum available.
Percentage Change in Remuneration of Directors and Employees
The table below shows the percentage change in the remuneration of the Board of Directors compared with that of the average of all of
the Company’s employees taken as a whole. Remuneration for employees is based on salary, benefits and annual bonus. The Chairman
and Non-Executive Directors do not receive any variable pay.
FY2021-FY2022
FY2020-FY2021
Change in annual
salary/fees
Change in annual
taxable benefits
Change in annual
bonus1
Change in annual
salary/fees
Change in annual
taxable benefits
Change in
annual bonus1
2.3%
(17.0)%3
(100)%
1.0%
(1.6)%
(1.2)%
8.4%9
–
(44.6)%
8.4%9
6.7%9
9.3%9
9.6%9
10.1%9
9.1%9
8.4%9
0.3%
–
(49.5)%
1.0%
1.3%
n/a
n/a
n/a
n/a
n/a
nil%
n/a
nil%
nil%
n/a
n/a
n/a
n/a
n/a
n/a
(4.0)%
(0.1)%
Nil%
–
–
–
(6.2)%
(6.2)%
(73.9)%
(4.5)%
–
(0.7)%
–
–
–
1.5%
n/a
(93.8)%
n/a
n/a
n/a
–
–
–
n/a
n/a
n/a
n/a
n/a
n/a
Average of all
employees2
Simon Emeny
Neil Smith4
Adam Councell5
Fred Turner6
Michael Turner
Sir James Fuller
Richard Fuller7
Helen Jones7
Robin Rowland8
Juliette Stacey7
1 Reflects the increase or decrease in the percentage of annual salary paid out as bonus.
2 The employee comparator group excludes pub staff who are employed by other Group companies.
3 The change in taxable benefits was principally due to the phasing out of company cars into a car allowance benefit.
4 Neil Smith was appointed on 30 November 2021, therefore the annual comparison from FY2021 to FY2022 is not relevant.
5 Adam Councell was appointed on 27 August 2019, therefore the annual comparison of FY2020 to FY2021 is not relevant. He resigned on
30 September 2021.
6 Fred Turner was appointed to the Board on 1 June 2019, therefore the annual comparison of FY2020 to FY2021 is not relevant.
7 A number of Non-Executive Directors had role changes during FY2020 (Richard Fuller, Juliette Stacey and Helen Jones), which impacted the
year on year comparison.
8 Robin Rowland was appointed on 23 March 2020, therefore the annual comparison from FY2020 to FY2021 is not relevant.
9 FY2021 to FY2022 increase in annual salaries for Directors reflects the fact that in the prior year Board members took a voluntary pay decrease
between April 2020 and June 2020. Non-Executive Director fees were also increased from 1 January 2022.
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CEO Pay Ratio
The following table sets out CEO pay ratio figures, in respect of the financial year ended 26 March 2022.
Year
FY2022
FY2021
FY2020
25th
percentile
pay ratio
Median pay
ratio
75th
percentile
pay ratio
49.1:1
35.7:1
33.0:1
43.6:1
33.2:1
32.6:1
30.7:1
23.8:1
31.6:1
Method
Option B
Option B
Option B
The increase in the pay ratio between FY2021 and FY2022 is predominately driven by the CEO receiving a bonus in relation to FY2022
whereas in the previous year no bonuses were paid.
The relevant individuals have been identified using Option B, as defined under the relevant regulations, as it is considered to be the most
appropriate methodology for Fuller’s based on the availability of data at the time the Annual Report was published.
The respective single figure values for each individual for FY2022 have then been calculated. No estimates were required, and no
elements of pay were omitted in calculating the relevant single figures. The figures do not include amounts paid to individuals in respect
of their tronc share. The figures for FY2022 are impacted in the first three months of the financial year by the coronavirus pandemic and
the furlough payments paid under the Coronavirus Job Retention scheme.
The single figure values for individuals immediately above and below the identified employee at each quartile within the Gender Pay Gap
analysis were also reviewed.
The chosen individuals were reviewed to determine if they were representative of the 25th percentile, median and 75th centile employees.
Where the chosen individual had left the business or had changed roles during the financial year, an alternative employee was used for the
calculations. The alternative employee used in each instance was the closest employee to the relevant percentile, who was considered
representative of that percentile. For the 52 weeks ended 26 March 2022, no adjustment was needed for the 75th percentile, but
alternative employees were selected for the 25th percentile and median.
Year
FY2022
Supporting information
Salary
Total pay
Relative Importance of Spend on Pay
25th
percentile
pay ratio
Median pay
ratio
75th
percentile
pay ratio
£18,648
£21,016
£29,901
£19,055
£21,439
£30,419
The graph below shows the total remuneration for the Group’s employees compared with other key financial indicators:
120
100
80
60
40
20
0
£m
Remuneration
Taxes
payable to
HMRC1
Capital
expenditure
and business
combinations2
Dividends
and share
buy-backs3
2022 2021
1 Taxes payable to HMRC is based upon tax incurred in the year and includes corporation tax, VAT, PAYE, NI, duty, stamp duty, non-domestic
rates, property licences, environmental levies and machine game duty.
2 Capital expenditure (including business combinations) represents cash paid in the year.
3 No dividends were paid during FY2021 due to the coronavirus pandemic.
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Directors’ Remuneration Report
Continued
The Remuneration Committee
The Remuneration Committee consists entirely of Independent Non-Executive Directors and the members during the period were Helen
Jones (Chair), Juliette Stacey and Robin Rowland. The Committee’s terms of reference are available on the Company’s website. The
Chairman of the Company, Michael Turner, and the Chief Executive, Simon Emeny, are invited to attend the Committee meetings and to
advise, where appropriate, on the remuneration and performance of the Executive Directors and related matters, except in circumstances
where their own remuneration is being discussed. Members of the Committee have no personal financial interest in the Company, other
than as shareholders and Directors. The Committee is advised internally by the Company Secretary, Rachel Spencer, who also acts as
secretary to the Committee.
Employee Engagement
The Remuneration Committee receives updates on workforce pay and benefits throughout the Group and considers workforce
remuneration as part of the review of executive remuneration. The Remuneration Committee did not formally consult directly with
employees on executive pay during the year but took into account the feedback provided by the People and Talent Director and any
relevant feedback from employee surveys. Share ownership amongst employees is encouraged and awards were made under the SAYE
scheme during the course of the year. This tax-advantaged scheme allows employees to participate as shareholders and aligns their
interests with those of other shareholders.
The Committee’s Advisors
Deloitte LLP was appointed by the Committee in June 2019 and during the year under review continued to provide the Committee and the
Company with advice in connection with remuneration matters as well as the Company’s LTIP and share option schemes.
Deloitte is a founding member of the Remuneration Consultants’ Group (“RCG”), which is responsible for the development and
maintenance of the voluntary Code of Conduct that clearly sets out the role of executive remuneration consultants and the professional
standards by which they advise their clients. Fees are charged on a time and expenses basis and totalled £26,620 (plus VAT) during
FY2022 (FY2021: £42,450 (plus VAT)). During the year, Deloitte also provided other unrelated tax advice to the Company.
The Committee is satisfied that advice received from Deloitte during the year was objective and independent and that all individuals who
provided remuneration advice to the Committee have no connections with Fuller’s or its Directors that may impair their independence.
The Committee reviewed the potential for conflicts of interest and judged that there were appropriate safeguards against such conflicts.
XPS Pension Group provides the Company with advice on matters relating to the defined benefit Company pension plan (now closed).
XPS Pension Group is authorised and regulated by the Financial Conduct Authority and its actuaries are also separately required to abide
by Actuarial Profession Standards which include the requirement for them to provide objective and independent advice.
Committee Evaluation
The Committee reviews its performance with Board members and other participants, through the annual Board evaluation. See further
information on page 64.
Statement of Voting at Annual General Meeting
At the AGM held on 23 September 2021, votes cast by proxy in respect of the approval of the Directors’ Remuneration Policy and the
Directors’ Remuneration Report were as follows:
Resolution text
Number of
votes cast for
Percentage of
votes cast for
Number of
votes cast
against
Percentage of
votes cast
against
Total
votes cast
Number of
votes withheld
Approval of Remuneration Policy 2021
89,801,044
86.15%
14,436,237
13.85% 104,237,281
5,833,531
Approval of Remuneration Report 2021
106,335,072
95.02%
5,568,608
4.98%
111,903,680
42,708
The Directors’ Remuneration Report, encompassing pages 70 to 84, was approved by the Board and signed on its behalf.
H E L E N J O N E S
C H A I R O F T H E R E M U N E R AT I O N C O M M I T T E E
8 June 2022
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Directors’ Report
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The Directors present their report to shareholders together
with the audited financial statements for the 52 weeks ended
26 March 2022. The Directors’ Report and the Strategic Report
(pages 1 to 84) together constitute the management report for
the purpose of Rule 4.1.8R of the Disclosure Guidance and
Transparency Rules. Other information relevant to the report,
including information relevant pursuant to the Companies Act
2006 and UK Listing Rule 9.8.4R, is incorporated.
As permitted by legislation, some of the matters required to be
included in the Directors’ Report have instead been included in
the Strategic Report as the Board considers them to be of
strategic importance. Specifically, these are:
Information
Reported in
Pages
Future business developments Strategy
22 and 23
Employee engagement
Stakeholder
Engagement
Sustainability
Report
50
45
Engagement with suppliers,
customers and others
Stakeholder
Engagement
50 and 51
Emissions reporting
Sustainability
Report
43
Annual General Meeting
The 2022 AGM will be held at 11am on Thursday 21 July 2022 at
The George IV, 185 Chiswick High Road, London, W4 2DR. The
Notice of Meeting which sets out the resolutions to be proposed
has been posted to shareholders and is available on the
Company’s website at www.fullers.co.uk.
Articles of Association
The Company’s Articles of Association were adopted in 2014.
In accordance with the Companies Act 2006, the Articles of
Association may only be amended by a special resolution of
shareholders in a general meeting.
Directors
The names and biographical details of the Directors who served
on the Board and Board Committees during the financial year and
up to the date of this report are given on pages 56 and 57. Adam
Councell’s resignation was effective from 30 September 2021
and Neil Smith’s appointment was effective from 30 November
2021. All other Directors served for the full year.
Appointment and retirement of Directors
The Articles state that the Board may appoint Directors and that
at the subsequent AGM, shareholders may elect any such
Director. Alternatively, the Company may directly appoint a
Director. The Articles also contain the power for the Company to
remove any Director by special resolution and appoint someone
in his or her place by ordinary resolution. There are various other
circumstances under the Articles which would mean that the
office of a Director would be vacated, including if he or she
resigns, or becomes of unsound mind or bankrupt.
At every AGM one-third of the Directors who are subject to
retirement by rotation or, if their number is not three or any
multiple of three, then the number nearest to but not exceeding
one-third shall retire from office but, if there is only one Director
who is subject to retirement by rotation, he or she shall retire. In
addition, if any Director has at the start of the AGM been in office
for more than three years since his or her last appointment or
re-appointment he or she shall retire at that AGM.
Powers of the Directors
Subject to the Company’s Memorandum and Articles of
Association and UK legislation, the business of the Company is
managed by the Board which may exercise all the powers of the
Company. The Articles of the Company have a section entitled
“Powers and Duties of the Board” which sets out powers such as
the rights to establish local boards, to appoint agents, to delegate
and to appoint persons with the designation “Director” without
implying that the person is a Director of the Company. There are
further sections of the Articles entitled “Allotment of Shares”
setting out the Board’s power to issue shares and purchase the
Company’s own shares, and “Borrowing Powers” setting out the
provisions concerning the Company’s power to borrow and give
security. The Directors have been authorised to allot and issue
ordinary shares. These powers are exercised under authority of
resolutions of the Company passed at its AGM.
Directors’ indemnities and insurance
The Articles of Association provide the Directors with indemnities in
relation to their duties as Directors, including qualifying third party
indemnity provisions (within the meaning of the Companies Act).
The Company purchases Directors and Officers liability insurance
which gives appropriate cover for any legal action brought
against its Directors. This insurance also covers the Trustees of
the Company’s defined benefit pension scheme.
Directors’ interests
Details of all Directors’ interests as at the end of the financial year are
set out in the Directors’ Remuneration Report on pages 77 to 80.
8
5
Dividends
The Company paid an interim dividend of 3.90p per ‘A’ and ‘C’
ordinary share of 40p each and 0.39p per ‘B’ ordinary share of 4p
each on 4 January 2022 (2021: no interim dividend paid). The
Directors now recommend a final dividend of 7.41p per ‘A’ and ‘C’
ordinary share of 40p each and 0.74p per ‘B’ ordinary share of 4p
each. This makes a total dividend for the financial year of 11.31p
per ‘A’ and ‘C’ ordinary share of 40p each and 1.13p per ‘B’
ordinary share of 4p each (2021: nil).
The total proposed final dividend on ordinary shares will be
£4.6 million, which, together with the 2022 interim dividend
payment of £2.4 million and the £120,000 of cumulative
preference share dividends paid in the year, will result in total
dividend payments of £7.1 million.
Employees
The Company is committed to treating all of its employees and
job applicants equally, in line with the Managing Diversity Policy.
No employee or potential employee receives less favourable
treatment or consideration on the grounds of race, colour,
religion, nationality, ethnic origin, sex, sexual orientation, marital
status, or disability. We give full consideration to applications for
employment from disabled persons where the requirements of
the job can be adequately fulfilled by people with disabilities.
We endeavour to retain the employment of, and arrange suitable
retraining for, any employee who becomes disabled during their
employment as well as providing training, career development
and promotion to disabled employees wherever appropriate.
During the year, the Company maintained arrangements to
provide employees with information on matters of concern to
them, to regularly consult employees for views on matters
affecting them, to encourage employee involvement in the
Company’s performance through share schemes, and to
make all employees aware of financial and economic factors
affecting the performance of the Group.
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Directors' Report
Continued
External Auditor
Purchase of Own Shares
The auditors, Ernst & Young LLP, were appointed by the Directors
in 2021 following a formal tender process. Ernst & Young LLP
have indicated their willingness to continue in office, and a
resolution that they be re-appointed will be proposed at the AGM.
Human Rights
The Board has overall responsibility for ensuring the Company
upholds and promotes respect for human rights. We respect
all human rights and regard those rights relating to non-
discrimination, fair treatment and respect for privacy to be most
relevant in conducting our business. The Company seeks to
anticipate, prevent and mitigate any potential negative human
rights impacts as well as enhance positive impacts through our
policies and procedures and, in particular, through our policies
regarding employment, equality and diversity, treating our
stakeholders and customers fairly and information security. Group
policies seek to ensure that employees comply with the relevant
legislation and regulations in place to promote good practice.
We are committed to ensuring that there are no forms of modern
slavery within our operations or supply chains. In line with the
Modern Slavery Act 2015, we publish an annual Modern Slavery
and Human Trafficking Statement on our website.
Information Required under the Listing Rules
For the purposes of LR9.8.4R, the information required to be
disclosed by the LR9.8.4R can be found in the Annual Report in
the following locations and is hereby incorporated by reference
into this Directors’ Report:
• Information about long-term incentives is disclosed in the
Directors’ Remuneration Report on page 80
• Any waiver of emoluments by a Director of the Company or any
subsidiary undertaking is disclosed in the Directors’
Remuneration Report on page 75
• Information about any waiver of dividends or future dividends
by a shareholder is disclosed on page 86
Political Donations
The Group does not make political donations.
Substantial Shareholdings
At the AGM held on 23 September 2021, the Company was given
authority to purchase up to 5,822,398 ‘A’ ordinary shares to be
held as treasury shares to be used in connection with, among
other purposes, the LTIP and/or other share option schemes.
Shareholders will be asked to give a similar authority to purchase
shares up to 10% of the ‘A’ ordinary capital at the 2022 AGM.
The Company’s maximum issued ordinary share capital during the
year was £25,381,446, comprising 41,082,339 ‘A’ ordinary shares,
89,052,625 ‘B’ ordinary shares and 13,466,013 ‘C’ ordinary shares.
During the year the Company did not purchase any shares.
10,028 ‘A’ ordinary shares held in treasury were allocated to
participants of the Savings Related Share Option Scheme, on
exercise of options, generating net cash proceeds of £76,873.62.
As at 26 March 2022, a total of 1,263,118 ‘A’ ordinary shares and a
total of 4,327,915 ‘B’ ordinary shares are held as treasury shares.
Share Capital
Information on the Company’s financial instruments, capital
structure and related restrictions is given in notes 26 and 27 to
the financial statements. Details of significant shareholdings are
set out below.
As at 26 March 2022, Computershare Trustees Limited holds a
total of 172,932 ‘A’ ordinary shares on behalf of employees of the
Company who are participants in its SIP. This represents 0.18% of
the issued ‘A’ ordinary share capital (excluding shares held in
treasury). A dividend waiver is in place in respect of the shares
that have not been allocated to participants. In respect of the
shares that have been allocated, Computershare Trustees
Limited exercises voting rights in relation to those shares, having
consulted with the participants about their voting intentions.
As at 26 March 2022, the Fuller, Smith & Turner Employee Share
Ownership Trust held 316,441 ‘B’ ordinary shares and 5,935 ‘C’
ordinary shares in the Company. A dividend waiver is in place to
cover the entire holding. The Trustees do not exercise the voting
rights attached to shares held in the Trust.
The Company had been notified under the Disclosure Guidance and Transparency Rules of the following holdings of voting rights of its
listed issued share capital:
‘A’ ordinary shares of 40p each
BlackRock, Inc
Lansdowne Partners (UK) LLP
Ameriprise Financial, Inc. (Columbia Threadneedle)
% of total voting rights
As at
26 March
2022
11.16
8.40
4.68
As at
7 June
2022
10.69
8.40
4.68
It should be noted that these holdings may have changed since the Company was notified of them as notification of any change is not
required until the next notifiable threshold is crossed.
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The Company is also aware of the following interests in 3% or more of the voting rights in the two classes of its unlisted share capital:
‘B’ ordinary shares of 4p each
Mr A W M Mitchell & Burges Salmon Trustees Ltd1
Mr R H F Fuller & Mr P J Turner & Mr P A Sheils1
Mr A G F Fuller
Mr R H F Fuller & Mr P A Sheils & Mr P J Turner1
Dunarden Limited
Mr R D Inverarity
Mr G F Inverarity
Mr M J Turner
Miss S M Turner
Mr R H F Fuller
Mr T J M Turner
‘C’ ordinary shares of 40p each
Mr A W M Mitchell & Burges Salmon Trustees Ltd1
Mr T J M Turner
Miss S M Turner
Mr P A R Carter & Sir J H F Fuller1
Sir J H F Fuller & Mr A W M Mitchell1
Mrs D M St. C Turner
Mr C D W Williams
1 Shares held for the benefit of a Trust.
Post Balance Sheet Events
As at
26 March
2022
14.85
As at
7 June
2022
14.85
7.66
5.74
4.62
3.60
3.59
3.48
3.39
3.33
3.08
3.00
7.66
5.74
4.62
3.60
3.59
3.48
3.39
3.33
3.08
3.00
As at
26 March
2022
33.31
As at
7 June
2022
33.31
6.66
5.64
4.61
4.43
3.32
3.25
6.66
5.64
4.61
4.43
3.32
3.25
Post balance sheet events are disclosed in note 31 to the financial statements.
Significant Agreements
The Group has entered into a number of agreements with the major brewers operating in the UK under which it buys beers, and these
agreements may be terminated by the other party should the Group undergo a change of control.
In the event of a change of control, the Company is obliged to notify its main bank lenders of such. The lenders shall not be obliged to fund
any new borrowing requests and the facilities will lapse after 30 days from the change of control if terms on which they can continue have
not been agreed. All borrowings including accrued interest will become repayable within 10 days of such a lapse.
The service agreements of the Executive Directors include provisions regarding a change of control. Further details are included in the
Directors’ Remuneration Policy published in the 2021 Annual Report.
By order of the Board
R A C H E L S P E N C E R
C O M P A N Y S E C R E T A R Y
8 June 2022
Fuller, Smith & Turner P.L.C.
Pier House
86-93 Strand-on-the-Green
London W4 3NN
Registered in England under number: 241882
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Directors’ Responsibilities Statement
Statement as to Preparation of Financial Statements
The Directors confirm, to the best of their knowledge:
• that these financial statements, prepared in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006 and IFRSs, give a
true and fair view of the assets, liabilities, financial position
and profit of the Group and Company taken as a whole;
• that the Annual Report and the Strategic Report includes
a fair review of the development and performance of the
business and the position of the Group and Company taken
as a whole, together with a description of the principal risks
and uncertainties that they face; and
• that they consider the Annual Report and the financial
statements, taken as a whole, provides the information
necessary to assess the Company’s performance, business
model and strategy and is fair, balanced and understandable.
The Directors of Fuller, Smith & Turner P.L.C. are listed on pages
56 and 57.
Directors’ Statement as to Disclosure of Information
to Auditors
The Directors who were members of the Board at the time of
approving the Directors’ Report are listed on pages 56 and 57.
Having made enquiries of fellow Directors and of the Company’s
auditors, each of these Directors confirms that:
• to the best of each Director’s knowledge and belief, there
is no information relevant to the preparation of this report
of which the Company’s auditors are unaware; and
• each Director has taken all the steps a Director might
reasonably be expected to have taken to be aware of
any relevant audit information and to establish that the
Company’s auditors are aware of that information.
On behalf of the Board
M I C H A E L T U R N E R
C H A I R M A N
8 June 2022
Statement of Directors’ Responsibilities in Respect of the
Financial Statements
The Directors are responsible for preparing the Strategic Report,
the Annual Report, the Remuneration Report and the Group and
Company financial statements in accordance with applicable
United Kingdom law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law, the Directors
have elected to prepare the financial statements in accordance
with international accounting standards in conformity with the
requirements of the Companies Act 2006.
Under company law, the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs and profit or loss of the Group and
Company for the financial period.
Under the Financial Conduct Authority’s Disclosure Guidance and
Transparency Rules, Group financial statements are required to
be prepared in accordance with international financial reporting
standards (“IFRSs”). In preparing the Group and Company
financial statements, the Directors are required to:
• select suitable accounting policies in accordance with IAS 8
Accounting policies, changes in accounting estimates and
errors and then apply them consistently;
• present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
• provide additional disclosures when compliance with the
specific requirements in IFRSs is insufficient to enable users
to understand the impact of particular transactions, other
events and conditions on the Group and Company financial
position and financial performance;
• make an assessment of the Company’s ability to continue
as a going concern;
• state that the Group and Company have complied with
international accounting standards in conformity with the
requirements of the Companies Act 2006 and IFRSs subject
to any material departures disclosed and explained in the
financial statements; and
• make judgements and estimates that are reasonable and prudent.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s
transactions and disclose with reasonable accuracy at any
time the financial position of the Group and Company and
enable them to ensure that the financial statements and the
Remuneration Report comply with the Companies Act 2006 and
applicable regulations, including the requirements of the Listing
Rules and the Disclosure and Transparency Rules (“DTR”) and in
the case of the Group financial statements, with Article 4 of the
IAS Regulation. They are also responsible for safeguarding the
assets of the Group and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors are responsible for preparing the Annual Report in
accordance with applicable law and regulations. The Directors
are responsible for the maintenance and integrity of the corporate
and financial information included on the Company’s website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
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Independent Auditor’s Report
to the members of Fuller, Smith & Turner P.L.C
Opinion
In our opinion:
• Fuller, Smith & Turner P.L.C.’s Group financial statements and Company financial statements (the “financial statements”) give a true and
fair view of the state of the Group’s and of the Company’s affairs as at 26 March 2022 and of the Group’s profit for the 52 week period
(the ‘period’) then ended;
• the Group financial statements have been properly prepared in accordance with UK adopted international accounting standards;
• the Company financial statements have been properly prepared in accordance with UK adopted international accounting standards as
applied in accordance with section 408 of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Fuller, Smith & Turner P.L.C. (the ‘Company’) and its subsidiaries (the ‘Group’) for the period
ended 26 March 2022 which comprise:
Group
Company
Group balance sheet as at 26 March 2022
Company balance sheet as at 26 March 2022
Group income statement for the 52 week period then ended
Group statement of comprehensive income for the 52 week
period then ended
Company statement of changes in equity for the 52 week period
then ended
Company cash flow statement for the 52 week period then ended
Group statement of changes in equity for the 52 week period
then ended
Related notes 1 to 31 to the financial statements including a
summary of significant accounting policies
Group cash flow statement for the 52 week period then ended
Related notes 1 to 31 to the financial statements, including a
summary of significant accounting policies
The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting
standards and as regards the Company financial statements, as applied in accordance with section 408 of the Companies Act 2006.
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Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group and Company in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Company and we remain
independent of the Group and the Company in conducting the audit.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation
of the financial statements is appropriate. Our evaluation of the directors’ assessment of the Group and Company’s ability to continue to
adopt the going concern basis of accounting included the following:
• We confirmed our understanding of the Group’s going concern assessment process and Management’s related Board memoranda.
• The audit engagement partner increased her time directing and supervising the audit procedures on going concern and utilised
corporate finance specialists, with relevant hospitality sector expertise, to assist in assessing the assumptions employed.
• We assessed the appropriateness of the duration of the going concern review period to the end of June 2023 and considered whether
there are any known events or conditions that will occur beyond the period.
• We obtained cash flow forecast models used by the Board in its assessment and checked their arithmetical accuracy.
• We agreed the debt facilities included in the model to the post year-end executed debt agreements and confirmed the key terms and
the calculation of covenants within the going concern review period against the terms of these agreements.
• We obtained the cashflow forecast models (base case, downside and reverse stress test) to the end of June 2023, used by the Board in
its assessment, reviewing their arithmetical accuracy, whether they have been approved by the Board and considering the Group’s
historical forecasting accuracy for periods when the Group’s pubs were able to trade without restrictions.
• We challenged the adequacy of liquidity and covenant headroom in the base and downside case forecasts by reviewing external market
data for any contradictory evidence and applied additional sensitivity analysis on revenue, cost inflation and potential changes in
interest rates as these are considered the most relevant assumptions, in order to understand the Group’s resilience to a range of
downside scenarios.
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Independent Auditor’s Report
to the members of Fuller, Smith & Turner P.L.C
Continued
• We confirmed the calculation of the reverse stress test scenario and considered the likelihood of the occurrence of the combination
of sensitivities applied as remote.
• We read the Board minutes to identify any matters that may impact the going concern assessment.
• We assessed the appropriateness of the going concern disclosures in describing the risks associated with the Group’s ability
to continue as a going concern for the review period to the end of June 2023.
Our key observations
The key observations we communicated to the Audit Committee were that the Group has committed borrowing facilities (totalling
£200m) and available liquidity throughout the going concern period as a result of the post year-end refinance. In management’s base
case and downside scenarios (which reflect high-cost inflation and a slowdown in customer spending influenced by the current cost of
living crisis) the Group remains in compliance with all banking covenants through the going concern period.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group and Company’s ability to continue as a going concern for a period of 12 months to
the end of June 2023.
In relation to the Group and Company’s reporting on how they have applied the UK Corporate Governance Code, we have nothing material
to add or draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this
report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Group’s ability
to continue as a going concern.
Going concern has also been determined to be a key audit matter
Overview of our audit approach:
Group
Audit scope
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Key audit matters
Company
• We performed an audit of the complete financial information of the Group, which accounted for 100% of
the profit before taxation, 100% of revenue and 100% of total assets. Our approach to scoping and resulting
coverage is consistent with 2021.
• Going concern
• Impairment of property, plant and equipment and right-of-use assets
• Management override in the recognition of revenue
Materiality
• Overall Group materiality of £1.27 million (2021: £0.9 million) which represents 0.5% of the Group’s revenue.
An overview of the scope of the Company and Group audits
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope
for each Company within the Group. Taken together, this enables us to form an opinion on the consolidated financial statements.
The Group’s operations are based solely in the United Kingdom with a single head office and finance function and therefore all audit
procedures are completed by one audit team at this location.
In assessing the risk of material misstatement to the Group financial statements, and to ensure we had adequate quantitative coverage
of significant accounts in the financial statements we performed full scope audit procedures over 100% of the Group’s results for the 52
week period ended 26 March 2022 and 100% of the Group’s total assets at that date. We obtained an understanding of the entity-level
controls of the Group which assisted us in identifying and assessing risks of material misstatement due to fraud or error, as well as
assisting us in determining the most appropriate audit strategy. This approach is consistent with the prior period.
Climate change
There has been increasing interest from stakeholders as to how climate change will impact the Group. The Group has determined that
the most significant future impacts from climate change on its operations will be from increased occurrence of extreme weather events,
regulations, government interventions, reporting obligations and inability to meet climate change targets. These are explained on pages
48-49 in the required Task Force for Climate related Financial Disclosures and on pages 36 to 39 in the principal risks and uncertainties,
which form part of the “Other information,” rather than the audited financial statements. Our procedures on these disclosures therefore
consisted solely of considering whether they are materially inconsistent with the financial statements or our knowledge obtained in the
course of the audit or otherwise appear to be materially misstated.
Our audit effort in considering climate change was focused on ensuring that the effects of material climate risks disclosed on page 126
have been appropriately reflected in asset values and associated disclosures where values are determined through modelling future cash
flows, being goodwill, property, plant and equipment and right-of-use assets. We also challenged the Directors’ considerations of climate
change in their assessment of going concern and viability and associated disclosures.
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Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we
identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.
Risk
Our response to the risk
Key observations communicated
to the Audit Committee
Impairment of property, plant and
equipment (PPE) and right-of-use
assets (ROUA)
Refer to the Audit Committee Report
(page 67); Accounting policies (page
107); and Note 13 of the Consolidated
Financial Statements (page 125)
As at 26 March 2022, the carrying
value of PPE is £592.7million
(2021: £590.2million) and right-of-use
asset is £73.8million
(2021: £81.9million).
The continued uncertainties over
the current economic environment
caused by the COVID-19 pandemic,
the current high levels of cost inflation
and any changes in consumer
spending habits arising from the
‘cost of living’ crisis, has been
identified as an indicator of
impairment.
Impairment for tangible assets (PPE
and ROUA) is tested on the basis of
each individual cash generating unit
(CGU) - an individual pub site.
There is a risk that pubs may not
achieve the anticipated business
performance to support their carrying
value. This could lead to an
impairment charge that has not been
recognised by management.
Significant judgement is required in
forecasting future cash flows of each
pub, the long-term growth rate and
the rate at which cash flows are
discounted. For a portion of the pub
estate where the value-in-use model
may indicate an impairment charge,
an overlay based on the market value
approach is performed which involves
significant judgement in determining
the fair value of these pubs.
The impairment charge is classified
as a separately disclosed item in the
Income Statement.
We gained an understanding through a walkthrough of the
process and controls management has in place over the
impairment process.
We validated that the methodology of the impairment exercise is
consistent with the requirements of IAS 36 Impairment of Assets,
including appropriate identification of cash generating units and the
allocation of central service costs in the value in use calculations.
We tested the arithmetical accuracy and integrity of the
impairment model and confirmed that the forecasts were
consistent with the Board approved forecasts and those
used in the going concern assessment.
We agreed the carrying value of each CGU back to the fixed
asset register.
Below we summarise the procedures performed in relation to
the key judgements for the tangible (PPE and ROUA) assets
impairment review:
Based on our audit procedures
we have concluded the
impairment charge of
£3.3 million (being £3.3m
million PP&E impairment) is
appropriately determined. We
highlighted that a reasonably
possible change in certain key
assumptions including sales
forecasts and risk adjustment
factors could lead to material
additional impairment
charges. We concluded
appropriate disclosures had
been included by management
for the above assumptions and
that the impairment is
appropriately presented as
separately disclosed items
given market practice.
• In respect of the impact of COVID-19, cost information and
consumer spending habits on both short-term trading and
the longer-term growth rate, we compared management’s
assumptions against external economic forecasts and actual
performance from the last year.
• We critically challenged and assessed the reasonableness of
management’s recovery assumptions and post-COVID-19
assumptions with the assistance of our EY sector specialists.
• We also performed sensitivity analysis based on reasonable
possible changes to key assumptions determined by
management being revenue, discount rate and long-term
growth rate. We assessed that the reasonably possible change
in assumptions applied by management were appropriate by
reference to the ranges independently established by our work.
• We used our internal valuations specialists to support our
assessment of the discount rate and long-term growth rate
applied to cashflows by independently determining an
acceptable range of values for each assumption.
• Where management’s pub impairment assessment was based
on the fair value approach, we obtained an external property
valuation from management’s specialists on a sample of pubs
and reviewed the methodology applied and audited the key
assumptions that form part of the valuation in light of recent
transactions in the market.
We assessed the disclosures in notes to the financial statements
against the requirements of IAS 36 Impairment of Assets, in
particular the requirement to disclose further sensitivities for CGUs
where a reasonably possible change in a key assumption would
cause an impairment. We also assessed the related separately
disclosed item accounting treatment by reference to the Company’s
accounting policy, industry practice and the FRC guidance.
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Independent Auditor’s Report
to the members of Fuller, Smith & Turner P.L.C
Continued
Key observations communicated
to the Audit Committee
We concluded that revenue
was reasonably stated.
We did not identify any
instances of management
override in relation to revenue.
Risk
Our response to the risk
Management override in the
recognition of revenue
Refer to the Accounting policies
(page 111) and Note 3 of the financial
statements (page 115)
We performed a walkthrough of each of the Group’s significant
revenue processes, including the recording of manual journal
adjustments, and assessed the design effectiveness of the key
controls that are in place.
We applied correlation data analysis over the Group’s entire
revenue journal population to identify how much of the Group’s
revenue is converted to cash postings and to isolate non-standard
revenue transactions for further analysis, focusing our testing on
higher risk transactions identified. We determined the higher risk
journal entries to be the adjustments made at or near the end of
the reporting period, post-closing adjustments and other
adjustments made to record transactions outside the normal
course of business and performed substantive procedures to
obtain sufficient appropriate audit evidence that those entries
were properly supported and approved.
We searched for any topside journals to revenue, but none were
identified.
We performed cut-off testing procedures including review of post
period end cash receipts and journals, and an analytical review of
significant variances to the prior year, to assess for completeness.
The Group recorded revenue of
£253.8 million in the period
(2021: £73.2 million), including
£228.8 million in the Managed
houses segment (2021: £64.0 million)
and £25.0 million in the Tenanted Inns
segment (2021: £9.2 million).
The vast majority of the Group’s
revenue transactions are non-
complex, with no judgement
applied over the amount recorded.
We consider the significant risk
relating to fraud in revenue recognition
to be around management override
of controls and topside journals to
revenue in the managed and
tenanted estate.
For managed houses, revenue is
typically comprised of a large number
of low value transactions. Although
there is little management judgement
involved, there is a risk that manual
topside adjustments could be posted
which could result in revenue being
overstated or not recorded. For
Tenanted Inns there is also a risk that
manual topside adjustments could be
posted to revenue.
In the prior year, our auditor’s report included a key audit matter in relation to the deferred taxation on the pub estate. This is no longer
a key audit matter as the error found in the prior year audit has been resolved.
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit
and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the
economic decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our
audit procedures.
We determined materiality for the Group and Company to be £1.27 million (2021: £0.9 million), which is 0.5% of the Group’s revenue
(2021: 3% of normalised profit before tax and separately disclosed items). We believe that revenue is an appropriate materiality basis for
2022 due to its prominence in financial reporting to the Group’s equity and debt stakeholders in the context of the Group which has not
returned to a normalised level of profit.
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Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Group’s overall control environment, our judgement was
that performance materiality was 75% (2021: 50%) of our planning materiality, namely £0.95m (2021: £0.45m). We have increased our
performance materiality from the prior year as this is no longer a first year audit and based on our experience from the prior year audit.
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of £64,000 (2021: £45,000), which
is set at 5% of planning materiality, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of other
relevant qualitative considerations in forming our opinion.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor’s report
thereon. The directors are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this
report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a
material misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the Companies
Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Company and its environment obtained in the course of the audit,
we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if,
in our opinion:
• adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from
branches not visited by us; or
• the Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the
accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
9
3
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
Independent Auditor’s Report
to the members of Fuller, Smith & Turner P.L.C
Continued
Corporate Governance Statement
We have reviewed the directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance
Statement relating to the Group and Company’s compliance with the provisions of the UK Corporate Governance Code specified for our
review by the Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance
Statement is materially consistent with the financial statements or our knowledge obtained during the audit
• Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material
uncertainties identified set out on page 31;
• Directors’ explanation as to its assessment of the Company’s prospects, the period this assessment covers and why the period is
appropriate set out on page 104;
• Director’s statement on whether it has a reasonable expectation that the Group will be able to continue in operation and meets its
liabilities set out on page 104;
• Directors’ statement on fair, balanced and understandable set out on page 88;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 35;
• The section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on
page 67; and;
• The section describing the work of the audit committee set out on page 66.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 88, the directors are responsible for the preparation of
the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine
is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group and Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors
either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or
intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including
fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the
Company and management.
• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and determined that the most
significant are Companies Act 2006, Health & Safety and food hygiene laws, Minimum Wage regulations, Money Laundering regulations
and the UK Corporate Governance Code 2018.
• We understood how the Company is complying with those frameworks by making inquires of management, those charged with
governance, those responsible for legal and compliance procedures and the Company Secretary. We corroborated our inquires through
inspection of board minutes and correspondence with regulatory authorities and through attendance at Audit Committee meetings.
• We assessed the susceptibility of the Group’s financial statements to material misstatement, including how fraud might occur by
making inquiries of management, those charged with governance and various other individuals within the financial reporting function.
We corroborated these inquiries by inspecting board minutes, internal audit reports and findings, reports to the Group’s internal
whistleblowing hotline and by understanding both the Group’s bonus scheme structure and the expectations of investors and analysts,
to understand areas in which individuals may be incentivised to commit fraud.
• Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our
procedures involved making inquiries as described above, inspecting minutes of all significant board and committee meetings, reading
correspondence with regulatory authorities, testing manual journal entries with higher risk characteristics and testing unusual or
non-standard transactions.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website
at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
S
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E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
4
9
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
Other matters we are required to address
• Following the recommendation from the audit committee, we were appointed by the Company on 27 January 2021 to audit the
financial statements for the period ending 26 March 2021 and subsequent financial periods.
The period of total uninterrupted engagement including previous renewals and reappointments is 2 years, covering the years ending
27 March 2021 to 26 March 2022.
• The audit opinion is consistent with the additional report to the audit committee.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in
an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
R A C H E L S A V A G E ( S E N I O R S TA T U T O R Y A U D I T O R )
F O R A N D O N B E H A L F O F E R N S T & Y O U N G L L P, S T AT U T O R Y A U D I T O R
L O N D O N
08 June 2022
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
9
5
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
Group Income Statement
for the 52 weeks ended 26 March 2022
52 weeks ended 26 March 2022
52 weeks ended 27 March 2021
Before
separately
disclosed
items
£m
Separately
disclosed
items
£m
Note
Before
separately
disclosed
items
£m
Separately
disclosed
items
£m
Total
£m
Total
£m
253.8
(235.3)
–
18.5
(11.3)
–
7.2
(1.2)
6.0
–
6.0
Pence
9.79
9.73
0.98
0.97
9.79
9.73
0.98
0.97
–
253.8
73.2
–
73.2
(2.0)
(237.3)
(113.7)
(14.8)
(128.5)
–
(2.0)
–
6.3
4.3
(3.2)
1.1
–
1.1
–
16.5
(11.3)
6.3
11.5
(4.4)
7.1
–
7.1
0.2
(40.3)
(8.4)
–
(48.7)
8.9
(39.8)
(0.5)
(40.3)
–
(14.8)
(0.1)
5.8
(9.1)
0.7
(8.4)
(0.9)
(9.3)
Pence
11.59
11.51
Pence
(73.00)
(73.00)
1.16
1.15
(7.30)
(7.30)
11.59
11.51
(72.09)
(72.09)
1.16
1.15
(7.21)
(7.21)
0.2
(55.1)
(8.5)
5.8
(57.8)
9.6
(48.2)
(1.4)
(49.6)
Pence
(89.84)
(89.84)
(8.98)
(8.98)
(87.31)
(87.31)
(8.73)
(8.73)
Continuing
Revenue
Operating costs
Other income
Operating profit/(loss)
Finance costs
Profit on disposal of properties
Profit/(loss) before tax
Tax
3
4
3
6
5
Profit/(loss) for the year from continuing operations
Net loss from discontinued operations after tax
19
Profit/(loss) for the year
Group
Earnings/(loss) per share per 40p ‘A’ and ‘C’ ordinary
share
8, 19
8, 19
8, 19
8, 19
8
8
8
8
Basic
Diluted
6
9
Earnings/(loss) per share per 4p ‘B’ ordinary share
Basic
Diluted
Continuing operations
Earnings/(loss) per share per 40p ‘A’ and ‘C’ ordinary
share
Basic
Diluted
Earnings/(loss) per share per 4p ‘B’ ordinary share
Basic
Diluted
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
Group Statement of Comprehensive Income
for the 52 weeks ended 26 March 2022
Profit/(loss) for the year
Items that may be reclassified to profit or loss in subsequent years (net of tax)
Net gains on valuation of financial assets and liabilities
Tax related to items that may be reclassified to profit or loss
Items that will not be reclassified to profit or loss in subsequent years (net of tax)
Net actuarial gains/(losses) on pension schemes
Tax related to items that will not be reclassified to profit or loss
Other comprehensive gains/(losses) for the year, net of tax
Total comprehensive income/(expenses) for the year, net of tax
Note
26
7
23
7
52 weeks
ended
26 March
2022
£m
52 weeks
ended
27 March
2021
£m
7.1
(49.6)
0.5
(0.1)
15.5
(3.8)
12.1
19.2
0.5
(0.1)
(1.0)
0.2
(0.4)
(50.0)
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
9
7
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
Group Balance Sheet
26 March 2022
Non-current assets
Intangible assets
Property, plant and equipment
Investment properties
Retirement benefit obligations
Right-of-use assets
Total non-current assets
Current assets
Inventories
Trade and other receivables
Current tax receivable
Cash and short-term deposits
Total current assets
Assets classified as held for sale
Total assets
Current liabilities
Trade and other payables
Provisions
Borrowings
Lease liabilities
Other financial liabilities
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Other financial liabilities
Retirement benefit obligations
Deferred tax liabilities
Total non-current liabilities
Net assets
Capital and reserves
Share capital
Share premium account
Capital redemption reserve
Own shares
Hedging reserve
Retained earnings
Total equity
Approved by the Board and signed on 8 June 2022.
M J T U R N E R , F C A
C H A I R M A N
Registered Number: 241882
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
8
9
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
Group
2022
£m
Group
2021
£m
Note
10
11
12
23
16
17
18
22
20
21
25
22
16
14
22
16
14
23
7
27
27
27
27
27
29.5
592.7
1.6
16.2
73.8
713.8
3.6
10.7
0.6
15.6
30.5
5.4
749.7
(57.1)
(0.5)
(120.0)
(6.8)
(0.1)
(184.5)
(27.5)
(73.9)
–
(1.9)
(12.7)
(116.0)
449.2
25.4
53.2
3.7
(16.6)
(0.1)
383.6
449.2
27.3
590.2
3.1
–
81.9
702.5
2.1
11.5
4.0
17.1
34.7
9.6
746.8
(28.7)
(4.0)
(207.7)
(6.7)
–
(247.1)
(27.5)
(83.2)
(0.7)
(3.5)
(5.3)
(120.2)
379.5
22.8
4.2
3.7
(17.0)
(0.5)
366.3
379.5
Company Balance Sheet
26 March 2022
Company
2022
£m
Company
2021
£m
Note
10
11
12
23
16
15
17
18
22
20
21
25
22
16
14
22
16
14
23
7
27
27
27
27
27
6.2
592.7
1.6
16.2
73.3
109.1
799.1
3.6
10.7
0.6
15.6
30.5
5.4
835.0
(193.8)
(0.5)
(120.0)
(6.5)
(0.1)
(320.9)
(27.5)
(72.8)
–
(1.9)
(12.8)
(115.0)
399.1
25.4
53.2
3.7
(16.6)
(0.1)
(1.6)
335.1
399.1
4.0
590.2
3.1
–
81.4
109.3
788.0
2.1
11.4
3.9
16.9
34.3
9.6
831.9
(161.6)
(4.0)
(207.7)
(6.5)
–
(379.8)
(27.5)
(81.8)
(0.7)
(3.5)
(5.4)
(118.9)
333.2
22.8
4.2
3.7
(17.0)
(0.5)
(1.6)
321.6
333.2
Non-current assets
Intangible assets
Property, plant and equipment
Investment properties
Retirement benefit obligations
Right-of-use assets
Investments in subsidiaries
Total non-current assets
Current assets
Inventories
Trade and other receivables
Current tax receivable
Cash and short-term deposits
Total current assets
Assets classified as held for sale
Total assets
Current liabilities
Trade and other payables
Provisions
Borrowings
Lease liabilities
Other financial liabilities
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Other financial liabilities
Retirement benefit obligations
Deferred tax liabilities
Total non-current liabilities
Net assets
Capital and reserves
Share capital
Share premium account
Capital redemption reserve
Own shares
Hedging reserve
Merger reserve
Retained earnings
Total equity
Profit attributable to ordinary shareholders and included in the financial statements of the Parent Company was £3.3 million
(2021: £50.7 million loss).
Approved by the Board and signed on 8 June 2022.
M J T U R N E R , F C A
C H A I R M A N
Registered Number: 241882
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
9
9
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
Group Statement of Changes in Equity
for the 52 weeks ended 26 March 2022
Group
At 28 March 2020
Loss for the year
Other comprehensive income/(expense)
for the year
Total comprehensive income/(loss)
for the year
Shares released from ESOT and treasury
Share-based payment credits
At 27 March 2021
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Shares released from ESOT and treasury
Dividends (note 9)
Share-based payment charges
Tax credited directly to equity
At 26 March 2022
Share
capital
(note 27)
£m
Share
premium
account
(note 27)
£m
Capital
redemption
reserve
(note 27)
£m
Own shares
(note 27)
£m
Hedging
reserve
£m
Retained
earnings
£m
22.8
4.2
3.7
(17.1)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.1
–
(0.9)
–
0.4
0.4
–
–
Total
£m
429.8
(49.6)
417.1
(49.6)
(0.8)
(0.4)
(50.4)
(50.0)
(0.1)
(0.3)
–
(0.3)
22.8
4.2
3.7
(17.0)
(0.5)
366.3
379.5
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.2
0.2
–
–
–
–
0.4
0.4
–
–
–
–
–
7.1
11.7
18.8
–
–
(2.4)
0.8
0.1
7.1
12.1
19.2
51.8
0.2
(2.4)
0.8
0.1
25.4
53.2
3.7
(16.6)
(0.1)
383.6
449.2
Issue of share capital (note 27)
2.6
49.0
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
0
0
1
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
Company Statement of Changes in Equity
for the 52 weeks ended 26 March 2022
Company
At 28 March 2020
Loss for the year
Other comprehensive income/(expense)
for the year
Total comprehensive income/(loss)
for the year
Shares released from ESOT and treasury
Hive up of Bel & The Dragon
Share-based payment credits
At 27 March 2021
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Shares released from ESOT and treasury
Dividends (note 9)
Share-based payment charges
Tax credited directly to equity
At 26 March 2022
Share
capital
(note 27)
£m
Share
premium
account
(note 27)
£m
Capital
redemption
reserve
(note 27)
£m
Own
shares
(note 27)
£m
22.8
4.2
3.7
(17.1)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.1
–
–
Hedging
reserve
£m
Merger
reserve
£m
Retained
earnings
£m
Total
£m
(0.9)
–
0.4
0.4
–
–
–
–
–
–
–
–
(1.6)
–
373.5
386.2
(50.7)
(50.7)
(0.8)
(0.4)
(51.5)
(0.1)
–
(0.3)
(51.1)
–
(1.6)
(0.3)
22.8
4.2
3.7
(17.0)
(0.5)
(1.6)
321.6
333.2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.2
0.2
–
–
–
–
0.4
0.4
–
–
–
–
–
–
–
–
–
–
–
–
–
3.3
11.7
15.0
–
–
(2.4)
0.8
0.1
3.3
12.1
15.4
51.8
0.2
(2.4)
0.8
0.1
25.4
53.2
3.7
(16.6)
(0.1)
(1.6)
335.1
399.1
Issue of share capital (note 27)
2.6
49.0
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
1
0
1
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
Group Cash Flow Statement
for the 52 weeks ended 26 March 2022
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
Profit/(loss) before tax for continuing operations
Net finance costs before separately disclosed items
Separately disclosed items
Depreciation and amortisation
Difference between pension charge and cash paid
Share-based payment charges/(credit)
Change in trade and other receivables
Change in inventories
Change in trade and other payables
Cash impact of operating separately disclosed items
Cash generated from/(absorbed by) operations
Tax received
Cash generated from/(absorbed by) operating activities – continuing operations
Cash absorbed by operating activities – discontinued operations
Net cash generated from/(absorbed by) operating activities
Cash flow from investing activities
Purchase of property, plant and equipment and intangibles
2
0
1
Sale of property, plant and equipment, right-of-use assets and assets held for sale
Cash absorbed by investing activities – continuing operations
Cash generated from investing activities – discontinued operations
Net cash (outflow) from investing activities
Cash flow from financing activities
Receipts on release of own shares to option schemes
Interest paid
Preference dividends paid
Equity dividends paid
Net proceeds from equity placing
(Repayment)/drawdown of CCFF
Drawdown/(repayment) of bank loans
Surrender of leases
Principal and interest elements of lease payments
Payment of loan arrangement fees
Cash (absorbed by)/generated from financing activities – continuing operations
Cash absorbed by financing activities – discontinued operations
Net cash (outflow)/inflow from financing activities
Net movement in cash and cash equivalents
Cash and cash equivalents at the start of the year
Total cash and cash equivalents at the end of the year
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
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L
A
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Group
52 weeks
ended
26 March
2022
£m
Group
52 weeks
ended
27 March
2021
£m
Note
11.5
11.3
(4.3)
25.8
44.3
(2.3)
0.8
0.5
(1.5)
28.8
(1.9)
68.7
2.5
71.2
–
71.2
(25.8)
10.0
(15.8)
–
(15.8)
0.1
(7.2)
(0.1)
(2.4)
51.8
(100.0)
12.6
(1.9)
(8.6)
(1.2)
(56.9)
–
(56.9)
(1.5)
17.1
15.6
6
5
4
23
4
5
19
19
27
9
9
22
22
16
22
19
22
22
(57.8)
8.4
9.1
27.2
(13.1)
(2.3)
(0.3)
(0.4)
1.7
(6.4)
(1.5)
(22.3)
3.4
(18.9)
(0.4)
(19.3)
(16.5)
10.8
(5.7)
0.3
(5.4)
–
(4.5)
(0.1)
–
–
99.4
(64.0)
–
(9.2)
–
21.6
(0.1)
21.5
(3.2)
20.3
17.1
Company Cash Flow Statement
for the 52 weeks ended 26 March 2022
Profit/(loss) before tax for continuing operations
Net finance costs before separately disclosed items
Separately disclosed items
Depreciation and amortisation
Difference between pension charge and cash paid
Share-based payment charges/(credit)
Change in trade and other receivables
Change in inventories
Change in trade and other payables
Cash impact of operating separately disclosed items
Cash generated from/(absorbed by) operations
Tax received
Net cash generated from/(absorbed by) operating activities
Cash flow from investing activities
Business combinations
Purchase of property, plant and equipment and intangibles
Sale of property, plant and equipment, right-of-use assets and assets held for sale
Cash absorbed by investing activities – continuing operations
Cash generated from investing activities – discontinued operations
Net cash (outflow) from investing activities
Cash flow from financing activities
Receipts on release of own shares to option schemes
Interest paid
Preference dividends paid
Equity dividends paid
Net proceeds of equity placing
(Repayment)/drawdown of CCFF
Drawdown/(repayment) of bank loans
Surrender of leases
Principal and interest elements of lease payments
Cost of refinancing
Net cash (outflow)/inflow from financing activities
Net movement in cash and cash equivalents
Cash and cash equivalents at the start of the year
Total cash and cash equivalents at the end of the year
Company
52 weeks
ended
26 March
2022
£m
Company
52 weeks
ended
27 March
2021
£m
7.6
14.9
(4.2)
25.7
44.0
(2.3)
0.8
0.5
(1.5)
29.0
(1.9)
68.6
2.5
71.1
–
(25.8)
10.0
(15.8)
–
(15.8)
0.1
(7.2)
(0.1)
(2.4)
51.8
(100.0)
12.6
(1.9)
(8.3)
(1.2)
(56.6)
(1.3)
16.9
15.6
(60.3)
12.1
8.5
26.8
(12.9)
(2.3)
(0.3)
7.1
1.7
(14.7)
(1.5)
(22.9)
3.6
(19.3)
0.2
(16.5)
10.8
(5.5)
0.6
(4.9)
–
(4.5)
(0.1)
–
–
99.4
(64.0)
–
(8.9)
–
21.9
(2.3)
19.2
16.9
Note
6
5
4
23
4
5
27
9
9
22
22
16
22
22
22
F
I
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I
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M
E
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1
0
3
F
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2
0
2
2
Notes to the Financial Statements
1. Authorisation of Financial Statements and Accounting Policies
Authorisation of Financial Statements
The financial statements of Fuller, Smith & Turner P.L.C. and its subsidiaries (the “Group”) for the 52 weeks ended 26 March 2022 were
authorised for issue by the Board of Directors on 8 June 2022 and the Balance Sheet was signed on the Board’s behalf by M J Turner.
Fuller, Smith & Turner P.L.C. is a public limited company incorporated and domiciled in England and Wales. The Company’s ordinary ‘A’
shares are traded on the London Stock Exchange.
Significant Accounting Policies
Basis of preparation
The Group’s and Company’s financial statements have been prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006, and in accordance with UK adopted International Financial Reporting
Standards, and applied to the financial statements of the Group and the Company for the 52 weeks ended 26 March 2022. The principal
accounting policies adopted by the Group and by the Company are set out in the accounting policies below.
The Group and Company financial statements are presented in Sterling and all values are shown in millions of pounds (£m) rounded
to the nearest hundred thousand, except where otherwise indicated.
As permitted by Section 408 of the Companies Act 2006, a separate Income Statement for the Parent Company has not been prepared.
Going concern
The Group’s business activities, together with the factors likely to affect its future development, performance and position are set out in
the Strategic Report on pages 1 to 53. The financial position of the Company, its cash flows, net debt and borrowing facilities and the
maturity of those facilities are set out above on pages 139 to 144.
In addition, there are further details in the financial statements on the Group’s financial risk management, objectives and policies in note 26.
At 26 March 2022, the Group had a strong Balance Sheet with 92% of the estate being freehold properties and available headroom on
facilities of £72.0 million, £15.6 million of cash and resulting pre IFRS 16 net debt of £131.9 million. At year end, the Group had existing
facilities of £192 million.
The Group completed an equity placing on 20 April 2021 which raised net proceeds of £51.8 million. The proceeds of the equity placing,
along with the Group’s existing facilities, were used to repay the CCFF on 12 May 2021. At the same time as the equity placing, the Group
also agreed an Amend and Extend Refinancing of its existing debt facilities with its relationship banks, extending the maturity of the
£192 million facilities to 19 February 2023 and amending the financial covenants to a minimum liquidity level of £10 million to be tested
monthly until 31 March 2022.
Since year end, the Group has secured a new facility of £200 million, split between a revolving credit facility of £110 million and a term
loan of £90 million, for a tenure of four years to May 2026. Under the new agreement, the minimum liquidity covenant of £10 million tested
monthly remains until November 2022. From December 2022 (and tested quarterly thereafter) the covenant suite will consist of net debt
to EBITDA (leverage) and EBITDA to net finance charges. See further details in note 26.
The Group has modelled financial projections for the going concern period, which is defined as the 12-month period from the date of
approval of these financial statements to June 2023, based upon two scenarios, the base case and the downside scenario. The base case
scenario indicates that it will have significant resources, to continue to settle its debts as they fall due and operate well within its
covenants for the going concern assessment period. The base case is the Board approved FY2023 budget as well as the Q1 FY2024 plan
which forms part of the Board approved three-year plan. The base case assumes that there will still be some impact felt, particularly in
urban areas, from the pandemic and costs will be impacted by the level of inflation currently seen and the increase in the national
minimum wage.
The Group has also modelled a downside scenario whereby sales drop by c.7% from that assumed in the base case and inflation
continues at an even higher rate than in the base case, specifically utilities (10% increase from base case) and food inflation (peaking at
3% higher peak compared to the base case). Under this scenario, the Group will still have sufficient resources and headroom on its
covenants throughout the assessment period.
The Group has also performed a reverse stress case which has shown that the Group could withstand a further 5% fall in sales, a further
5% increase in food inflation and another 10% increase in utilities during October – February 2023 compared to the downside scenario,
before the covenant levels would be exceeded on 31 December 2022. The model assumes increased costs for this period as October
2022 is when the energy price cap is expected to increase again and it is assumed this will have an impact on consumers and hence sales
volumes. The stress test represents a 39% decline in EBITDA and therefore the Directors believe the scenario to be remote.
Under both the base case and downside scenarios modelled, the Group would have sufficient headroom on its facilities throughout the
going concern assessment period. Additionally, neither the downside scenerio or the reverse stress test include any mitigating factors
which the Group have in their control, to either improve EBITDA or reduce net debt, such as disposals of licensed and unlicensed
properties, reduction in capex spend to only essential maintenance and decision not to pay dividends and bonuses.
The Directors have also determined that, over the period of the going concern assessment, there is not expected to be a significant impact
on the Group because of climate change.
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4
0
1
2
2
0
2
S
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A
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At the half year two material uncertainties were reported: (1) the refinance of the debt was not formalised which presented a material
uncertainty; and (2) that under a severe but not implausible scenario of further government imposed closures, the Group’s forecast
showed it would be able to withstand two months of closure before it would forecast a breach of its leverage covenant at June 2022.
The matters that gave rise to the above uncertainties have been resolved either in the year or post year end. On this basis, along with the
facts and circumstances set out above, the Directors are satisfied that there is a reasonable expectation that the Group has adequate
resources to continue in operational existence for the going concern assessment period, being the 12 months from the date of signing
these financial statements through to June 2023.
Significant accounting judgements, estimates and assumptions
The areas of estimation and assumption which are considered to be significant in the preparation of the financial statements are as follows:
The Group determines whether goodwill is impaired on an annual basis and this requires an estimation of the value in use of the cash-
generating units (“CGUs”) to which the goodwill is allocated. This involves estimation of future cash flows and choosing a suitable
discount rate. Full details are supplied in note 13, together with an analysis of those key assumptions.
The Group reviews impairment of all property, plant and equipment and right-of-use assets at CGU level where there is any indication
of impairment. This requires an estimation of the value in use and involves estimation of future cash flows and choosing a suitable
discount rate. See note 13, which describes the assumptions used together with an analysis of the key assumptions.
Measurement of defined benefit pension obligations requires estimation of future changes in inflation, as well as mortality rates, the
expected return on assets and the selection of a suitable discount rate. These have been determined on advice from the Group’s qualified
actuary. The estimates used and the key assumptions are provided in note 23.
The areas of judgement which are considered to be significant in the preparation of the financial statements are as follows:
Judgement is used to determine those items that should be separately disclosed to allow a better understanding of the underlying trading
performance of the Group. The judgement includes assessment of whether an item is of a nature that is not consistent with normal
trading activities or of sufficient size or infrequency. See note 5 for further details.
The Group has exercised significant accounting estimation and judgement in the recognition of deferred tax liabilities in respect of
property, plant and equipment. Significant accounting estimates and judgements include those used to determine the amount of net
book value of property, plant and equipment to which the initial recognition exemption applies, the calculation of the tax base on sale
(which is subject to certain restrictions under tax law) and the offsetting of inherent losses against inherent gains where tax losses are
expected to be utilised against future profits and gains.
1
0
5
Basis of consolidation
The Group financial statements consolidate the financial statements of Fuller, Smith & Turner P.L.C. and the entities it controls (its
subsidiaries) drawn up for the 52 weeks ended 26 March 2022 (2021: 52 weeks ended 27 March 2021). Subsidiaries are consolidated
from the date of their acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date
that such control ceases. Control comprises the power to direct the relevant activities of the subsidiary which significantly affect
the return of the subsidiary, so as to obtain benefit from its activities, and is achieved through direct or indirect ownership of voting
rights; currently exercisable or convertible potential voting rights; or by way of contractual agreement. All intercompany balances
and transactions, including unrealised profits arising from them, are eliminated.
Adoption of new standards and interpretations
The Group applied for the first time certain standards and amendments, which are effective for annual periods beginning on or after
28 March 2021. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not
yet effective.
• Covid-19 Related Rent Concessions beyond 30 June 2021 – Amendment to IFRS 16 – The amendment applies to annual reporting
periods beginning on or after 1 April 2021. Earlier application is permitted. The Group has elected to not take the practical expedient
and instead has treated rent concessions received as lease modifications.
The Directors do not believe the adoption of new standards has had any significant impact on the amounts reported in the financial statements.
Business combinations and goodwill
Business combinations are accounted for under IFRS 3 Business Combinations using the purchase method. Any excess of the
consideration of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent
liabilities is recognised in the Balance Sheet as goodwill and is not amortised. To the extent that the net fair value of the acquired entity’s
identifiable assets, liabilities and contingent liabilities is greater than the cost of the investment, a gain is recognised immediately in the
Income Statement.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Contingent
consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent
consideration classified as an asset or liability that is a financial instrument and within the scope of IFRS 9 Financial Instruments is
measured at fair value with the changes in fair value recognised in the statement of profit or loss in accordance with IFRS 9. Other
contingent consideration that is not within the scope of IFRS 9 is measured at fair value at each reporting date with changes in fair
value recognised in profit or loss.
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2
0
2
2
Notes to the Financial Statements
Continued
1. Authorisation of Financial Statements and Accounting Policies continued
After initial recognition, goodwill is stated at cost less any accumulated impairment losses, with the carrying value being reviewed
for impairment, at least annually and whenever events or changes in circumstances indicate that the carrying value may be impaired.
Any impairment of goodwill made cannot be reversed if circumstances subsequently change.
For the purpose of impairment testing, goodwill is allocated to the related CGUs (or group of CGUs) monitored by management.
Where the recoverable amount of the CGU is less than its carrying amount, including goodwill, an impairment loss is recognised
in the Income Statement.
The carrying amount of goodwill allocated to a CGU is taken into account when determining the gain or loss on disposal of the CGU,
or of an operation within it.
Property, plant and equipment
Property, plant and equipment is stated at cost or deemed cost less accumulated depreciation and any impairment in value.
Depreciation is calculated on a straight-line basis to write down the cost to the estimated residual value over the expected useful
life of the asset as follows:
Freehold buildings – Hotel accommodation and offices
Up to 50 years
Freehold buildings – Licensed retail property and unlicensed property
From 50 to 100 years
Leasehold improvements
Roofs
The term of the lease
From 10 to 50 years
Plant, machinery and vehicles, fixtures and fittings
From three years up to 25 years
As required under IAS 16 Property, Plant and Equipment, expected useful lives and residual values are reviewed every year. Land is not
depreciated. An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal (i.e., at
the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising
on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is
included in the Income Statement when the asset is derecognised.
Government grants
Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attached to
them and that the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in
which the Group recognises as expenses the related costs for which the grants are intended to compensate. When the grant relates to
an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.
Coronavirus Job Retention Scheme (“CJRS”)
Under this scheme, HMRC will reimburse up to 80% of the wages of certain employees who have been asked to stop working, but who
are being kept on the payroll (“furloughed”). The scheme is designed to compensate for staff costs, so amounts received are recognised
in the Income Statement over the same period as the costs to which they relate. In the Income Statement, payroll costs are shown net of
grant income.
Eat Out to Help Out
From 3 to 31 August 2020, HMRC offered a 50% discount of food and non-alcoholic drinks, capped to £10 per person, when dining
out between Monday and Wednesday. Revenue in the prior year includes amounts reimbursed from HMRC in respect of the scheme.
Business rates
Businesses in the retail, hospitality and leisure sectors in England did not have to pay business rates for the 2020 to 2021 tax year.
No business rate charge has therefore been recognised in the Income Statement for the period ended 27 March 2021. Income relating
to the business rate grants has been recognised in operating expenses in the Income Statement.
Covid Corporate Financing Facility (“CCFF”)
Commercial Paper issued to the Bank of England at a favourable yield is deemed to constitute a government grant. In the prior year, the
debt was recognised within current borrowings on the Balance Sheet at fair value, with the grant element, reflecting the favourable yield,
recognised as deferred income within trade and other payables. On amortisation, the grant element has been recognised within finance
costs, consistent with where the cost is recognised, as the Group’s policy is to present the income as a deduction from the related expense.
Hive-up transaction
When a subsidiary transfers its business to its parent immediately after acquisition (hive-up transaction) the assets are transferred at
market value and the investment is reduced to reflect the net effect of a return of capital in the form of the underlying net assets with
any difference taken to the merger reserve.
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6
0
1
2
2
0
2
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Investment property
The Group owns properties that are not used for the sale of goods or services but are held for capital appreciation or rental purposes.
These properties are classified as investment properties and their carrying values are based on cost less impairment. Depreciation
is calculated on a straight-line basis to write down the cost to the estimated residual value over the expected useful life of the asset,
which for investment properties is between 50 and 100 years.
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business
combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any
accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding capitalised development
costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication
that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite
useful life are reviewed at least at the end of each reporting period.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the CGU
level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not,
the change in useful life from indefinite to finite is made on a prospective basis.
An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss.
Research and development costs
Research costs are expensed as incurred. Development expenditures on an individual project are recognised as an intangible asset when
the Group can demonstrate:
• The technical feasibility of completing the intangible asset so that the asset will be available for use or sale
• Its intention to complete and its ability and intention to use or sell the asset
• How the asset will generate future economic benefits
• The availability of resources to complete the asset
• The ability to measure reliably the expenditure during development.
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortisation
and accumulated impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use
and will be amortised over the period of expected future benefit. Amortisation is recorded in operating costs. During the period of
development, the asset is tested for impairment annually.
Cloud Computing Arrangment costs
Cloud computing arrangements are ones in which a customer does not have control of the underlying software and use the software on
an as-needed basis. Costs associated with Cloud computing arrangements can be recognised as an intangible asset when the Group can
demonstrate ultimate control over the software, with the entity having the power to obtain sole future economic benefits from access to
the software and restrict others’ access to those benefits. Where the above criteria can not be demonstrated, then the right to access the
software over the contract term in the future is a service contract. If the Group determines that a cloud computing arrangement is a
service contract, then it recognises the related expenditure when it receives the service.
Impairment
Carrying values are reviewed for impairment if events indicate that the carrying value of the asset may not be recoverable. If such an indicator
exists and where the carrying values exceed the estimated recoverable amount, the assets or CGUs are written down to their recoverable
amounts. An asset’s recoverable amount is the greater of the fair value less costs to sell, and the value in use. In assessing value in use, the
estimated future cash flows are discounted to present value using a pre-tax discount rate that reflects the current market assessments of
the time value of money and risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken
into account. If no such transactions can be identified, an appropriate valuation model is used. For an asset that does not generate largely
independent cash inflows, the recoverable amount is determined for the smallest CGUs to which the asset belongs.
The Group bases its impairment calculation on most recent management approved budgets and forecast calculations, which are
prepared separately for each of the Group’s CGUs to which the individual assets are allocated. These budgets and forecast calculations
generally cover a period of two years. A long-term growth rate is calculated and applied to project future cash flows after the second year.
For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously
recognised impairment losses no longer exist or have decreased. If such indication exists, the Group estimates the asset’s or CGU’s
recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to
determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying
amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net
of depreciation, had no impairment loss been recognised for the asset in prior years.
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1
0
7
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2
0
2
2
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Notes to the Financial Statements
Continued
1. Authorisation of Financial Statements and Accounting Policies continued
Impairment losses, and any reversal of such losses, are recognised in the Income Statement.
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control
the use of an identified asset for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of
low value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right
to use the underlying assets.
a) Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use).
Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement
of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease
payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a
straight-line basis over the lease term.
b) Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be
made over the lease term. The lease payments include fixed payments less any lease incentives receivable, variable lease payments that
depend on an index or a rate, and amounts expected to be paid under residual value guarantees. Variable lease payments that do not
depend on an index or a rate are recognised as expenses in the period in which the event or condition that triggers the payment occurs.
The lease payment also includes the exercise price of a purchase option reasonably certain to be exercised by the Group and payment
of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. Extensions to leases are
recognised when it is reasonably certain the option is going to be exercised.
8
0
1
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date
because the interest rate implicit in the lease is not readily determinable. The carrying amount of lease liabilities is remeasured if there is
a modification, a change in the lease term or a change in the lease payments (e.g., changes to future payments resulting from a change
in an index or rate used to determine such lease payments).
The Group’s lease liabilities are included in Cash, Borrowings and Net Debt (see note 22).
c) Short-term leases and leases of low value assets
The Group applies the short-term lease recognition exemption to its short-term leases of equipment (i.e., those leases that have a lease
term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low value
assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases
and leases of low value assets are recognised as expense on a straight-line basis over the lease term.
Group as a lessor
Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as
operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and is included in revenue in the
Income Statement due to its operating nature.
Assets held for sale and discontinued operations
Assets are classified as held for sale when the carrying amount will be recovered principally through a sale transaction rather than
continuing use. The criteria for held for sale classification are regarded as met only when the sale is highly probable and the asset or
disposal group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is
unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn. Management must be committed
to the plan to sell the asset and the sale expected to be completed within one year from the date of the classification.
Assets held for sale are valued at the lower of the carrying amount and fair value less costs to sell. No depreciation is charged whilst
assets are classified as held for sale.
In accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, results for the discontinued operations are
presented separately in the Group’s Income Statement (for which the comparatives and related notes have been restated). Additional
disclosures are provided in note 20. All other notes to the financial statements include amounts for continuing operations, unless
indicated otherwise.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is calculated using the “first in first out” method. Net realisable
value is the estimated selling price in the ordinary course of business less estimated costs of completion and the costs to be incurred in
marketing, selling and distribution.
2
2
0
2
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Financial instruments
Initial recognition and derecognition
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of
another entity.
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial
instrument. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the
financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished,
discharged, cancelled or expires.
Financial assets
Recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive
income (“OCI”), and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial
asset’s contractual cash flow characteristics and the Group’s business model for managing them. With the exception of trade receivables
that do not contain a significant financing component or for which the Group has applied the practical expedient, the Group initially
measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.
Trade receivables that do not contain a significant financing component are measured at the transaction price in accordance with IFRS 15.
There are three measurement categories into which the Group classifies its debt instruments:
• Amortised cost: Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of
principal and interest, are measured at amortised cost. Interest income from these financial assets is included in finance income using
the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other
gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the statement
of profit or loss. The Group’s cash and cash equivalents, trade and other receivables fall into this category.
• Fair value through OCI (“FVOCI”): Assets that are held for collection of contractual cash flows and for selling the financial assets, where
the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount
are taken through OCI and will be recycled upon derecognition of the asset.
• Fair value through profit or loss (“FVPL”): Assets that do not meet the criteria for amortised cost or Fair value through OCI are measured
at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognised in profit or loss and presented net
within other gains/(losses) in the period in which it arises.
1
0
9
Impairment
IFRS 9’s impairment requirements use more forward-looking information to recognise expected credit losses – the expected credit loss
(“ECL”) model. Recognition of credit losses is no longer dependent on the Group first identifying a credit loss event. Instead the Group
considers a broader range of information when assessing credit risk and measuring expected credit losses, including past events, current
conditions, reasonable and supportable forecasts that affect the future cash flows of the instrument.
When assessing impairment for trade receivables, the Group has applied the simplified approach to expected credit losses as per IFRS 9
Financial Instruments. The model focuses on an appraisal of the risk that a receivable will default rather than whether a loss has been
incurred. This involves an unbiased assessment of a range of possible outcomes and their probabilities of occurrence, and is supported
by past experience of collecting payments as well as changes in economic conditions that correlate with default on receivables. Expected
credit losses are initially determined based on the Group’s historical credit loss experience, any forward-looking factors specific to a
particular trade receivable and the current economic environment.
The timing of initial recognition for impairment losses is the same period that the asset is recognised. Movements in expected credit
losses are recognised in the Income Statement within operating costs. At the point a trade receivable is written off the ledger as
uncollectable, the cost is charged against the allowance account and any subsequent recoveries of amounts previously written off
are credited to the Income Statement.
In the Parent Company, amounts due from subsidiary undertakings are recognised at their original amount less allowance for impairment
based on the ECL model. In determining the model the Company considers the net assets and the resources available to that subsidiary.
Financial liabilities
Recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings,
payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable
transaction costs.
The Group’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, derivative financial
instruments and lease liabilities.
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2
Notes to the Financial Statements
Continued
1. Authorisation of Financial Statements and Accounting Policies continued
For purposes of subsequent measurement, financial liabilities are classified in two categories:
• Financial liabilities at fair value through profit or loss which are measured subsequently at fair value with gains or losses recognised
in the Income Statement
• Financial liabilities at amortised cost (loans and borrowings) which are measured using the effective interest method.
Bank loans, overdrafts and debentures
Interest bearing bank loans, overdrafts and debentures are initially recorded at the fair value of proceeds received, net of direct issue
costs, and thereafter at amortised cost. Finance charges, including premiums payable on settlement or redemption and direct issue
costs, are accounted for on an effective interest rate basis in the Income Statement. Finance charges are added to the carrying amount
of the instrument to the extent that they are not settled in the period in which they arise.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if
there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise
the assets and settle the liabilities simultaneously.
Derivative financial instruments and hedge accounting
Recognition and measurement
The Group uses interest rate swaps to hedge its interest rate risks. Such derivative financial instruments are initially recognised at fair
value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried
as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
For the purpose of hedge accounting, hedges are classified as:
• Fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liability or an unrecognised firm
commitment
• Cash flow hedges when hedging the exposure to variability in cash flows that is either attributable to a particular risk associated with a
recognised asset or liability or a highly probable forecast transaction or the foreign currency risk in an unrecognised firm commitment
• Hedges of a net investment in a foreign operation.
At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which it wishes to apply
hedge accounting and the risk management objective and strategy for undertaking the hedge.
The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the
Group will assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of
hedge ineffectiveness and how the hedge ratio is determined). A hedging relationship qualifies for hedge accounting if it meets all of the
following effectiveness requirements:
• There is “an economic relationship” between the hedged item and the hedging instrument
• The effect of credit risk does not “dominate the value changes” that result from that economic relationship
• The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually
hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.
Hedges that meet all the qualifying criteria for hedge accounting are accounted for, as described below.
The Group has interest rate swaps which are classified as cash flow hedges. The effective portion of changes in the fair value of
derivatives that are designated and qualify as cash flow hedges is recognised in the cash flow hedge reserve within equity. The gain
or loss relating to the ineffective portion is recognised immediately in profit or loss, within other gains/(losses). Amounts previously
recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged
item affects profit or loss, in the same line as the recognised hedged item. If cash flow hedge accounting is discontinued, the amount that
has been accumulated in OCI must remain in accumulated OCI if the hedged future cash flows are still expected to occur. Otherwise, the
amount will be immediately reclassified to profit or loss as a reclassification adjustment. When a hedging instrument expires, or is sold or
terminated, or when a hedge no longer meets the criteria for hedge accounting, but the risk management objective remains the same, the
hedge ratio is adjusted so that it meets the qualifying criteria again.
Classification of shares as debt or equity
When shares are issued, any component that creates a financial liability of the Company or Group is presented as a liability in the
Balance Sheet; measured initially at fair value net of transaction costs and thereafter at amortised cost until extinguished on conversion
or redemption. The corresponding dividends relating to the liability component are charged as interest expense in the Income Statement.
The initial fair value of the liability component is determined using a market rate for an equivalent liability without a conversion feature.
The remainder of the proceeds on issue is allocated to the equity component and included in shareholders’ equity, net of transaction
costs. The carrying amount of the equity component is not remeasured in subsequent years.
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0
1
1
2
2
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2
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The Group’s ordinary shares are classified as equity instruments. For the purposes of the disclosures given in note 26, the Group
considers its capital to comprise its ordinary share capital, share premium, capital redemption reserve, hedging reserve and accumulated
retained earnings plus its preference shares which are classified as a financial liability in the Balance Sheet. There have been no changes
to what the Group considers to be capital since the prior year.
Preference shares
The Group’s preference shares are reported under non-current liabilities. The corresponding dividends on preference shares are charged
as interest in the Income Statement. Preference share dividends are at fixed rates.
Revenue
Revenue is recognised under IFRS 15 upon application of the following steps:
• Identify the contract with a customer
• Identify the performance obligations in the contract
• Determine the transaction price
• Allocate the transaction price to each performance obligation
• Recognise revenue when a performance obligation is satisfied by transferring a promised good or service to a customer.
Managed Pubs and Hotels revenue primarily consists of food, drink and accommodation sales. Food and drink revenue is recognised
when control of the goods/services has transferred, being at the point the customer purchases the food or drink. The Group also takes
bookings for events and accommodation which require a deposit to secure the booking. A contract liability for the deposit is recognised
at the time of the sale. The contract liability is released and revenue is recognised on a straight-line basis over the duration of the room
occupation or event. A contract liability is recognised until the event is complete or the guest has occupied the room.
The Group also earns revenue through selling drink to the Tenanted Inns division which is supplied to Fuller’s by Asahi under the Long-
Term Service Agreement (“LTSA”). Revenue is recognised as though the Group is the principal as it has primary responsibility over the
product and also bears the inventory risk.
Following the sale of the Fuller’s Beer Business to Asahi Europe Ltd, the Group entered into a TSA to provide certain services to facilitate
the successful separation of the two companies. The revenue is recognised over the period the services are provided.
Revenue is recognised under IFRS 16 where the Group receives rental income from Tenanted and unlicensed properties. This is
recognised on a straight-line basis over the lease term. Some rental income includes turnover rent which is based on the percentage of
the income generated by that pub. This is recognised when the revenue is earned. Revenue is recognised for machine income when net
takings are earned.
Borrowing costs
Borrowing costs directly attributable to the acquisition or construction of an asset that takes a substantial period of time to get ready
for use are capitalised as part of the cost of the asset being created. This is applied to development projects where the development is
expected to last in excess of six months at the commencement of the project. All other borrowing costs are expensed in the period in
which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
Separately disclosed items
The Group presents as separately disclosed items on the face of the Income Statement those material items of income and expense
which, because of the nature or expected infrequency of the events giving rise to them, merit separate presentation to allow shareholders
to understand better the elements of financial performance in the year, so as to facilitate comparison with prior periods and to better
assess trends in financial performance. Separately disclosed items are a key element used to demonstrate the underlying performance
of the Group and reported as an alternative performance measure within the management commentary for the reporting period.
Share-based payments
The Group has an employee Share Incentive Plan that awards shares to employees based on the reported profits of the Group for the year,
and a Long-Term Incentive Plan that awards shares to Directors and Senior Executives subject to specific performance criteria. The Group
also issues equity-settled share-based payments to certain employees under approved and unapproved share option schemes and a
Savings Related Share Option Scheme.
The cost of equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at
which they are granted and is recognised as an expense over the vesting period, which ends on the date on which the relevant employees
become fully entitled to the award. Fair value is determined using an appropriate pricing model. In valuing equity-settled transactions, no
account is taken of any vesting conditions. The Group has no equity-settled transactions that are linked to the price of the shares of the
Company (market conditions).
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1
1
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2
0
2
2
Notes to the Financial Statements
Continued
1. Authorisation of Financial Statements and Accounting Policies continued
No expense is recognised for awards that do not ultimately vest. At each Balance Sheet date before vesting, the cumulative expense
is calculated, representing the extent to which the vesting period has expired and management’s best estimate of the achievement or
otherwise of non-market conditions and of the number of equity instruments that will ultimately vest. The movement in cumulative
expense since the previous Balance Sheet date is recognised in the Income Statement, with a corresponding entry in equity.
Where the terms of an equity-settled award are modified or a new award is designated as replacing a cancelled or settled award, the cost
based on the original award terms continues to be recognised over the original vesting period. In addition, an expense is recognised over
the remainder of the new vesting period for the incremental fair value of any modification, based on the difference between the fair value
of the original award and the fair value of the modified award, both as measured on the date of the modification. No reduction is
recognised if this difference is negative.
Where an equity-settled award is cancelled (including when a non-vesting condition within the control of the entity or employee is not
met), it is treated as if it had vested on the date of cancellation, and any cost not yet recognised in the Income Statement for the award
is expensed immediately. Any compensation paid up to the fair value of the award at the cancellation or settlement date is deducted
from equity, with any excess over fair value being treated as an expense in the Income Statement.
Own shares
Shares to be awarded under employee incentive plans and those that have been awarded but have yet to vest unconditionally are held
at cost by an employee share ownership trust (“ESOT”) and shown as a deduction from equity in the Balance Sheet. ESOT is an
independently managed trust and not controlled by the Group.
In addition to the purchase of shares by the various ESOTs for specific awards, the Group also from time to time acquires own shares to
be held as treasury shares. These shares are occasionally but not exclusively used to satisfy awards under various share option schemes.
Treasury shares are held at cost and shown as a deduction from total equity in the Balance Sheet.
Consideration received for the sale of such shares is also recognised in equity, with any difference between the proceeds from sale and
the original cost being taken to reserves. No gain or loss is recognised in the profit or loss on the purchase, sale, issue or cancellation of
treasury shares.
Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The current tax payable is based on taxable profit for the year using UK tax rates enacted or substantively enacted at the Balance Sheet
date and any adjustment to tax payable in respect of previous years. Taxable profit differs from net profit as reported in the Income
Statement because it excludes items of income or expense that are taxable or deductible in other years or are never taxable or deductible.
Deferred tax
Deferred tax is recognised on temporary differences at the Balance Sheet date between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible
temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit
will be available against which they can be utilised.
Such deferred tax assets and liabilities are not recognised where the asset or liability arises from the initial recognition of goodwill or an
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss. The carrying amount of deferred tax assets is reviewed at each Balance Sheet date.
Deferred tax is not recognised in respect of taxable temporary differences associated with investments in subsidiaries, where the timing
of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the
foreseeable future.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where
the deferred tax balance relates to the same taxation entities.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the periods when the asset is realised or the
liability is settled, based on tax rates and laws enacted or substantively enacted at the Balance Sheet date.
Current and deferred tax for the year
Current and deferred tax are recognised in the Income Statement except when they relate to items that are recognised in the Statement
of Comprehensive Income or in equity, in which case the current and deferred tax are also recognised in the Statement of Comprehensive
Income or directly in equity respectively.
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2
1
1
2
2
0
2
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Pensions and other post-employment benefits
Defined contribution schemes
Payments to defined contribution retirement benefit schemes are charged to the Income Statement as they fall due.
Defined benefit schemes
The Group operated a defined benefit pension plan for eligible employees where contributions were made into a separate fund
administered by Trustees. The Scheme closed to future accrual in January 2015.
The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method calculated by qualified
actuaries. This attributes entitlement to benefits to the current period (to determine current service cost) and to the current and prior
periods (to determine the present value of defined benefit obligation) and is based on actuarial advice. Past service cost is recognised
as an expense at the earlier of the date when a plan amendment or curtailment occurs and the date when an entity recognises any
termination benefits, or related restructuring costs under IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
When a settlement (eliminating all obligations for benefits already accrued) or a curtailment (reducing future obligations as a result of
a material reduction in the scheme membership or a reduction in future entitlement) occurs, the obligation and related plan assets are
remeasured using current actuarial assumptions and the resultant gain or loss is recognised in the Income Statement during the period
in which the settlement or curtailment occurs.
The Group determines the net interest charge/(credit) on the net defined benefit liability/(asset) for the period by applying the discount
rate used to measure the defined benefit obligation at the beginning of the period to the net pension liability/(asset) at the beginning of
the period. The net interest charge/(credit) is recognised immediately as a separately disclosed finance cost/(income) in the Income
Statement. Actuarial gains and losses are recognised in full in the Statement of Comprehensive Income in the period in which they occur.
The defined benefit pension asset or liability in the Balance Sheet comprises the total of the present value of the defined benefit obligation
(using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be
settled directly. Fair value is based on market price information and in the case of quoted securities is the published bid price. The value
of a net pension benefit asset is restricted to the sum of the present value of any amount the Group expects to recover by way of refunds
from the plan or reductions in the future contributions.
Foreign currencies
Transactions denominated in foreign currencies are recorded at the rates of exchange ruling at the dates of the transactions. Monetary
assets and liabilities are translated at the year end exchange rates and the resulting exchange differences are taken to the Income Statement.
Dividends
Dividends recommended by the Board but unpaid at the year end are not recognised in the financial statements until they are paid
(in the case of the interim dividend) or approved by shareholders at the Annual General Meeting (in the case of the final dividend).
The Company’s investments in subsidiaries
In its separate financial statements, the Parent Company recognises its investment in its subsidiaries on the basis of cost less provision
for impairment.
New standards and interpretations issued but not yet applied
The International Accounting Standards Board and International Financial Reporting Interpretations Commitee have issued the following
standards and interpretations with an effective date for periods starting on or after the date on which these financial statements start:
• Amendments to IAS 1: Classification of Liabilities as Current and Non-current (effective 1 January 2023)
• Reference to the Conceptual Framework – Amendments to IFRS 3 (effective 1 January 2022)
• Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16 (effective 1 January 2022)
• IFRS 17 Insurance Contracts (effective 1 January 2023)
• Onerous Contract – Costs of Fulfilling a Contract – Amendments to IAS 37 (effective 1 January 2022)
• Definition of Accounting Estimates – Amendments to IAS 8 (effective 1 January 2022)
• Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2 (effective 1 January 2022)
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12 (effective 1 January 2022)
• IFRS 9 Financial Instruments – Fees in the “10 per cent” test for derecognition of financial liabilities (effective 1 January 2022).
Other new standards and interpretations in issue but not yet effective are not applicable to the Company and therefore are not expected
to have material impact on the Group’s financial position and results.
2. Segmental Analysis
Operating Segments
For management purposes, the Group’s operating segments are:
• Managed Pubs and Hotels, which comprises managed pubs, managed hotels, Bel & The Dragon and Cotswold Inns & Hotels.
• Tenanted Inns, which comprises pubs operated by third parties under tenancy or lease agreements.
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1
1
3
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2
2
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Notes to the Financial Statements
Continued
2. Segmental Analysis continued
The most important measure used to evaluate the performance of the business is adjusted profit, which is the profit before tax, adjusted
for separately disclosed items. The operating segments are organised and managed separately according to the nature of the products
and services provided, with each segment representing a strategic operating unit. The Managed Pubs and Hotels operating segments
have been aggregated to one reportable segment on the basis they have similar economic characteristics. Economic indicators assessed
in determining that the aggregated operating segments share similar characteristics include expected future financial performance,
operating and competitive risks, and return on capital. As such, the operating segments meet the aggregation criteria in paragraph 12
IFRS 8 Operating Segments (amended). More details of these segments are given in the Strategic Report on pages 1 to 53 of this report.
As segment assets and liabilities are not regularly provided to the Chief Operating Decision Maker (“CODM”), the Group has elected,
as provided under IFRS 8 Operating Segments (amended), not to disclose a measure of segment assets and liabilities.
52 weeks ended 26 March 2022
Revenue
Sale of goods and services
Accommodation income
Total revenue from contracts with customers
Rental income
Revenue
Segment result
Operating separately disclosed items
Operating profit
Profit on disposal of properties
Net finance costs
Profit before tax
4
1
1
Managed
Pubs and
Hotels
£m
Tenanted
Inns
£m
Unallocated1
£m
Total
continuing
operations
£m
205.1
21.9
227.0
1.8
228.8
24.7
17.9
–
17.9
7.1
25.0
11.1
–
–
–
–
–
(17.3)
223.0
21.9
244.9
8.9
253.8
18.5
(2.0)
16.5
6.3
(11.3)
11.5
25.1
25.8
3.3
Other segment information
Additions to property, plant and equipment and intangible assets
Depreciation and amortisation
Impairment of property
20.2
23.3
3.0
2.3
1.8
0.3
2.6
0.7
–
52 weeks ended 27 March 2021
Revenue
Sale of goods and services
Accommodation income
Total revenue from contracts with customers
Rental income
Revenue
Other income
Segment result
Operating separately disclosed items
Operating loss
Profit on disposal of properties
Net finance costs
Loss before tax
Other segment information
Additions to property, plant and equipment and intangible assets
Depreciation and amortisation
Impairment of property, right-of-use assets, assets held for sale and goodwill
Managed
Pubs and
Hotels
£m
Tenanted
Inns
£m
Unallocated1
£m
Total
continuing
operations
£m
56.6
5.9
62.5
1.5
64.0
–
(26.1)
12.6
24.7
11.3
6.9
–
6.9
2.3
9.2
–
1.2
0.7
1.8
1.6
–
–
–
–
–
0.2
(15.4)
1.1
0.7
–
63.5
5.9
69.4
3.8
73.2
0.2
(40.3)
(14.8)
(55.1)
5.8
(8.5)
(57.8)
14.4
27.2
12.9
1 Unallocated expenses represent primarily the salaries and costs of central management. Unallocated revenue represents Transitional Services
Agreement (“TSA”) income while unallocated capital expenditure relates to additions to the head office and additions to IT development costs.
2
2
0
2
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3. Revenue
Geographical Information
All of the Group’s business is within the UK and therefore the Group only has one distinct geographical market.
Revenue disclosed in the Income Statement is analysed as follows:
Sale of goods and services1
Accommodation income
Total revenue from contracts with customers
Rental income
Revenue
Other income2
Revenue and other income
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M
E
N
T
S
52 weeks
ended
26 March
2022
£m
52 weeks
ended
27 March
2021
£m
223.0
21.9
244.9
8.9
253.8
–
253.8
63.5
5.9
69.4
3.8
73.2
0.2
73.4
1 Revenue in the prior year includes £2.0 million received from the Government under the Eat Out to Help Out scheme.
2 Following the sale of the Fuller’s Beer Business to Asahi Europe Ltd, the Group entered into a TSA to provide certain services to facilitate the
successful separation of the two companies. This included finance, IT and payroll services. The TSA was completed during the prior financial
year on 27 April 2020.
4. Operating Costs
52 weeks
ended
26 March
2022
£m
52 weeks
ended
27 March
2021
£m
1
1
5
Production costs and cost of goods used in retailing
Staff costs
Repairs and maintenance
Depreciation of property, plant and equipment and amortisation of intangible assets
Depreciation of right-of-use assets
Rental expense relating to short-term and low value leases
Variable lease payments1
Property costs
Utilities
Separately disclosed items (note 5)
Grant income2
Other operating costs
57.9
96.2
8.5
18.1
7.7
0.4
1.4
14.4
12.1
2.0
(5.4)
24.0
19.1
40.8
8.6
18.6
8.6
0.2
0.9
3.5
4.8
14.8
(4.7)
13.3
237.3
128.5
1 Variable lease payments are dependent on turnover levels.
2 Grant income is amounts received from the Government to support businesses throughout the pandemic that were eligible depending on their
rateable value.
Details of income and direct expenses relating to rental income from investment properties are shown in note 12.
a) Auditors’ Remuneration
Fees payable to Company’s auditors:
– Statutory audit fees of Group financial statements
52 weeks
ended
26 March
2022
£m
52 weeks
ended
27 March
2021
£m
0.4
0.4
0.4
0.4
Other audit related services of £5,000 (2021: £1,650) for covenant reporting and £35,000 (2021: £nil) for interim review were also incurred
in the period.
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
Notes to the Financial Statements
Continued
4. Operating Costs continued
b) Employee Benefit Expenses1
Wages and salaries2,3
Social security costs
Pension benefits
Other staff costs
1 Includes Executive Directors.
2 Includes share-based expense of £0.8 million (2021: credit £0.3 million).
3 Staff costs are stated net of £4.3 million (2021: £41.2 million) claimed from the Government through the CJRS.
c) Average Number of Employees1
The average monthly number of persons employed by the Group (including part-time staff) was as follows:
Continuing operations
Pub, hotel and restaurant teams
Support office2
£m
84.8
7.0
1.9
2.5
£m
31.6
5.8
1.7
1.7
96.2
40.8
Number
Number
4,118
122
4,240
4,046
103
4,149
1 Includes Executive Directors.
2 Support office includes Finance, People Team, IT and other central functions.
d) Directors’ Emoluments
Full details are provided in the Directors’ Remuneration Report and tables on pages 70 to 84.
5. Separately Disclosed Items
The Group presents separately disclosed items on the face of the Income Statement for those material items of income and expense
which, because of the nature or expected infrequency of the events giving rise to them, merit separate presentation to allow shareholders
to understand better the elements of financial performance in the year.
Amounts included in operating profit/(loss):
Reorganisation costs
Impairment of intangible assets, properties and right-of-use assets
Release of provision on final settlement of the Beer Business
Total separately disclosed items included in operating profit/(loss)
Profit on disposal of properties
Separately disclosed finance costs:
Finance charge on net pension liabilities
Total separately disclosed finance costs
Total separately disclosed items before tax
Exceptional tax:
Profit on disposal of properties
Change in tax rate
Other items
Total separately disclosed tax
Total separately disclosed items
52 weeks
ended
26 March
2022
£m
52 weeks
ended
27 March
2021
£m
(0.8)
(3.3)
2.1
(2.0)
6.3
–
–
4.3
(1.3)
(3.3)
1.4
(3.2)
1.1
(1.9)
(12.9)
–
(14.8)
5.8
(0.1)
(0.1)
(9.1)
(0.2)
–
0.9
0.7
(8.4)
The reorganisation costs of £0.8 million during the 52 weeks ended 26 March 2022 (2021: £1.9 million) were largely incurred as a result
of a corporate reorganisation of the Group, costs associated with the loan refinancing and license costs associated with the
implementation of a new finance system.
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
6
1
1
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
The £2.1 million credit is the release of the provision, net of the final settlement amount on the sale of the Fuller’s Beer Business.
The property impairment charge of £3.3 million during the 52 weeks ended 26 March 2022 (2021: £12.9 million) relates to the write down
of six licensed properties (2021: 37 licensed properties) to their recoverable value.
The profit on disposal of properties of £6.3 million during the 52 weeks ended 26 March 2022 (2021: £5.8 million) relates to the disposal
of 12 predominately unlicensed properties (2021: seven properties).
The 2021 Budget in March last year announced an increase in the UK corporation tax rate to 25% with effect from 1 April 2023. This was
substantively enacted on 24 May 2021. The UK corporation tax rate increase has resulted in an increase to the deferred tax liability of
£3.3 million. This has been recognised within separately disclosed items in the tax charge for the period as it is unrelated to underlying
trading and is one-off in nature.
The cash impact of operating separately disclosed items before tax for the 52 weeks ended 26 March 2022 was £1.9 million cash outflow
(2021: £1.5 million cash outflow).
6. Finance Costs
Finance costs
Interest expense arising on:
Financial liabilities at amortised cost – loans and debentures1
Financial liabilities at amortised cost – preference shares
Financial liabilities at amortised cost – lease liabilities
Total finance costs before separately disclosed items
Finance charge on net pension liabilities (note 5)
Total finance costs after separately disclosed items
52 weeks
ended
26 March
2022
£m
52 weeks
ended
27 March
2021
£m
(8.1)
(0.1)
(3.1)
(11.3)
–
(11.3)
(5.3)
(0.1)
(3.0)
(8.4)
(0.1)
(8.5)
1
1
7
1 In the prior year, interest expense on loans and debentures is shown net of £0.6 million of grant income recognised in relation to the CCFF.
7. Taxation
Tax on Profit/(Loss) on Ordinary Activities
Group
Tax charged/(credited) in the Income Statement
Current income tax:
Current tax on profit/(loss) for the year
Adjustments for current tax on prior periods
Total current income tax expense/(credit)
Deferred income tax:
Origination and reversal of temporary differences
Change in corporation tax rate
Adjustments for deferred tax on prior periods
Total deferred tax expense/(benefit)
Total tax charged/(credited) in the Income Statement
Analysed as:
Before separately disclosed items
Separately disclosed items
52 weeks
ended
26 March
2022
£m
52 weeks
ended
27 March
2021
£m
0.2
0.6
0.8
2.2
3.3
(1.9)
3.6
4.4
1.2
3.2
4.4
(1.0)
(0.5)
(1.5)
(8.1)
–
–
(8.1)
(9.6)
(8.9)
(0.7)
(9.6)
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
Notes to the Financial Statements
Continued
7. Taxation continued
Reconciliation of the Total Tax Charge/(Credit)
The tax expense in the Income Statement for the year is higher (2021: tax credit is lower) than the standard rate of corporation tax in the
UK of 19% (2021: 19%). The differences are reconciled below:
52 weeks
ended
26 March
2022
£m
52 weeks
ended
27 March
2021
£m
11.5
2.2
(0.3)
(1.3)
0.5
3.3
4.4
(0.8)
5.2
1.6
(2.8)
(0.7)
1.1
3.6
0.1
3.8
3.9
(57.8)
(11.0)
0.5
(0.5)
1.4
–
(9.6)
(0.6)
(0.4)
1.6
(7.4)
(0.1)
(1.2)
(8.1)
0.1
(0.2)
(0.1)
(0.1)
(0.1)
–
–
Profit/(loss) from continuing operations before income tax expense/(credit)
Accounting profit/(loss) multiplied by the UK standard rate of corporation tax of 19% (2021: 19%)
Items not (taxable)/deductible for tax purposes
Current and deferred tax (over) provided in previous years
Net movements in respect of property
Change in corporation tax rate
Total tax charged/(credited) in the Income Statement
Deferred tax relating to items charged/(credited) to the Income Statement
Deferred tax depreciation
Unrealised capital gains (on PP&E)
Retirement benefit obligations
Tax losses
Other
Corporate interest restriction
Deferred tax in the Income Statement
8
1
1
Tax relating to items charged/(credited) to the Statement of Comprehensive Income
Deferred tax:
Valuation gains on financial liabilities
Net actuarial gains/(losses) on pension scheme
Total tax charged/(credited) in the Statement of Comprehensive Income
Tax relating to items credited directly to equity
Deferred tax:
Share-based payments
Total tax credited to equity
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
Deferred Tax Provision
The deferred tax included in the Balance Sheet is as follows:
Deferred tax
Deferred tax asset/(liability)
Retirement
benefit
obligations
£m
Tax losses
carried
forward
£m
Employee
share
schemes
£m
Financial
(liabilities)/
assets
£m
Decelerated
tax
depreciation
£m
Unrealised
capital
gains (on
PP&E)
£m
(23.1)
0.4
–
–
0.4
(22.3)
(5.2)
–
–
0.4
Pension
spreading
£m
3.5
(1.2)
–
–
–
2.3
(1.2)
–
–
–
4.0
0.6
–
–
(0.5)
4.1
0.8
–
–
–
0.9
(0.4)
0.2
–
–
0.7
(0.4)
(3.8)
–
–
0.6
7.4
–
–
(0.2)
7.8
2.8
–
–
–
0.1
–
–
–
–
0.1
0.1
–
0.1
–
0.3
0.2
–
(0.1)
–
–
0.1
–
(0.1)
–
–
–
Balances at 26 March 2022
(3.5)
10.6
4.9
(27.1)
1.1
1 The closing balance includes £0.1 million relating to the corporate interest restriction.
Deferred tax asset/(liability)
Retirement
benefit
obligations
£m
Tax losses
carried
forward
£m
Employee
share
schemes
£m
Financial
(liabilities)/
assets
£m
Decelerated
tax
depreciation
£m
Unrealised
capital
gains (on
PP&E)
£m
Pension
spreading
£m
0.9
(0.4)
0.2
–
–
0.7
(0.4)
(3.8)
–
–
0.3
7.4
–
–
–
7.7
2.8
–
–
–
0.1
–
–
–
–
0.1
0.1
0.1
–
0.3
0.2
–
(0.1)
–
–
0.1
–
(0.1)
–
–
–
3.9
0.6
–
–
(0.4)
4.1
0.8
–
–
–
(20.3)
0.4
–
–
(2.4)
(22.3)
(5.2)
–
–
0.4
3.5
(1.2)
–
–
–
2.3
(1.2)
–
–
–
4.9
(27.1)
1.1
Balances at 26 March 2022
(3.5)
10.5
1 The closing balance includes £0.1 million relating to the corporate interest restriction.
Deferred tax assets
Deferred tax liabilities
Group
Balances at 28 March 2020
(Charge)/credit to Income Statement
Credit/(charge) to other
comprehensive income
Charge taken directly to equity
Disposals
Balances at 27 March 2021
(Charge)/credit to Income Statement
(Charge) to other comprehensive
income
Credit taken directly to equity
Recategorisation
Deferred tax assets
Deferred tax liabilities
Company
Balances at 28 March 2020
(Charge)/credit to Income Statement
Credit/(charge) to other
comprehensive income
(Charge) taken directly to equity
Acquisitions
Balances at 27 March 2021
(Charge)/credit to Income Statement
Credit/(charge) to other
comprehensive income
(Charge) taken directly to equity
Recategorisation
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
1
1
9
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
Other1
£m
0.7
1.3
–
–
(0.1)
1.9
(0.5)
–
–
(0.4)
1.0
2022
£m
18.5
(31.2)
(12.7)
Other1
£m
0.6
1.3
–
–
–
1.9
(0.5)
–
–
(0.4)
1.0
2022
£m
18.4
(31.2)
(12.8)
Total
£m
(13.1)
8.1
0.1
–
(0.4)
(5.3)
(3.6)
(3.9)
0.1
–
(12.7)
2021
£m
17.0
(22.3)
(5.3)
Total
£m
(10.8)
8.1
0.1
–
(2.8)
(5.4)
(3.6)
(3.9)
0.1
–
(12.8)
2021
£m
16.9
(22.3)
(5.4)
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
Notes to the Financial Statements
Continued
8. Earnings/(Loss) Per Share
Group
Profit/(loss) attributable to equity shareholders
Separately disclosed items net of tax
Adjusted earnings/(loss) attributable to equity shareholders
Weighted average share capital
Dilutive outstanding options and share awards
Diluted weighted average share capital
40p ‘A’ and ‘C’ ordinary share
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
Adjusted earnings/(loss) per share
Diluted adjusted earnings/(loss) per share
4p ‘B’ ordinary share
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
Adjusted earnings/(loss) per share
Diluted adjusted earnings/(loss) per share
0
2
1
Continuing operations
Profit/(loss) attributable to equity shareholders
Separately disclosed items net of tax
Adjusted earnings/(loss) attributable to equity shareholders
Weighted average share capital
Dilutive outstanding options and share awards
Diluted weighted average share capital
40p ‘A’ and ‘C’ ordinary share
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
Adjusted earnings/(loss) per share
Diluted adjusted earnings/(loss) per share
4p ‘B’ ordinary share
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
Adjusted earnings/(loss) per share
Diluted adjusted earnings/(loss) per share
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
52 weeks
ended
26 March
2022
£m
52 weeks
ended
27 March
2021
£m
7.1
(1.1)
6.0
(49.6)
9.3
(40.3)
61,264,000 55,207,000
413,000
139,000
61,677,000 55,346,000
Pence
11.59
11.51
9.79
9.73
Pence
(89.84)
(89.84)
(73.00)
(73.00)
Pence
Pence
1.16
1.15
0.98
0.97
(8.98)
(8.98)
(7.30)
(7.30)
52 weeks
ended
26 March
2022
£m
52 weeks
ended
27 March
2021
£m
7.1
(1.1)
6.0
(48.2)
8.4
(39.8)
Number
Number
61,264,000
55,207,000
413,000
139,000
61,677,000 55,346,000
Pence
11.59
11.51
9.79
9.73
Pence
(87.31)
(87.31)
(72.09)
(72.09)
Pence
Pence
1.16
1.15
0.98
0.97
(8.73)
(8.73)
(7.21)
(7.21)
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
For the purposes of calculating the number of shares to be used above, ‘B’ shares have been treated as one-tenth of an ‘A’ or ‘C’ share.
The earnings per share calculation is based on earnings from continuing operations and on the weighted average ordinary share capital
which excludes shares held by trusts relating to employee share options and shares held in treasury of 1,744,564 (2021: 1,777,248).
Diluted earnings per share amounts are calculated using the same earnings figure as for basic earnings per share, divided by the weighted
average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be
issued on the conversion of all the dilutive potential options into ordinary shares.
Adjusted earnings per share are calculated on profit after tax excluding separately disclosed items and on the same weighted average
ordinary share capital as for the basic and diluted earnings per share. Adjusted earnings per share measures have been included as the
Directors consider that these measures better reflect the underlying earnings of the Group.
9. Dividends
Declared and paid during the year
Equity dividends on ordinary shares:
Final dividend for 2021: 0p (2020: 0p)
Interim dividend for 2022: 3.90p (2021: 0p)
Equity dividends paid
Dividends on cumulative preference shares (note 6)
Proposed for approval at the Annual General Meeting
Final dividend for 2022: 7.41p (2021: 0p)
52 weeks
ended
26 March
2022
£m
52 weeks
ended
27 March
2021
£m
–
2.4
2.4
0.1
4.6
–
–
–
0.1
–
The pence figures above are for the 40p ‘A’ ordinary shares and 40p ‘C’ ordinary shares. The 4p ‘B’ ordinary shares carry dividend rights of
one-tenth of those applicable to the 40p ‘A’ ordinary shares. Own shares held in the employee share trusts do not qualify for dividends as
the Trustees have waived their rights. Dividends are also not paid on own shares held as treasury shares.
1
2
1
10. Intangible Assets
Cost
At 28 March 2020
Additions
Hive up of Bel & The Dragon
At 27 March 2021
Additions
At 26 March 2022
Amortisation and impairment
At 28 March 2020
Impairment
At 27 March 2021
Provided during the year
At 26 March 2022
Net book value at 26 March 2022
Net book value at 27 March 2021
Net book value at 28 March 2020
Group and Company
IT
Development
costs
£m
Goodwill
£m
Group
Total
£m
Company
Total
£m
31.8
–
–
31.8
–
31.8
4.3
0.8
5.1
–
5.1
26.7
26.7
27.5
–
0.6
–
0.6
2.4
3.0
–
–
–
0.2
0.2
2.8
0.6
–
31.8
0.6
–
32.4
2.4
34.8
4.3
0.8
5.1
0.2
5.3
29.5
27.3
27.5
2.6
0.6
1.0
4.2
2.4
6.6
–
0.2
0.2
0.2
0.4
6.2
4.0
2.6
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
2
2
1
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
Notes to the Financial Statements
Continued
10. Intangible Assets continued
IT Development costs
Costs are capitalised as IT development costs where it is deemed that the Group has control of the underlying asset. IT development
costs relate to the implementation of a new finance system and are made up of consulting time and internal employee costs. IT
development costs were capitalised until December 2021 when it was available to use. Amortisation began on that date and is recognised
over the useful life of the asset of five years. IT development costs also relate to an ongoing digital project.
Goodwill
Goodwill is allocated to CGUs as follows:
Gales estate
Jacomb Guinness estate
Bel & The Dragon
Cotswold Inns & Hotels
11. Property, Plant and Equipment
Group
Cost
At 28 March 2020
Additions
Disposals
Disposals of discontinued operations
Transfer to assets held for sale (note 20)
At 27 March 2021
Additions
Disposals
Transfer to assets held for sale (note 20)
Transfer from assets held for sale (note 20)1
At 26 March 2022
Depreciation and impairment
At 28 March 2020
Provided during the year
Disposals
Disposals of discontinued operations
Impairment loss
Transfer to assets held for sale (note 20)
Reclassification of impairment to right-of-use assets (note 16)
At 27 March 2021
Provided during the year
Disposals
Impairment loss
Transfer to assets held for sale (note 20)
Transfer from assets held for sale (note 20)1
At 26 March 2022
Net book value at 26 March 2022
Net book value at 27 March 2021
Net book value at 28 March 2020
2022
2021
Managed
£m
Tenanted
£m
9.1
0.6
1.0
2.4
13.6
–
–
–
Total
£m
22.7
0.6
1.0
2.4
13.1
13.6
26.7
Land &
buildings
– owned &
used
£m
Land &
buildings
– owned &
acting as
lessor
£m
Plant,
machinery &
vehicles
£m
Fixtures &
fittings
£m
£m
22.7
0.6
1.0
2.4
26.7
Total
£m
498.4
109.2
6.5
168.9
783.0
0.6
(1.4)
(6.8)
(8.1)
482.7
11.3
(1.3)
(1.5)
2.4
–
(0.3)
–
(1.1)
107.8
1.8
–
–
–
–
–
(0.1)
(0.1)
6.3
–
–
–
–
13.2
(0.6)
(7.6)
(2.3)
171.6
9.6
(1.9)
(0.4)
0.6
13.8
(2.3)
(14.5)
(11.6)
768.4
22.7
(3.2)
(1.9)
3.0
493.6
109.6
6.3
179.5
789.0
43.7
3.9
(0.2)
(4.7)
7.4
(0.9)
(0.4)
48.8
4.2
(1.3)
3.3
(0.1)
–
7.5
0.7
–
–
1.6
(0.1)
–
9.7
0.6
–
–
–
–
1.8
–
–
–
–
(0.1)
–
1.7
–
–
–
–
–
112.3
14.0
(0.6)
(5.8)
–
(1.9)
–
165.3
18.6
(0.8)
(10.5)
9.0
(3.0)
(0.4)
118.0
178.2
13.1
(1.9)
–
(0.3)
0.5
17.9
(3.2)
3.3
(0.4)
0.5
54.9
10.3
1.7
129.4
196.3
438.7
433.9
454.7
99.3
98.1
101.7
4.6
4.6
4.7
50.1
53.6
56.6
592.7
590.2
617.7
Company
Cost
At 28 March 2020
Additions
Disposals
Transfer to assets held for sale (note 20)
At 27 March 2021
Additions
Disposals
Transfer to assets held for sale (note 20)
Transfer from assets held for sale (note 20)1
At 26 March 2022
Depreciation and impairment
At 28 March 2020
Provided during the year
Disposals
Impairment loss
Transfer to assets held for sale (note 20)
Reclassification of impairment to right-of-use assets (note 16)
At 27 March 2021
Provided during the year
Disposals
Impairment loss
Transfer to assets held for sale (note 20)
Transfer from asset held for sale1
At 26 March 2022
Net book value at 26 March 2022
Net book value at 27 March 2021
Net book value at 28 March 2020
Land &
buildings
– owned &
used
£m
Land &
buildings
– owned &
acting as
lessor
£m
Plant,
machinery &
vehicles
£m
Fixtures &
fittings
£m
Total
£m
470.2
18.9
(1.8)
(8.1)
479.2
11.3
(1.3)
(1.5)
2.4
108.9
4.9
159.3
743.3
–
–
(1.1)
107.8
1.8
–
–
–
–
–
(0.1)
4.8
–
–
–
–
14.8
(0.6)
(2.3)
171.2
9.6
(1.9)
(0.4)
0.6
33.7
(2.4)
(11.6)
763.0
22.7
(3.2)
(1.9)
3.0
490.1
109.6
4.8
179.1
783.6
34.8
3.9
(0.2)
7.4
(0.9)
(0.4)
44.6
4.2
(1.3)
3.3
(0.1)
–
7.5
0.7
–
1.6
(0.1)
–
9.7
0.6
–
–
–
–
2.6
104.6
149.5
18.4
(0.7)
9.0
(3.0)
(0.4)
13.8
(0.5)
–
(1.9)
–
116.0
172.8
13.1
(1.9)
–
(0.3)
0.5
17.9
(3.2)
3.3
(0.4)
0.5
–
–
–
(0.1)
–
2.5
–
–
–
–
–
50.7
10.3
2.5
127.4
190.9
439.4
434.6
435.4
99.3
98.1
101.4
2.3
2.3
2.3
51.7
55.2
54.7
592.7
590.2
593.8
1 During the year ended 26 March 2022, two unlicensed properties were transferred back to Property, Plant and Equipment, with a change in
circumstances meaning they no longer continued to meet the criteria for Non-current asset held for sale under IFRS 5.
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
1
2
3
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
Notes to the Financial Statements
Continued
12. Investment Properties
Cost at 28 March 2020
Transfer to assets held for sale
Cost at 27 March 2021
Disposals
Transfer to assets held for sale
At 26 March 2022
Depreciation and impairment at 28 March 2020
Provided during the year
Transfer to asset held for sale
At 27 March 2021
Transfer to asset held for sale
At 26 March 2022
Net book value at 26 March 2022
Net book value at 27 March 2021
Net book value at 28 March 2020
Fair value at 26 March 2022
Fair value at 27 March 2021
Fair value at 28 March 2020
Group and
Company
Freehold
and
leasehold
properties
£m
5.7
(2.4)
3.3
(0.1)
(1.5)
1.7
0.9
–
(0.7)
0.2
(0.1)
0.1
1.6
3.1
4.8
8.4
15.0
20.1
The fair value of investment properties has been estimated by the Directors, based on the rental income earned on the properties during
the year and average yields earned on comparable properties from publicly available information, which is a Level 3 fair value valuation
technique. An independent valuation of the properties has not been performed.
Impairment
The Group considers each trading outlet to be a CGU and each CGU is reviewed annually for indicators of impairment. In assessing
whether an asset has been impaired, the carrying amount of the CGU is compared to its recoverable amount. The recoverable amount
is the higher of its fair value less costs to sell and its value in use. During the 52 weeks ended 26 March 2022, the Group did not impair
any investment properties (2021: £nil).
Management have determined that the highest and best use of the property is its current use.
Investment Property Income
The properties are let on both landlord and tenant repairing leases. Amounts recognised in the profit for the financial year relating to rental
income from investment properties are as follows:
Group and Company
Rental income
Direct operating expenses
All direct operating expenses relate to properties that generate rental income.
2022
£m
0.4
(0.1)
2021
£m
0.7
(0.1)
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
4
2
1
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
13. Impairment
During the year, impairment losses of £3.3 million (2021: £12.9 million) were recognised within separately disclosed items:
Group
Impairment losses
Intangible assets
Property, plant and equipment
Right-of-use assets
Assets held for sale
Lease receivable
Total net impairment charge
Company
Impairment losses
Property, plant and equipment
Right-of-use assets
Assets held for sale
Lease receivable
Investments in subsidiaries1
Total net impairment charge
2022
£m
2021
£m
–
3.3
–
–
–
0.6
9.0
1.6
0.2
1.5
3.3
12.9
2022
£m
3.3
–
–
–
0.2
3.5
2021
£m
9.0
0.7
0.2
1.5
6.9
18.3
1 Investment of Cotswold Inns & Hotels was impaired as the majority of the trade and assets have been hived up into the Parent Company.
Lease receivables have been assessed for impairment under IFRS 9. All other assets above were assessed for impairment under IAS 36.
Property, Plant and Equipment and Right-of-use Assets
The Group considers each trading outlet to be a CGU and each CGU is reviewed annually for indicators of impairment. In assessing whether
an asset has been impaired, the carrying amount of the CGU is compared to its recoverable amount. The recoverable amount is the higher
of its fair value less costs to sell (“FVLCS”) and its value in use. In the absence of any information about the fair value of a CGU, the
recoverable amount is deemed to be its value in use. For the purposes of estimating the value in use of CGUs, management have used a
discounted cash flow approach. The calculations use cash flow projections based on the following plans covering a three year period.
The Group uses a range of methods for estimating FVLCS which include applying a market multiple to the CGU EBITDA and, for leasehold
sites, present value techniques using a discounted cash flow method. The Group has also obtained valuations for a subset of these CGUs
from a third-party property valuation expert. Both FVLCS methods rely on inputs not normally observable by market participants and are
therefore Level 3 measurements in the fair value hierarchy.
The key assumptions used by management in setting the Board approved financial budgets for the initial three year period were as
follows:
• Normalised trading volumes: February FY2020 MAT has been used as a basis for the budget as that represents normalised trading
before the impact of the pandemic.
• Forecast growth rates: Forecast growth rates are based on the Group’s plans which includes assumptions around the timing and profile
of the UK economy recovery from the pandemic. Those forecast growth rates to normalised trading volumes will differ depending on
the location of the site. We expect rural sites to trade well from the outset, with some urban sites taking longer to recover. The forecasts
also take into consideration the impact that the inflationary environment will have on consumer behaviour.
• Operating profits are forecast based on historical experience of operating margins, adjusted for the impact of inflation most notably
food, utilities, and wage inflation. They also include the assumption that in the long-term utilities cost will come down as part of our ESG
initiative. We expect to sign up to a power purchase agreement from mid-2023 which will secure better pricing but more importantly, is
environmentally friendly. Also, as part of our ESG strategy, we have set targets to reduce usage by c5% annually.
• Local factors impacting the site in the current year or expected to impact the site in future years. Key assumptions include the future
potential of recently invested sites and the impact of increasing or reducing market supply in the local area.
Other assumptions used:
• A long-term growth rate of 2.0% (2021: 2.0%) was used for cash flows subsequent to the three year approved budget/forecast period.
• An EBITDA multiple is estimated based on a normalised trading basis and market data obtained from external sources. An average
multiple of 10.5x (freehold 11.8x) is used for the managed estate and 10.9x on the Tenanted estate.
• The discount rate is based on the Group’s weighted average cost of capital, which is used across all CGUs due to their similar
characteristics. The pre-tax discount rate is 8.6% (2021: 6.9%).
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
1
2
5
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
Notes to the Financial Statements
Continued
13. Impairment continued
Impairments are recognised where the property valuation is also lower than the CGU’s carrying value for those determined to be at risk
of impairment. This is measured as the difference between the carrying value and the higher of FVLCS and its value in use. Where the
property valuation exceeds the carrying value, no impairment is required.
During the 52 weeks ended 26 March 2022, the Group recognised an impairment loss of £3.3 million (2021: £9.0 million) on property, plant
and equipment and £nil (2021: £1.6 million) of impairment on right-of-use assets in respect of the write down of six licensed properties
where their asset values exceeded the higher of FVLCS or their value in use. The impairment losses were driven principally by changes
in the local competitive environment in which the pubs are situated.
Sensitivity to Changes in Assumptions
The calculation of value in use is most sensitive to the assumptions in respect of achievement of budgeted cash flows, growth rate and
discount rate. The calculation of value in use is also dependent on the following assumptions: sales volume; gross margin in Managed
premises; barrelage and rent projections in Tenanted premises; and wage cost in Managed premises. The key assumptions above have
their assigned values based on management knowledge and historical information. The value in use calculations are sensitive to the
assumptions used. The Directors consider a movement of 1.5% in the discount rate and 0.5% in the growth rate to be reasonable with
reference to current market yield curves and the current economic conditions. The impact is set out as follows:
Impact on impairment of assets at risk – increase/(decrease)
Increase discount rate by 1.5%
Decrease discount rate by 1.5%
Increase growth rate by 0.5%
Decrease growth rate by 0.5%
2022
£m
11.1
(4.4)
(1.5)
3.3
2021
£m
22.3
(13.6)
(5.9)
7.0
The value in use calculation is also sensitive to variations in the budgeted cash flows, which represents the rate of recovery from the
pandemic, the inflationary environment and the consumer behaviour as a result of it. The CGUs represented by the “impact on impairment
of assets at risk” would have their FVLCS determined in order to conclude on whether an impairment is required. A general decrease in
property values across the portfolio would have a similar effect to that set out above i.e. any reduction in property values would lead to
assets being at risk of impairment. In the current year, a decrease of 5% in the FVLCS would have led to an additional impairment of
£0.6 million for the CGUs where recoverable amount has been assessed on FVLCS.
6
2
1
Goodwill
Goodwill acquired through business combinations has been allocated for impairment testing on an estate and divisional CGU level. This
represents the lowest level within the Group at which goodwill is monitored for internal management purposes. An analysis of goodwill by
operating segment is included within note 10. Recoverable amount is based on a calculation of value in use based upon the same cash
flows as discussed under property, plant and equipment. Cash flows beyond the budget period are extrapolated in perpetuity on the
assumption that the growth rate does not exceed the average long-term growth rate for the relevant markets. The same assumptions
to calculate the value in use are used for goodwill as those for property, plant and equipment.
In the prior year, the Group recognised an impairment loss of £0.6 million in relation to Jacomb Guinness Limited as the recoverable
amount being the value in use for those pubs of £0.6 million could not support the carrying value.
Sensitivity to Changes in Assumptions
Management have considered reasonable changes in key assumptions used in their calculations of value in use. An increase of 1.5% in
discount rate would result in an impairment of £1.0 million. A decrease in growth rate by 0.5% would result in an impairment of £1.8 million.
Investment Property
The Group considers each trading outlet to be a CGU and each CGU is reviewed annually for indicators of impairment. During the 52
weeks ended 26 March 2022, the Group did not impair any investment properties (2021: £nil). Refer to note 12.
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
14. Other Financial Liabilities
Group and Company
Interest rate swaps
Total financial liabilities within non-current liabilities
Details of the interest rate swaps are provided in note 26c (i).
15. Investments in Subsidiaries
Company
At 28 March 2020
Return of capital
Disposals
At 27 March 2021
Impairment
At 26 March 2022
Group
2022
£m
(0.1)
(0.1)
Group
2021
£m
(0.7)
(0.7)
Company
2022
£m
Company
2021
£m
(0.1)
(0.1)
(0.7)
(0.7)
Cost
£m
126.6
(5.8)
–
120.8
–
120.8
Provision
£m
Net book
value
£m
(4.2)
(6.9)
(0.4)
(11.5)
(0.2)
(11.7)
122.4
(12.7)
(0.4)
109.3
(0.2)
109.1
Principal subsidiary undertakings
Holding
Proportion held
Nature of business
Griffin Catering Services Limited
£1 ordinary shares
100% (indirect)
Managed houses service company
George Gale and Company Limited
£1 ordinary shares
100%
Non-trading subsidiary
25p ‘A’ ordinary shares
100%
£10 preference shares
100%
F.S.T. Trustee Limited
£1 ordinary shares
Fuller Smith & Turner Estates Limited
£1 ordinary shares
Ringwoods Limited
Griffin Inns LTD.
Jacomb Guinness Limited
£1 ordinary shares
£1 ordinary shares
£1 ordinary shares
100%
100%
100%
100%
100%
Non-trading subsidiary
Non-trading subsidiary
Non-trading subsidiary
Non-trading subsidiary
Non-trading subsidiary
45 Woodfield Limited
£1 ordinary shares
100% (indirect)
Non-trading subsidiary
Grand Canal Trading Limited
£1 ordinary shares
100% (indirect)
Non-trading subsidiary
B & D Country Inns I Limited
B & D Country Inns II Limited
£1 ordinary shares
£1 ordinary shares
100%
100%
Holding company
Holding company
B & D (Cookham) Limited
£1 ordinary shares
100% (indirect)
Non-trading subsidiary
B & D (Farnham) Limited
£1 ordinary shares
100% (indirect)
Non-trading subsidiary
B & D (Kingsclere) Limited
£1 ordinary shares
100% (indirect)
Non-trading subsidiary
B & D (Odiham) Limited
B & D (Reading) Limited
B & D (Win) Limited
RSH 200 Limited
£1 ordinary shares
100% (indirect)
Non-trading subsidiary
£1 ordinary shares
100% (indirect)
Non-trading subsidiary
£1 ordinary shares
100% (indirect)
Non-trading subsidiary
£1 ordinary shares
100%
Holding company
Cotswold Inns and Hotels Limited
£1 ordinary shares
100% (indirect)
Non-trading subsidiary
The above companies are registered and operate in England and Wales. The registered office of all subsidiary companies is the same as
Fuller, Smith & Turner P.L.C. at Pier House, 86-93 Strand-on-the-Green, London, England, W4 3NN.
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
1
2
7
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
Notes to the Financial Statements
Continued
16. Leases
This note provides information for leases where the Group is a lessee. For leases where the Group is a lessor, see note 29.
a) Amounts Recognised in the Balance Sheet
Group and Company
Right-of-use assets
Properties
Equipment
Vehicles
Lease liabilities
Current
Non-current
Group
2022
£m
Group
2021
£m
Company
2022
£m
Company
2021
£m
73.1
0.6
0.1
73.8
6.8
73.9
80.7
81.3
0.2
0.4
81.9
6.7
83.2
89.9
72.6
0.6
0.1
73.3
6.5
72.8
79.3
Vehicles
£m
0.4
–
(0.2)
(0.1)
0.1
Vehicles
£m
0.4
–
(0.2)
(0.1)
0.1
80.8
0.2
0.4
81.4
6.5
81.8
88.3
Total
£m
81.9
(2.6)
2.2
(7.7)
73.8
Total
£m
81.4
(2.6)
2.2
(7.7)
73.3
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:
Group
Net carrying value as at 27 March 2021
Lease amendments – rent concessions
Lease amendments – other1
Depreciation
Net carrying value as at 26 March 2022
Company
Net carrying value as at 27 March 2021
Lease amendments – rent concessions
Lease amendments – other1
Depreciation
Net carrying value as at 26 March 2022
Property
£m
81.3
(2.6)
1.3
(6.9)
73.1
Property
£m
80.8
(2.6)
1.3
(6.9)
72.6
Equipment
£m
0.2
–
1.1
(0.7)
0.6
Equipment
£m
0.2
–
1.1
(0.7)
0.6
1 Lease amendments include lease terminations, modifications, reassessments and extensions to existing lease agreements.
Set out below are the carrying amounts of lease liabilities (included under interest bearing loans and borrowings) and the movements
during the period:
Net carrying value as at 27 March 2021
Disposal
Lease amendments – rent concessions
Lease amendments – other
Accretion of interest
Payments
Net carrying value as at 26 March 2022
A maturity analysis of gross lease liability payments is included within note 26.
Group
£m
89.9
(3.1)
(2.6)
2.2
3.1
(8.8)
80.7
Company
£m
88.3
(3.1)
(2.6)
2.2
3.0
(8.5)
79.3
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
8
2
1
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
b) Amounts Recognised in the Income Statement
Group
Depreciation charge of right-of-use assets
Properties
Equipment
Vehicles
Interest expense (included in finance cost)
Expense relating to short-term leases and low value assets (included in operating costs)
Expense relating to variable lease payments not included in lease liabilities (included in operating costs)
Impairment of right-of-use assets
Income from sub-leasing right-of-use assets
52 weeks
ended
26 March
2022
£m
52 weeks
ended
27 March
2021
£m
6.9
0.7
0.1
7.7
3.1
0.4
1.4
–
(0.2)
4.7
7.6
0.7
0.3
8.6
3.0
0.2
0.9
1.6
–
5.7
The Groups total cash outflow in relation to leases in 2022 was £8.6 million (2021: £9.2 million).
Variable lease payments
Some property leases contain variable payment terms that are linked to sales generated from a pub. Variable payment terms are used for
a variety of reasons, including minimising the fixed costs base for newly established pubs. Variable lease payments that depend on sales
are recognised in profit or loss in the period in which the condition that triggers those payments occurs. Variable lease payments
recognised in the Income Statement in the year ended 26 March 2022 were £1.4 million (2021: £0.9 million).
17. Inventories
Group and Company
Stock at retail outlets
Group
2022
£m
3.6
Group
2021
£m
2.1
Company
2022
£m
Company
2021
£m
3.6
2.1
Amounts recognised in profit or loss
Inventories recognised as an expense during the year ended 26 March 2022 amounted to £53.2 million (2021: £15.8 million). These were
included in operating costs. Inventory is stated net of a provision for obsolete stock of £0.2 million (2021: £0.3 million).
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
1
2
9
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
Notes to the Financial Statements
Continued
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
18. Trade and Other Receivables
Group
Trade receivables
Other receivables
Prepayments and accrued income
Company
Trade receivables
Other receivables
Prepayments and accrued income
2022
£m
1.6
4.8
4.3
10.7
2022
£m
1.6
4.8
4.3
10.7
2021
£m
2.1
6.6
2.8
11.5
2021
£m
2.1
6.5
2.8
11.4
At 26 March 2022, the Group has accrued Nil (2021: £4.0 million), shown in other receivables, in relation to CJRS. Also included in other
receivables is £0.6 million (2021: £0.8 million) lease receivable for subleases. In the prior year, £1.5 million of lease receivable was
impaired during the year based on the expected credit loss model and recorded in separately disclosed items given its one-off nature.
The trade receivables balance above is shown net of the loss allowance. The Group and Company provide against trade receivables
based on an expected credit loss model, calculated from the probability of default for the remaining life of the asset.
In measuring the expected credit losses, the trade receivables have been assessed on a collective basis as they possess shared credit
risk characteristics. They have been grouped based on the days past due and also according to the geographical location of customers
which is the same for all.
0
3
1
The expected loss rates are based on the payment profile for sales over the past 24 months before the Balance Sheet date. The historical
rates are adjusted to reflect current and forward-looking macroeconomic factors affecting the customers’ ability to settle the amount
outstanding, the most significant factor being the current inflationary environment. A financial asset is written off when there is no
reasonable expectation of recovering the contractual cash flows.
The movements on the loss allowance during the year are summarised below:
Group and Company
Opening balance
(Decrease)/Increase in loss allowance recognised in profit and loss
Amounts released for balances written off during the year
Closing balance
2022
£m
1.0
(0.1)
–
0.9
2021
£m
0.9
0.3
(0.2)
1.0
The loss allowance for trade receivables is recorded in the accounts separately from the gross receivable. The contractual ageing of the
trade receivables balance is as follows:
Group and Company
Current
Overdue up to 30 days
Overdue between 30 and 60 days
Overdue between 60 and 90 days
Overdue more than 90 days
Trade receivables before loss allowance
Less provision
Trade receivables net of loss allowance
Group
2022
£m
Group
2021
£m
Company
2022
£m
Company
2021
£m
1.1
0.5
0.1
–
0.8
2.5
(0.9)
1.6
1.3
0.4
0.1
0.1
1.2
3.1
(1.0)
2.1
1.1
0.5
0.1
–
0.8
2.5
(0.9)
1.6
1.3
0.4
0.1
0.1
1.2
3.1
(1.0)
2.1
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
19. Discontinued Operations
In the prior year, on 7 June 2020, the Group sold its subsidiary Stable Pizza & Cider Limited (“The Stable”) to Sourdough South Limited
(“Three Joes”), for an enterprise value of £0.5 million on a debt free basis including any cash left in the business. Accordingly this business
was reported as discontinued operations in the Annual Report for the 52 weeks ended 27 March 2021.
Financial Performance and Cash Flow
The financial performance and cash flow information presented reflects the operations for the period ended 7 June 2020.
Segment result
Operating separately disclosed items
Operating loss
Net finance costs
Loss from operating activities – discontinued operations
Loss on sale of discontinued operation1
Income tax on loss on sale of discontinued operation
Loss before tax – discontinued operations
Taxation
Loss from discontinued operations
Net cash outflow from operating activities
Net cash inflow from investing activities
Net cash outflow from financing activities
Net decrease in cash generated by discontinued operations
Other segment information
Depreciation and amortisation
Loss per share – discontinued operations
40p ‘A’ and ‘C’ ordinary share
Basic loss per share
Diluted loss per share
Adjusted loss per share
Diluted adjusted loss per share
4p ‘B’ ordinary share
Basic loss per share
Diluted loss per share
Adjusted loss per share
Diluted adjusted loss per share
1 This is treated as a separately disclosed item.
20. Assets Held for Sale
Assets held for sale at the start of the year
Assets disposed of during the year
Assets transferred from Investment Properties
Assets transferred from Property, Plant and Equipment
Assets transferred to Property, Plant and Equipment1
Assets held for sale at the end of the year
52 weeks
ended
27 March
2021
£m
(0.5)
–
(0.5)
–
(0.5)
(0.9)
–
(1.4)
–
(1.4)
(0.4)
0.3
(0.1)
(0.2)
0.3
(2.54)
(2.54)
(0.91)
(0.91)
(0.25)
(0.25)
(0.09)
(0.09)
Group
2022
Company
2022
9.6
(4.6)
1.4
1.5
(2.5)
5.4
9.6
(4.6)
1.4
1.5
(2.5)
5.4
1 During the year assets relating to two properties have been transferred to property, plant and equipment due to a change in market conditions
and the properties no longer meet the criteria under IFRS 5.
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
1
3
1
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
Notes to the Financial Statements
Continued
20. Assets Held for Sale continued
At 26 March 2022, nine properties have been classified as held for sale (2021: 17 properties). The properties are predominately unlicenced
properties. Sale is expected within 12 months from the reporting date. No material change in value was recognised on reclassifying
the property to held for sale. Valuations performed are based on observations of transactions involving properties of a similar nature,
location and condition. Since this valuation was performed using a significant non-observable input, the fair value measurement can
be categorised as a Level 3.
21. Trade and Other Payables
Due within one year:
Group
Trade payables
Other tax and social security
Other payables
Accruals
Contract liabilities
Due within one year:
Company
Trade payables
Amounts due to subsidiary undertakings
Other tax and social security
Other payables
Accruals
Contract liabilities
2
3
1
2022
£m
24.4
4.3
7.2
18.2
3.0
57.1
2022
£m
24.4
136.7
4.3
7.2
18.2
3.0
2021
£m
12.7
1.6
5.7
7.3
1.4
28.7
2021
£m
12.6
133.1
1.5
5.7
7.3
1.4
193.8
161.6
Company amounts due to subsidiary undertakings of £136.7 million (2021: £133.1 million) have no fixed repayment date. Interest is
payable on the balance at 3% above the Bank of England base rate. Company amounts due to subsidiary undertakings are unsecured.
Contract liabilities relate to deposits received from customers to secure bookings for events and accommodation. The balance will
unwind and be recognised as revenue in the following financial year.
22. Cash, Borrowings and Net Debt
Cash and Short-Term Deposits
Cash at bank and in hand
Group
2022
£m
15.6
Group
2021
£m
17.1
Company
2022
£m
Company
2021
£m
15.6
16.9
For the purposes of the Consolidated Cash Flow Statement, cash and cash equivalents comprise cash at bank and in hand, as above.
Cash at bank earns interest at floating rates.
Borrowings
Bank loans
CCFF
Debenture stock
Preference shares
Total borrowings
Analysed as:
Borrowings within current liabilities
Borrowings within non-current liabilities
Group
2022
£m
120.0
–
25.9
1.6
Group
2021
£m
107.9
99.8
25.9
1.6
Company
2022
£m
Company
2021
£m
120.0
–
25.9
1.6
107.9
99.8
25.9
1.6
147.5
235.2
147.5
235.2
120.0
27.5
147.5
207.7
27.5
235.2
120.0
27.5
147.5
207.7
27.5
235.2
All borrowings at both year ends are denominated in Sterling and, where appropriate, are stated net of issue costs. Further information on
borrowings is given in note 26.
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
Bank Loans
Group and Company
The Group has facilities of £191.7 million at year end. The CCFF of £100 million was repayable in May 2021 and was repaid using the
Group’s existing facilities and the proceeds of the equity placing. On 31 March 2021, the Group agreed an Amend and Extend Refinancing
of its Existing Debt Facilities with its relationship banks, extending the maturity of the £191.7 million facilities to 19 February 2023 and
amending the financial covenants to a minimum liquidity level of £10 million to 31 March 2022.
At 26 March 2022, £71.2 million (2021: £83.7 million) of the total of £191.7 million (2021: £291.7 million) committed bank facility was
available and undrawn.
As a result of coronavirus and the temporary closure of the entire estate for a portion of the period, the facilities two main quarterly
covenants, being net debt to EBITDA (leverage) and net debt to finance charges, were waived for the whole period and revised to a
more appropriate test based of minimum liquidity of £10 million for each month during the financial year.
The bank loans at 26 March 2022 are unsecured, and are repayable as shown in the table below. Interest is payable at SONIA plus a
margin, which varies dependent on the ratio of net debt to EBITDA, but since the covenants were waived in March 2020 and replaced
with a liquidity test the interest rate margin has been fixed.
The bank loans and CCFF are repayable as follows:
On demand or within one year
Less: bank loan arrangement fees
Less: CCFF amortisation fees and fair value adjustments
Current liabilities
2022
£m
120.6
(0.6)
–
2021
£m
208.0
(0.1)
(0.2)
120.0
207.7
Debenture Stock
The debenture stocks are secured on specified fixed and floating assets of the Company and are redeemable on maturity.
Debenture stocks are repayable as follows:
Group and Company
In the second to fifth year inclusive – 10.70% 1st Mortgage Debenture Stock 2023
In greater than five years – 6.875% Debenture Stock 2028 (1st floating charge)
Less: discount on issue
Non-current liabilities
2022
£m
6.0
20.0
(0.1)
25.9
2021
£m
6.0
20.0
(0.1)
25.9
Preference Shares
The Company’s preference shares are classified as debt. The shares are not redeemable and are included in borrowings within
non-current liabilities. See note 24 for further details of the preference shares.
Analysis of Net Debt
Group
52 weeks ended 26 March 2022
Cash and cash equivalents:
Cash and short-term deposits
Financial liabilities:
Lease liabilities
Debt:
Bank loans2
CCFF
Debenture stock
Preference shares
Total borrowings
Net debt
At
27 March
2021
£m
Cash flows
£m
Non-cash1
£m
At
26 March
2022
£m
17.1
17.1
(89.9)
(89.9)
(107.9)
(99.8)
(25.9)
(1.6)
(235.2)
(308.0)
(1.5)
(1.5)
8.6
8.6
(11.4)
100.0
–
–
88.6
95.7
–
–
0.6
0.6
(0.7)
(0.2)
–
–
(0.9)
(0.3)
15.6
15.6
(80.7)
(80.7)
(120.0)
–
(25.9)
(1.6)
(147.5)
(212.6)
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
1
3
3
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
Notes to the Financial Statements
Continued
22. Cash, Borrowings and Net Debt continued
52 weeks ended 27 March 2021
Cash and cash equivalents:
Cash and short-term deposits
Financial liabilities:
Lease liabilities
Debt:
Bank loans2
CCFF
Debenture stock
Preference shares
Total borrowings
Net debt
At
28 March
2020
£m
Cash flows
£m
Non-cash1
£m
At
27 March
2021
£m
20.3
20.3
(112.9)
(112.9)
(171.7)
–
(25.9)
(1.6)
(199.2)
(291.8)
(3.2)
(3.2)
9.2
9.2
64.0
(99.4)
–
–
(35.4)
(29.4)
–
–
13.8
13.8
(0.2)
(0.4)
–
–
(0.6)
13.2
17.1
17.1
(89.9)
(89.9)
(107.9)
(99.8)
(25.9)
(1.6)
(235.2)
(308.0)
1 Non-cash movements relate to the amortisation of arrangement fees, arrangement fees accrued and movements in lease liabilities.
2 Bank loans net of arrangement fees and cash flows include the payment of arrangement fees.
At
27 March
2021
£m
16.9
16.9
(88.3)
(88.3)
(107.9)
(99.8)
(25.9)
(1.6)
(235.2)
(306.6)
Cash flows
£m
Non-cash1
£m
At
26 March
2022
£m
(1.3)
(1.3)
8.3
8.3
(11.4)
100.0
–
–
88.6
95.6
–
–
15.6
15.6
0.7
0.7
(0.7)
(0.2)
–
–
(0.9)
(0.2)
(79.3)
(79.3)
(120.0)
–
(25.9)
(1.6)
(147.5)
(211.2)
Company
4
3
1
52 weeks ended 26 March 2022
Cash and cash equivalents:
Cash and short-term deposits
Financial liabilities:
Lease liabilities
Debt:
Bank loans2
CCFF
Debenture stock
Preference shares
Total borrowings
Net debt
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
At
28 March
2020
£m
Cash flows
£m
Non-cash1
£m
At
27 March
2021
£m
19.2
19.2
(2.3)
(2.3)
–
–
16.9
16.9
(99.6)
(99.6)
(171.7)
–
(25.9)
(1.6)
(199.2)
(279.6)
8.9
8.9
64.0
(99.4)
–
–
(35.4)
(28.8)
2.4
2.4
(0.2)
(0.4)
–
–
(0.6)
1.8
(88.3)
(88.3)
(107.9)
(99.8)
(25.9)
(1.6)
(235.2)
(306.6)
52 weeks ended 27 March 2021
Cash and cash equivalents:
Cash and short-term deposits
Financial liabilities:
Lease liabilities
Debt:
Bank loans2
CCFF
Debenture stock
Preference shares
Total borrowings
Net debt
1 Non-cash movements relate to the amortisation of arrangement fees, arrangement fees accrued and movements in lease liabilities.
2 Bank loans net of arrangement fees and cash flows include the payment of arrangement fees.
23. Pensions
a) Retirement Benefit Plans – Group and Company
The Group operates one closed funded defined benefit pension scheme, the Fuller Smith & Turner Pension Plan (“The Scheme”). The plan
is defined benefit in nature, with assets held in separate professionally managed, trustee-administered funds. The Scheme is an HM
Revenue & Customs registered pension plan and subject to standard United Kingdom pension and tax law. On 1 January 2015 the plan
was closed to future accrual.
1
3
5
The Group also operates two defined contribution stakeholder pension plans for its employees. The Fuller’s Stakeholder Pension Plan
was set up for new employees of the Parent Company after the closure of the Fuller, Smith & Turner Pension Plan to new entrants on
1 August 2005. The Gales 2001 scheme was set up following the closure of the Gales defined benefit scheme in 2001.
The Group offers workplace pensions to all employees who are not members of the three defined contribution stakeholder pension plans.
The Group offers these pensions through the National Employment Savings Trust (“NEST”).
The Group also pays benefits, which are unfunded, to a number of former employees. The Directors consider these benefits to be defined
benefit in nature and the full defined benefit liability is recognised on the Balance Sheet.
Group and Company
Total amounts charged in respect of pensions in the year
Charged to Income Statement:
Defined benefit scheme – net finance charge – separately disclosed items
Defined contribution schemes and NEST – total operating charge
(Credit)/Charge to equity:
Defined benefit schemes – net actuarial (gains)/losses
Total pension (credit)/charge
52 weeks
ended
26 March
2022
£m
52 weeks
ended
27 March
2021
£m
–
1.9
1.9
(15.5)
(13.6)
0.1
1.7
1.8
1.0
2.8
b) Defined Contribution Stakeholder Pension Plans – Group and Company
The total cost charged to income in respect of the defined contribution stakeholder schemes is shown in the total operating charge above.
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
6
3
1
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
Notes to the Financial Statements
Continued
23. Pensions continued
c) Defined Benefit Plans – Group and Company
The Scheme provides pensions and lump sums to members on retirement and to their dependants on death.
Trustees are appointed by both the Company and the Scheme’s membership and act in the interest of the Scheme and all relevant
stakeholders, including the members and the Company. The Trustees are also responsible for the investment of the Scheme’s assets.
The Company pays the costs as determined by regular actuarial valuations. The Trustees are required to use prudent assumptions to
value the liabilities and costs of the Scheme whereas the accounting assumptions must be best estimates.
Responsibility for making good any deficit on the Scheme lies with the Company and this introduces a number of risks for the Company.
The major risks are:
• Interest and investment risk – The value of the Scheme’s assets are subject to volatility in equity prices. The Scheme has diversified
its investments to reduce the impact of volatility and variable interest return rates
• Inflation risk – The defined benefit obligation is linked to inflation so higher rates would result in a higher defined benefit obligation
• Longevity risk – An increase over the assumptions applied will increase the defined benefit obligation.
The Company and Trustees are aware of these risks and manage them through appropriate investment and funding strategies.
The Trustees manage governance and operational risks through a number of internal control policies.
The Scheme is subject to regular actuarial valuations, which are usually carried out every three years. In June 2021, the 2019 triennial
valuation was concluded and the Company has agreed to continue to pay in line with the existing recovery plan. Under this plan, deficit
reduction contributions started at £2.1 million in July 2019 and increase per annum in line with CPI. On 10 June 2021, fixed security over
certain of the Company’s freehold properties (with a net book value of £28.2 million), has been provided to the Scheme as additional
security, the value of which will be reviewed at each triennial valuation. The next triennial valuation is due on 30 July 2022.
The figures in the following disclosures were measured using the projected unit credit method.
The Scheme has not invested in any of the Group’s own financial instruments or in properties or other assets in use by the Group.
Key assumptions
The key assumptions used in the 2022 valuation of the Scheme are set out below:
Mortality assumptions
Current pensioners (at 65) – males
Current pensioners (at 65) – females
Future pensioners (at 65) – males
Future pensioners (at 65) – females
2022
Years
22.2
24.5
23.6
25.9
2021
Years
22.2
24.4
23.5
25.9
The Scheme is now closed to future accrual. The average age of the members who were active at closure is 57 for males and 55 for
females. The average age of all non-pensioners is 56.
Key financial assumptions used in the valuation of the Scheme
Rate of increase in pensions in payment
Discount rate
Inflation assumption – RPI
Inflation assumption – CPI (pre 2030/post 2030)
The present value of the Scheme liabilities is sensitive to the assumptions used, as follows:
Impact on Scheme liabilities – increase/(decrease)1
Increase discount rate by 0.1%
Increase inflation assumption by 0.1%2
Increase life expectancies by 1 year
2022
3.75%
3.00%
3.80%
2021
3.35%
1.95%
3.40%
2.9%/3.8% 2.5%/3.4%
2022
£m
(2.1)
1.3
6.2
2021
£m
(2.6)
2.1
7.3
1 The sensitivity analyses are based on a change in an assumption whilst holding all of the other assumptions constant. In practice this is unlikely
to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity to change, the same actuarial method
has been applied as when calculating the pension liability within the Balance Sheet. Due to the Scheme closing to future accrual on 1 January
2015, there are no longer any active members in the Scheme. As the members who were active at closure did not maintain a salary link on their
past service benefits, the future salary increase assumptions no longer have an impact on the Scheme’s liabilities.
2 For members who were active at closure, their pensions now increase in deferment in line with CPI inflation.
Assets in the Scheme
Corporate bonds
Index linked debt instruments
Overseas equities
Alternatives1
Cash
Annuities
Total market value of assets
1 Alternatives is composed of holdings in diversified growth investment funds.
Fair value of Scheme assets
Present value of Scheme liabilities
Surplus/(deficit) in the Scheme
26 March
2022
£m
27 March
2021
£m
25.0
26.0
31.5
56.5
1.6
3.3
25.5
28.3
30.6
53.7
1.9
3.8
143.9
143.8
2022
£m
143.9
(129.6)
14.3
2021
£m
143.8
(147.3)
(3.5)
Included within the total present value of Group and Company Scheme liabilities of £129.6 million (2021: £147.3 million) are liabilities of
£1.9 million (2021: £2.1 million) which are entirely unfunded. These have been shown separately on the Balance Sheet as there is no right
to offset the assets of the funded Scheme against the unfunded Scheme.
Defined benefit obligation
Fair value of Scheme
assets
Net defined benefit
surplus/(deficit)
Balance at beginning of the year
Included in profit and loss
Net interest cost
Included in Other Comprehensive Income
Actuarial gains/(losses) relating to:
Actual return less expected return on Scheme’s assets
Experience gains/(losses) arising on Scheme liabilities
Other
Employee contributions
Benefits paid
2022
£m
2021
£m
(147.3)
(128.5)
2022
£m
143.8
2021
£m
123.8
2022
£m
(3.5)
(2.8)
(2.8)
(3.0)
(3.0)
–
14.9
14.9
–
5.6
5.6
–
(20.5)
(20.5)
–
4.7
4.7
2.8
2.8
0.6
–
0.6
2.3
(5.6)
(3.3)
2.9
2.9
19.5
–
19.5
2.3
(4.7)
(2.4)
–
–
0.6
14.9
15.5
2.3
–
2.3
14.3
2021
£m
(4.7)
(0.1)
(0.1)
19.5
(20.5)
(1.0)
2.3
–
2.3
(3.5)
Balance at end of the year
(129.6)
(147.3)
143.9
143.8
The weighted average duration of the Scheme’s liabilities at the end of the period is 17 years (2021: 17 years).
The total contributions to the Scheme in the next financial year are expected to be £2.3 million for the Group and Company. Following
the conclusion of the 2019 triennial valuation on 15 June 2021, it was agreed that the Company would continue to pay contributions in
line with the deficit recovery plan which started at £2.1 million in July 2019 and increase each year with CPI. The recovery deficit plan will
be reviewed at the next triennial valuation, which is due on 30 July 2022. No further payments are made as the Scheme is now closed to
future accrual.
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
1
3
7
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
Notes to the Financial Statements
Continued
24. Preference Share Capital
Group and Company
Authorised, issued and fully paid share capital
Number authorised and in issue:
At 27 March 2021 and 26 March 2022
Monetary amount:
At 27 March 2021 and 26 March 2022
First 6%
cumulative
preference
share of
£1 each
Number
000s
Second 8%
cumulative
preference
share of
£1 each
Number
000s
Total
Number
000s
400
1,200
1,600
£m
0.4
£m
1.2
£m
1.6
The first 6% cumulative preference shares of £1 each are entitled to first payment of a fixed cumulative dividend and on winding up to a
return of paid capital plus arrears of dividends. The second 8% cumulative preference shares of £1 each are entitled to second payment
of a fixed cumulative dividend and on winding up a return of capital paid up (plus a premium calculated by reference to an average quoted
price on the London Stock Exchange for the previous six months) plus arrears of dividends.
Preference shareholders may only vote in limited circumstances: principally on winding up, alteration of class rights or on unpaid
preference dividends. Preference shares cannot be redeemed by the holders, other than on winding up.
25. Provisions
Group and Company
Balance at the beginning of the year
8
3
1
Utilised
Released
Balance at the end of the year
Analysed as:
Due within one year
Due in more than one year
Legal claim
2022
£m
4.0
(1.4)
(2.1)
0.5
2022
£m
0.5
–
0.5
2021
£m
4.1
(0.1)
–
4.0
2021
£m
4.0
–
4.0
The £2.1 million credit is the release of a provision, after the final settlement amount on the sale of the Fuller’s Beer Business, which has
been released to separately disclosed items.
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
26. Financial Instruments
Details of the Group’s treasury function are included in the Financial Review’s discussion of financial risks and treasury policies on page 31.
The accounting treatment of the Group’s financial instruments is detailed in note 1.
a) Capital Management – Group and Company
As described in note 1, the Group considers its capital to comprise the following:
Group
Ordinary share capital
Share premium
Capital redemption reserve
Hedging reserve
Retained earnings
Preference shares
Company
Ordinary share capital
Share premium
Capital redemption reserve
Hedging reserve
Merger reserve
Retained earnings
Preference shares
2022
£m
25.4
53.2
3.7
(0.1)
383.6
1.6
467.4
2022
£m
25.4
53.2
3.7
(0.1)
(1.6)
335.1
1.6
417.3
2021
£m
22.8
4.2
3.7
(0.5)
366.3
1.6
398.1
2021
£m
22.8
4.2
3.7
(0.5)
(1.6)
320.7
1.6
350.9
In managing its capital, the primary objective is to ensure that the Group is able to continue to operate as a going concern and to
maximise return to shareholders through a combination of capital growth, distributions and the payment of preference dividends to its
preference shareholders. The Group seeks to maintain a ratio of debt and equity that balances risks and returns at an acceptable level
and maintains sufficient funds to meet working capital targets, investment requirements and comply with lending covenants. As a
minimum, the Board reviews the Group’s dividend policy twice yearly and reviews the treasury position at every Board meeting.
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
1
3
9
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
Notes to the Financial Statements
Continued
26. Financial Instruments continued
b) Categories of Financial Assets and Liabilities
The Group’s financial assets and liabilities as recognised at the Balance Sheet date may also be categorised as follows:
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
2022
£m
2021
£m
1.6
1.6
1.6
46.1
6.8
120.0
172.9
0.1
173.0
2.1
2.1
2.1
25.4
6.7
207.7
239.8
–
239.8
–
0.7
73.9
25.9
1.6
101.4
101.4
274.4
83.2
25.9
1.6
110.7
111.4
351.2
Group
Current assets
Trade and other receivables in scope of IFRS 9
Total current assets
Total financial assets
Current liabilities
Financial liabilities at amortised cost:
Trade and other payables in scope of IFRS 9
Lease liabilities
Loans
Total carried at amortised cost
Derivative financial instruments used for hedging
Total current liabilities
Non-current liabilities
Derivative financial instruments used for hedging
Financial liabilities at amortised cost:
0
4
1
Lease liabilities
Loans and debenture stock
Preference shares
Total carried at amortised cost
Total non-current liabilities
Total financial liabilities
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
Company
Current assets
Trade and other receivables in scope of IFRS 9
Total current assets
Total financial assets
Current liabilities
Financial liabilities at amortised cost:
Trade and other payables in scope of IFRS 9
Lease liabilities
Loans
Total carried at amortised cost
Derivative financial instruments used for hedging
Total current liabilities
Non-current liabilities
Derivative financial instruments used for hedging
Financial liabilities at amortised cost:
Lease liabilities
Loans and debenture stock
Preference shares
Total carried at amortised cost
Total non-current liabilities
Total financial liabilities
2022
£m
2021
£m
1.6
1.6
1.6
182.8
6.5
120.0
309.3
0.1
309.4
2.1
2.1
2.1
158.4
6.5
207.7
372.6
–
372.6
–
0.7
72.8
25.9
1.6
100.3
100.3
409.7
81.8
25.9
1.6
109.3
110.0
482.6
There is no set-off of financial assets and liabilities as shown above.
c) Financial Risks – Group and Company
The main risks associated with the Group’s financial assets and liabilities are set out below, as are the Group’s policies for their
management.
Derivative instruments are used to change the economic characteristics of financial instruments in accordance with Group policy.
i. Interest rate risk
The Group manages its cost of borrowings using a mixture of fixed rates, variable rates and interest rate swaps. Fixed rates do not expose
the Group to cash flow interest rate risk, but do not enjoy a reduction in borrowing costs in markets where rates are falling. Floating rate
borrowings, although not exposed to changes in fair value, expose the Group to cash flow risk following rises in interest rates and cost.
The debentures totalling £25.9 million (2021: £25.9 million) and the CCFF totalling £nil (2021: £99.8 million), net of interest paid in advance,
are at fixed rates. The bank loans totalling £120.0 million (2021: £107.9 million), net of arrangement fees, are at floating rates. At the year
end, after taking account of interest rate swaps, 17% (2021: 19%) of the Group’s bank loans and 32% (2021 63%) of gross borrowings were
at fixed rates.
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
1
4
1
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
Notes to the Financial Statements
Continued
26. Financial Instruments continued
Interest rate swaps
The Group has entered into interest rate swap agreements, where the Group pays a fixed rate and receives one month or three month
LIBOR, in order to hedge the risk of variation in interest cash flows on its borrowings. At the Balance Sheet date, £20.0 million of the Group
and Company’s borrowings (2021: £20.0 million) were hedged by interest rate swaps at a blended fixed rate of 2.34% (2021: 2.30%). The
swap active at 26 March 2022 expires in August 2022.
The interest rate swap is expected to impact the Income Statement in line with the liquidity risk table shown in section (iii) below. The
interest rate swap cash flow hedge in effect at 26 March 2022 was assessed as being highly effective. Net unrealised gain of £0.4 million
(2021: £0.4 million) has been recorded in Other Comprehensive Income.
Sensitivity – Group and Company
The Group borrows in Sterling at market rates. Three month Sterling SONIA rate during the 52 weeks ended 26 March 2022 ranged
between 0.05% and 0.69%. The Directors consider 1.00% to be a reasonable possible increase in rates and 0.50% to be a reasonable
possible decrease in rates, with reference to market yield curves and the current economic conditions.
The annualised effect of these changes to interest rates on the floating rate debt at the Balance Sheet date, all other variables being
constant, are as follows:
Impact on post-tax profit and net equity – increase/(decrease)
Decrease interest rate by 0.5%
Increase interest rate by 1.0%
Group
Company1
2022
£m
0.5
(1.0)
2021
£m
0.4
(0.7)
2022
£m
1.0
(2.1)
2021
£m
0.9
(1.8)
1 The Company has substantial interest bearing payables due to subsidiary companies (note 21).
ii. Credit risk
The risk of financial loss due to a counter party’s failure to honour its obligations arises principally in relation to transactions where
the Group provides goods and services on deferred payment terms, deposits surplus cash and enters into derivative contracts.
Group policies are aimed at minimising losses and deferred terms are only granted to customers who demonstrate an appropriate
payment history and satisfy credit worthiness procedures. Individual customers are subject to credit limits to control debt exposure
and goods may also be sold on a cash with order basis.
Cash deposits with financial institutions for short periods and derivative transactions are only permitted with financial institutions
approved by the Board. There are no significant concentrations of credit risk within the Group. The maximum credit risk exposure
relating to financial assets is represented by their carrying value as at the Balance Sheet date.
Trade and other receivables
The Group records impairment losses on its trade receivables separately from gross receivables. Further detail is included in note 18.
iii. Liquidity risk
The Group minimises liquidity risk by managing cash generation, applying trade receivables collection targets, monitoring daily cash
receipts and payments and setting rolling cash forecasts. Investments have cash payback periods applied as part of a tightly controlled
investment appraisal process. The Group’s rating with credit agencies is excellent.
The Group has a mixture of long and short-term borrowings and overdraft facilities: 15% (2021: 9%) of the Group’s borrowings are
repayable after more than five years, 4% (2021: 3%) within the first to fifth years and 81% (2021: 88%) within one year.
The tables on the following page summarise the maturity profile of the Group’s financial liabilities at 26 March 2022 based on
undiscounted contractual cash flows, including interest payable. Floating rate interest is estimated using the prevailing interest
rate at the Balance Sheet date.
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
2
4
1
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
Group at 26 March 2022
Interest bearing loans and borrowings1
Preference shares2
Trade and other payables
Lease liabilities
On
demand
£m
Less than
3 months
£m
–
–
24.4
–
1.9
–
21.2
2.3
3 to 12
months
£m
125.4
0.1
0.5
6.8
1 to 5
years
£m
12.0
0.5
–
27.3
6 to 10
years
£m
More than
10 years
£m
–
–
–
26.0
21.5
3.4
–
39.4
Total
£m
160.9
4.0
46.1
101.8
1 Bank loans are included after taking account of the following cash flows in relation to the interest rate swap held in respect of these borrowings:
Interest rate swaps
–
0.1
0.1
–
–
0.2
Group at 27 March 2021
Interest bearing loans and borrowings1
Preference shares2
Trade and other payables
Lease liabilities
On
demand
£m
Less than
3 months
£m
–
–
12.7
–
0.9
–
8.7
2.4
3 to 12
months
£m
210.0
0.1
4.0
7.2
1 to 5
years
£m
12.8
0.5
–
30.6
6 to 10
years
£m
More than
10 years
£m
–
–
–
27.8
22.9
3.4
–
35.7
Total
£m
246.6
4.0
25.4
103.7
1 Bank loans are included after taking account of the following cash flows in relation to the interest rate swap and cap held in respect of these
borrowings:
Interest rate swaps
–
0.1
0.3
0.2
–
–
0.6
2 The preference shares have no contractual repayment date. For the purposes of the table above, interest payments have been shown for 20
years from the Balance Sheet date but no further.
The Company figures are as for the Group, except as follows:
Company at 26 March 2022
Amounts due to subsidiary undertakings3
Trade and other payables
Lease liabilities
Company at 27 March 2021
Amounts due to subsidiary undertakings3
Trade and other payables
Lease liabilities
On
demand
£m
Less than
3 months
£m
3 to 12
months
£m
136.6
24.4
–
133.1
12.6
–
–
21.2
2.2
–
8.7
2.3
–
0.5
6.6
–
4.0
7.0
1 to 5
years
£m
–
–
6 to 10
years
£m
More than
10 years
£m
–
–
–
–
26.2
25.9
39.2
–
–
–
–
–
–
29.4
27.5
35.7
Total
£m
136.6
46.1
100.1
133.1
25.3
101.9
3 Amounts due to subsidiary undertakings have no fixed repayment date. Interest is payable on the balance at 3% above the Bank of England base rate.
Security – Group and Company
The 10.7% debentures 2023 are secured on property, plant and equipment with a net book value of £10.5 million (2021: £11.6 million).
The 6.875% debentures 2028 are secured by a floating charge over the assets of the Company.
Covenants – Group and Company
The Group and Company are subject to a number of covenants in relation to their borrowing facilities which, if contravened, would result
in its loans becoming immediately repayable. These covenants inter alia specify maximum net debt to earnings before interest, tax,
depreciation and amortisation, and minimum earnings before interest, tax, depreciation and amortisation to interest.
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
1
4
3
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
Notes to the Financial Statements
Continued
26. Financial Instruments continued
The Group completed an equity placing on 20 April 2021 which raised net proceeds of £51.8 million. The proceeds of the equity placing,
along with the Group’s existing facilities, were used to repay the CCFF on 12 May 2021. At the same time as the equity placing, the Group
also agreed an Amend and Extend Refinancing of its existing debt facilities with its relationship banks, extending the maturity of the
£192 million facilities to 19 February 2023 and amending the financial covenants to a minimum liquidity level of £10 million to be tested
monthly until 31 March 2022. Since year end, the Group has secured a new facility of £200 million, split between a RCF of £110 million and
a term loan of £90 million, for a tenure of four years to May 2026. Under the new agreement, there is a minimum liquidity requirement of
£10 million until November 2022. From December 2022, there will be a covenant suite which will consist of net debt to EBITDA (leverage)
and EBITDA to net finance charges. See further details in note 22.
d) Fair Value
Group
Financial liabilities
Lease liabilities
Fixed rate borrowings
Floating rate borrowings
Preference shares
Interest rate swaps
The Company figures are as for the Group above except for:
Company
Financial liabilities
Lease liabilities
4
4
1
Book value
Fair value
2022
£m
2021
£m
2022
£m
2021
£m
Fair
value
Level
(80.7)
(25.9)
(120.0)
(1.6)
(0.1)
(89.9)
(125.7)
(107.9)
(1.6)
(0.7)
(80.7)
(32.0)
(120.0)
(1.6)
(0.1)
(89.9)
(132.7)
(107.9)
(1.6)
(0.7)
3
3
3
3
2
Book value
Fair value
2022
£m
2021
£m
2022
£m
2021
£m
Fair
value
Level
(79.3)
(88.3)
(79.3)
(88.3)
3
Level 1 fair values are valuation techniques where inputs are quoted prices in active markets for identical assets or liabilities that the entity
can access at measure data.
Level 2 fair values are valuation techniques where all inputs which have a significant effect on the recorded fair value are observable,
either directly or indirectly, but are not derived directly from quoted prices in active markets. The Group bases its valuations on information
provided by financial institutions, who use a variety of estimation techniques based on market conditions, such as interest rate
expectations, existing at each Balance Sheet date.
Level 3 fair values are valuation techniques for which all inputs that have a significant effect on the recorded fair value are not observable.
Derivative fair values are obtained from quoted market prices in active markets. The fair values of borrowings have been calculated by
discounting the expected future cash flows at prevailing interest rates. Interest rates for borrowings range from 1.5% to 10.7%. The fair
values of preference shares have been calculated using the market interest rates.
Management assessed that the fair values of cash and short-term deposits, trade receivables and other receivables, and trade and other
payables approximate their carrying amounts largely due to the short-term maturities of these instruments.
There were no transfers between levels in the fair value hierarchy as at 26 March 2022 and 27 March 2021.
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
27. Share Capital and Reserves
a) Share Capital
Authorised, issued and fully paid
Number in issue
At 30 March 2020 and 27 March 2021
Share placing
Share conversions
At 26 March 2022
Proportion of total equity shares at 26 March 2022
Monetary amount
At 27 March 2021
Share placing
Share conversions
At 26 March 2022
‘A’ ordinary
shares of
40p each
Number
000s
33,620
6,469
993
41,082
28.6%
£m
13.4
2.6
0.4
16.4
‘C’ ordinary
shares of
40p each
Number
000s
‘B’ ordinary
shares of
4p each Number
000s
14,459
89,052
–
(993)
13,466
9.4%
£m
5.8
–
(0.4)
5.4
–
–
89,052
62.0%
£m
3.6
–
–
3.6
Total
Number
000s
137,133
6,469
–
143,600
100%
£m
22.8
2.6
–
25.4
Share capital represents the nominal value proceeds received on the issue of the Company’s equity share capital, comprising 40p and 4p
ordinary shares. The Company’s preference shares are classified as non-current liabilities in accordance with IFRS (see note 24).
The ordinary shareholders are entitled to be paid a dividend out of any surplus profits and to participate in surplus assets on winding up
in proportion to the nominal value of each class of share (‘B’ shares have one-tenth of the nominal value of ‘A’ and ‘C’ shares).
All equity shares in the Company carry one vote per share, save that shares held in treasury have their voting rights suspended. The ‘A’ and
‘C’ shares have a 40p nominal value and the ‘B’ shares have a 4p nominal value so that a ‘B’ share dividend will be paid at 10% of the rate
applying to ‘A’ and ‘C’ shares. The ‘A’ shares are listed on the London Stock Exchange. The ‘C’ shares carry a right for the holder to convert
them to ‘A’ shares by written notice in the 30 day period following the half year and preliminary announcements. The ‘B’ shares are not
listed and have no conversion rights. In most circumstances the value of a ‘B’ share is deemed to be 10% of the value of the listed ‘A’
shares. The Trustee holding shares for participants of the LTIP currently waives dividends for shares held during the initial three year
period. Dividends are not paid on shares held in treasury.
1
4
5
The Articles include provisions relating to the Company’s ‘B’ and ‘C’ shares which provide that shareholders who wish to transfer
their shares may only do so if the transfer is to another ‘B’ or ‘C’ shareholder, or if the transfer is to certain of that shareholder’s family
members or their executors or administrators or, where shares are held by trustees, to new trustees, or to the trustees of any employee
share scheme, or if the Company is unable to identify another shareholder of that class willing to purchase the shares within the specified
period, to any person.
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
Notes to the Financial Statements
Continued
27. Share Capital and Reserves continued
b) Own Shares
Own shares relate to shares held by independently managed employee share ownership trusts (“ESOTs”) together with the Company’s
holding of treasury shares. Shares are purchased by the ESOTs in order to satisfy potential awards under the Long Term Incentive Plan
(“LTIP”) and Share Incentive Scheme (“SIP”). Treasury shares are used, inter alia, to satisfy options under the Company’s share options
schemes. The LTIP ESOT has waived its rights to dividends on the shares it holds. Treasury shares have voting and dividend rights
suspended. All own shares held, as below, are excluded from earnings and net assets per share calculations.
Number
Treasury shares
LTIP ESOT
SIP ESOT
Total
Total
‘A’ ordinary
40p shares
000s
‘B’ ordinary
4p shares
000s
‘B’ ordinary
4p shares
000s
‘C’ ordinary
40p shares
000s
‘A’ ordinary
40p shares
000s
‘A’ ordinary
40p shares
000s
‘B’ ordinary
4p shares
000s
‘C’ ordinary
40p shares
000s
Own shares
000s
At 28 March 2020
1,281
4,558
326
Shares released
At 27 March 2021
Shares released
(7)
–
1,274
4,558
(11)
(230)
At 26 March 2022
1,263
4,328
Monetary amount
At 28 March 2020
Shares released
At 27 March 2021
Shares released
At 26 March 2022
6
4
1
Market value at
26 March 2022
£m
12.0
(0.1)
11.9
(0.1)
11.8
£m
4.6
–
4.6
(0.3)
4.3
–
326
–
326
£m
0.3
–
0.3
–
0.3
6
–
6
–
6
£m
0.1
–
0.1
–
0.1
5
–
5
–
5
£m
0.1
–
0.1
–
0.1
1,286
4,884
6
6,176
(7)
–
1,279
4,884
(11)
(230)
1,268
4,654
£m
12.1
(0.1)
12.0
(0.1)
11.9
£m
4.9
–
4.9
(0.3)
4.6
–
6
–
6
£m
0.1
–
0.1
–
0.1
(7)
6,169
(241)
5,927
£m
17.1
(0.1)
17.0
(0.4)
16.6
7.8
2.7
0.2
–
–
7.9
2.9
–
10.8
c) Other Capital Reserves
Share premium account
The balance in the share premium account represents the proceeds received above the nominal value on the issue of the Company’s
equity share capital.
Capital redemption reserve
The capital redemption reserve balance arises from the buy-back of the Company’s own equity share capital.
Hedging reserve
The hedging reserve contains the effective portion of the cash flow hedge relationships incurred at the Balance Sheet date, net of tax.
Merger reserve
The merger reserve balance arises from the hive up of Bel & The Dragon.
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
28. Share Options and Share Schemes
The key points of each of the Group’s share schemes for grants up to 26 March 2022 are summarised below. All schemes are equity-
settled. All disclosure relates to both Group and Company. For the purposes of option and LTIP schemes, “Adjusted EPS” will normally be
consistent with the post-tax earnings per share excluding separately disclosed items as presented in the financial statements. However,
the Remuneration Committee is authorised to make appropriate adjustments to Adjusted EPS as applied to these schemes.
Savings Related Share Option Scheme (“SAYE”)
This scheme grants options over shares at a discount of 20% on the average market price over the three days immediately prior to the
date of offer. Employees must save a regular amount each month. Savings are made over three or five years, at the participant’s choice.
The right to buy shares at the discounted price lasts for six months after the end of the savings contract. There are no performance
conditions, other than continued employment.
Executive Share Option Scheme
This is an approved Executive Share Option Scheme. For grants up to the year ended 28 March 2020 options vest if growth in Adjusted
EPS exceeds the growth in RPI by 9% or more, over the three year performance period of the option. For grants made during the year
ended 27 March 2021 options vest if a set EBITDA target is achieved. For grants made during the year ended 26 March 2022 onwards,
the options vest if a set pre-tax Adjusted EPS target is achieved. The options must then be exercised within seven years after the end of
the performance period.
LTIP
This plan grants conditional share awards. Up until the LTIP granted during the year ended 28 March 2020 vesting is conditional on
growth in Adjusted EPS exceeding growth in RPI by 9% or more over the three year initial performance period of the award, with vesting
levels on a sliding scale from 40% up to 100%, if growth in Adjusted EPS exceeds growth in RPI by 24% or more.
From the LTIP granted during the year ended 27 March 2021 vesting is conditional upon pre-tax Adjusted EPS targets, with vesting levels
on a sliding scale from 25% up to 100% dependent on the level of EPS achieved. An independent firm of advisors verifies the vesting level
each year. The initial vesting period is three years and, for Executive Directors, is followed by a two year holding period. After this time the
shares may be passed to the plan participants, as long as vesting conditions are met.
A one-off Recovery LTIP was granted during the year ended 26 March 2022. Vesting is conditional upon Group EBITDA (excluding IFRS
16) targets, with vesting levels on a sliding scale from 25% up to 100% dependent on the level of EBITDA achieved. The initial vesting
period is three years and is followed by a two year holding period. After this time the shares may be passed to the plan participants,
as long as vesting conditions are met.
1
4
7
SIP
This plan awards free shares. An equal number of shares are awarded to each eligible employee. The maximum value of shares allowable
under the scheme is £3,000 per year, per person with at least five months’ service as at 15 May each year. The basis of the award was
changed with effect from the 2018 award so that all eligible employees receive the same number of shares. There is no requirement for
performance targets (although there may be tax consequences if sold within five years of the award).
Share-based payment expense recognised in the year
The expense recognised for share-based payments in respect of employee services received during the 52 weeks ended 26 March 2022
is £0.8 million charge (2021: £0.3 million credit). The whole of that expense arises from equity-settled share-based payment transactions.
Market value
The market value of the shares at 26 March 2022 was £6.20 (2021: £8.60).
Movements in the year
The following tables illustrate the number and weighted average exercise prices (“WAEP”) of, and movements in, each category of share
instrument during the year.
Volatility
The expected volatility is based on the historical volatility over the expected life of the rights.
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
Notes to the Financial Statements
Continued
28. Share Options and Share Schemes continued
a) SAYE
Outstanding at the beginning of the year
Granted
Forfeited
Expired
Exercised
Outstanding at the end of the year
Exercisable at the end of the year
Weighted average share price for options exercised in the year
2022
Number
000s
460
130
(105)
–
(11)
474
4
£7.35
2022
WAEP
£4.79
£5.43
£5.43
–
£7.66
£4.70
£7.70
2021
Number
000s
167
410
(78)
(38)
(1)
460
9
£8.99
2021
WAEP
£7.98
£4.35
£7.54
£8.06
£8.12
£4.79
£8.51
Weighted average contractual life remaining for share options outstanding at the
year end
2.7 years
3.1 years
Weighted average share price for options granted in the year
Weighted average fair value of options granted during the year
Range of exercise prices for options outstanding at the year end
– from
– to
£6.40
£0.77
£4.35
£8.12
£5.59
£1.38
£4.35
£8.70
Outstanding share options granted to employees under the SAYE scheme are as follows:
Exercisable at
September 2020
September 2020
September 2021
September 2021
September 2022
September 2023
November 2023
December 2024
November 2025
December 2026
Number of
‘A’ ordinary
shares
under
option
2022
000s
Number of
‘A’ ordinary
shares
under option
2021
000s
Exercise
price 40p
shares
£
8.70
8.12
7.74
7.70
8.12
7.70
4.35
5.43
4.35
5.43
–
–
–
4
2
2
187
76
149
54
474
6
3
17
24
3
4
228
–
175
–
460
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
8
4
1
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
b) Share Option Schemes
Outstanding at the beginning of the year
Granted
Lapsed
Surrendered
Exercised
Outstanding at the end of the year
Exercisable at the end of the year
Weighted average share price for options exercised in the year
Executive Share Option Scheme
2022
Number
000s
212
–
(28)
–
–
184
25
2022
WAEP
£7.46
–
£9.00
–
–
£7.23
£9.17
2021
Number
000s
159
163
(44)
(65)
(1)
212
26
£7.36
2021
WAEP
£9.69
£6.92
£10.24
£9.71
£5.78
£7.46
£9.03
Weighted average contractual life remaining for share options outstanding at the
year end
8.84 years
8.63 years
Weighted average share price for options granted in the year
Weighted average fair value of options granted during the year
Range of exercise prices for options outstanding at the year end
– from
– to
n/a
n/a
£6.92
£10.90
£6.92
£0.94
£6.92
£10.90
Outstanding options which are capable of being exercised between three and ten years from date of issue and their exercise prices are
shown in the table below:
Exercisable in/between
2014 and 2021
2015 and 2022
2016 and 2023
2017 and 2024
2018 and 2025
2020 and 2027
2021 and 2028
2022 and 2029
2023 and 2030
Exercise
price 40p
shares
£
7.09
7.05
9.10
9.65
10.90
10.34
9.46
9.61
6.92
Executive Approved
Scheme
Number of
‘A’ ordinary
shares
under
option
2022
000s
Number of
‘A’ ordinary
shares
under option
2021
000s
1
4
9
–
5
9
5
5
–
1
–
159
184
2
5
9
5
5
–
19
4
163
212
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
Notes to the Financial Statements
Continued
28. Share Options and Share Schemes continued
c) LTIP
Shares
Outstanding at the beginning of the year
Granted
Lapsed
Outstanding at the end of the year
2022
‘A’ shares
Number
000s
2022
‘B’ shares
Number
000s
2021
‘A’ shares
Number
000s
2021
‘B’ shares
Number
000s
404
533
(155)
782
1,009
1,332
(388)
1,953
288
220
(104)
404
721
549
(261)
1,009
Weighted average share price for shares vested in the year
n/a
n/a
n/a
n/a
For shares outstanding at the year end, the weighted average contractual life
remaining is
Weighted average share price for shares granted in the year
Weighted average fair value of shares granted during the year
2.12 years 2.12 years
1.91 years
1.91 years
£7.40
£7.16
£0.74
£0.72
£5.90
£5.75
£0.59
£0.58
All LTIPs have a vesting price of £nil. LTIP shares do not receive dividends until vested.
d) SIP
Outstanding at the beginning of the year
Granted
Lapsed
Released
Outstanding at the end of the year
2022
Number
000s
2021
Number
000s
112
–
–
(39)
73
150
–
–
(38)
112
Weighted average share price for shares released in the year
£7.17
£7.22
For shares outstanding at the year end, the weighted average contractual life remaining is
1.32 years
1.88 years
Weighted average share price for shares granted during the year
Weighted average fair value of shares granted during the year
–
–
–
–
Outstanding SIP shares represent shares allocated and held by the SIP Trustees on behalf of employees, which remain in the trust for
between three and five years. All SIPs have a vesting price of £nil. SIP shares receive dividends once allocated.
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
0
5
1
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
e) Fair Value of Grants
i. Equity-settled options and LTIPs
The fair value of equity-settled share options granted is estimated as at the date of grant, taking into account the terms and conditions
upon which the awards were granted. The following table lists the inputs to the model used for the 52 weeks ended 26 March 2022 and
52 weeks ended 27 March 2021, except for exercise price and the weighted average share price for grants in the year, which are disclosed
in sections a) to d) above.
LTIP scheme
SAYE
Executive Share Option Scheme
Fair value inputs
Dividend yield (%)
Expected share price volatility (%)
Risk-free interest rate (%)
2022
1.1%
n/a
0.5%
2021
nil%
n/a
(0.1%)
2022
1.3%
2021
nil%
2.3-2.7%
17.2%-19.1%
(0.1%)
(0.1%)
Expected life of option/award (years)
3 years
3 years
3-5 years
3-5 years
2022
n/a
n/a
n/a
n/a
2021
nil%
18.7%
(0.1%)
4 years
Model used
Black Scholes Black Scholes Black Scholes Black Scholes
n/a Black Scholes
ii. SIP free shares awarded
The fair value of free shares awarded under the SIP is the share price at the date of allocation. The total value of SIPs awarded is a fixed
rate based on the Group’s performance in the preceding financial year. The number of shares awarded is therefore dependent on the
share price at the date of the award.
29. Guarantees and Commitments
a) Operating Lease Commitments
Operating leases where the Group is the lessor
The Group earns rental income from two sources. Licensed property included within property, plant and equipment is rented under
agreements where lessees must also purchase goods from the Group. Additionally, there are a smaller number of agreements in respect
of investment properties where there is no requirement for the lessee to purchase goods.
Investment properties are let to third parties on leases that have remaining terms of between one and fifteen years.
At 26 March 2022, future minimum rentals receivable are as follows:
Group
Within one year
One to two years
Two to three years
Three to four years
Four to five years
After five years
Company
Within one year
One to two years
Two to three years
Three to four years
Four to five years
After five years
Investment properties
Property, plant and
equipment
2022
£m
2021
£m
2022
£m
2021
£m
0.3
0.2
0.2
0.2
0.1
0.6
1.6
0.3
0.2
0.2
0.2
0.1
0.6
1.6
0.5
0.3
0.1
0.2
0.1
0.3
1.5
0.5
0.3
0.1
0.2
0.1
0.3
1.5
5.7
2.0
1.5
0.6
0.1
0.6
7.8
5.0
4.5
1.4
0.3
0.8
10.5
19.8
5.7
2.0
1.5
0.6
0.1
0.6
7.8
5.0
4.5
1.4
0.3
0.8
10.5
19.8
The Group and Company’s commercial leases on property are principally for licensed outlets. The terms of the leases are normally for
either three, four or five years. The agreements allow for annual inflationary increases and full rental reviews occur on renewal of the lease.
At 26 March 2022, future minimum rentals receivable under non-cancellable sub-leases included in the figures above were £2.0 million
(2021: £1.6 million).
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
1
5
1
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
Notes to the Financial Statements
Continued
29. Guarantees and Commitments continued
b) Other Commitments
Group and Company
Capital commitments – authorised, contracted but not provided for
2022
£m
2.2
2021
£m
2.4
30. Related Party Transactions
Group and Company
During the current and prior years, the Company provided various administrative services to the Fuller, Smith & Turner Pension Plan free
of charge. In addition, the Company settled costs totalling £394,000 (2021: £368,000) relating to the provision of actuarial, consulting
and administrative services by third parties to the Fuller, Smith & Turner Pension Plan.
Compensation of key management personnel (including Directors)
Short-term employee benefits
Termination benefits
Post-employment benefits
Company Only
During the year, the Company entered into the following related party transactions:
52 weeks
ended
26 March
2022
£m
52 weeks
ended
27 March
2021
£m
3.1
–
0.3
3.4
3.0
0.1
0.3
3.4
2
5
1
52 weeks ended 26 March 2022
Subsidiaries
52 weeks ended 27 March 2021
Subsidiaries
Sales to
related
parties
£m
Purchases
from related
parties
£m
Interest due
from related
parties
£m
Interest due
to related
parties
£m
Amounts
due to
related
parties
£m
Amounts
due from
related
parties
£m
–
61.1
–
3.7
(136.7)
–
Sales to
related
parties
£m
Purchases
from related
parties
£m
Interest due
from related
parties
£m
Interest due
to related
parties
£m
Amounts
due to
related
parties
£m
Amounts
due from
related
parties
£m
–
21.0
–
4.2
(133.1)
–
Interest is payable on the majority of the amounts due to subsidiaries at 3% above the Bank of England base rate. All amounts outstanding
are unsecured and repayable on demand.
The Company also incurred rental expenses from subsidiaries of £0.3 million (2021: £0.1 million).
In addition, the Company has recharged an amount of £0.1 million (2021: £nil) to its subsidiaries and incurred £nil (2021: £0.1 million)
of recharges from its subsidiaries during the year.
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
Subsidiaries of parent companies established within the European Economic Area are exempt from an audit if a guarantee is provided
by the parent for the subsidiary liabilities and the shareholders are in unanimous agreement. The Group will be exempting the following
companies from an audit in 2022 for the period ended 26 March 2022 under Section 479A of the Companies Act 2006, all of which are
fully consolidated in these financial statements:
Company
Griffin Catering Services Limited
Jacomb Guinness Limited
George Gale and Company Limited
45 Woodfield Limited
Grand Canal Trading Limited
B & D Country Inns I Limited
B & D Country Inns II Limited
B & D (Cookham) Limited
B & D (Odiham) Limited
B & D (Reading) Limited
B & D (Win) Limited
B & D (Farnham) Limited
B & D (Kingsclere) Limited
RSH 200 Limited
Cotswold Inns and Hotels Limited
Company Number
01577632
02934979
00026330
04279254
04271734
07292333
08029280
07320065
08377459
07309587
07320245
08392963
08975762
12035987
03309179
The Group will be exempting the following companies from the preparation and delivering of accounts to Companies House under
Section 394A of the Companies Act 2006, all of which are fully consolidated in these financial statements:
Company
Griffin Inns Ltd.
Ringwoods Limited
F.S.T. Trustee Limited
Fuller Smith & Turner Estates Limited
Company Number
00495934
00178536
03163480
01831674
31. Post Balance Sheet Events
On 27 May 2022, the Group successfully completed the refinance of its debt facilities of £192 million, which were due to mature in
February 2023. The new debt facilities consist of a £90 million term loan and a £110 million revolving credit facility provided by a
syndicate of seven banks. The new facilities have an initial maturity date of 27 May 2026 with an option to extend by a further year.
The facilities are unsecured, and the borrowing cost of the facilities is determined by the level of Company leverage.
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
1
5
3
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
Additional Information
as at 7 June 2022
Directors, Advisors and Corporate Information
Chairman
Michael Turner, FCA,
Non-Executive Chairman
Executive Directors
Simon Emeny, Chief Executive
Neil Smith, Finance Director, ACA
Fred Turner, Retail Director, ACA
Non-Executive Directors
Sir James Fuller, Bt
Richard Fuller
Helen Jones*
Robin Rowland*
Juliette Stacey, ACA*
* Independent
President
Anthony Fuller, CBE
Chairman from 1982-2007, Anthony
Fuller retired from the Board in 2010 after
a long career with Fuller’s and continues
as President.
Secretary and Registered Office
Rachel Spencer
Pier House
86-93 Strand-on-the-Green
London W4 3NN
Tel: 020 8996 2105
Email: company.secretariat@fullers.co.uk
Registered Number
241882
Auditors
Ernst & Young LLP
1 More London Place
London SE1 2AF
Stockbrokers
Numis Securities Limited
10 Paternoster Square
London EC4M 7LT
Registrars
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Tel: 0870 889 4096
Email via website:
www.investorcentre.co.uk/contactus
Shareholder Information
Registrars
Any enquiries relating to shareholdings on
the share register (for example, change of
address, bank mandates, communication
preferences) should be sent to the
Company’s Registrars, Computershare.
You can also manage your shareholding
online at www.computershare.com/
investor/uk.
Shareholder Privileges
Individual shareholders with at least 1,000 ‘A’
or ‘C’ ordinary shares or 10,000 ‘B’ ordinary
shares are eligible to receive a Shareholder
Inndulgence Card. For any individual issued
with a Card prior to 1 April 2022, continued
eligibility will be based on the eligibility criteria
at the time of issue, being at least 500 ‘A’ or ‘C’
ordinary shares or 5,000 ‘B’ ordinary shares.
Shareholders may at any time choose to
receive notification of the availability of
corporate communications on Fuller’s
website by email or choose to receive
them in printed form. To receive
notifications of the availability of a
corporate communication by email,
or revoke or amend an instruction to
receive such notifications by email go to
www.computershare.com/investor/uk
or contact Computershare, quoting your
shareholder reference number.
Card holders are entitled to a 15% discount on
food and drinks in any of our Managed Pubs
and Hotels, including Bel & The Dragon and
Cotswold Inns & Hotels. It also offers a 15%
discount on the Best Flexible Rate or
Standard Flexible B&B Rate for Beautiful
Bedrooms by Fuller’s and Bel & The Dragon
accommodation. There is currently no
accommodation discount available with the
Card at any of the Cotswold Inns & Hotel
sites. Further information is available from
the Company Secretariat.
Redesignation of ‘C’ Shares
‘C’ ordinary shares can be redesignated
as ‘A’ ordinary shares within 30 days of the
full year and half year announcements by
sending in your certificates and a written
instruction to redesignate prior to or during
the period to the Company’s Registrars.
ShareGift
The Orr Mackintosh Foundation operates
a charity share donation scheme for
shareholders with small parcels of shares
whose value makes it uneconomic to sell
them. If you have a small number of shares
and would like to donate them to charity,
details of the scheme can be found on the
ShareGift website www.sharegift.org, or by
contacting the Company Secretariat.
Financial Calendar and Key Dates
21 July 2022
Annual General Meeting (11am)
17 November 2022
FY2023 Half year results announcement
June 2023
FY2023 Full year results announcement
N
O
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T
A
M
R
O
F
N
I
L
A
N
O
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T
I
D
D
A
4
5
1
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
Glossary
Adjusted earnings per share (“EPS”) – this is earnings per share, adjusted for separately disclosed items. The Directors believe that this
measure provides useful information for shareholders as to the performance of the Group.
Adjusted profits – this is profit before tax and before separately disclosed items.
CCFF – this is an HM Treasury and Bank of England lending facility.
CJRS – this is a claim for 80% of employees’ wages plus any employer National Insurance and pension contributions for staff on furlough
through the Government’s Coronavirus Job Retention Scheme.
CRM – Customer Relationship Management.
Drinks, food and accommodation like for like sales growth – this is measured on the same basis as “Managed Pubs and Hotels
invested like for like sales growth”.
EBITDA – this is the earnings before interest, tax, depreciation, profit on disposal of plant and equipment, and amortisation, adjusted for
separately disclosed items.
ESOS –Executive Share Option Scheme.
LTIP – Long-Term Incentive Plan.
A
D
D
I
T
I
O
N
A
L
I
N
F
O
R
M
A
T
I
O
N
Managed Pubs and Hotels invested like for like sales growth – this is the sales growth calculated to exclude those pubs which have not
been trading throughout the two years for the corresponding period in both years. The principal exclusions from this measure are: pubs
purchased or sold in the last 12 months; sites which are closed; and pubs which are transferred to tenancy.
Market capitalisation – only the Company’s 40p ‘A’ ordinary shares are listed. The Company calculates its market capitalisation as the
total of all classes of ordinary shares; i.e. listed 40p ‘A’ ordinary shares, unlisted 4p ‘B’ ordinary shares and unlisted 40p ‘C’ ordinary shares
plus all potentially awardable share options and LTIP awards less any shares held in treasury. For the purposes of the calculation of
market capitalisation, a 4p ‘B’ ordinary share is treated as having 10% of the market value of a quoted 40p ‘A’ ordinary share and a 40p
‘C’ ordinary share is treated as having an equivalent value to a 40p ‘A’ ordinary share.
1
5
5
Net debt – this comprises cash, bank loans, CCFF, debenture stock, preference shares and lease liabilities.
Operating profit – this is profit before finance costs and tax and profit on disposal of properties.
SIP – Share Incentive Plan.
Total annual dividend – the total annual dividend for a financial year comprises interim dividends paid during the financial year and
the final dividend proposed for approval by shareholders at the Annual General Meeting after the completion of the financial year.
Unnecessary plastic – eliminating all plastic which is used instantaneously but is unnecessary for food safety purposes and its removal
will not lead to unintended environmental consequences by its removal, such as increased waste or carbon emissions.
Working capital – calculated as current assets (trade receivables and inventory) less current liabilities (trade and other payables).
F
U
L
L
E
R
’
S
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
A
C
C
O
U
N
T
S
2
0
2
2
Five Years’ Progress
N
O
I
T
A
M
R
O
F
N
I
L
A
N
O
I
T
I
D
D
A
Group Income Statement
Revenue and other income
Operating profit before separately disclosed items
Finance costs before separately disclosed items
Adjusted profit/(loss) before income tax
Exceptional items and discontinued operations
Profit/(loss) before income tax
Taxation
Profit/(loss) after income tax
Non-controlling interest
Profit/(loss) attributable to equity shareholders of the Parent Company
EBITDA1
1 Continuing operations only.
Assets employed
Non-current assets
Inventories
Other current assets
Assets classified as held for sale
Cash and cash equivalents
6
5
1
Current borrowings
Other current liabilities
Non-current borrowings
Other non-current liabilities
Net assets
Per 40p ‘A’ ordinary share
Adjusted earnings
Basic earnings
Dividends (interim and proposed final)2
Net assets
Net debt (£ million)3
Gross capital expenditure (£ million)
Average number of employees
2 2020 includes ‘D’ share dividend.
3 Net debt from FY20 onwards includes amounts relating to leases under IFRS 16.
2
2
0
2
S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R
L
A
U
N
N
A
S
’
R
E
L
L
U
F
2022
£m
253.8
18.5
(11.3)
7.2
4.3
11.5
(4.4)
7.1
–
7.1
44.3
Restated
2020
£m
Restated
2019
£m
2021
£m
73.4
(40.3)
(8.4)
(48.7)
(10.5)
(59.2)
9.6
319.7
27.0
(7.6)
19.4
146.8
166.2
(5.3)
(49.6)
160.9
–
(49.6)
(13.1)
–
160.9
53.9
2018
£m
403.6
49.2
(6.0)
43.2
0.4
43.6
(8.8)
34.8
1.0
35.8
70.9
324.7
40.0
(6.9)
33.1
(8.4)
24.7
(5.2)
19.5
(0.2)
19.3
59.5
713.8
702.5
757.1
595.3
623.2
3.6
11.3
5.4
15.6
2.1
15.5
9.6
17.1
749.7
746.8
(120.0)
(207.7)
(64.5)
565.2
(27.5)
(88.5)
449.2
(39.4)
499.7
(27.5)
(92.7)
379.5
4.0
18.6
2.6
20.3
802.6
(171.7)
(50.7)
580.2
5.0
8.4
87.0
11.0
13.5
22.9
2.1
11.7
706.7
673.4
(50.0)
(62.9)
(30.0)
(71.8)
593.8
571.6
(27.5)
(206.2)
(183.6)
(122.9)
429.8
(49.1)
338.5
(53.1)
334.9
2022
2021
2020
2019
2018
9.79p
(73.00)p
20.50p
62.78p
62.90p
11.59p
(89.84)p
291.89p
–
132.80p
35.12p
20.15p
64.89p
19.55p
£6.87
£7.80
£6.16
£6.07
(212.6)
(308.0)
(291.8)
(245.2)
(201.9)
25.8
4,240
16.5
4,219
84.5
5,166
58.6
5,399
40.6
4,913
11.31p
£7.27
Consultancy, design and production
www.luminous.co.uk
Design and production
www.luminous.co.uk
Fuller, Smith & Turner P.L.C.
Registered Office
Pier House
86-93 Strand-on-the-Green
London W4 3NN
Registered number: 241882
Telephone: +44 (0)20 8996 2000
Email: fullers@fullers.co.uk
www.fullers.co.uk