Annual Report and Accounts 2024
Investing in
SUCCESS
At Fuller’s, we have
confidence in tomorrow
because we are investing
in success today.
During the year, we have invested
in our properties, in our people
and in gaining even more detailed
knowledge of our customers. We do
this because we have confidence in
these areas and in the outstanding
hospitality we deliver every day as
part of our purpose in life – to create
experiences that nourish the soul.
Griffin
theFollow
TO LEARN MORE ABOUT...
Confidence in...
OUR OUTSTANDING
HOSPITALITY
P 1 8
OUR PEOPLE
P 2 0
OUR CUSTOMERS
P 2 2
OUR PROPERTIES
P 24
OV E R V I E W
Highlights
1
At a Glance
2
Where We Operate
3
Investment Proposition
4
S T R AT EG I C R E P O R T
Chairman’s Statement
6
Chief Executive’s Review
8
Business Model & Stakeholder Engagement
12
Strategy
16
Key Performance Indicators
26
Financial Review
27
Risk Management
30
Principal Risks and Uncertainties
33
Sustainability Report
37
Streamlined Energy and Carbon Reporting
42
Task Force on Climate-related
Financial Disclosures
43
Non-Financial Information Statement
57
G OV E R N A N C E
Chairman’s Introduction
58
Board of Directors
60
Corporate Governance Report
62
Nominations Committee Report
68
Audit and Risk Committee Report
74
Directors’ Remuneration Report
80
Directors’ Report
112
Directors’ Responsibilities Statement
115
F I N A N C I A L S TAT E M E N T S
Independent Auditor’s Report
116
Group Income Statement
124
Group Statement of
Comprehensive Income
125
Group Balance Sheet
126
Company Balance Sheet
127
Group Statement of Changes in Equity
128
Company Statement of Changes in Equity
129
Group Cash Flow Statement
130
Company Cash Flow Statement
131
Notes to the Financial Statements
132
A D D I T I O N A L
I N FO R M AT I O N
Shareholder Information
181
Glossary
182
Five Years’ Progress
183
Financial and Operational Highlights
• Revenue up 7%, against a 53-week year, to £359.1 million
(FY2023: £336.6 million), driven by strong performances across the estate
• Like for like sales up 11.0%, significantly outperforming the industry’s CGA
RSM Hospitality Business Tracker on average by four percentage points
• Strong profit conversion, with adjusted profit before tax increased by 61%
to £20.5 million (FY2023: £12.7 million)
• Operating cash flow used to fund estate enhancements and finance
shareholder returns in the form of dividends and share buybacks – net debt
stable at £133.1 million (FY2023: £132.8 million)
• Total dividend increased by 21% to 17.75p (FY2023: 14.68p)
• Bought back three million ‘A’ shares since September 2022, with a further
one million ‘A’ shares in progress since March 2024. Today we announce our
intention to buy up to a further two and a half million ‘A’ shares – bringing the
total number of shares repurchased to 6.5 million shares.
Strategic Highlights
• An excellent year for the Company, with strong like for like sales and
volume growth across all areas of the business:
– Food like for like sales increased by 14.5%
– Drink like for like sales increased by 9.8%
– Accommodation like for like sales increased by 7.8%
• Invested £27.2 million in our existing estate of iconic properties, including
transformational schemes at The Rising Sun in the heart of the New Forest,
The Windmill at Portishead, The Butcher’s Hook & Cleaver in Smithfield, and
The Forester in Ealing
• Completed the roll out of our Lead Your Way programme to all General
Managers – demonstrating our commitment to develop our people
• Continued proactive management of the estate to enhance shareholder value:
– Transferred 23 pubs from Managed Pubs and Hotels to Tenanted Inns,
generating an incremental £1.0 million profit in a full year
– Agreed terms on the sale of The Mad Hatter in SE1, which will realise
£20 million of value – due July 2024
– Agreed sale of a portfolio of 37 non-core pubs to Admiral Taverns for
£18.3 million, at a £1.6 million premium to the gross asset value of
£16.7 million.
52 weeks
ended
30 March
2024
£m
53 weeks
ended
1 April
2023
£m
Revenue and other income
359.1
336.6
Adjusted EBITDA1
60.8
51.8
Adjusted profit before tax2
20.5
12.7
Statutory profit before tax
14.4
10.3
Basic earnings per share3
15.16p
12.98p
Adjusted earnings per share3
24.48p
16.10p
Dividend per share3
17.75p
14.68p
Net debt excluding lease liabilities4
133.1
132.8
All figures above are from continuing operations.
1 Earnings before interest, tax, depreciation, amortisation, profit on disposal of property,
plant and equipment, and separately disclosed items.
2 Adjusted profit before tax is the profit before tax excluding separately disclosed items.
3 Per 40p ‘A’ or ‘C’ ordinary share. Basic EPS is calculated using earnings attributable to
equity shareholders after tax including separately disclosed items. Adjusted EPS excludes
separately disclosed items.
4 Net debt excluding lease liabilities comprises cash and short-term deposits, bank
overdraft, bank loans, debenture stock and preference shares net of debt issue costs.
HIGHLIGHTS
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
1
OUR PURPOSE
We create experiences
that nourish the soul
OUR MISSION
We’re crafting a family
of distinctive pubs and
hotels where people feel
they belong
OUR VALUES
Doing things the
right way
Being part of
the family
Celebrating individuality
Always asking
what’s next?
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 diverse portfolio
encompasses some 370
wonderful sites across London
and the South of England. Our
portfolio includes 190 Tenanted
Inns and 180 Managed Pubs and
Hotels, including six Bel & The
Dragon country inns and seven
Cotswold Inns & Hotels.
Managed Pubs and
Tenanted Inns (%)
Fuller’s Managed
within M25
Fuller’s Tenanted
within M25
Fuller’s Managed
outside M25
Fuller’s Tenanted
outside M25
Revenue by Division
(%)
Managed
Tenanted
Analysis of Managed
revenue urban/
suburban/rural (%)
Urban
Suburban
Rural
SUSTAINABILITY
PILLARS:
Life is too good
to waste
See page 37
Our people
See page 40
Our communities
See page 40
Our planet
See page 41
Who we are
15%
20%
29%
36%
38%
17%
45%
9%
91%
2
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
AT A GLANCE
LONDON
Where we
operate
OUR PUBS AND HOTELS
167
Managed Pubs
and Hotels 6
Bel & The
Dragon
7
Cotswold Inns
& Hotels
190
Tenanted Inns 34
Rural Managed
Pubs and Hotels 73
Suburban Managed
Pubs and Hotels 73
Urban Managed
Pubs and Hotels
Key
Managed
Bel & The Dragon
Cotswold Inns & Hotels
Tenanted
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
3
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
WE HAVE A CLEAR STRATEGY
We operate a family of characterful
pubs and hotels in the South of England
• Our estate encompasses some
370 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 decor 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.
Our investment
proposition puts us in
a position of strength
and security
WE OPERATE IN A MARKET WITH OPPORTUNITIES
Demographic strengths
• In our heartland of London and the
South of England, incomes are
traditionally more resilient.
Hospitality spend in our regions
is 8% greater than the UK average,
and incomes are circa 12% 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 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 digital infrastructure 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.
4
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
INVESTMENT PROPOSITION
WE ARE FAMILY,
INSIDE AND OUT
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 55%
of our General Managers and a
number of our Tenants, 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 apprentices
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.
WE ACTIVELY MANAGE OUR ASSET PORTFOLIO
The Company has a high quality portfolio
• Freehold ownership represents 88%
of our estate. Following the latest
valuation reported in June 2022, this
represented 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 a four year £200 million bank
facility to May 2027. This also provides
significant headroom to continue our
acquisition strategy, building on the
successful Cotswold Inns & Hotels
and Bel & The Dragon transactions
• We actively manage the property
portfolio to optimise returns – as
demonstrated by the transfers of
Managed pubs to Tenanted operations
• We continually gauge the performance
of assets, considering fresh pub
propositions, or the option of disposals.
WE HAVE A CLEAR
AND CONSISTENT
CAPITAL ALLOCATION
FRAMEWORK TO
ENHANCE LONG-TERM
VALUE CREATION
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.
Acquisition opportunities
• With a disciplined approach to
inorganic investment and a view to
increasing long-term returns.
Leverage
• With a target of up to circa 3x net
debt/EBITDA. If achieved, surplus cash
may be returned to shareholders.
WE OWN OUR IMPACT
BECAUSE LIFE IS TOO
GOOD TO WASTE
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 is 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.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
5
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
An excellent year and
significant progress
It has been an excellent year for
your Company – with significant
progress and growth in all areas of the
business. Of particular note is the rise
in like for like sales in our Managed
Pubs and Hotels of 11% and a 13%
rise in our Tenanted Inns revenue.
Against this backdrop, we have seen total
revenues rise by 7%, against a 53-week
year, and adjusted profit before tax rise
by 61%. This has resulted in an increase
of the full year dividend of 21%, showing
a continued return to a progressive
dividend policy.
Simon Emeny and his team have made
some excellent new appointments over
the last couple of years. Sam Bourke,
who we added to our team in the role of
Marketing Director in autumn 2022, is
making a real difference to the way we
communicate with customers and the
campaigns we undertake to attract new
business and further build on our food,
drink and accommodation offer.
Carrie Joslin, our new Food & Drink
Director who joined in September 2023, is
already making an excellent contribution.
“A plethora of
outstanding schemes
have been completed
during the year from
Portishead in the
West to EC3 in the
East, building on our
commitment to always
having one of the best
estates in the industry.”
MICHAEL TURNER
CHAIRMAN
Meanwhile our People & Talent Director
Dawn Browne – who may not be new to
Fuller’s but joined the Board in July 2023
– has brought her expertise in both
people and operations to the boardroom,
while also driving further investment in
our talented team members.
On the property front, we have continued
investing in our existing estate to deliver
further value. A plethora of outstanding
schemes have been completed during the
year from Portishead in the West to EC3
in the East, building on our commitment
to always having one of the best estates
in the industry. While some of these are
transformational schemes, which will
open sites like The Rising Sun in the
beautiful New Forest and The Forester
in Ealing to new audiences, others are
primarily to ensure our wonderful, iconic
sites are always looking their best and
deserving of their premium position.
6
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
CHAIRMAN’S STATEMENT
During the year, we have used our capital
wisely – buying back our own shares,
which we know are currently still at a
considerable discount to their true value.
In 2021, you will remember that we raised
equity through a placing of 6.5 million
‘A’ shares at £8.30 each. Since September
2022, we have bought back over three
million of our shares and today we have
announced that we intend to continue
the buyback programme, aiming to
repurchase up to the 6.5 million ‘A’
shares that were issued in 2021. To date,
the buyback has been completed at a
30% discount to the £8.30 price of the
share issue. This leaves your Company
in a strong financial position and ready
to take advantage of appropriate
acquisition opportunities.
Finally, it just remains for me to pay
tribute to our amazing team members
across the business. They are the
backbone of the Company and the source
of our success. I am proud to be their
Chairman and I thank each and every
one for their continued contribution,
dedication and enthusiasm.
Dividend
The Board is pleased to announce a
final dividend of 11.12p (FY2023: 10.0p)
per 40p ‘A’ and ‘C’ ordinary share and
1.112p (FY2023: 1.0p) per 4p ‘B’ ordinary
share, representing a year on year
increase of 11%. This will be paid on
25 July 2024 to shareholders on the share
register as at 5 July 2024. The total
dividend of 17.75p (FY2023: 14.68p) per
40p ‘A’ and ‘C’ ordinary share and 1.775p
(FY2023: 1.468p) per 4p ‘B’ ordinary share
represents a 21% year-on-year increase.
MICHAEL TURNER
CH AIRM A N
12 June 2024
Making the customer journey simpler
When guests are coming to stay with us for a weekend,
we want to make things as welcoming and easy as possible.
That’s why we have worked hard to build a really simple
customer booking journey. You can always get the best
rates by booking online through our websites, and the work
we have carried out over the past few years has made that
booking journey even easier for the customer.
From a simple online check in, to a quick way for the
customer to also book dinner at the same time as they
reserve their room, it adds value to the customer and to
Fuller’s. You can even add a ticket for one of our garden
cultural performances to add that extra special touch to
your stay.
We won’t stop there though – we know there is more we
can do with our systems, and we will keep working to make
things better for our customers and grow the business for us.
1,009
Bedrooms in our Managed
Pubs and Hotels
+7.8%
Rise in like for like
accommodation sales
Building on
OUR
SUCCESS
Always asking
what’s next?
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
7
It has been a strong year for Fuller’s,
and I am pleased and proud of the
progress we have made. All parts of
the Company have performed well –
with like for like sales in our Managed
Pubs and Hotels increasing by 11%,
Tenanted Inns operating profit rising
4% and adjusted profit before tax
rising 61% to £20.5 million.
“Meanwhile, our focus
on ensuring we have
the best training and
development for our
people delivers an
outstanding customer
experience, setting
Fuller’s apart and
delivering profitable
sales growth.”
SIMON EMENY
CHIEF EXECUTIVE
The actions we have undertaken during
the year, doubling down on investing in
our iconic pubs and hotels and in our
amazing team, have delivered excellent
results this year and will ensure
continued growth in the future. The long-
term strengths of the Company – a
predominately freehold estate, premium
position and strong Balance Sheet –
provide excellent foundations for our
consistent, clear and long-term strategy.
Investing in our iconic pubs and hotels
ensures we maintain our premium
position, which in turn optimises
revenue and profit from our sites.
Meanwhile our focus on ensuring we
have the best training and development
for our people delivers an outstanding
customer experience, setting Fuller’s
apart and delivering profitable sales
growth. This will result in further growth
both organically and by generating the
financial strength that will enable us to
capitalise on appropriate acquisition
opportunities if and when they arise.
We took a number of strategic decisions
during the year which have also
delivered excellent results including the
transfer of 23 sites from our Managed
Pubs and Hotels division to Tenanted
Inns, which is on track to deliver an
incremental £1 million in profit in a
full year. We have also, as previously
announced, agreed the sale of The Mad
Hatter in Southwark for a total value
of £20 million, and post year end, we
agreed the sale of 37 non-core pubs
to Admiral Taverns for £18.3 million.
A great performance
across the business
8
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
CHIEF EXECUTIVE’S REVIEW
Trading Update
Our success during the year has been
due to outstanding work by our teams
across the estate and in our support
office at Pier House. The team has rolled
out new initiatives, focused on our
long-term strategy and vision and
delivered excellent results. We set
ourselves a goal at the beginning of
the financial year to deliver a record
number of record sales weeks – and
our teams across the business rose to
the challenge. We smashed our target
– not only generating great sales, but
also motivating our team and giving
plenty of opportunities to recognise,
acknowledge and celebrate success.
Giving our customers
reasons to visit
Knowing your customers is key for any
business and during the year we have
completed work to better understand our
key customer groups. This work not only
allows us to refine our offer, and monitor
changes in behaviour post-Covid, but
also to identify potential customers with
similar characteristics that we can target
both on and offline.
To further aid development, ideas
and growth in our food business, and
building on the appointment of Carrie
Joslin as Food & Drink Director last
autumn, we have opened a new
development kitchen and training centre
in Reading. This facility will allow for
even more creativity and innovation,
and we are excited by what the future
could bring in this area.
This customer work has been particularly
useful for transformational
refurbishments and to target marketing
activity, post-investment, at a number
of our sites. This additional customer
knowledge has driven decisions on
menu options, drinks range, decor, and
the events and activities we stage within
our sites. While it is early days, the initial
signs are positive and we continue to
learn, develop and improve this process.
Supporting this wider piece of work is
our desire to keep our customers coming
back with exciting in-pub events.
We have continued with our cultural
events programme – with another
successful summer season of
Shakespeare and opera, while adding
panto, classic plays and a host of other
events and activities. We have also
upweighted our focus on sport, including
a wider range of sharing options on the
menu and improved promotion of
forthcoming sporting events. We have
increased the number of sites that show
sport, and we have exciting plans to
build on this activity in the coming year,
particularly around the imminent UEFA
European Football Championship.
Strong growth across food,
drink and accommodation
During the year, we have seen growth in
like for like sales and volumes in all our key
areas – food, drink and accommodation.
Our food sales have risen by 14.5% on
a like for like basis. This comes on the
back of work completed to improve our
menu development process, allowing
for better bespoke dish creation and
changes to the way menus are designed
and presented that reflect the customer
segment for that particular site.
In addition, we have launched an
exciting new kids’ menu – by kids,
for kids – during the year, appealing
to our important family market.
This has improved margins and was
nominated for a Restaurant Marketer
and Innovator award.
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
9
Kalaveti Ravouvou and Siva
Naulago, from the Bristol
Bears, at the opening of The
Windmill in Portishead
A first-class premium drinks range has
always been at the heart of the great
Fuller’s pub, and our like for like drinks
sales have risen by 9.8%. We have
hosted over 100 guest cask ales in our
pubs during the year – including a
number of brews that are unique to
Fuller’s pubs from breweries including
Siren and Tiny Rebel. Although we have
always had a premium range, we have
introduced a number of super premium
spirits including Casamigos Tequila.
We also continue to widen our appeal
to those seeking low or no alcohol
alternatives and sales in this category,
for beers alone, have risen by 81% in
value. Our bottled sales of no and low
alcohol beers now account for one in
five of all packaged sales.
Our accommodation business has also
seen impressive growth during the year,
with like for like accommodation sales
rising 7.8%, RevPAR rising to £97.26
(FY2023: £89.47), a rise in occupancy
rates to 79% (FY2023: 78%) and a 9%
increase in average room rate to
£119.84. We also continue to grow our
direct bookings – which are up by 36%
during the year – and we are using our
digital platforms to make sure that our
customers can enhance their stay with
dinner bookings and events easily
booked at the same time.
Investing for the future
in our pubs and people
Over the last 12 months, we have taken
the opportunity to increase investment in
the pubs we already own and the teams
that operate them. Hence, the last quarter
of the financial year has been particularly
busy for investments across our estate –
both in terms of transformational
schemes aimed at broadening the appeal
of our wonderful pubs and hotels to new
audiences, and light-touch investment to
keep our pubs looking their absolute best.
As a result, total investment spend for the
year was £27.2 million.
Investment highlights over the last year
include a substantial scheme at The
Rising Sun in the heart of the New Forest,
a pub we acquired in late summer 2022.
A transformational refurbishment has
broadened the pub’s appeal and we have
increased covers both inside and outside,
with a wonderful garden scheme to
maximise summer months and shoulder
period trading.
We have also undertaken trade-
enhancing investment schemes at sites
including The Windmill in Portishead,
overlooking the Severn Estuary, The
Butcher’s Hook & Cleaver in Smithfield,
and The Forester in Ealing – a site that we
transferred from our Tenanted Inns
division to our Managed Pubs and Hotels
business in June 2023. The results from
all sites are already looking very positive.
On the people front, we have invested
heavily in our leaders with a new
leadership framework called Lead Your
Way, which combines residential courses
with online and face to face learning.
This has been rolled out to all our General
Managers, and in the coming financial
year will be extended to Head Chefs
and support centre managers.
The programme has been incredibly
well received and we are already seeing
the benefits of this work.
It has been another busy year for our
People Team. We held our first General
Managers’ Conference for four years,
completed a review and relaunch of
our flagship Management Training
Programme for the leaders of the future,
recruited 144 new apprentices and
launched our Inclusion Action Plan with
a focus on age, neurodiversity and
inclusion training for all our senior leaders.
Life is too good to waste
We have made good progress in all
areas of our Life is too good to waste
campaign – working on initiatives
relating to our people, our planet and
our communities. Starting with the
last of these, we continue to raise
awareness of, and money for, Special
Olympics Great Britain. Last year’s
popular Bridge Walk and Football
Tournaments raised a total of £37,000
across the two and we also completed
work on a neurodiverse recruitment
guide that was launched in April.
+11%
Like for like Managed sales growth
61%
Increase in adjusted profit before tax
10
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
CHIEF EXECUTIVE’S REVIEW continued
Our happiness and
engagement scores rose
again this year
Work continues on our commitment
to achieve Net Zero by 2040 (2030 for
Scope 1 & 2) and we were pleased to
have had our science-based emissions
reduction target approved by the Science
Based Targets initiative. We now have
15 Sustainability Champions across
our pubs and hotels to support our
sustainability programme, help embed
new initiatives, roll out best practice and
share new ideas. We have committed to
reduce our food waste by 50% by 2030
as a signatory to the Courtauld
Commitment and we continue to
improve our recycling rates.
The benefits of the focus on
sustainability include reducing our
electricity usage by 3.5% and our gas by
6.5% during the last financial year, with
considerable associated cost savings.
Other highlights for the year include
increasing the number of fully electric
kitchens – 10% of our Managed Pubs
and Hotels now have fully electric
kitchens – achieving the Green Tourism
Bronze Award in 12 hotels and gaining
BII Sustainability Champion status for
our entire Managed estate.
Tenanted Inns
It has been another good year for our
Tenanted Inns with revenue rising by
13%. The Business Development Team
has strong relationships with all our
Tenants and we have invested in further
support around marketing and
promotion to ensure our Tenants can
grow their business – which in turn
grows ours. Our core Tenanted business
is very strong and delivers excellent
returns for the business with high
margins and relatively low capital.
The 23 pubs we transferred from our
Managed Pubs and Hotels division to
our Tenanted Inns during the first half
of the year have performed well,
generating £1 million of incremental
annualised profit. It is particularly
pleasing to see our former General
Managers in some of these sites relishing
their new life as Tenants. Despite the
obvious additional responsibility, they
are showing creativity and innovation
– and that individuality allows these
sites to flourish.
Fuller’s is committed to owning and
operating both Managed and Tenanted
pubs as an integral part of the
Company’s future strategy – each
operating model has its strengths and
can learn from the other. The Company
actively manages its pub estate,
continually evaluating strategic
opportunities, and has agreed the
sale of 37 pubs to Admiral Taverns
allowing the Company to focus on the
development of its retained Managed
and Tenanted estates. The sale proceeds
are £18.3 million, and it is due to
complete on 25 June 2024.
Current Trading and Outlook
We have continued to build on the
strong momentum of the last year with
like for like sales in the first 10 weeks of
the year rising by 4.4%. We have
commenced a wide-ranging investment
programme, with seven schemes
already on site or completed since the
start of the new financial year.
Complementing this investment in our
properties is continued investment in
our people. We will be rolling out our
leadership development programme
to our support centre managers and Head
Chefs and continuing to provide
development opportunities to team
members at all levels across the business.
Fuller’s has delivered excellent results
in the last financial year, despite the high
inflationary environment. As of today,
those inflationary pressures – especially
in regard to food and energy – have
reduced, which gives us additional
confidence in the coming year.
As a Company, we are primed for further
success and growth. We will continue
with our share buyback programme
and we will benefit from the sale of
The Mad Hatter in July 2024 for a total
consideration of £20 million, and
£18.3 million from the sale of 37 non-
core pubs to Admiral Taverns.
With the solid financial foundation of
a strong Balance Sheet and a first-class,
predominately freehold estate of iconic
pubs and hotels, combined with a team
that has the ability and capacity to drive
the business forward, we are confident
and excited by the opportunities the
future will bring.
SIMON EMENY
CHIEF E X ECU TIV E
12 June 2024
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
11
PEOPLE
We have more than 5,000 team members in
our business, across 180 pubs and hotels and
in Support Centre roles. Our people make the
difference in our pubs and hotels. They deliver
outstanding customer service and play a critical
role in the success of the business. They make
the experience for our customers and deliver
our business strategy on the front line.
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.
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 our
purpose, vision and strategy.
ICONIC PROPERTIES
Our predominately 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.
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 enhances our customer
knowledge and understanding
and creates 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.
Our resources
CUSTOMERS
We welcome thousands of people to our pubs
and hotels each week and strive to deliver positive
and memorable experiences that nourish the soul.
Our goal is to make sure that people leave that little
bit happier than they arrive – ensuring their future
repeat custom. We communicate with them in
person at our pubs and hotels and also through
direct marketing and social media.
COMMUNITIES
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.
TENANTS
Our Tenants are an extension of the Fuller’s team
and we look to recruit Tenants who share our vision
and values. We have a team of Business and Sales
Development Managers led by an experienced
Director of Tenanted Operations, who ensure our
Tenants are in the best place to operate a
successful business that delivers a good return
for both Tenants and the wider business.
SUPPLIERS
We work with our suppliers to monitor consumer
trends and ensure we are offering the best of the
season to our customers. An excellent supply
chain is key and we look for genuine partnerships
that provide a real point of difference, helping us
to delight our customers.
SHAREHOLDERS
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 and deliver our strategy.
Shareholders with over 1,000 shares also
benefit from our Inndulgence discount card.
And stakeholder engagement....
12
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
BUSINESS MODEL
To create
experiences
that nourish
the soul
OUR PURPOSE
Read more on page 19
Support value creation
UNDERPINNED BY OUR COMMITMENT TO SUSTAINABILITY
Life is too good to waste
Read more on page 37
Continued over
CONTINUOUS
SUPPLIER
COLLABORATION
We work closely with our
suppliers in the spirit of
mutual collaboration and
often have bespoke
products on our bars and
menus that are available
only at Fuller’s.
REINVESTMENT
AND
REFURBISHMENT
Keeping our fantastic,
iconic properties in first-
class condition is a key tenet
for Fuller’s.
Read more on page 25
REVENUE
GENERATION
Revenues come from three
main sources – primarily
through operations in our
Managed Pubs and Hotels
and our Tenanted Inns,
but also through some
unlicensed property rental.
UNIQUE COMBINATION
OF MANAGED ESTATES
AND TENANTED INNS
We own and operate 370 pubs,
inns and hotels across the
South of England, comprising
180 Managed Pubs and Hotels
and 190 Tenanted Inns.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
13
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Enabling us to share value with...
CUSTOMERS
Our customers reward our efforts with their trade and their loyalty.
They are ultimately the reason for everything we do and delighting our
customers through delivering experiences that nourish the soul is our
purpose. Our customer database allows us to keep them informed of
what’s new in their favourite pub or hotel.
See more details about our commitment to delighting our customers on
page 23.
1.5m
Contactable customers on
our database
23
Different training
programmes
delivered
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.
Read more on page 21.
TENANTED PUB
COMPANY OF
THE YEAR 2023
TENANTS
Having a Tenanted estate is a fundamental part of our business and we share
best practice and learnings, as well as ensuring the benefit from initiatives like
Shakespeare in the Garden and access to a number of our suppliers. Around
a third of our Tenants are on a mutually beneficial turnover agreement.
You can learn more about our Tenanted Inns on page 11.
£218k
Donated to Special
Olympics GB
£276k
Total charity donations
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.
We also encourage our team members to raise money both through the
pub and personally and, where possible, offer matched funding. We were
delighted to see the opening of WEST – the Hammersmith Youth Zone run
by Onside – as we were a founder patron of this amazing facility that
offers support and activities for children in West London.
See more details about our commitment to our communities on
page 40.
17.75p
Total dividend
SHAREHOLDERS
This year we have returned £22.4 million to shareholders through a
combination of share buybacks and dividends. We have a progressive
dividends policy and this year’s dividend has risen by 21%. Over the
past two years, we have returned £34.6 million of capital to our shareholders.
113
Different cask beers
sold in FY2024
SUPPLIERS
Having true partnerships with suppliers makes a real difference – to
both parties. We always look to the long term and making commitments
such as forward buying helps both parties to plan for the future with
confidence and certainty. It also allows us to work collaboratively to come
up with interesting, bespoke drinks and dishes, which are available only at
Fuller’s, to tantalise our customers’ tastebuds.
14
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
BUSINESS MODEL continued
STAKEHOLDER ENGAGEMENT
SECTION 172 STATEMENT
This section outlines how, as required by Section 172 of the Companies Act 2006 (the “Act”), the Directors have acted 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
A
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 and is underpinned by our value of always
asking what’s next?
The interest of the Company’s employees
B
Our people are what makes Fuller’s special and our commitment
to their personal development is reflected through our value of
celebrating individuality. Each and every one plays 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 pages 12 to 14, the Sustainability Report
on pages 37 to 40 and the Corporate Governance Report on page 63.
The need to foster the Company’s business
relationship with suppliers, customers
and others
C
The Board believes that successfully delivering our strategy
requires strong mutually beneficial relationships, in line with our
value of being part of the family, 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 on pages 37 to 41 and Stakeholder
Engagement on pages 12 to 14.
The impact of the Company’s operations
on the community and the environment
D
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. Details can be found from page 37.
The desirability of the Company
maintaining a reputation for high
standards of business conduct
E
Fuller’s is well regarded as a business because it has a
consistent record of always doing things the right way – 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
F
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.
Principal Decisions Taken During the Year
Share Buyback Programme
Factors considered A E F
Since its announcement in September 2022, the share buyback
programme has bought back three million ‘A’ ordinary shares,
with a further one million in progress. The Board has now
announced its intention to repurchase up to the 6.5 million ‘A’
shares that were issued through the equity raise in 2021 and
agreed to increase the quantum of the buyback by a further
2.5 million ‘A’ shares once the current programme completes.
In making this decision, the Board considered the effective
management of cash and the need to balance existing and
planned investment into the business.
The Board continues to support the share buyback programme
as it aligns with the Company’s strategy of long term sustainable
growth and delivering value for our shareholders. To date, the
buyback has been completed at a 30% discount to the £8.30
price of the share issue, representing significant value creation
for long term shareholders.
Estate Rationalisation
Factors considered A B C D E
Fuller’s is committed to owning and operating both Managed
and Tenanted pubs as an integral part of the Company’s future
strategy. However, the Company proactively manages its pub
estate, continually evaluating strategic opportunities.
The decision was made to sell a package of 36 Tenanted pubs
and one Managed pub that the Board believes will be better
aligned to a more specialist wet-led community operator.
This long term strategic move will further strengthen the
Company’s balance sheet, enabling additional investment in
its existing pubs, as well as supporting future acquisition
opportunities, as appropriate, and continued investment in our
people. Heads of terms have been agreed and it is anticipated
that the transaction will complete on 25 June 2024.
The Board considered the impact on Tenants – both those
exiting with the sale and those remaining with Fuller’s – as well
as employees to ensure that appropriate plans were in place to
communicate details of the transaction in a timely and sensitive
manner, as well as to offer continued support and handover
through to completion of the transaction.
Director Board Appointment
Factors considered A B
As part of ongoing succession planning Dawn Browne, People
& Talent Director, was appointed on the recommendation of the
Nominations Committee to the Board with effect from 3 July 2024.
In making its decision, the Board considered the background
and experience of Dawn and concluded, as a people-centric
business, and given her unique skillset and in-depth knowledge
of our team members, alongside her operational experience, she
would strengthen the Board and provide invaluable insight.
Further, in light of the Board’s priorities around culture and
diversity and inclusion, it was agreed that Dawn would help
drive this important agenda.
Details of the appointment were shared with colleagues in
the business. The appointment demonstrated the Board’s
commitment to internal development and diversity, and
received positive feedback from colleagues.
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
15
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
• Measure through Net Promoter Score (“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
• Broad selection of beers, wines and 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.
2025 priorities
• Further build sales using our digital channels
• Continue to work with our teams to Be the Difference
and deliver exceptional customer service every time
• Reinvigorate our roasts and build on our position as
the natural home of great cask ale.
DELIGHT OUR
CUSTOMERS
INSPIRE OUR
PEOPLE
1
2
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
• Evolve our distinctive benefits package.
Support and encourage career development
• Focus on internal promotions, particularly at General
Manager level
• Provide at least 100 apprentices with
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.
2025 priorities
• Continue our Lead Your Way journey – rolling out to
Head Chefs and support office managers
• Year four of the Happiness Index – looking to maintain
high response rate and continue to improve happiness
and engagement
• Embedding Attensi – our new learning system that
utilises gamification.
We’re crafting a distinctive family of pubs and hotels where people feel
they belong
16
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
STRATEGY AT A GLANCE
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.
2025 priorities
• Invest in building a truly premium
sports experience for our
customers in targeted sites and
use our CRM capability to target
sports customers
• Drive pre-booked sales through
our internal sales team and using
our digital connectivity.
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 Tenants to drive returns.
Invest in growing
the estate
• Invest in markets where we
already excel
• 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.
2025 priorities
• Targeted capital investment of
£30 million to deliver returns and
enhance the value of our estate
• Invest in growing the estate.
ENHANCE
OUR ESTATE
3
EVOLVE OUR
BUSINESS
4
OWN OUR
IMPACT
5
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.
2025 priorities
• Further reductions in gas usage
through focused behavioural
change and the conversion of
kitchens to electric power
• Focus on measuring and reducing
food waste in line with our
agreement to the Courtauld
Commitment
• Support more local community
events across our pubs and hotels
• Launching training programme
around safety, care and respect.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
17
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
OUR
HOSPITA
Confidence in
18
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
Q&A
FRED TURNER
RETAIL DIRECTOR
What has been the secret to Fuller’s
operational success this year?
Everything has come together this year
and that has been recognised by our
customers. Small changes to the process
behind menu design and creation have
led to stronger food sales and the range
of drinks on the bar is outstanding.
Customers liked that and responded by
visiting more frequently and spending
more on their experience.
How will you build on that success
in the coming year?
We are becoming much better at the
way we launch new menus internally.
With inflation falling, that gives us greater
opportunity to innovate and I think we
will see further upside when it comes to
food sales in particular.
How else do you make sure you
are always delivering outstanding
hospitality?
Our purpose in life is to create
experiences that nourish the soul.
Experiences often begin before you are
welcomed at the door and don’t finish
until after you have left. As a result we are
always working on the whole customer
journey to keep enhancing every element.
What else are you doing to keep Fuller’s
in an industry-leading position?
We have great people and we will
continue to invest in them, building the
behaviours that make the team strong
and the customers happy. It’s not rocket
science – it does take hard work, but we
are definitely not scared of that!
LEARN MORE
ABOUT...
Our food and
drink sales
performance
p9
How we engage
with our
customers
p12
How we
communicate
with our
customers
p16
Griffin
theFollow
LITY
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
19
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
OUR PEO
Confidence in
20
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
PLE
Q&A
DAWN BROWNE
PEOPLE & TALENT
DIRECTOR
What’s been your highlight of the year?
Holding our first General Manager
conference since 2019. We are
a people business and bringing
everyone together to focus on the
challenges and celebrate our successes
is so important. The conference is a
very special event – you can feel the
energy on the day and afterwards.
What makes a Fuller’s team
member special?
About two years ago, we started
a programme encouraging our
team members to Be the Difference –
taking ownership for truly delighting
our customers. They have seized the
opportunity to own the customer
relationship and we have seen
increases in our customer
satisfaction scores as a result.
How are you planning to develop
your teams this year?
We have always invested in our people
and this year we launched our Lead Your
Way programme. Our first attendees
have been our pub and hotel General
Managers. We know that great leaders
develop stable, resilient and truly
brilliant teams – the foundation of
any successful business.
What else are you proud of this year?
We have rolled out our inclusion action
plan – and that’s a real game changer
for us. We are focused on a few
areas that we are passionate about –
encouraging more over 50s to work with
us and supporting our neurodivergent
colleagues. We have a way to go but
our team members appreciate the
steps we are taking.
LEARN MORE
ABOUT...
How we are
training our
workforce and
investing in our
people
p10
How we engage
with our teams
p12
How we are
helping our
communities
p39
Dawn Browne’s
Board induction
programme
p70
Griffin
theFollow
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
21
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
OUR
CUSTOM
Confidence in
22
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
Q&A
SAM BOURKE
MARKETING DIRECTOR
What makes you confident
in your customers?
We are fortunate because we have
a loyal customer base who trust our
pubs and hotels to deliver consistently.
This is reflected both in our repeat visit
numbers and directly from customers’
feedback. We always know who our
customers are and which pubs and
hotels they visit.
And what do you know about them?
Last year we undertook a project to
delve into what our customers expect
from our pubs and hotels. We have
beautiful properties, all with their own
unique selling points. We are on a
journey to use our customer behavioural
and transactional data to tailor our food,
drink, decor and room offering to meet
and exceed their expectations.
And what should they expect
from Fuller’s?
Our intention is to delight and surprise our
customers. We have developed spring /
summer menus that reflect recent trends,
seasonal ingredients and innovation
alongside brilliantly executed traditional
pub classics. We have also created a
summer drinks menu that elevates our
pub and garden experiences and offers
creative alcohol-free options for those who
are moderating but still want to join in.
What excites you most about
the coming year?
Customers are seeking experiences
so it’s always exciting to find new ways
to ensure they are having a good time.
Our Shakespeare in the Garden and
Opera programmes continue to attract
good numbers and we are working with
our pubs and hotels to create relevant
reasons-to-visit by location such as
murder mystery dinners, steak and
wine evenings, comedy nights, and
F1 watch parties.
LEARN MORE
ABOUT...
The way we
market to our
customers
p4
How we engage
with our
customers
p12
The outstanding
hospitality we
offer
p18
Griffin
theFollow
ERS
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
23
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
OUR
PROPER
Confidence in
24
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
Q&A
PETER TURNER
PROPERTY DIRECTOR
How have you chosen where to invest
during the year?
We have always had a commitment to
ensuring our pubs, both front of house
for our customers and behind the scenes
for our colleagues, are in excellent
condition. Over and above normal
maintenance, investing in our own pubs
will often give the best financial returns.
We have a long-term strategic plan to
carry out a number of transformational
refurbishments each year.
What is the aim of a transformational
refurbishment?
We have a wide range of pubs, each
with its own charm, history and
characteristics. A transformational
refurbishment is about broadening the
appeal of a pub. A great example is
The Rising Sun in the New Forest.
Can you tell us about a couple of other
forthcoming projects?
We have another really exciting
programme of investment coming up –
from overhauling the bedrooms at The
Head of the River in Oxford, carefully
installing air conditioning into a listed
building, to a major scheme at The
Drayton Court Hotel in Ealing. The team
are amazing at juggling very different
looks, feels and locations simultaneously.
What else is a key priority for the
coming year?
We will continue to invest in sites,
including the electrification of kitchens
in order to achieve our Net Zero targets.
LEARN MORE
ABOUT...
Our investments
over the last year
p10
The role of
property in our
business model
p13
Our property
and investment
strategy
p17
Electric kitchens
p41
Griffin
theFollow
TY
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
25
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Non-financial performance metrics are used within the business, including employee engagement and satisfaction scores,
customer NPS and environmental targets.
26
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
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.
Definition
Revenue comprises sales
of goods and services,
accommodation income and
rental income. We have two
main revenue segments:
Managed Pubs and Hotels,
and Tenanted Inns.
Why is it important
for Fuller’s?
Revenue drives the overall
business, resulting in cash
generation which allows
for investment in our estate,
our people, rewards to our
stakeholders and acquisitions.
Performance in 2024
Revenue increased by 7%
compared to 2023 with a 6%
increase in Managed Pubs
and Hotels revenue and an
increase of 13% in Tenanted
Inns revenue. This increase
is driven through volume
as well as price increases.
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?
The Directors believe
that this measurement
of profitability allows
stakeholders to analyse
trends and performance
without being impacted by
separately disclosed items.
Performance in 2024
Adjusted profit before tax
increased by 61% compared
to 2023. This is mainly driven
through revenue growth but
is also through margin
improvement, with operating
margin improving from 7.4%
to 9.6%.
Definition
Adjusted earnings per share
is profit after tax excluding
separately disclosed items
attributable to equity holders
of the Company divided
by the weighted average
number of ordinary shares
in issue during the year.
Why is it important
for Fuller’s?
This measure shows how
much profit the Group is
generating for its
shareholders. It takes into
consideration changes in
profit and loss after tax and
movements in the number
of shares but excludes the
impact of separately
disclosed items. It is an
important variable in
determining our share price.
Performance in 2024
Adjusted earnings per share
increased by 52% compared
to 2023 less than the
increase in the adjusted
profit before tax due to the
increase in the corporation
tax rate.
Definition
Net debt comprises cash
and short-term deposits,
bank overdraft, bank loans,
debenture stock and
preference shares net
of debt issue costs.
Why is it important
for Fuller’s?
This measure helps
shareholders to determine
the level of debt compared
to liquid assets and analyse
the overall financial stability
of the Group.
Performance in 2024
Net debt increased
marginally by £0.3 million
compared to FY2023.
Despite EBITDA improving
by 17% against prior
year, the Group has
implemented its capital
allocation framework
through investment in the
estate and returns to
shareholders. A total of
£27.2 million was invested
in the existing estate in
the year and £22.4 million
returned to shareholders
through dividends and
share buybacks.
REVENUE
ADJUSTED PROFIT
BEFORE TAX
ADJUSTED
EARNINGS PER
SHARE (“EPS”)
NET DEBT
EXCLUDING
LEASE LIABILITIES
£359.1m
24.48p
£20.5m
£133.1m
2024
2023 2022
359.1
336.6
253.8
2024
2023 2022
20.5
12.7
7.2
2024
2023 2022
24.48
16.10
9.79
2024
2023 2022
133.1
132.8
131.9
We are pleased to have delivered
an excellent set of financial results,
showing significant progress in
the year. Revenue grew by 7% to
£359.1 million (FY2023: £336.6
million) and adjusted profit before
tax increased by 61% to £20.5 million
(FY2023: £12.7 million).
The increased revenues, combined
with effective cost management, have
enabled operating profits to grow by
37% to £34.5 million with operating
margins improving to 9.6%
(FY2023: 7.4%). This was achieved
despite a challenging inflationary
environment with food inflation
averaging 9.3% and the increase in
National Living Wage resulting in labour
inflation of 6.3%. However, there was
some movement in our favour, with total
utilities cost for the year reducing to
£11.6 million, saving £2 million on the
prior year (FY2023: £13.6 million) albeit
remaining significantly higher than the
£6.3 million charged in FY2020.
In our Managed Pubs and Hotels business
like for like sales grew by 11% compared
to the prior year, with total sales
increasing by 6%. In the year, we
transferred 23 sites from our Managed
business to our Tenanted business, and
excluding the impact of those sites, total
sales were up 10%. The performance of
our urban sites was particularly strong,
with like for like sales up 15.6%, which
follows an increase of 32.8% in the prior
year. The revenues generated by
Managed Pubs and Hotels are well
balanced across all categories, with drink
like for like sales up 9.8% and food like for
like sales up 14.5%. We delivered volume
increases in both categories, up 1.1%
Delivering sales and
profit growth
and 3.8% respectively, reflecting strong
underlying growth and recognition of
our customers’ appreciation of our offer.
Accommodation also performed well
with total sales up 5.3% and RevPAR
increasing by £7.79 to £97.26.
Tenanted Inns revenue grew by 13%
from £29.8 million to £33.8 million.
Profits also increased by 4% up to
£13.7 million (FY2023: £13.2 million).
There was a marginal decline in
operating margins as a result of one-off
costs associated with the transfer of the
23 sites from the Managed business.
Finance Costs
Total net finance costs (before separately
disclosed items) have increased by
£1.6 million to £14.0 million. This increase
is due to the rise in the Bank of England
base rate at the beginning of the year
which has remained high at 5.25%.
The Group has a zero premium cap and
collar over £60 million of the term facility
which has a floor of 310bps and a cap of
500bps. This gave some protection when
the rate went over 500bps in August 2023.
The Group also repaid one of its
debentures of £6 million in December
2023 which had a fixed interest rate
of 10.7%. Overall, this has meant that the
average cost of borrowing was 8.0% in
the current financial year compared to
7.0% in the prior year.
“Our teams have
worked tirelessly
to deliver a great
experience for our
customers – this
has yielded great
financial results.”
NEIL SMITH
FINANCE DIRECTOR
Separately disclosed items
The net position on separately disclosed
items is an expense of £6.1 million
(FY2023: £2.4 million expense).
This consists of a release of a VAT
provision of £1.1 million on settlement
of a claim; a net credit of £0.4 million
for legal and insurance claims; a finance
credit of £0.7 million on the Group’s
pension surplus; offset by an
£8.3 million impairment charge relating
to the write down on a number of
properties and right-of-use assets to
their recoverable value net of reversal
of impairments on five properties.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
27
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
FINANCIAL REVIEW
Tax
The underlying effective tax rate has
increased to 28.3% (FY2023: 22.8%).
The increase in the effective tax rate
is mainly due to the withdrawal of the
capital allowance super-deduction from
April 2023. The main driver of the
increase in effective tax rate on adjusted
profits over the standard rate of tax is
non-deductible depreciation on
assets that do not qualify for
capital allowances.
During the 52 weeks ended 30 March
2024, the total tax contribution of the
Group to the UK Exchequer was
£86.0 million (FY2023: £80.0 million)
in taxes borne and taxes collected
on behalf of colleagues, customers
and suppliers.
Total tax collected (£m)
37.0
19.0
14.4
8.6
1.0
42.9
1.0
20.4
11.8
8.9
1.0
0
60
80
40
100
20
FY2024
FY2023
VAT
PAYE and Employees’ NI
Corporation tax
Business rates
Employer’s NI
Other taxes and Apprenticeship Levy
Pension
The defined benefit pension scheme
surplus has increased by £2.7 million
to £17.3 million accounting surplus
(FY2023: £14.6 million surplus) as a
result of a decrease in the present
value of pension obligations as the
discount rate increased from 4.75%
to 4.85%, offset by only a small decline
in the fair value of scheme assets.
As the Group has an unconditional
right to refund under the pension
trust deed, an asset has been
recognised as at 30 March 2024.
Shareholders’ return
The proposed final dividend of 11.12p per ‘A’ and ‘C’ ordinary share (FY2023: 10.0p),
together with the interim dividend of 6.63p per share already paid makes a total of 17.75p
per share which is an increase of 21% on the prior year and continues our return to a
progressive dividend policy. The middle-market quotation of the Company’s ordinary
shares at the end of the financial year was 590p. The highest price during the year was
696p, while the lowest was 458p. The Company’s market capitalisation as at 30 March
2024 was £347.4 million (FY2023: £282.6 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 & Philosophy
Outlook
Invest in
long-term
organic growth
Returns-based
approach to
capital investment
• Invested £27m into the estate in
FY2024 with plans to invest over
£30m in FY2025, including 26
transformational schemes
Sustainable &
progressive
dividend
Dividend cover
normalised
range of 2.5-3x
• FY2024 dividend 17.75p – up 21%
• Progressive dividend growth in line with
EPS growth once cover normalised
Invest in
additional
growth
opportunities
Disciplined approach to
assessing acquisition
opportunities
• Strong Balance Sheet with headroom for
high quality acquisition opportunities
Targeting
leverage of 3x
net debt / EBITDA
Strong Balance Sheet
maintained – target
leverage at 3x net debt
/ EBITDA
• Buyback of over 3 million ‘A’ shares
with programme extended to
repurchase a total of 6.5 million
‘A’ shares since Sept 2022
Cash flow
FY2024
£m
EBITDA
60.8
Interest, tax & pensions
(14.1)
Separately disclosed items
1.7
Working capital and share transactions
9.9
Lease payments
(8.7)
Cash available for allocation
49.6
Capital expenditure
(27.2)
Dividends
(10.0)
Share buyback
(12.4)
Cash flow
–
Non-cash movement
(0.3)
Net debt movement
(0.3)
Source of finance
Bank debt
123.8
Debenture & Preference shares
21.5
Cash
(12.2)
Net debt before lease liabilities
133.1
Lease liabilities
65.9
Total net debt
199.0
28
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
FINANCIAL REVIEW continued
Cash flow and net debt
Net debt (excluding leases) was at
£133.1 million (FY2023: £132.8 million).
This was a marginal increase from last
year as the Group has implemented its
capital allocation framework through
investment in the estate and returns to
shareholders. A total of £27.2 million was
invested in the existing estate in the year
with transformational schemes at The
Sanctuary House in Westminster, The
Rising Sun in the New Forest, The
Forester in Ealing and The Counting
House in the City.
A share buyback programme of two
million ‘A’ shares was completed in
FY2024 for a total of £12.4 million.
A further share buyback programme
of one million ‘A’ shares started at the
end of March 2024 and is ongoing,
and an intention to buy back up to an
additional 2.5 million ‘A’ shares was
announced today.
The improvement in EBITDA has meant
that net debt/EBITDA is now at 2.5x which
remains in line with our capital allocation
framework and provides headroom for
acquisition opportunities as they arise.
Sources of finance
The Group has unsecured banking
facilities of £200 million, split between
a revolving credit facility of £110 million
and a term loan of £90 million.
During the year, the Group agreed with
its lenders to extend these facilities for
a further year through to May 2027.
The facilities bear interest at a margin
dependent on the leverage covenant
plus a base rate of SONIA.
The Group repaid £6 million of its
debentures in December 2023 from
the Group’s current bank facilities.
The debenture had an interest rate of
10.7% so the repayment will help to
reduce the Group’s future finance costs.
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 6 to 57.
The financial position of the Company,
its cash flows, net debt and borrowing
facilities and the maturity of those
facilities are set out on pages 124 to 179.
In addition, there are further details in
the financial statements on the Group’s
financial risk management, objectives
and policies in Note 25. 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 2027
as this aligns with the Group’s strategic
planning which was reviewed and
approved in February 2024. 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, and the
potential impact of the principal risk
documented on pages 33 to 36 in the
Strategic Report. The most significant
risks impacting the forecasts are
consumer demand shifts, cost of living
and the impact they could have on sales
volumes, as well as wage cost inflation.
Management have prepared, and the
Board has considered, two key scenarios:
A “base case” is the Board-approved
Budget for FY2025 which forms part of
the three year plan to FY2027. The base
case assumes an easing in cost inflation
for food and utilities, but continued
wage inflation mainly as a result of
increases in National Living Wage.
Under this scenario, the Group would
have sufficient resources and headroom
on its covenants through the duration of
the viability period.
A “downside case” assumes that sales
volume reduces by 10% compared to the
base case, costs across food and staff do
not ease and continue to rise at a higher
rate than assumed in the base case and
interest costs remain at current levels.
The model assumes that these cost
pressures remain during FY2026 and
FY2027. The model also assumes that
train strikes will continue through
FY2025 at the same run rate as in FY2024
but are resolved in the longer term.
In this downside case, management
would implement mitigating actions
such as overhead cost reduction and
reduction of capital expenditure.
Under this scenario, the Group would
still have sufficient resources and
headroom on its covenants through the
duration of the period.
At 30 March 2024, the Group’s Balance
Sheet is comprised of 88% of the estate
being freehold properties and available
headroom on facilities of £75.0 million
and £12.2 million of cash and resulting
net debt of £133.1 million. The Group
has unsecured banking facilities of
£200 million, split between a revolving
credit facility of £110 million and a term
loan of £90 million. Under the facilities
agreement, the covenant suite (tested
quarterly) consist of net debt to adjusted
EBITDA (leverage) and adjusted EBITDA
to net finance charges. During the
period, the Group agreed with its
lenders to extend these facilities for a
further year through to May 2027.
The Group repaid £6 million of its
debentures during the period out of the
Group’s current facilities. The remaining
debentures of £20 million are not due for
repayment until 2028.
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.
NEIL SMITH
FIN A NCE DIREC TOR
12 June 2024
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
29
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Managing risks effectively is key to ensuring that we achieve our strategic
objectives in the long term and continue to deliver the high standards
our customers, our people and our shareholders expect.
Risk Management Governance Framework
The risk management process is operated by the Executive Team, supported by the Risk
Manager, and is overseen by the Audit and Risk Committee and the Board, which is further
supported by the external audit process.
Governance
Role
Output
BOARD
• Oversees the risk management and internal
controls processes
• Defines the Group’s risk appetite and assesses
the principal risks
• Final approval
AUDIT AND
RISK
COMMITTEE
• Provides guidance and direction and supports the
Board in the management of risk
• Reviews the effectiveness of the risk management
strategy and internal controls process
• Recommendations
to the Board
EXECUTIVE
TEAM
• 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 and Risk Committee
and Board
• Group risk
register
• Principal risk
reviews
• Audit and
Board reports
BUSINESS
RISK
MANAGEMENT
• Implements and maintains risk management
procedures
• Maintains risk registers including identification
of risk, mitigating controls and actions
• Division and
Department
risk registers
TASK FORCE
ON CLIMATE-
RELATED
FINANCIAL
DISCLOSURES
WORKING
GROUP
• Oversees climate specific risks and integrates
mitigation controls and actions into the wider
risk strategy
• TCFD report and
climate related
risk mitigation
approach
30
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
RISK MANAGEMENT
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 ensures that a robust assessment
has been performed.
Role of the Board
The Board is responsible for 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 to
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.
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.
Changes to Risk Scores Versus Prior Year
Consumer
Demand Shifts
Financing
Cost Inflation
Health & Safety
Sustainability &
Environment
Whilst many of the
changes in consumer
behaviour brought about
by Covid-19 are
undoubtedly here for the
long term, these trends
are now more
established and better
understood. The benefits
of our investment in our
digital transformation,
which allows us to easily
split our data by
segment, are now
embedded and being
used to the advantage of
our business and our
customers by improving
our ability to tailor our
offer across the estate.
The extension of our
existing facilities to May
2027 and improved
trading increasing
headroom means that
the likelihood of the
business being unable to
find suitable financing
when required has
decreased.
Interest rates and
inflation may have
peaked with food
inflation in particular
falling in recent months.
Taking into account the
decreasing inflationary
environment and our risk
mitigation measures,
such as hedging of
utilities, our assessment
of the impact of overall
cost inflation has
reduced. As material
increases in the National
Living Wage are
projected to continue,
our risk assessment of
wage inflation
specifically has diverged
from general cost
inflation, and therefore
wage cost inflation has
been split out as a
separate principal risk.
The rigorous set of
controls for the mitigation
of Health & Safety risks
has been embedded in
our business
for a number of years,
and we have sustained
high levels of employee
training as well as strong
but still improving results
from third party audits.
Embedding this
compliance culture has
led us to reduce our
assessment of the likely
impact of a Health &
Safety failing in
the business.
The effects of climate
change are already
apparent from the
frequency of extreme
weather events and
increasing global
temperatures. The work we
have undertaken to assess
the likely impact of climate
change on our supply
chains (see the TCFD
reporting on pages 43 to
56), combined with the
expected expansion of
legislation to tackle climate
change and increasing
investor scrutiny on all
areas of sustainability, has
increased our assessment
of the likelihood of this risk
impacting our business.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
31
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
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
• This also includes a review of the
climate-related risks considered over
short, medium and long-term
horizons. The detail of our climate
related risks are disclosed in our
TCFD reporting on pages 43 to 56
• We use a risk categorisation
framework to analyse the risk registers
• The risks identified through this
mechanism that are considered most
significant, in terms of their materiality
to the Group, are recorded in the
Group risk register
• Emerging risks are discussed
regularly by the Executive Team
and escalated to the Audit and Risk
Committee as required
• In addition, the Audit and Risk
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 impact; any
changes to the mitigation; and
controls that are in place
• 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 managed appropriately,
monitored and reported internally
and externally
• At each half year, the Executive
Team considers and challenges
whether risks are 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 and Risk
Committee and the Board, with
particular focus on risks that are
outside tolerance, and actions
are agreed
• Principal risk reviews also support
the Audit and Risk Committee and
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.
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. Our Executive Team
and department heads horizon-scan
to monitor any potential disruptions
that could dramatically change our
industry and/or our business, from
both a risk and opportunity perspective,
to understand the changing landscape
and take appropriate actions. It is
often possible to predict the potential
impacts of emerging risks, but it is more
challenging to predict their likelihood,
timing and velocity.
The emerging risks we consider most
likely to impact the business include:
• Change of UK Government – there
is a risk that a change of Government in
July 2024 would bring about legislative
changes requiring adaptations to the
business’s operations
• Geo-political instability – the effects
of increasing global tensions could
include further inflationary pressures
as well as changes in consumer
confidence and tourism
• Artificial Intelligence – there are
risks associated with the use of
AI technology both by and against
the business.
32
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
RISK MANAGEMENT continued
Risks
1 Economic Environment
2 Consumer Demand Shifts
3 Information Technology/Cyber Security
4 Financing
5 Cost Inflation
6 Wage Cost Inflation
7 Supply Chain
8 Recruitment & Retention
9 Health & Safety
10 Future Pandemic
11 Sustainability & Environment
Annual impact to profit before tax
Likelihood
Impact
2
1
3
4
5
6
8
11
10
9
7
The following heatmap sets out the impact and likelihood scores for our
principal risks, and further details of these risks are 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 25 to the financial statements.
Risk Key
Decrease
Increase
No change
PRINCIPAL RISKS
1. Economic Environment
Movement
Owner
Description
Control and Risk Mitigation
Chief Executive
The inflationary environment, cost of
living increases and the threat of recession
could have an impact on demand.
In addition, the impact of strike action –
particularly transport strikes – has a
significant impact on our city centre sites.
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.
Our core customer group is typically at higher income levels,
which helps mitigate some of the effects of inflationary
pressures on our business.
We are able to adjust our variable cost base to reduce the
impact of strike action on our overall profitability.
2. Consumer Demand Shifts
Movement
Owner
Description
Control and Risk Mitigation
Marketing
Director
The Group’s ability to anticipate and
react to consumer demand remains key
to its continued success.
Changes around working from home and
the corresponding demand shift in city
venues vs rural continue to be relevant,
as do trends towards healthier and
environmentally sustainable options.
Management monitor and research trends for each of our
key customer groups; gathering consumer feedback and data
through Net Promoter Score surveys, online and social media
reviews, customer complaints, purchasing records and basket
analysis. This allows us to be focused in providing the right offer
to the right customer whilst analysing retail pricing and market
share data to ensure we are competitive but still premium.
Our use of digital tools enables us to maximise visit
frequency and spend from existing customers, and to
target new ones.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
33
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
PRINCIPAL RISKS AND UNCERTAINTIES
3. Information Technology/Cyber Security
Movement
Owner
Description
Control and Risk Mitigation
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 data
centres, 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
Movement
Owner
Description
Control and Risk Mitigation
Finance Director
Interest rates may still increase in the
future, adversely impacting profit, and/or
there could be a risk of breaching
financial covenants. Should there be a
downturn in market conditions which
could affect liquidity we may be unable
to find suitable financing when required.
Our current financing facility runs until May 2027, and
improved trading has increased headroom. We maintain
good relationships with our current lenders. The predominately
freehold nature of our business means we have the ability to
offer more certainty than many in our sector when raising
finance, and alternative financing approaches are available.
We closely monitor our cash flow and control of investments
to ensure we maintain appropriate levels of debt cover.
We have an interest rate cap and collar in place to mitigate
some of the impact of rising rates.
5. Cost Inflation
Movement
Owner
Description
Control and Risk Mitigation
Finance Director
Although there has been some softening
of the rate of increase there remains a
risk of rising input costs across all areas,
including food, drink and utilities.
We regularly monitor prices using relevant commodity
databases, review forward-looking inflation, and all key
contracts are competitively tendered. We frequently review
our margin, and our retail prices 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.
We have a Long-Term Supply Agreement (“LTSA”) in place
with Asahi Europe & International Ltd for the supply of beer,
cider and other beverages to 2029, which caps the increase to
below CPI.
The majority of our energy use is covered by fixed-term
prices. For the current financial year, we are fully hedged for
both gas and electricity.
34
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
PRINCIPAL RISKS AND UNCERTAINTIES continued
6. Wage Cost Inflation
Movement
Owner
Description
Control and Risk Mitigation
People & Talent
Director
Staff costs are expected to be impacted
by further changes to the National Living
Wage, a tightening of labour supply, and
the demand for higher wages due to the
cost of living increases and inflation.
We aim to mitigate the risk of staff cost increases through
operational efficiency and continued optimisation of
staffing levels.
7. Supply Chain
Movement
Owner
Description
Control and Risk Mitigation
Retail Director
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.
We have also identified a potential
long-term risk to our supply chain as a
result of climate change.
The LTSA in place with Asahi Europe & International 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. 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. These relationships, coupled with
our ability to replace and adapt our customer offering, help us
to mitigate supply chain challenges. We seek to understand
more about products at risk as a result of climate change and
look to identify ways to mitigate this risk over time.
8. Recruitment & Retention
Movement
Owner
Description
Control and Risk Mitigation
People &
Talent Director
The recruitment and retention of high
calibre team members is fundamental
to our ability to deliver a distinctive
experience for our customers, and to
support our continued growth.
While recruitment challenges have eased
slightly over the last year, recruitment and
retention remain key focus areas for us.
Due to our extensive listening work, we know that our
team members stay with us because of the supportive and
inclusive culture of the business and because of the career
paths we offer, supported by training at all levels.
We continue to invest heavily in training and development,
including apprenticeships, and this year have launched a
bespoke Leadership programme. We benchmark pay for our
pubs teams quarterly, and annually for our support office
colleagues, to ensure it remains competitive.
We also regularly review our benefits, taking feedback from
our listening channels. We have succession plans in place for
key roles and have a strong track record of growing our own.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
35
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
9. Health & Safety
Movement
Owner
Description
Control and Risk Mitigation
Retail Director
The Health & 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.
There is a risk of a customer suffering
from our staff failing to deliver our
allergens policies and procedures.
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.
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 to perform detailed investigations in
instances where an incident does occur.
10. Future Pandemic
Movement
Owner
Description
Control and Risk Mitigation
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 remains some risk of subsequent
pandemics, either entirely new strains of
a virus or evolutions of the current strain,
and a government strategy in response to
this that negatively impacts the business.
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.
11. Sustainability & Environment
Movement
Owner
Description
Control and Risk Mitigation
Chief Executive
Through our Climate Risk disclosure we
have identified that climate change could
have a material impact on our supply
chain under certain climate scenarios.
Uncertainties over how these risks will
evolve may impact product availability
which could lead to reduced revenues
and profit. This could also impact trust
and reputation among customers,
investors and other stakeholders.
The Group has committed to the Net Zero Carbon Roadmap
to Net Zero by 2030 for Scope 1 and 2 and 2040 for Scope 3.
We have underpinned this commitment in setting carbon
reduction targets out to 2030 in line with the Science Based
Targets initiative’s 1.5 degree scenario. 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 the impacts of climate change to our
business. As part of our scenario analysis, we have assessed
the impact on our direct business and our supply chain and
set out a plan to mitigate these risks over time.
We have implemented our Life is too good to waste
programme which is across our people, communities
and planet.
Our Sustainability Director has identified a programme of
changes and initiatives in our pubs, hotels, support office
and supplier base to help us grow in a sustainable way.
36
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
PRINCIPAL RISKS AND UNCERTAINTIES continued
Life is too
good to waste
OUR
PLANET
OUR
COMMUNITIES
OUR
PEOPLE
Life is too good
to waste
SUSTAINABILITY
AT FULLER’S
Our Life is too good to waste
programme provides a clear
path, with strong goals, for
our sustainability journey. We
protect and respect the things
that matter – our people, our
planet and our communities.
OUR PEOPLE
Our people are the key to our success. We have confidence in our people
and we want to make sure that they have confidence in us. We are committed
to creating inclusive workspaces – where everyone can belong. Our team
members’ individualities are what makes Fuller’s such a vibrant and inspiring
place to work, and we aim to support everyone’s right to be themselves.
We are proud to celebrate individuality.
OUR COMMUNITIES
Fuller’s pubs and hotels have always been at the heart of their communities.
The Fuller’s cartouche above the door is a strong image that our communities
know they can rely on. We are committed to donating 1% of our profits to
charity – but we also provide a place for locals to host events, gather with
like-minded people and make new connections.
OUR PLANET
Future planning has kept Fuller’s thriving for nearly 180 years. We know
a healthy planet is essential to the future of our business, people and
communities. We know that there is a lot of work to be done to reduce
our impact on the planet – but we trust that our commitment to Net Zero,
among other initiatives, will help us play our part in protecting the planet.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
37
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
SUSTAINABILITY REPORT
2024 Highlights
Our first fully electric pub
London
Essence
waste to landfill
OPENED
THE ADMIRALTY
10%
50%
58%
75%
ZERO
tonic dispense
solution saved
use of 61k glass
bottles
Reduced our operational
carbon emissions by
Trialled
Grassroots beef
Committed to reduce
our food waste by
by 2030 –
as signatories of the
Courtauld Commitment
– resulting in a 52% reduction in
carbon emission related to beef
recycling rate
of our Managed estate
Electric
kitchens in
litres of cooking oil recycled,
avoiding 632T of CO2
GREEN GOBLET
328K
reusable cups
saved 186k single-use
plastic cups at The
Cabbage Patch across
all event days
38
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
SUSTAINABILITY REPORT continued
100%
93
26
£218K
£13K
£44K
£5K
224
LAUNCHED
INCLUSION GROUPS
team members aged over
50 recruited
team members with
intellectual disabilities
through Rest Less
Special Olympics
local causes
Annual Sausage Roll
Off raised
Apprentices
for Only a Pavement Away
donated to
donated to
donated to
Launched employee-led
across our Managed estate and 22
Tenanted sites
renewable electricity
Intellectual Disability
Hiring Guide
Made in Hackney
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
39
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
OUR
PEOPLE
OUR
COMMUNITIES
We have worked with our charity
partner, Special Olympics GB, to launch
a guide for our managers on recruiting
team members who are neurodiverse
or have intellectual disabilities (“IDs”).
There are 1.5 million people living with
an ID in Great Britain and only 6% are
in paid employment. As part of our
inclusivity programme, we set the goal
of employing at least 20 people with IDs
by July 2023.
To help achieve this, we held workshops
with General Managers from a handful
of our pubs – and invited some Special
Olympics GB athletes along to share
their experiences of employment.
The athletes, Matt Dodds and Mitch
Camp, shared invaluable information on
reasonable adjustments that we, as an
employer, can easily make to help them
in the workplace.
We then worked in partnership with
Special Olympics GB and the Licensed
Trade Charity (“LTC”) to create a helpful
guide for our managers. The guide
covers every part of the recruitment
journey – including tips on how to
make job adverts accessible and clear
that the position is open to all, hints on
interviewing those with IDs, steps to
take when onboarding the new team
members and things to consider during
their induction.
The guide has been launched internally
initially – with a guide sent to every
managed site, and offered to all of our
tenanted pubs. We are also going to roll
it out to the wider industry with the help
of the LTC.
Fuller’s is committed to donating 1%
of profit to charity. We are extremely
proud of our relationship with our
charity partner Special Olympics GB
– but we also support other causes
that are local to our West London
home, and our pubs and hotels.
OnSide is a youth charity that
builds Youth Zones in the most
disadvantaged areas in England.
Fuller’s is one of the founder patrons
of OnSide’s new Youth Zone, WEST,
in West London – which opened in
April 2024.
As well as donating £150,000 to the
development, we are looking at how
we can further our partnership with
WEST – such as our chefs running
cooking sessions to inspire young
people to cook healthy and nutritious
meals, Fuller’s team members
volunteering at the Youth Zone, and
providing information and support on
employment and apprenticeships.
Fuller’s Chief Executive, Simon
Emeny, was invited to an opening
event at WEST alongside special
guest, William, Prince of Wales.
40
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
SUSTAINABILITY REPORT continued
OUR
PLANET
Electric Kitchens
To support our journey to Net Zero, we
are committed to acquiring 100% of our
electricity from renewable sources –
such as hydro, wind and solar. To shift
our sites to zero carbon energy sources,
we need to transition our sites that have
been historically powered by gas to
electricity. As part of this transition, we
have started to install electric equipment
in our kitchens. This year, we have
transitioned nine of our gas-led kitchens
to electricity.
Grassroots Beef
We know from our review of our carbon
footprint that beef makes up a significant
part of our Scope 3 carbon emissions.
In March 2024, we introduced Grassroots
beef to a number of our sites as part of
a trial to introduce products that are
less carbon intensive on our menus.
Grassroots beef is farmed using
methods that have less of an impact
on the planet.
Founded by Alastair Trickett, James
Evans and James Daniel, Grassroots
is a collective of farmers that provides
a supply of beef from farms that have
been audited and certified to
Grassroots’ regenerative farming
standards. Grassroots beef is
independently assessed using the
Farm Carbon Toolkit – which measures
carbon emissions. The toolkit found that
beef from Grassroots farms produces
half the amount of carbon of typical beef
herds in the UK.
Grassroots incorporates six principles
within its standards – including animal
welfare and protecting the local
environment. It’s been proven that this
approach can reduce emissions from
beef by up to 52% when compared
with typical beef farmed in the UK.
When farmed following all six principles,
the beef produced not only has less
impact on the planet, it is also extremely
high quality.
This is in addition to the existing seven
kitchens that were already fully electric.
The changes have led to a significant
reduction in gas usage on these sites,
between 40 and 100%, with nominal
increase in electricity consumption.
The Admiralty on Trafalgar Square
reopened in April 2023 as one of our
first fully electric pubs. This not only
eliminated the pub’s gas usage entirely –
but we also saw a reduction of
approximately 20% in its electricity usage.
Another benefit of electric kitchen
equipment is that it only switches on
when in use – unlike gas equipment,
such as hobs, which are often left on
during food service times. It has also
led to our kitchens being cooler in
summer months. Feedback from our
chefs who use the electric equipment
shows that it makes for a much more
pleasant working environment.
The Willow, Bourton-on-the-Water
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
41
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
FY21
FY22
FY23 (restated)**
FY24
Scope 1 energy consumption kWh
23,590,317.4
43,047,444.9
40,972,459.3
38,470,945.3
Scope 2 energy consumption kWh
18,503,251.4
30,438,473.0
32,767,748.3
32,907,053.3
Scope 3 energy consumption kWh
202,475.6
827,608.5
1.025,618.3
1,034,448.7
Total energy consumption kWh
42,296,044.4
74,313,526.4
74,765,825.9
72,412,447.3
Scope 1 emissions tCO2e
4,419.1
8,119.0
8,007.5
7,791.0
Scope 2 emissions tCO2e
4,313.8
6,463.0
6,336.6
6,553.8
Scope 3 emissions tCO2e
47.6
928.3
253.0
249.4
Gross Scope 1, 2 and 3 emissions tCO2e
8,780.5
15,510.3
14,597.1
14,594.2
Net Scope 1, 2 and 3 emissions tCO2e
8,780.5
11,910.6
8,260.5
8,147.3
Gross intensity ratio: tCO2e / turnover £m
120.0
61.1
43.4
40.7
Net intensity ratio: tCO2e / turnover £m*
120.0
46.9
24.5
22.7
* Fuller’s purchases renewable electricity in the majority of buildings and therefore associated emissions can be deducted from the gross total
to give net emissions, also known as market-based emissions.
** FY2023 has been restated due to additional information becoming available.
Observations from SECR review
Fuller’s continues to reduce net carbon
emissions through a commitment to
energy saving and switching
consumption from non-renewable gas
and stationary fuel (liquefied petroleum
gas and heating oil) to renewable
electricity supply. In addition, Fuller’s
has moved nearly all Company-owned
vehicles to electric.
A baseline period of 1 April 2019 to
31 March 2020 has been selected as
this reflects a more appropriate
representation of a normal trading
period when compared to the following
year, due to the global pandemic which
greatly affected business operations and
significantly reduced trading, and thus
reduced energy consumption.
Since establishing the baseline
performance levels, Fuller’s has
continued to explore opportunities to
reduce energy consumption and
establish an energy saving strategy
for the business. The opportunities
for energy reduction explored to
date include:
• Behavioural change programmes to
focus on energy reduction
• The introduction of smart meters to
measure, monitor and reduce usage
• Energy controls introduced in cellars
and walk-in fridges
• The electrification of kitchen, heating
and hot water systems
• More regular heating servicing
and the use of EndoTherm and
heat recovery for water to reduce
gas usage
• LED lighting as standard in all sites
• On-site energy audits to facilitate
targeted initiatives and identify areas
of capex spend.
These actions are leading to a continued
drive for energy efficiency as illustrated
in the repeated reduction shown in the
intensity ratio metrics year on year.
42
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
STREAMLINED ENERGY AND CARBON REPORTING (“SECR”) REPORT
This report details Fuller’s greenhouse
gas (“GHG”) emissions and energy use
for FY2024.
Methodology:
Fuller’s has collated data relating to its
Scope 1 and Scope 2, and partial Scope
3 emissions, and energy use for
activities over which it has financial
control. The calculations have been
made in line with HM Government
Environmental Reporting Guidelines and
the GHG Protocol methodology.
The table below summarises emissions
and energy use in recent years:
Reporting of Scope 3
Greenhouse Gas Emissions
Fuller’s commitment to Net Zero is in
line with the Science Based Targets
initiative. Moving forward, Fuller’s
intends to report its Scope 3 carbon
emissions on an annual basis.
This year, we are pleased to report for
the first time our full Scope 3 emissions
– which have been calculated in
accordance with the Greenhouse Gas
Protocol. These are detailed below for
FY2024 as well as for FY2020, which is
the base year for our near-term targets
and Net Zero commitment.
Baseline
Results
FY2020
FY2024
Scope 3
GHG emissions
tCO2e*
71,631**
70,159
* These metrics have not undergone external
verification or assurance.
** Updated from 74,756 tCO2e to 71,631 tCO2e
to reflect improvements to data and
methodology since first calculating and
submitting our Scope 3 emissions to the
Science Based Targets initiative in 2023.
Below is a breakdown of Fuller’s Scope 3 carbon emissions showing the key
areas of emissions:
Total Scope 3 tCO2e FY2024
1 Includes emissions from procured food and drink – including from transportation.
2 Includes emissions from stationary gas, electricity, and company vehicle use not included in
Scope 1 and Scope 2 at our managed properties – as well as from water use, on-site waste
disposal, and employee commuting.
3 Includes emissions from stationary gas and electricity use from our Tenanted properties.
These include both Fuller’s branded franchises and non-branded leased out properties.
4 Includes emissions from the disposal of sold products by customers off-site, business travel,
and the procurement and transport of non-food and drink consumable products.
Food and drink1
Managed sites2
Tenanted sites3
Capital goods and services4
Other4
35,733
51%
70,159
tCO2e
16,037
23%
3,367
5%
6,677
9%
8,345
12%
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
43
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (“TCFD”)
Introduction
The year ending 30 March 2024 represents the third year in which we have disclosed our climate related risks in line with the
TCFD framework. With last year’s report representing a significant development in the maturity of our TCFD reporting activities,
we are pleased to continue our progress. We have reviewed and reconfirmed the assessment of our climate related risks and
opportunities; conducted further scenario analysis on them; and developed new metrics and targets to advance our approach to
managing and monitoring climate related risks. We continue to view our TCFD disclosures as an evolving area of work for the
business. As we progress and advance our understanding of climate related risks and opportunities, we will seek to keep
enhancing the maturity of our disclosures.
The table below sets out where in this report you can find our TCFD disclosures for each of the framework’s recommendations:
TCFD disclosure recommendations
FY2024 compliance
Page reference for disclosure
Governance
✓
Pages 45 to 46
a. Describe the Board’s oversight of climate-related risks and
opportunities.
✓
b. Describe management’s role in assessing and managing climate-
related risks and opportunities.
✓
Strategy
✓
Pages 46 to 47
a. Describe the climate-related risks and opportunities the organisation
has identified over the short, medium and long term.
✓
b. Describe the impact of climate-related risks and opportunities on
the organisation’s businesses, strategy, and financial planning.
✓
c. Describe the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios, including a 2°C
or lower scenario.
✓
Risk Management
✓
Pages 48 to 51
a. Describe the organisation’s processes for identifying and assessing
climate-related risks.
✓
b. Describe the organisation’s processes for managing
climate-related risks.
✓
c. Describe how processes for identifying, assessing, and managing
climate-related risks are integrated into the organisation’s overall
risk management.
✓
Metrics & Targets
✓
Pages 52 to 56
a. Disclose the metrics used by the organisation to assess climate-
related risks and opportunities in line with its strategy and risk
management process.
✓
b. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse
gas (“GHG”) emissions and the related risks.
✓
c. Describe the targets used by the organisation to manage climate-
related risks and opportunities and performance against targets.
✓
44
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
TCFD continued
Governance
Our approach to the governance of
sustainability and climate related
matters remains unchanged this year.
We firmly believe that our top-down and
bottom-up approach to managing risks,
with responsibility integrated
throughout the business, ensures that
we manage our climate related risks
appropriately, while continuing to
deliver on the business strategy.
The Board
Fuller’s Board continues to take overall
responsibility and accountability for the
management of all of our risks and
opportunities, and this includes our
climate related risks.
The Audit and Risk Committee supports
the Board in its execution of this
responsibility, through both its oversight
of our integrated risk management
assurance model and its consideration
of the potential materiality and impact
of climate related risks. This forms a key
part of the Committee’s broader role in
ongoing risk management. As part of
its continued support to the Board,
the Committee receives briefings, at
appropriate junctures, on the progress of
the TCFD work to date and our plans for
further development. These updates are
provided throughout the year, with input
and advice from senior leaders, such as
the Property and Sustainability Directors,
to guide the Committee’s consideration
and oversight of our TCFD work.
More broadly, the Board also considers
the business’s material climate related
issues when reviewing strategic projects
and business objectives, such as the
acquisition of new sites or investment in
redevelopment of existing sites, to
ensure that the business continues to
perform in the short and long term.
This process is informed by the updates,
support and advice provided by senior
leaders in the business to the Board as
described above.
Executive Team
Our Executive Team provides the crucial
link between the business’s day to day
management of climate related matters
and the strategic consideration and
oversight of them by the Board.
The Chief Executive holds overall
responsibility for all sustainability
matters, including climate change, and
oversees the delivery of our Life is too
good to waste strategy. The Finance
Director supports the Chief Executive in
this area and is the designated Board
member responsible for overseeing our
TCFD work programme.
Our senior leadership team, the
Sustainability Director and the
Environment Committee support the
Executive Team in delivering our
sustainability agenda and TCFD work
programme. The Sustainability Director
acts as a key link between the Board,
the Executive Team, the Environment
Committee and our senior leadership
team. Regular updates on the TCFD
work programme are provided by
the Sustainability Director to the
Environment Committee, Audit and
Risk Committee and the Finance
Director. The Environment Committee
is one of our Sustainability Committees.
It is chaired by the Retail Director, who
oversees the delivery of our climate
related targets and objectives and is
a member of the Board.
Through this integration of our
Executive Team and senior leaders
in the governance of our climate related
matters, we ensure that these topics
are considered as part of the business’s
strategic and financial planning.
This complements and informs
the Board’s strategic consideration
of climate related matters, as set
out above.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
45
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Senior leadership team and
internal stakeholders
As detailed in last year’s disclosure,
our TCFD Working Group represents
the primary forum through which we
progress our work on identifying and
managing the business’s climate related
risks and opportunities. It is convened
by the Sustainability Director as a
sub-committee of the Environment
Committee and membership is drawn
from our senior leadership team.
Current Working Group members
include the Property Director, the Group
Financial Controller, the Food & Drink
Director, the Company Secretary, and
the Group Tax and Risk Manager.
Outside of this forum, our Sustainability
Director leads the day to day work on
our sustainability, climate and TCFD
agendas, and works with departments
across the business to ensure we are
delivering on our sustainability
commitments. The Sustainability
Director also provides regular updates
to the Board on our sustainability and
TCFD work, including our climate related
risks and opportunities, and our
performance against the targets and
objectives that we have set ourselves.
The business’s performance against
these sustainability targets and
objectives is described on pages 52 to
56 and forms part of the criteria for the
remuneration of our Executive Team.
Further detail on this can be found on
page 102.
Strategy
Our approach to strategy disclosures
With last year’s disclosures representing
a significant development of our
approach to TCFD, we are pleased to
have continued this trend this year
through our TCFD work programme.
A primary focus has been understanding
in greater depth the exposure to climate
risk in our supply chain. Further detail
on the work we have undertaken in this
area is provided in the scenario analysis
section below.
We have also completed our annual
review and confirmation of the
business’s key climate related risks and
opportunities. These remain unchanged
from our disclosure last year and are set
out below. We define these key climate
related risks as those that we consider
potentially material to Fuller’s, its
investors and its other stakeholders.
Further information on how we identify,
assess and manage our climate related
risks is provided in the Risk Management
section of this disclosure.
46
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
TCFD continued
We continue to recognise the
importance of taking an approach to
climate related risks that allows the
business to identify potential risks early,
actively monitor them and implement
mitigation strategies. We believe that
our current approach provides this for
the business and positions us well to
take advantage of the opportunities
that will be presented by a transition
to a low carbon economy.
Scenario analysis
Last year, we completed our first climate
scenario analysis, and this involved the
use of qualitative and, for selected risks,
quantitative analysis to understand how
the business’s key risks could evolve in
different climate scenarios. Scenario
analysis – as identified by the TCFD
framework – is a key tool to support the
business’s assessment of its key climate
related risks, and we are pleased to have
continued to develop our use of this tool.
This year, one of the focus areas of
our TCFD work programme has been
to develop our understanding of the
business’s exposure to climate related
risks in the supply chain. This focus is
an important area of interest, and this
was reinforced by last year’s TCFD work,
which identified “increased supply chain
disruption” as one of the business’s key
climate related risks (as set out in the
risk table on the next page).
As in last year’s exercise, we have
continued to use the scenario analysis
tools and framework published by the
Network for Greening the Financial
System (“NGFS”)1. This regularly
updated resource remains a highly
valuable input for our scenario analysis
work. For continuity and comparability,
we have used two of the three scenarios
– “Current Policies” and “Delayed
Transition” – that were used in last
year’s scenario analysis. We used
these scenarios to conduct qualitative
scenario analysis of our key food
and drink supply chains to further
understand how our business and
suppliers could be impacted by a
changing climate up to 2050. With
a particular focus on the potential
impact of physical climate risks, we
were particularly interested in these
two scenarios, given their association
with GHG emissions and global warming
trajectories above a 1.5-degree future.
As our own scenario analysis work
conducted this year recognised, climate
change has been identified as a
significant risk to the UK and European
food and drink sector. Cognisant of this
risk, and building on our own work,
we have begun to integrate these
considerations into the business’s
strategic planning for sourcing and our
supply chains. The implementation of
this work is reflected in our updated
approach to Metrics & Targets, where
we have included a new target on supply
chain engagement. More detail on the
new target can be found in this section
of the disclosure.
With this being only our second year
conducting climate scenario analysis,
we recognise that this area continues to
represent a complex and relatively new
process for the business. However, we
continue to develop our approach and
are looking to further our work in this
area such that we can provide further
insights in our future TCFD disclosures.
Our identified climate related risks,
opportunities and consideration of
our resilience
In the table on the next page, where
we set out our key climate related
risks, we categorise each one as either
a physical or transition risk and set out
the timeframes in which we see them
potentially materialising as impacts
on our business.
These timeframes have been defined
based both on the nature of climate
related risks, which generally require
organisations to take a long-term view
beyond traditional business planning
cycles, and how we view the life of our
physical assets and business models.
The periods are therefore defined as:
short (1-5 years); medium (5-15 years);
and long (>15 years).
The risks listed in the table represent
those that we have identified as key
for the business across these time
horizons. For each risk, we have set out
how we view them and their potential
impact on Fuller’s, as well as detailing
the mitigation activities identified as
strategies to control and mitigate the
potential impact.
Where relevant, we have indicated
whether these mitigation strategies have
already been implemented, are planned
in the near future, or are currently being
considered as part of the business’s
strategic and financial planning.
As appropriate for these risks and the
dynamic picture that climate change
presents, we continually review our
mitigation strategies to ensure that the
business’s approach remains resilient to
the potential impacts of climate change.
In light of the approach to climate
related risks and information set out
above, each year, we consider the
business’s overall resilience to climate
change. We base this judgement on a
consideration of the risks that we have
identified as key to the business; the
mitigations we have in place; and the
insights gathered from our TCFD work
programme and scenario analysis.
This year, it remains the business’s
view that climate related risks do
not represent a material concern to
the business in the short term, and
that there are currently no material
concerns pertaining to the resilience
of the business or our strategies.
1. The Network for Greening the Financial
System (“NGFS”) is a group of central
banks and supervisory bodies that share
best practice and analytical tools to
support climate risk management in the
financial sector. In recognition of the value
and broader applicability of the Group’s
work, corporate organisations outside
of the financial sector, such as Fuller’s,
have also engaged with the NGFS’s
guidance to develop their approach to
climate scenario analysis.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
47
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Risks
Risk
Type of risk?
Risk
sub-category
Timeframe
How do we define this risk and
see it impacting our business?
Mitigation activities
Introduction
of a carbon
tax
Transition
Policy
Medium
The introduction by the UK
Government of mandatory
carbon pricing.
This risk could lead to
a direct cost to the
business based on our
direct Scope 1 and Scope 2
operational emissions.
• Our science-based targets were
approved by the SBTi this year, and
we have committed to reducing
our absolute Scope 1 and 2 GHG
emissions 42% by FY2030 from a
FY2020 base year. We have also
committed to reducing our absolute
Scope 3 GHG emissions 25% within
the same timeframe.
• We are in the process of implementing
our decarbonisation plans to deliver
these targets and in parallel, will be
looking to develop our first climate
transition plan over the next two years.
• Our recent decarbonisation actions
include moving to 100% renewable
energy supply for our Managed estate;
pursuing electrification of sites where
possible; shifting to low global
warming potential refrigerants; and
transitioning the company car fleet to
electric vehicles.
Legislative
changes
to support
climate
change
initiatives
Transition
Policy
Medium
The introduction by the UK
Government of mandatory
policies to support the
transition to Net Zero in
2050 (e.g. more stringent
legal requirements for
minimum energy
performance standards in
commercial properties).
This could result in
increased costs as the
business adapts to comply
with any new legislation
(e.g. the need to invest in
our properties to raise
Energy Performance
Certificate (“EPC”) ratings).
This could also lead to an
increased risk of costs
associated with non-
compliance.
• The implementation of our climate
and broader sustainability strategy,
which will lower our overall impact
as a business, should position the
business well to respond to potential
legislative changes.
• Our Sustainability Director continues
to work with external consultants and
industry bodies to monitor potential
legislation that may impact our
business and regularly meets with
the Executive Team and the Board, to
keep them informed of any relevant
developments and how the business
may need to respond.
• Regarding proposed legislation
on increased Minimum Energy
Efficiency Standards, we are aware
of our Tenanted estate’s current
performance and the changes
that would be required.
Energy
price
volatility
Transition
Market
Medium
The fluctuation of energy
prices as economic
conditions, supply
availability and changing
weather patterns affect
the energy market.
This could result in
increased operating costs
for properties in our
Managed estate. In our
Tenanted estate, under
extreme energy price rises,
this could result in a loss
of income if tenants were
unable to meet the
obligations of their leases.
• We are exploring opportunities to
secure long-term electricity supply
for our Managed estate through on-
and off-site renewable installations,
such as a power purchasing
agreement (“PPA”).
• We are implementing an energy
efficiency strategy across our
Managed estate to reduce on-site
energy consumption.
• We continue to engage with our
Tenanted estate to help them
effectively manage their energy
use and costs.
48
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
TCFD continued
Risk
Type of risk?
Risk
sub-category
Timeframe
How do we define this risk and
see it impacting our business?
Mitigation activities
Increased
supply
chain
disruption
Physical/
Transition
Chronic/
Market
Medium/
Long
Disruption in global
supply chains arising
as a second-order effect
of either physical or
transition risks.
This risk could lead to
increased procurement
costs and, in some cases,
the reduced availability
of products for our sites.
This could, in turn,
have an impact on
customer demand.
• The scenario analysis conducted this
year on the potential impact of climate
change on our supply chain has further
informed our strategy to mitigate our
risks in this area.
• We continue to pursue, where
appropriate, a diversified supplier
base, which we believe will allow the
business to adapt to potential
disruption more effectively.
• In 2024, we have plans to engage with
our key suppliers on sustainability
issues, including climate risk, to
understand what actions they are taking
to address their own impacts and risks.
See the Metrics & Targets section of this
disclosure for more detail.
• More broadly, our flexible food and
drink offering prevents over-reliance
on any single product/category of
product. We continue to prioritise the
use of local and seasonal produce
where possible.
Flooding
Physical
Acute/
Chronic
Short
Increased inland and
coastal flooding due to
more frequent and severe
precipitation and rising
sea levels.
This risk would primarily
affect properties in the
estate that are in flooding-
prone areas and result in
costs for the business
associated with repairs and
business interruption,
where these are not covered
by insurance. In the longer
term, the businesses could
also see increases in
insurance premiums and
reduced asset values for
sites that are highly
impacted by flood risk.
This risk could also
manifest in any proposed
site acquisitions and this
is therefore something
that we take into account
when considering such
strategic projects.
• We are aware of the risk exposure of
our estate at a property level, for both
inland and coastal flooding, and have
suitable insurance provisions in place.
These provisions are reviewed
annually to ensure they remain
appropriate.
• For properties considered particularly
exposed to this risk, we engage with
local partners, such as the
Environment Agency, to implement
mitigation measures, including flood
defences or dredging, where possible.
The business has also invested in
these sites to improve their resilience,
for example, through the installation of
site flood defences.
• We plan to actively evaluate our
exposure for certain at-risk properties
in the medium to long term and
explore how this can be mitigated
appropriately.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
49
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Risk
Type of risk?
Risk
sub-category
Timeframe
How do we define this risk and
see it impacting our business?
Mitigation activities
Water
stress and
drought
Physical
Acute/
Chronic
Medium
Drought events and/or
prolonged periods of
abnormally dry weather
leading to water scarcity.
This risk could lead to
increased operating costs
for properties in our
Managed estate as the cost
of water supply increases.
In some cases, business
interruptions costs may also
arise where localised
droughts severely impact
water availability on sites.
This risk could also lead to
disruption in our supply
chain. For example, it could
disrupt the supply of key
beverages, such as beer.
• We continue to manage our properties’
water use by proactively identifying
and repairing leaks in partnership with
our water consultants.
• We are investing in the estate to
improve water use efficiency through
the installation of low flow taps,
showers and toilets. We work with
our landscaping contractors to
minimise use of water through the
installation of drip watering for
hanging baskets and planters.
Heat stress
Physical
Chronic
Medium
Prolonged periods of
abnormally hot weather
affecting the operation
of Fuller’s sites.
This could affect our
business through
(temporary) changes in
customer demand during
sustained periods of hot
weather and the need
for increased capital
investment to manage the
impact of hotter weather
on our properties.
• We continue to invest in our estate
and, where appropriate, we are
continuing to look into glazing and
shading opportunities as part of
our site investment and development
work.
• We have also been installing air
conditioning units in affected sites
to mitigate the impact of heat on both
our customers and our people.
Storm
damage
Physical
Acute
Medium
Site damage or interruption
of service caused by
extreme weather such as
high winds, heavy rain or
snowstorms.
This risk could lead to
increased costs associated
with repair or business
interruption, where these
are not covered by insurance.
Further, extreme weather
may also lead to a fall in
customer demand if visiting
sites becomes undesirable
or unsafe.
• Through our insurance provisions, we
are aware of the risk exposure of our
property estate to storm damage.
• We carry out annual property and
maintenance reviews to ensure that
our estate is in a good condition and
that appropriate action has been taken
where necessary to mitigate any
property-specific storm risks.
50
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
TCFD continued
Opportunities
Opportunity
Category
Timeframe
How do we define this opportunity and see it impacting our business?
Changing
consumer
expectations
and demand
Market/Reputation
Medium
The demand from consumers for “greener” menu options is a
potential trend that we remain well positioned to respond to given our
flexible menu offering and our continued implementation of our Life is
too good to waste strategy.
For example, we are currently exploring how we can reduce the
emissions of our menu by introducing alternative and innovative
production methods into our supply chain, such as regenerative and
vertical farming. The recent launch of regenerative beef on some of
our menus, in partnership with Grassroots Farming, is an example of
how we are already piloting this in our business.
This type of initiative could generate market and reputational
advantages in responding to changing customer expectations and
meeting new demands.
Site investment –
reduced costs,
increased
efficiency
Operations
Medium
Investment in our sites to meet our climate targets and respond to
potential legislative requirements could realise reductions in our
operating costs in the medium to long term.
We continue to explore, where appropriate, shifts to renewable energy
on- and off-site; the electrification of kitchens and hot water heating; and
the adoption of energy efficiency measures for our sites.
Such investments could contribute to mitigating multiple climate related
risks for Fuller’s and help to future-proof our business for a more
uncertain world.
Our programme of work to electrify our kitchens is recognised this year
with a new target. See the Metrics & Targets section for more detail.
Risk Management
We view the effective management of our risks as a key to ensuring that we achieve our strategic objectives in the long term, while
continuing to deliver the high standard that our customers, our people and our shareholders expect.
Our approach to the identification, assessment and management of our climate related risks and opportunities remains unchanged
this year. We continue to use a framework for assessing climate related risks that aligns with our approach to assessing our other
corporate risks, but has been adapted to reflect the complex nature of climate related risks. We consider climate related risks as a
subset of our wider corporate risks to ensure that they are appropriately integrated into our corporate risk assessment framework.
The TCFD Working Group, with support from external advisors, oversees the annual review and assessment of our identified
climate related risks. These are identified and assessed with input from departments across the business and evaluated on the
basis of their potential impact, likelihood and timeframes. This year’s review scrutinised the findings of last year’s work to identify
whether the business still considered them a fair and reflective view. The results were shared with the Executive Team and the Audit
and Risk Committee for further input and appraisal. We found that last year’s disclosure remains an accurate reflection of our view
of the business’s relevant climate related risks, and hence, the risks in this year’s disclosure remain unchanged.
We also consider these individual climate related risks as part of our broader assessment of the sustainability and climate change
related risk to the business. This assessment is reflected in the inclusion of a sustainability and climate change risk in our corporate
risk register (see page 36). It captures our view of the overall risk associated with the climate related risks identified in this disclosure
and other sustainability related risks. The Chief Executive holds responsibility for this overall risk, with the responsibility for the
individual climate related risks and opportunities assigned to the TCFD Working Group, Sustainability Director, Environment
Committee and Executive Team. In line with our top-down and bottom-up governance structures, we believe that this approach
ensures that we have comprehensive and robust oversight of the risks from the Board through to our departments.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
51
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Metrics & Targets
Metrics & Targets has represented an area of focus in our TCFD programme of work this year in recognition that, as stated last year,
we wished to further develop our approach to this part of the TCFD framework. We are therefore pleased to be able to present some
significant updates.
This year, we are setting new targets, with associated metrics, as we implement our climate strategies and continue to manage and
mitigate our climate related risks. Further information on these new Metrics & Targets is provided below. We believe that these new
targets are an important first step on our journey towards a Net Zero and climate-resilient future and intend to build on this initial set
of Metrics & Targets over time. A key step in this direction will be the development of the business’s first climate transition plan.
While we have previously conducted work to understand the pathway to our near-term targets, the finalised guidance of the Transition
Plan Taskforce provides us with a detailed framework to build on and enhance this work. We are therefore looking forward to
beginning the work this year, with the intention of publishing our first transition plan in 2026. We will seek to provide a more significant
update on our progress in this area next year.
We are also pleased to have achieved a major milestone this year in the form of the validation of our near-term company-wide GHG
emission reduction targets by the SBTi. This represents a significant step for the business and as detailed throughout this disclosure,
and our wider annual sustainability report, we are hard at work delivering on these targets. Alongside this significant update to our
GHG emissions targets, we are also able to disclose a breakdown of our full Scope 3 GHG emissions for the first time (see page 43).
This is the culmination of significant work we have undertaken, and continue to undertake, with our supply chain to gather the
necessary data to calculate our Scope 3 emissions. The introduction of the SBTi Food, Land and Agriculture (“FLAG”) guidance, and
related targets in the past year, marks a further development in this space that we will also be implementing in the coming year.
We look forward to providing an update on this work in next year’s disclosure.
Target
Metric
Absolute/
Intensity
Relevant climate
related risk/
opportunity
Current, and
historical,
performance
Future delivery plans
New this FY Metrics & Targets
By the end of
FY2025, 90% of
our Chefs and
General
Managers will
have completed
our sustainability
training suite
and 100% of
inductions for
new employees
will feature
sustainability
training.
To deliver this,
we are
developing a
bespoke
sustainability
training suite.
% of Fuller’s
Chefs and
General
Managers who
have completed
sustainability
training
% of inductions
completed with
sustainability
training as a
compulsory
module
Base year:
FY2024
Absolute
Applicable across
all of our key
climate related
risks and
opportunities
New this year.
• We have already been exploring
the roll out of sustainability
training for all of our colleagues
and, with this new target, we are
committed to developing and
delivering a bespoke training
suite for the business this year
to support our colleagues.
• As part of this roll out, we will
look to integrate this training
within all new employee
inductions in the business to
embed sustainability as an
everyday business concern
and practice.
• We will also seek to ensure that,
once we have rolled out this
training suite to the business, we
engage with our key leaders on
our sites and in our kitchens – our
Chefs and General Managers – to
ensure that they have undertaken
this training.
52
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
TCFD continued
Target
Metric
Absolute/
Intensity
Relevant climate
related risk/
opportunity
Current, and
historical,
performance
Future delivery plans
100% of Board
members and
the senior
management
team will have
undergone
sustainability
training by the
end of FY2025.
% of Board
members and
senior
management
team who have
undergone
sustainability
training
Base year:
FY2024
Absolute
Applicable across
all of our key
climate related
risks and
opportunities
New this year.
• Sustainability and climate change
training have already been
provided to the Board and senior
management team, as
appropriate, in the last few years
alongside regular updates from
the Sustainability Director and
Environment Committee.
• We have formalised a
commitment to enhanced and
in-depth training this year to
recognise the increasing
importance of this area in the
oversight and management of our
business. We will be undertaking
a formal training programme,
with the support of external
advisors, to deliver on this
commitment.
We will engage
with the suppliers
representing
95% of our food
and drinks
spend on their
sustainability
strategies and
climate risk
mitigation plans
by the end of
FY2025.
% of Fuller’s
supplier spend
covered by
engagement with
suppliers on their
sustainability and
climate risk
strategies
Base year:
FY2024
Absolute
Risk:
Increased supply
chain disruption
New this year.
• In recognition of the importance
of our supply chain and suppliers,
including the potential impact of
climate related risks, we are
looking to undertake engagement
with our top suppliers in the
coming year to further build our
understanding of this area.
In alignment with
the Courtauld
Commitment, we
are committed to
reducing the food
waste footprint
of our operations
by 50% by 2030
from a FY2025
base year.
% reduction in
operational food
waste footprint
Base year:
FY2025
Absolute
Risk:
Legislative
changes to support
climate change
initiatives
Opportunity:
Changing
consumer
expectations and
demand
Site investment –
reduced costs,
increased
efficiency
New this year.
• The Courtauld Commitment is a
voluntary agreement in the UK
food sector to deliver farm-to-fork
reductions in food waste, GHG
emissions and water stress.
• We are pleased to be able to align
ourselves with this ambitious
commitment to reducing the
impact of the sector on the
environment.
We will electrify
20% of Fuller’s
Managed estate
kitchens by the
end of FY2025.
% of Managed
estate kitchens
that are fully
electric
Absolute
Risk:
Introduction of a
carbon tax
Energy price
volatility
Legislative changes
to support climate
change initiatives
Opportunity:
Site investment –
reduced costs,
increased efficiency
New this year.
• We continually invest in our sites
to improve the experience of our
customers and colleagues.
• As part of this work, we have
been investing in the
electrification of our sites to
increase efficiency and reduce
our impact.
• With this work already underway,
we have plans to deliver on a
significant number of
investments in the coming year to
progress this work further.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
53
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Target
Metric
Absolute/
Intensity
Relevant climate
related risk/
opportunity
Current, and
historical,
performance
Future delivery plans
Existing Metrics & targets
Net Zero across
our operational
emissions by
2030, and across
our supply chain
by 2040.
Scope 1, 2 and 3
GHG emissions
Absolute
Risk:
Introduction of
a carbon tax
Opportunity:
Site investment –
reduced costs,
increased
efficiency
Changing
consumer
expectations
and demand
• Delivered a
6.1% reduction
in gross
operational
carbon
emissions in
FY2024 (Scope
1 and 2).
• We electrified
seven kitchens
and opened our
first fully
electric pub
– The
Admiralty.
• We continued
to procure
renewable
electricity
covering 100%
of our Managed
estate’s
consumption
leading to a to
a net carbon
emissions
reduction of
31.6% vs
FY2022.
Please see
pages 52 to 56
for our GHG
emissions
figures, and
associated
intensity
metrics.
• We have continued to invest in
energy efficiency measures on
our sites and provide training to
our teams to support them to
reduce their site’s energy use.
• We are also investing in the
electrification of our kitchens,
where local power supplies are
sufficient, or can be upgraded to
support this.
• The development of our
comprehensive transition plan by
the end of FY2026 to map out our
longer-term pathway to Net Zero
will represent a key step for the
business.
• Our new commitment to work
with our suppliers representing
95% of our food and drink spend
also represents an important step
in our Net Zero plans as we seek
to work with them on their
long-term plans for
decarbonisation and improve the
accuracy and reliability of our
Scope 3 emissions reporting.
• The introduction of the SBTi FLAG
Guidance and related targets,
alongside the GHG Protocol’s
Land Sector and Removals
Guidance, has represented a
significant development in the last
year. We will be implementing
these revised approaches to FLAG
emissions in our own work in the
coming year and will look to
provide an update on this in the
next report.
SBTi targets
• A 42%
reduction of
our absolute
Scope 1 and 2
GHG emissions
by FY2030,
from a FY2020
base year.
• A 25%
reduction of
our absolute
Scope 3 GHG
emissions
within the same
timeframe.
% reduction in
our Scope 1, 2
and 3 GHG
emissions
Absolute
Risk:
Introduction of
a carbon tax
Opportunity:
Site investment –
reduced costs,
increased
efficiency
Changing
consumer
expectations
and demand
Securing 100%
renewable
electricity supply
long term.
% of electricity
supply covered
by renewable
energy
certificates/
instruments/
power purchasing
agreements
(“PPAs”)
Absolute
Risk:
Introduction
of a carbon tax
Energy price
volatility
Legislative
changes to
support climate
change initiatives
Opportunity:
Site investment –
reduced costs,
increased
efficiency
• We continue to
purchase
renewable
electricity
covering 100%
of our Managed
estate’s
consumption.
• We continue to review
opportunities for securing supply
for our estate from off-site
renewable generation, and we are
considering longer-term options,
such as a PPA.
• Where possible, we are also
reviewing the potential for on-site
renewable installations on several
of our key sites.
• As outlined above, we are
pursuing electrification of our
sites to reduce our consumption
of natural gas.
54
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
TCFD continued
Target
Metric
Absolute/
Intensity
Relevant climate
related risk/
opportunity
Current, and
historical,
performance
Future delivery plans
By 2025, we aim
to recycle at least
75% of our
operational waste
and divert 100%
from landfill.
% of operational
waste that is
recycled
% of operational
waste that is sent
to landfill
Absolute
Risk:
Legislative
changes to support
climate change
initiatives
Opportunity:
Site investment –
reduced costs,
increased
efficiency
Changing
consumer
expectations
and demand
• FY2022 – 39%
recycling rate
with 98%
diverted from
landfill
• FY2023 – 56%
recycling rate
with 100%
diverted from
landfill
• FY2024 – 58%
recycling rate
with 100%
diverted from
landfill
• Throughout the business, we
have implemented further
training on reusing and recycling
to drive efficiency and waste
reductions.
• We are also working with our
suppliers to reduce the volume of
packaging sent to our sites in the
first place.
• To deliver food waste reductions,
we have introduced a scheme to
support waste segregation before
recycling and, more recently,
introduced a training programme
for kitchen teams to begin
measuring and reducing food
waste.
• As outlined above, we have also
committed this year to the
Courtauld Commitment and a
50% reduction in our food waste
footprint by 2030.
By 2030, we aim
to reduce our
overall energy
usage by at
least 25%.
% reduction in
operational
energy usage
Absolute
Risk:
Introduction of
a carbon tax
Energy price
volatility
Legislative
changes to support
climate change
initiatives
Opportunity:
Site investment –
reduced costs,
increased
efficiency
• Since the
baseline year of
FY2020,
electricity
usage has
reduced by
11.5% and gas
usage has
reduced by
22.6%
By 2030, we aim
to eliminate the
use of natural
gas, oil and
liquefied
petroleum gas
(“LPG”) where
feasible.
% of sites where
natural gas, oil
and LPG are still
used
OR
% reduction in
use of natural
gas, oil, and LPG
across sites
Absolute
Risk:
Introduction
of a carbon tax
Energy price
volatility
Legislative
changes to support
climate change
initiatives
Opportunity:
Site investment –
reduced costs,
increased
efficiency
Changing
consumer
expectations
and demand
• Since the
baseline year of
FY2020, we
have reduced
natural gas
usage by
22.6%. We also
have several
properties
including The
Head of the
River and The
Admiralty
where we have
eliminated the
use of natural
gas.
• As detailed above, we continue to
invest in our Managed estate to
deliver the electrification of our
kitchens. For sites using LPG and
oil, we continue to plan to
transition them to electric
kitchens and hot water and
heating systems.
• Where eliminating oil and gas is
not possible due to building
constraints, we will focus on
implementing reduction
measures and upgrading heating
systems to be more efficient.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
55
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Target
Metric
Absolute/
Intensity
Relevant climate
related risk/
opportunity
Current, and
historical,
performance
Future delivery plans
By 2030, we aim
to eliminate all
unnecessary
plastics from our
operations.
% reduction in
use of single-use
plastics in
operations
Absolute
Risk:
Legislative
changes to support
climate change
initiatives
Opportunity:
Site investment –
reduced costs,
increased
efficiency
Changing
consumer
expectations
and demand
• Continued
implementation
of Green Goblet
reusable cups
for major
events to
replace
single-use
plastic cups.
• We are working with our
suppliers to transition away from
single-use plastic items, primarily
in our Hotels estate.
• As outlined above, we are also
working with our suppliers to
reduce the volume of packaging
in our supply chain.
We also continue to track several internal metrics including packaging waste output; waste processing and destination; and
water consumption. Our performance against these metrics is monitored against targets that we have set in our Life is too good
to waste strategy.
With the above disclosure on Metrics & Targets representing a significant development of our maturity in this part of our TCFD
disclosure this year, we are looking forward to building on this progress in the coming year and delivering on our new targets.
The development of the business’s first climate transition plan will represent a major next step for our sustainability and climate
agenda. We look forward to providing further updates on this work, and how the business will achieve Net Zero by 2040 (across
all emissions scopes) in alignment with the hospitality industry’s Net Zero Roadmap, in the coming years.
56
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
TCFD continued
The table below, together with signposts to other relevant sections of the Annual Report and Fuller’s website, 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
Business model
Business Model
on pages 12 to 14
Principal risks and
impact on business
Risk Management
on pages 30 to 36
Non-financial Key
Performance Indicators
Strategic Report
on pages 16 and 17
Sustainability Report
on pages 37 to 41
Environmental matters,
including climate related
disclosures
Sustainability strategy – Our planet
Responsible Sourcing Policy*; Environmental Policy*
Sustainability Report
from page 37
TCFD Report
on pages 43 to 56
Employees
Sustainability strategy – Our people
People policies including flexible working; parental
leave including maternity, paternity and adoption leave;
mental wellbeing; employee conduct; recruitment,
training and development; and health and safety
Whistleblowing Policy
Sustainability Report
from page 37
Stakeholder Engagement
on pages 12 to 14
Corporate Governance Report
on page 62
Social matters
Sustainability strategy – Our people, planet
and communities; Gender Pay Gap reporting*
Sustainability Report
from page 37
Human rights
Modern Slavery Statement*
Privacy policies in relation to employees, customers*
and Tenants*
Stakeholder Engagement
on pages 12 to 14
Directors’ Report
on page 112
Anti-corruption and
anti-bribery matters
Anti-Bribery and Corruption Policy (covering gifts
and hospitality); Responsible Sourcing Policy*
Whistleblowing Policy
Audit and Risk Committee Report
on page 78
* Available at www.fullers.co.uk
2024 Strategic Report
The Group’s Strategic Report, encompassing pages 6 to 57, was approved by the Board and signed on its behalf by:
SIMON EMENY
CHIEF E X ECU TIV E
12 June 2024
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
57
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT
CHAIRMAN’S INTRODUCTION TO GOVERNANCE
Doing things the right way is one of Fuller’s
values, and this is especially important when
it comes to governance.
On behalf of the Board, I am
pleased to present our Corporate
Governance Report for the year
ended 30 March 2024.
This has been a year of significant
progress and growth in the
business and the Board remains
dedicated to ensuring effective
corporate governance.
“I am grateful to my
fellow Board members
and the Executive Team
for their continued
contribution to the
success of the business.”
MICHAEL TURNER
CHAIRMAN
As a business we all have a role to play
in delivering our purpose, vision and
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.
The Board met regularly throughout the
year both at Pier House and in some of
the excellent meeting rooms in our pubs
and hotels across the estate. Our Board
Committees have been busy during the
year and you can read more about their
key activities, and more detail of their
work, on pages 68 to 111.
I am grateful to my fellow Board
members and the Executive Team for
their continued contribution to the
success of the business. Each year,
they overcome unexpected challenges
while continuing to drive growth and
strategic change.
The Nominations Committee, which
I chair, has continued to review the
composition and diversity of the Board
throughout the year. At the top of the
agenda has been succession planning
and prioritising diversity and inclusion
initiatives within our policies and
objectives. More details on the work
of the Nominations Committees
throughout the year can be found on
pages 68 to 73.
58
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
As a people focused business, valuable
and regular engagement with our team
members is important. Members of the
Executive Team and senior management
are invited to make presentations to the
Board on key business and strategic
projects regularly throughout the year.
Board members also make time to visit
our sites and meet team members so we
can hear their views first-hand. Our Non-
Executive Director, Helen Jones, is our
designated Director responsible for
employee engagement and provides
bi-annual updates to the Board. You
can read more about Helen’s role and
employee engagement on page 63.
Sustainability is deeply embedded in
our approach to people, communities
and the planet, and we know that
governance around sustainability
is fundamental to the success of the
business. The Board puts sustainability
at the front and centre of decision
making and proactively manages risks
and opportunities. We are provided
with regular updates on sustainability
matters from our Executive Team and
Oliver Rosevear, our Sustainability
Director. Throughout the year we have
continued to evolve our TCFD reporting,
forming an internal TCFD working group
and adding more bespoke metrics and
refinement to the governance structure.
Details of this can be found on pages 43
to 56.
I firmly believe that our Directors possess
the skills required to run this business,
providing a good balance of experience,
independence and knowledge, as outlined
on pages 60 to 61.
As mentioned in my Chairman’s
Statement, the appointment of Dawn
Browne to the Board in July 2023 has
been an excellent addition to the group.
Throughout the year Dawn has enriched
Board discussions with her in-depth
knowledge of our team members and
operational expertise.
The Board carried out an internal review
this year which was led by our Senior
Independent Director, Juliette Stacey.
The results show that the Board and its
Committees continue to work effectively
and add value. Our progress against last
year’s review, as well as the outcome
from this year’s review, has been
considered and discussed by the Board.
Further details of the evaluation and
progress against our action plan from
last year can be found on page 73.
This year our AGM will take place at
The George IV in Chiswick, London, on
23 July 2024 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.
MICHAEL TURNER
CH AIRM A N
12 June 2024
Board Composition
(%)
Chairman
Executive Directors
Non-Executive Directors
Independent
Non‑Executive Directors
40%
20%
10%
30%
Board Gender Balance
(%)
Male
Female
70%
30%
30%
10%
20%
40%
Board Tenure
(%)
<3 years
3-6 years
6-9 years
9+ years
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
59
1
MICHAEL TURNER
N
NON-EXECUTIVE CHAIRMAN
Date appointed to the Board: January 1985
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
CHAIRMAN
EXECUTIVE DIRECTORS
2
SIMON EMENY
CHIEF EXECUTIVE
Date appointed to the Board: May 1998
Experience: Simon has a detailed knowledge
of Fuller’s operations gained through his 25
years’ 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 UKHospitality, and Senior
Independent Director of WH Smith PLC.
3
NEIL SMITH
FINANCE DIRECTOR
Date appointed to the Board: November 2021
Experience: As well as extensive financial
experience in hospitality and consumer-focused
businesses, Neil has strong commercial
expertise, including business and strategic
development. Previously served as Chief
Financial Officer of Domino’s Pizza Group PLC
and, prior to this, Chief Financial Officer of Ei
Group plc (formerly Enterprise Inns plc). Neil has
also 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
1
3
4
6
10
11
7
8
5
9
2
KEY TO COMMITTEE MEMBERSHIP:
A
N
R
Audit and Risk Committee
Nominations Committee
Remuneration Committee
Committee Chair
60
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
BOARD OF DIRECTORS
NON-EXECUTIVE DIRECTORS
4
FRED TURNER
RETAIL DIRECTOR
Date appointed to the Board: June 2019
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
7
SIR JAMES FULLER, BT
N
NON-EXECUTIVE DIRECTOR
Date appointed to the Board: June 2010
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
10
ROBIN ROWLAND, OBE
A N R
INDEPENDENT NON-EXECUTIVE
DIRECTOR
Date appointed to the Board: March 2020
Experience: Robin brings over 35 years’
experience in the restaurant and food and
beverage sectors, and has strong financial and
commercial expertise, and business and
strategic 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 five portfolio
companies: Mowgli, Pho, Rosa Thai, Rosa
Mexicano (USA) and Thunderbird. Independent
Non-Executive Director at Caffè Nero and
UKHospitality.
11
RACHEL SPENCER
COMPANY SECRETARY
Date appointed to the Board: January 2021
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 Chartered Governance
Institute. Rachel serves as a trustee to the
Fuller, Smith & Turner Pension Plan.
5
DAWN BROWNE
PEOPLE & TALENT DIRECTOR
Date appointed to the Board: July 2023
Experience: Dawn is an experienced People
and Development Director, with a background
in both the hospitality and travel sectors, and has
strong expertise in organisational change,
diversity and inclusion, and culture. She brings
a deep understanding of our people and Fuller’s
operations having worked in a number of roles
in the business. Dawn joined the Company in
2011 as Group Development Manager and was
appointed Head of Operations for the City in 2016
and People & Talent Director in 2019. Previously
she was Head of Training & Development at
Compass Group and held various people roles at
Qantas and British Airways. She has an MSc in
People & Organisational Development.
Key external appointments: None
8
RICHARD FULLER
NON-EXECUTIVE DIRECTOR
Date appointed to the Board: December 2009
Experience: Richard has a deep understanding
of the Fuller’s business and operations, having
worked for the Company since 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. Master of
the Worshipful Company of Brewers 2020 – 2022.
Key external appointments: Non-Executive
Chair of both the Cotswold Cider Company and
Kempton Park Racecourse.
6
JULIETTE STACEY
A N R
SENIOR INDEPENDENT
NON-EXECUTIVE DIRECTOR
Date appointed to the Board: March 2018
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 LLP and is a Fellow of the
Royal Institution of Chartered Surveyors.
Key external appointments: Non-Executive
Director and Chair of the Audit Committees of
Renishaw PLC and Sanderson Design Group plc,
and Non-Executive Director of Willmott Dixon
Holdings Limited.
9
HELEN JONES
A N R
INDEPENDENT NON-EXECUTIVE
DIRECTOR
Date appointed to the Board: March 2019
Experience: Helen has over 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. In
light of her background, Helen is the designated
Director responsible for employee engagement
for Fuller’s. 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: Non-Executive
Director and Chair of the Remuneration
Committees of Virgin Wines UK Plc, Premier
Foods plc and THG PLC. She is also the workforce
engagement director for Premier Foods.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
61
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
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.
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.
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.
19
Chairman has been
in post for more than
nine years.
The Board considers that the Chairman’s knowledge and understanding of this
long-established family business and its requirements is extremely valuable.
Principle 5: remuneration
38
Pension contribution rates
for the Chief Executive
and Retail Director are
not aligned with those
available to the workforce.
Given the pension rate for the Chief Executive and Retail Director represents an
existing contractual commitment, the Board does not consider it appropriate to
make a reduction at this stage. The rate for the People & Talent Director who was
appointed in July 2023 is aligned with the rate of pension that is available to the
majority of Fuller, Smith & Turner P.L.C. employees.
The pages that follow in this Governance section explain how we have complied with and applied the Code during the year.
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 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 66.
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 and
reviewed annually. Committee Chairs
report to the Board on their activities
following meetings, and the minutes of
those meetings are made available to
Board members (other than if there is
a conflict of interest in respect of any
particular matter).
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.
The Board delegates all operational
matters and execution of the strategy
to the Chief Executive, who is
supported by his Executive Committee
which comprises the Executive
Directors, the Marketing Director and
the Property Director.
62
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
CORPORATE GOVERNANCE REPORT
As set out in the governance framework
on page 66, a number of sub-
committees report into the Executive
Committee and are responsible for
reviewing and approving capital related
projects and investments and central
costs, and driving and monitoring
progress against the Life is too good to
waste strategy. Regular updates from
these sub-committees are reported to
the Executive Committee.
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 it 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.
Each quarter, we bring all the support
team together so the Executive team
can update on business performance,
challenges and successes.
Different departments are also
encouraged to update their colleagues
on projects and progress. The event
provides an opportunity for the
Executive Team to re-articulate the
Company’s purpose and values and to
outline the key strategic priorities for
the year ahead.
In May 2024, our annual General
Managers Conference took place which
provided our operational team leaders
with the same opportunity as well as an
occasion to reconnect with colleagues
and celebrate achievement.
The Board monitors the values and
culture of the business through a
number of channels, including regular
updates from the Executive Directors
on operational performance and health
and safety reporting, the results of
employee engagement surveys and
action plans, and the approval of key
policies. The Board also receives regular
updates from the designated Non-
Executive Director responsible for
employee engagement (see below
for more information).
Directors 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, from the
designated Non-Executive Director
responsible for employee engagement,
and through briefings on key employee
matters provided by the People & Talent
Director. The Chief Executive has
continued to deliver occasional 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 Executive
Committee and the Board.
Helen Jones is the designated Non-
Executive Director responsible for
employee engagement. During the year,
she has continued to work with the
People & Talent Director to develop her
role and connections with the wider
business. Her work has included:
• attending Quarterly Business Updates,
the General Managers Conference and
similar events across the business
• becoming a regular attendee at
meetings of the General Managers
Forum and the Head Chefs Forum
• reviewing feedback from various
listening channels including the
Happiness Index survey; My Voice;
recruitment and induction surveys; and
exit interviews and Glassdoor reviews
• providing advice and guidance on
employee engagement initiatives;
• providing regular reports to the Board
on the themes emerging from the
different listening channels, any
relevant matters and concerns that
may arise through the role.
We provide opportunities for the
Non-Executive Directors to spend time
in the business with members of the
Executive Team and Operations Team.
This helps to keep Non-Executive
Directors up to date with the operations
in our pubs and hotels and provides
them with an opportunity to engage
directly with a broad range of our team
members and hear valuable feedback.
Attendance at events such as the
Quarterly Business Updates and General
Managers Conference, as well as the
“Long Service Celebration” to recognise
employees reaching a service milestone
of more than 15 years, provides Non-
Executive Directors with another
opportunity to engage with employees.
The Board recognises the benefits of
encouraging employee share ownership,
and the Company offers employees the
opportunity to purchase shares in the
Company at a discounted price through
its Sharesave 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.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
63
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
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, Sir James Fuller and
Richard 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
available 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.
The 2023 AGM was held at The George IV,
in Chiswick, in July. 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 2023 AGM was, in line with best
practice, conducted by way of a poll.
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 covering
operational, financial and
governance matters in the period
• Employee engagement reports
• Reports from the Audit and Risk,
Remuneration and Nominations
Committees
• Monthly management accounts
and Health and Safety reports
• Half yearly updates on employee
engagement
Q1 FY2024
• FY2023 Results Announcement and
Annual Report and Accounts,
including risk review
• FY2023 final dividend payment
• Transfer of Managed sites to Tenanted
• Dawn Browne’s appointment to the
Board
Q2 FY2024
• FY2023 Board evaluation feedback
and agreed areas of focus
• Anti-Bribery and Corruption Policy
• Group extension of banking facilities
• Modern Slavery statement
• Anti-Facilitation of Tax Evasion Policy
Q3 FY2024
• Environmental, Social and
Governance (“ESG”) training
• FY2024 Interim Results, including
risk review
• Employee Engagement Survey
outcomes and action plans
• Estate rationalisation plan
• FY2024 Interim dividend payment
• Cyber security update
Q4 FY2024
• Food and drink review
• Group interest rate hedging
arrangements
• Tax strategy statement
• FY2024 Board evaluation and agreed
areas of focus
• Annual review of Conflicts Register
• Estate rationalisation plan
• FY2025 Budget
• FY2025 Group-wide remuneration
proposal
• Re-appointment of Robin Rowland and
Juliette Stacey as Independent Non-
Executive Directors
Q1 FY2025
• FY2024 Results Announcement and
Annual Report and Accounts,
including risk review
• Sale of portfolio of Tenanted sites
• FY2024 Final dividend payment
Shareholders can 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. The Board
continues to encourage shareholders
to consider moving to electronic
communications to benefit from timely
and secure communications and to help
reduce the cost and environmental
impact of our communications.
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.
64
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
CORPORATE GOVERNANCE REPORT continued
Engagement with
Stakeholders
The Board recognises the importance of
building strong relationships with its key
stakeholders to ensure we understand
how our decisions may impact them.
We therefore actively encourage and
carry out engagement with our key
stakeholders to understand their views,
predominantly through the Executive
Directors, who ensure that the Board is
kept informed of any key issues or
changes, which helps to inform our
decision making. Our Section 172
statement outlined on page 15 explains
how the Board’s duty to promote the
success of the Company takes into
account stakeholder considerations.
The Board holds at least six meetings
a year, with additional meetings
scheduled as required. Meetings are
held in-person at the Group’s Support
Centre, Pier House, and also within the
retail estate. Board calls which are
scheduled to provide business updates
between meetings are also held.
An annual programme of agenda items
is agreed with the Board in advance of
the start of the financial year. It is
developed from the matters reserved
for the Board, strategic objectives and
the financial calendar, and provides a
framework to ensure that key matters
are addressed. The process for agreeing
the final agenda is managed by the
Company Secretary in consultation with
the Chairman and with input from the
Chief Executive.
The programme includes updates from
each of the Executive Directors and the
Company Secretary on matters for which
they are responsible. It also includes
presentations from members of the
Executive Team and senior management.
This 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 during the year
have included initial observations from
the newly appointed Marketing Director
and the Food & Drink Director, a deep
dive into the Cotswold Inns & Hotels
business, an update on the Tenanted
business and an annual report on Health
and Safety. 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 over two days in
Bath. 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,
sector and consumer trends, and
investor considerations.
As well as the dialogue within the
boardroom, the independent Non-
Executive Directors communicate
privately, under the leadership of the
Senior Independent Director, without the
Executive Directors and other Non-
Executives present. All Non-Executive
Directors also meet informally 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, four Executive Directors,
and five Non-Executive Directors, of
which two, Sir James Fuller and Richard
Fuller, are family members, as is the
Chairman Michael Turner.
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.
Board and Committee structure
The Board has overall responsibility for
governance across the Group and set
out on the next page is the Company’s
governance framework. There is clear
differentiation between the roles of
Chairman, Chief Executive and Senior
Independent Director, and the particular
responsibilities of Board members are
also set out on the next page.
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.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
65
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
THE BOARD
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
Advising the Board on
all corporate governance
matters and ensuring good
governance practices are
followed throughout
the Group
Supporting the Chairman and
Non-Executive Directors with
their responsibilities
Communications
with shareholders and
organisation of the AGM
All Directors have access to
the advice of the Company
Secretary
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
BOARD COMMITTEES
Audit and Risk 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
Remuneration Committee
Sets the Remuneration Policy for the
Chairman and the Executive Directors,
and also reviews the remuneration
framework for other
senior management
Nominations Committee
Responsible for leading the process for
appointment of Directors for approval by
the Board, succession planning,
reviewing the structure, size and
composition of the Board and overseeing
diversity and inclusion initiatives
Executive Committee
The Chief Executive is supported by the Executive Team consisting of the Executive Directors, the Marketing Director,
the People & Talent Director and the Property Director
Approvals Committee
Responsible for reviewing and
approving central costs, Support
Centre staffing changes and material
procurement contracts
Sustainability Committees
Responsible for developing the Group’s
sustainability strategy around our
people, communities and the planet, and
providing oversight of key sustainability
initiatives, targets and objectives
Investment Committee
Responsible for reviewing and
approving capital related projects
and investments
Senior Independent
Director
Is responsible for:
Non-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
Ensuring effective
communication
with the Group’s
shareholders and
other stakeholders
Managing the Group’s
financial 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 financial matters
of significance
Facilitating two-way
communication between
the Board and the workforce
through various employee
engagement initiatives
Ensuring that information
feeding into the Board’s
decision-making process
reflects the views of
employees
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
Managing the Group’s
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
Managing the Group’s
people and talent
agenda including
recruitment, training
and development and
succession planning
Leading the safety
programme
Providing regular
updates to the Board
on all matters relating
to team members,
diversity and inclusion,
culture and
organisational change
Chairman
Is responsible for:
Chief Executive
Is responsible for:
Retail Director
Is responsible for:
People & Talent
Director
Is responsible for:
Finance Director
Is responsible for:
Non-Executive Director
responsible for employee
engagement
Is responsible for:
Company Secretary
Is responsible for:
GOVERNANCE FRAMEWORK
66
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
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
Board1
Audit and Risk
Committee
Nominations
Committee
Remuneration
Committee
Michael Turner
9/9
–
5/5
–
Simon Emeny
9/9
–
–
–
Neil Smith
9/9
–
–
–
Fred Turner
9/9
–
–
–
Dawn Browne3
7/7
–
–
–
Sir James Fuller
9/9
–
5/5
–
Richard Fuller
9/9
–
–
–
Helen Jones
9/9
4/4
5/5
6/6
Robin Rowland2
9/9
3/4
5/5
6/6
Juliette Stacey
9/9
4/4
5/5
6/6
1 Includes scheduled and ad hoc meetings.
2 Unable to attend one scheduled meeting due to an external meeting being called at short notice at which it was critical he attended.
Comments were provided on the papers beforehand.
3 Dawn Browne was appointed as an Executive Director on 3 July 2023.
Time Commitment
The Board is satisfied that all Directors
can devote sufficient time to their roles
to discharge their duties effectively.
All Directors are required to seek
permission before accepting any
external appointments so that, amongst
other things, the Board can be satisfied
that they will continue to have sufficient
time available to devote to the Company.
Further, the Nominations Committee
considers the time commitments of
proposed candidates prior to
appointment to the Board to ensure
that they are able to dedicate sufficient
time to the role.
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.
Directors have a continuing duty to update
any changes to their conflicts of interest.
The Company maintains a register of
authorised conflicts of interest which
is reviewed at least annually and
authorisations reconfirmed. The Board
may impose certain limits or conditions
when giving authorisation.
Advice for the Board
All Directors have access to the advice
and services of the Company Secretary,
whose appointment and removal is a
matter for the whole Board. There is
also a formal procedure in place under
which Board members can, at the
Company’s expense, obtain independent
professional advice should they decide
it is necessary in order to fulfil their
responsibilities as Directors.
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.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
67
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Nominations
Committee
At a glance
Key Activities During the Year
• Reviewed the Board composition,
supported by the Board’s skills matrix
and agreed the recommendation of
Dawn Browne as a Director
• Considered succession planning
for the Board and received
updates on changes to Executive
management roles
• Recommended the appointment
of Dawn Browne, People & Talent
Director to the Board
• Agreed the process for reporting
on new gender and diversity
requirements set out in the
Listing Rules
• Recommended the re-appointment
of Robin Rowland as a Non-Executive
Director and Juliette Stacey as a
Non-Executive Director and Chair
of the Audit and Risk Committee
at the expiry of their terms
• Facilitated the annual Board
evaluation process for FY2024
• Reviewed the Company’s Inclusion
Plan which sets out our commitments
and initiatives to promote diversity,
equality and inclusion.
Members
Michael Turner (Chair), Juliette Stacey,
Sir James Fuller Bt, Helen Jones,
Robin Rowland
Number of
meetings
held
Number of
meetings
attended
Michael Turner
(Chair)
5
5
Juliette Stacey
5
5
Sir James Fuller Bt
5
5
Helen Jones
5
5
Robin Rowland
5
5
“We were delighted to recommend
the appointment of Dawn Browne,
who has brought her talent in
both people and operations to
the Boardroom.”
MICHAEL TURNER
CHAIR OF THE NOMINATIONS
COMMITTEE
Key Duties of the Committee
• Lead the process for appointment
and re-appointment of Directors,
for approval by the Board
• Regularly review the size, structure
and composition of the Board
and its Committees
• Consider succession planning
for the Board and senior
management positions
• Oversee the development of the
Company’s policy and initiatives
on diversity and inclusion
• Oversee Board induction, training
and professional development
• Assist the Chairman and Senior
Independent Director with the
implementation of the annual
Board evaluation.
68
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
NOMINATIONS COMMITTEE REPORT
Dear Shareholder,
As Chair of the Nominations Committee,
I am pleased to present the Nominations
Committee Report for the year ending
30 March 2024.
The Nominations Committee comprises
our three independent Non-Executive
Directors, Juliette Stacey, Helen Jones
and Robin Rowland, and Non-Executive
Director, Sir James Fuller, who is the key
contact with family shareholders. In the
event of any matters being discussed
concerning my role, Juliette Stacey, as
Senior Independent Director, would
chair the meeting in line with the Code
requirements. The Chief Executive
attends meetings by invitation and the
Company Secretary acts as secretary to
the Nominations Committee.
We were delighted to recommend the
appointment of Dawn Browne to the
Board with effect from 3 July 2023.
She has brought her talent in both
people and operations to the
Boardroom. Although Dawn had been
with Fuller’s for 12 years she was given
a formal customised induction
programme to support her transition
into the Director role. The induction
aimed to provide business context,
support her understanding of the role
of the Director, and recommended
commencement of a professional
development programme. A more
in-depth look at Dawn’s induction can
be found on page 70 of this Report.
As reflected in its terms of reference,
the Nominations Committee has further
strengthened its remit this year with
regards to Board composition,
succession and diversity and inclusion
initiatives. These topics have been high
on the Committee’s agenda throughout
the year.
Looking forward to the year ahead, the
Nominations Committee will continue to
focus on longer term succession planning
to ensure that appropriate succession
arrangements are in place for the Board
and Executive Committee members.
The Nominations Committee will also
continue to oversee implementation of
the Company’s Inclusion Plan which sets
out our commitments and initiatives to
promote diversity, equity and inclusion.
MICHAEL TURNER
CH AIR OF THE NOMIN ATIONS
COMMIT TEE
12 June 2024
Composition, Succession
and Evaluation
Board composition
Details of the Directors, including their
qualifications, experience and other
commitments, are set out on pages 60
and 61. Dawn Browne was appointed to
the Board as a Director with effect from
3 July 2023.
Under its terms of reference, a key area
of focus for the Nominations Committee
is to keep under review the composition
of the Board and its 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 evaluation. During the year, the
Nominations Committee undertook a
comprehensive review of the
composition of the Board, taking into
account the skills, experience, diversity
and tenure of the Directors. The review
was supported by the Board skills matrix
which captures the current skills and
expertise of the Board and assists the
Nominations Committee in its
discussions regarding future Board
composition and succession planning.
The matrix demonstrates, along with the
Director biographies on pages 60 to 61,
that the Directors have a range of
relevant skills and experience which has
been further strengthened by the
appointment of Dawn Browne.
The Nominations Committee is satisfied
that the Board has the necessary mix
of skills and subject matter expertise,
further supported by the expertise of
the Executive Committee members
and functional heads.
While at least half of the Board,
excluding the Chairman, is not
independent as stipulated by the Code,
the Committee believes that the
presence of Non-Executive Directors
who are long-standing family
shareholders is important.
The Nominations Committee also
acknowledges that the Chairman
has been in post beyond nine years;
however, the Nominations Committee
considers that the Chairman’s
knowledge and understanding of this
long-established family business and
its requirements are extremely valuable.
In line with the Code and letters of
appointment, independent Non-
Executive Directors serve no more
than nine years and the chart below
summarises their current tenure and
unexpired terms.
Independent Non-Executive
Director Tenure
2018
Helen Jones
2020
2022
2024
2026
2028
Current term ends
Nine year rule
Robin Rowland
Juliette Stacey
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
69
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Succession planning and the
development of talent is a key focus of
the Nominations Committee, and is a
standing agenda item at each meeting.
The Committee has reviewed and
updated the plan that is in place
for the succession of key roles.
Talented and “critical to retain”
individuals have been identified,
and each individual has their own
development plan, owned by the
individual and supported and overseen
by their leader and the People Team.
Development plans are grounded in
data from assessments and feedback,
and external partners and experts are
engaged to support development
where required.
Role descriptions and personal
specifications for key Board positions,
including the Chairman and Chief
Executive, have been reviewed by the
Committee and updated to reflect the
needs of the business and to support
longer-term succession planning.
Induction and Professional
Development
On appointment, the Nominations
Committee will, in conjunction with
the Chairman and the Company
Secretary, ensure that new Directors
undertake a tailored induction
programme. This would typically consist
of an introduction to the Board and the
Executive Team, visits to pubs and
hotels across the estate, an induction
reference material pack, briefings
on governance requirements and legal
and regulatory obligations as a Director,
and access to independent advisors.
Details of Dawn Browne’s bespoke
induction programme – which takes into
account her long tenure with the
business – are set out below.
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 and Nominations Committee,
has developed a Learning and
Development programme for the Board
and arranges for external speakers and
specialists, such as the Company’s
brokers and legal advisors, to join Board
meetings to brief the Board on topics of
interest as appropriate. During the year,
the Board received a market update and
ESG teach-in presented by the Company’s
brokers. In line with our commitment to
our sustainability journey, an external
advisor facilitated a presentation on
climate risk and TCFD reporting.
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 the Company.
Succession Planning
Succession planning is a key issue for
a business that has low turnover
amongst its senior management and
is still very much a family-controlled
concern while also being a public
listed company.
DAWN BROWNE
PEOPLE & TALENT
DIRECTOR
Even though she had been with Fuller’s for 12 years, Dawn
was given a formal and in-depth induction programme on
joining the Board. She joined on 3 July 2023, and the
programme supported her transition into the new role –
building on Dawn’s excellent understanding and knowledge
of the Company, particularly in the area of operations and
people. The induction aimed to provide additional context
around the business and our markets, and a better
understanding of the role of a Director and the framework
in which the Board operates.
“The induction process
has been excellent –
building the additional
skills needed for my
new role.”
THE FIRST MONTH
• Meeting with the Chairman to
discuss Board dynamics, output
and behaviours
• Session with the Company
Secretary to provide an
understanding of the duties of a
director, corporate governance
requirements and Board
processes
• Provision of a Director
Information File including key
corporate information and Board
papers from the last 12 months
• Commencement of the IoD
Certificate in Company Direction
programme.
WITHIN THE FIRST
THREE MONTHS
• Mentoring sessions with Juliette
Stacey, Senior Independent NED
• Time out in trade with the
Non-Executive Directors to build
relationships
• Full participation in the
September 2023 Board meeting,
providing the first People &
Talent update
• Commenced attendance at the
Remuneration Committee as a
standing invitee.
ONGOING DEVELOPMENT
• Introductions to the Company’s
principal advisers
• Coaching with an independent
Board-level coach
• Feedback on any further
induction requirements
• Working towards the IoD
Diploma in Company Direction
and Chartered Directorship.
70
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
NOMINATIONS COMMITTEE REPORT continued
During the year ahead, the Nominations
Committee will continue to focus on
longer-term succession planning to
ensure that appropriate succession
arrangements are in place for the Board
and Executive Committee members.
Election and Re-election
The Nominations Committee is
responsible for recommending to
the Board the appointment of new
Directors and the re-appointment of
existing Directors.
The Committee considered the re-
appointment of Robin Rowland as an
Independent Non-Executive Director
whose term expired in March 2024 and
recommended that his term be renewed
for a further three years, to March 2027.
In addition, the Committee also discussed
the re-appointment of Juliette Stacey as
the Senior Independent Director and
Chair of the Audit and Risk Committee,
whose three year term will expire in July
2024, and recommended that her term
be renewed for a further three years, to
July 2027. Both recommendations were
approved by the Board.
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 2024, Simon Emeny
and Fred Turner will retire by rotation
and offer themselves for re-election.
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 Nominations Committee has
considered the Code requirement
for Directors to be subject to annual
re-election. In view of the Company’s
size, its ownership structure and its
history, the Board agreed with the
Nominations Committee not to move to
annual re-election of Directors but will
keep this requirement under review.
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 Nominations Committee will ensure
that it only uses firms that have signed
up to their industry’s Voluntary Code
of Conduct.
Fuller’s is a signatory to the British
Beer and Pub Association’s (“BBPA”)
diversity and inclusion charter and
our aim is to ensure all our venues are
inclusive spaces and that we have a
zero-tolerance approach to harassment
or discrimination of any kind.
The Nominations Committee has
increased its oversight of diversity and
inclusion objectives across the business
and reviewed the Company-wide
Inclusion Plan which has been
developed. Inclusive leadership training
has been completed by the Board,
Executive Team and our senior leaders.
An annual report on diversity and
inclusion initiatives is presented to the
Nominations Committee by the People
& Talent Director.
The Nominations Committee considered
and reported to the Board details of new
reporting requirements introduced
by the Financial Conduct Authority
(“FCA”). These changes set targets
in relation to Board diversity and the
disclosure of diversity and inclusion
metrics at the Board and Executive
Committee level going forward.
A process for the collection of the
required numerical data was agreed and
the output of this has been included on
page 72.
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.
In line with the Code, the Nominations
Committee has reviewed the gender
balance of those in senior management,
considered to be the Executive
Committee members, and their
direct reports at 30 March 2024.
This information is illustrated on the
right alongside details of the gender
balance for the Board and all employees.
Executive Team and
their direct reports
53%
47%
Male 17
Female 15
Board
70%
30%
Male 7
Female 3
All Employees (excluding
Directors and Executive Team)
54%
46%
Male 2,743
Female 2,304
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
71
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Board and Executive Management Diversity Disclosures
As at our chosen reference date of 30 March 2024, our year end, the targets and reporting requirements set out in Listing Rule
9.8.6(9) and (10) respectively are reported below.
FCA targets
Target
Outcome
Position as at 30 March 2024
At least 40% of the Board are women
Not met
30% of the Board are women
At least one senior Board position held by a woman
Met
The position of Senior Independent Director is held by
a woman.
At least one Board Director from a non-white ethnic
minority background
Not met
No Directors are from a non-white ethnic minority
background
Gender identity1
Director
Number of
Board members
Percentage of
the Board
Number of
senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number in
Executive
management
Percentage of
Executive
management
Men
7
70%
3
4
57%
Women
3
30%
1
3
43%
Other categories
0
0%
0
0
0%
Not specified/prefer not to say
0
0%
0
0
0%
Ethnic background1
Director
Number of
Board members
Percentage of
the Board
Number of
senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number in
Executive
management
Percentage of
Executive
management
White British or other white (including
minority-white groups)
10
100%
4
7
100%
Mixed/Multiple ethnic groups
0
0%
0
0
0%
Asian/Asian British
0
0%
0
0
0%
Black/African/Caribbean/Black British
0
0%
0
0
0%
Other ethnic group, including Arab
0
0%
0
0
0%
Not specified/prefer not to say
0
0%
0
0
0%
Notes:
1 For Board members and Executive management, data was collected via a manual process managed by the Company Secretary.
Members were asked to self-report via an email data collection exercise with options aligned to the categories specified in the Listing Rules.
2 The Chief Executive, Finance Director, Retail Director and People & Talent Director are members of both the Board and Executive
management and are counted in both groups in the above tables.
72
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
NOMINATIONS COMMITTEE REPORT continued
Board Evaluation
The annual Board and Committee evaluation continues 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. Following the completion of an in-depth external
review for FY2022, on the recommendation of the Nominations Committee, for FY2024, the Board completed an internal
evaluation process between January and February this year, led by the Senior Independent Director. The evaluation consisted
of a questionnaire which probed how the Board had operated during the year under review and included the performance of the
Board as whole and its Committees, the effectiveness of the Executive Directors and Non-Executive Directors, key learnings
from the year in review and considerations for future areas of focus.
Outcomes and Recommendations from FY2024 Evaluation
The consolidated output was finalised in March 2024. Overall, the output was positive and the evaluation concluded the Board
and its Committees were cohesive and performing well. 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 Board members to further improve effectiveness to ensure
that the Company benefits from the combined expertise and insight of the Board. The key themes have been prioritised and will
be incorporated in a tracker, alongside any ongoing recommendations from the prior year, to monitor progress.
Update on FY2023 Evaluation Recommendations
Good progress has been made against the recommendations arising from the Board evaluation completed at the end of FY2023
as set out in the table below.
Recommendation
Progress update
Increase reporting on people
matters
Following the appointment of the People & Talent Director to the Board there is now a
standing agenda item at Board meetings which provides increased focus on people
matters and a clear connection between people plans and the long term strategy.
Broaden focus on succession
planning to encompass all senior
management roles
Following the broadening of the role of the Nominations Committee in 2023, there has
been a deepened focus on longer term succession planning both for the Board and wider
business. This now features as a standing agenda item at all Nominations Committee
meetings.
Provide opportunities for Non-
Executive Directors to spend days
in trade and engage with the
wider business
Arrangements are facilitated to provide the Non-Executive Directors with more
opportunities to connect with the people in the Company and spend time in trade with the
Executive Team and members of the Operations Team. Non-Executive Directors are now
also invited to Quarterly Business Updates, the General Managers Conference and similar
events across the business to enable them to interact with employees in a more relaxed
environment.
Increase engagement with the
Tenanted business
The forward planner for the Board has been amended to provide the Board with regular
updates from the Tenanted Director.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
73
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Audit and Risk
Committee
At a glance
• Reviewed and confirmed the
appropriateness of the Policy on
Auditor Independence and Provision
of Non-Audit Services
• Reviewed and recommended to the
Board for approval the Tax Strategy
Statement for the year ended
30 March 2024
• Considered the Corporate Criminal
Offence legislation and approved the
Anti-facilitation of Tax Evasion Policy
• Considered reports on key areas of
compliance, including data protection,
employee relations, cyber security,
and whistleblowing; and received an
annual report on health and safety
• Received a climate risk annual update
and training session from an external
sustainability consultant
• Established a clear process for the
development of our TCFD reporting
(the TCFD Report is set out on pages
43 to 56)
• Considered the FRC’s revisions to the
Corporate Governance Code and
established a plan to implement
changes
• Reviewed EY’s plan for the FY2024
audit, terms of engagement
and proposed fee.
Members
Juliette Stacey (Chair), Helen Jones,
Robin Rowland
Number of
meetings
held
Number of
meetings
attended
Juliette Stacey
(Chair)
4
4
Helen Jones
4
4
Robin Rowland
4
3
“The Committee provides
independent challenge to ensure a
robust governance framework.”
JULIETTE STACEY
CHAIR OF THE AUDIT AND RISK
COMMITTEE
Key Duties of the Committee
• Monitors the integrity of the financial
reporting for the Group
• Manages the relationship with the
external auditor
• Oversees the effectiveness of the
risk management and internal
control systems.
Key Activities During the Year
• Reviewed the effectiveness of the
Group’s internal controls and risk
management systems and assessed
the need for an internal audit function
• Received updates on specific risk
areas, including cyber risk and
climate risk
• Reviewed the Group’s principal risks
register ahead of the announcement
of the half year and full year results
• Reviewed all matters relating to the
half year and full year results
announcements, including reports
presented by the external auditor
Ernst & Young (“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 re-appointment
• Reviewed and recommended to the
Board for approval the revised
Anti-Bribery and Corruption Policy
74
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
AUDIT, RISK AND INTERNAL CONTROL
AUDIT AND RISK COMMITTEE REPORT
Dear Shareholder,
I am pleased to present the Audit and
Risk Committee Report for the year
ended 30 March 2024.
This report is intended to provide
shareholders with an understanding of
the work we have completed to provide
assurance on the integrity of the Annual
Report and Accounts for the year ended
30 March 2024. Much of the work of the
Committee is necessarily targeted
around the key areas of financial
reporting, external audit, internal control
and risk management, all of which is
underpinned by a robust governance
framework. A description of the main
activities that the Committee considered
during the year are set out on the
opposite page.
During the year we continued to monitor
the Government’s corporate governance
reforms and welcomed the FRC’s
approach in its revisions to the UK
Corporate Governance Code that
effective governance should be targeted
and proportionate. We intend to update
our terms of reference to reflect changes
to the Code and will meet the required
implementation dates. The release of
the new Code in January 2024 has
allowed us to finalise our roadmap for
enhancing our internal control
environment which will aid the Board in
making their disclosures around the
review of the effectiveness of material
controls, and its outcome, in the FY2027
Annual Report.
In terms of other legislation, the
Committee has considered the reforms
to the identification doctrine arising
from the Economic Crime and Corporate
Transparency Act which significantly
broadens the range of employees who
can trigger corporate criminal liability.
Economic crime training is to be
provided to senior management.
In addition, in respect of corporate
criminal offences, the Committee
intends to examine existing fraud
detection and prevention processes to
establish whether these need to be
enhanced as a result of the new
legislation expected to come into force
in the next year.
Working with our Sustainability Director,
the Audit Committee has supported the
development of the Group’s scenario
planning and reporting in relation to the
Task Force on Climate-Related Financial
Disclosures (“TCFD”). Through this
work, the Board has concluded that
climate change – which is a principal risk
– could have a material impact on our
supply chain, and agreed the risk has
increased. You can read the full TCFD
Report on pages 43 to 56.
I will be attending the AGM on 23 July
2024 and I look forward to answering
any questions about the work of the
Audit and Risk Committee.
JULIET TE STACEY
CH AIR OF THE AUDIT A ND RISK
COMMIT TEE
12 June 2024
Committee Membership
The Audit and Risk Committee
comprises three independent Non-
Executive Directors and has a good
balance of skills, with competence and
experience in the sector in which the
Group operates. The Chair of the Audit
and Risk 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 Audit
and Risk 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
auditor and the Company Secretary, and
regular attendees include the Chairman,
Chief Executive, Finance Director, Group
Financial Controller and Risk Manager.
Other senior management attend relevant
meetings at the Audit and Risk Committee
Chair’s request or submit reports as
required by the agenda.
The Audit and Risk Committee meets
at least once a year with the external
auditor, without management present,
to discuss any matters they may wish
to raise. The Audit and Risk Committee
Chair also meets separately with the
Finance Director and EY 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 and Risk
Committee’s agenda.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
75
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
During its review of the Group’s
financial statements for the period
to 30 March 2024, the Audit and Risk
Committee has reviewed the key
judgements and estimates applied in
the preparation of the consolidated
financial statements, including those
communicated by the external auditor
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.
The key judgements and estimates
considered by the Audit and Risk
Committee are detailed in the
table below:
Key Activities
The Audit and Risk Committee has a
detailed annual meeting planner which
sets out the key items to be covered at
its scheduled meetings. This 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 meeting, an update on risk
management and internal controls is
presented, together with reports on
compliance, including employee
relations, data protection and cyber
security. In addition, an annual report
on Health and Safety matters is presented
to the Audit and Risk Committee. In light
of the impact of inflation and ongoing
tube and rail strikes on trading during
the year, there has continued to be
focus around potential risks arising
from any ongoing economic and
operational uncertainty.
Key accounting judgement and
estimates
How the issue was addressed
Going concern
The Audit and Risk Committee considered the appropriateness of the decision to adopt the going
concern basis of reporting in the preparation of the financial statements. The Audit and Risk
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 to the financial statements. The Audit and Risk 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 and Risk Committee considered the proposed impairment of property assets as well
as the reversal of impairments for both the Half Year Report and the Annual Report.
The Audit and Risk Committee challenged management’s approach, in particular the
methodology and inputs used to estimate both value in use and fair value less cost to sell
for site level impairment reviews, including challenging the underlying trading forecasts.
The Audit and Risk Committee also reviewed the disclosures in the Annual Report to ensure
their appropriateness. The Audit and Risk 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 2024 Annual Report and Accounts.
Separately disclosed items
The Audit and Risk Committee considered the nature of items classified as “separately disclosed
items” in the financial statements. The Audit and Risk 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:
• impairment on properties
• settlement or provisions for legal claims and settlement of an insurance claim.
In addition, the Audit and Risk Committee reviewed these disclosures within the 2024
Annual Report and Accounts to ensure they clearly identified and reconciled to the relevant
GAAP measure.
The Audit and Risk Committee keeps
abreast of regulatory and governance
developments as part of ongoing
reporting from the external auditor and
the Company Secretary.
The effectiveness of the Audit and Risk
Committee formed part of the Board
evaluation process described in the
Nominations Committee Report on
page 73.
Financial Reporting and
Significant Judgement
The Audit and Risk 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.
76
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
AUDIT AND RISK COMMITTEE REPORT continued
Going Concern and Viability
Statement
The Audit and Risk Committee assessed
in detail the going concern and viability
reviews undertaken by management, as
detailed in the Financial Review on page
29. 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 Audit and
Risk 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 and Risk
Committee has reviewed the Group’s
assessment of viability over a period
greater than 12 months. The Audit and
Risk 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 Audit and Risk
Committee has concluded that the
factors considered and assumptions
used are appropriate in assessing the
Group’s viability.
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 Directors’ statement on the
Company’s system of internal controls
is set out below.
At the start of the year, the Audit
and Risk Committee discussed the
Company’s risk management process
and, on behalf of the Board, considered
the Group’s principal risks which had
been reviewed by the individual risk
owners. Where applicable, the
mitigating actions and controls had been
updated and the risk rating updated.
Any significant changes to risks were
discussed in each subsequent Audit and
Risk Committee meeting.
During the year, a selection of key risks
were presented to the Audit and Risk
Committee or the Board. This has
included risks around climate change
and cyber security.
The Group maintains business continuity
plans and normally tests the resilience
of these plans on an annual basis.
In May 2024, a scenario based crisis
management exercise based around
a food safety disruptive issue was
completed. There were some learnings
from the exercise which the Executive
Team is evaluating with a view to
implementing any actions to improve
resilience and response capability.
The Board and Audit and Risk Committee
also consider the thorough responses
by the Executive Team and the broader
management teams to significant
challenges they have faced during
the year – the continued challenging
trading environment due to inflation and
the UK economic uncertainty, and the
repeated disruption to trading due
to tube and rail strike action – as solid
evidence of the effectiveness of existing
disaster recovery and business
continuity plans.
The Finance Team is 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 finance system, launched in
November 2021, has simplified the
accounting process and control
framework. Following on from this,
in November 2022, a budgeting and
forecasting system was introduced to
improve the quality of our budgeting
process and insight used for management
decision making. The Investment
Committee and Approvals Committee,
two sub-committees of the Executive
Committee, 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 chairs both sub-
committees and provides regular updates
to the Executive Committee, and to the
Audit and Risk Committee and the Board
as required.
Throughout the period, the Executive
Directors provided relevant and timely
financial commentary to supplement the
financial reporting, ensuring the Audit
and Risk Committee and the Board were
informed of the financial position and
results of the Group.
The Audit and Risk Committee and the
Board have considered the effectiveness
of the Group’s system of internal controls.
Key elements of the system of internal
control designed to address significant
risks and uncertainties, as documented
on pages 30 to 32, 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
• 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
as requested by the Board
• 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 and Risk Committee
and the Board which, among other
things, take account of the significance
of ESG matters to the business
• information reported through any one
of the whistleblowing channels
• regular reporting of compliance with
data protection and health and safety,
and the monitoring of accident
statistics and the results of health
and safety audits.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
77
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
External Audit
Ernst & Young LLP were 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 its
fourth 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 FY2024 audit is the
fourth year of Rachel Savage’s tenure as
lead audit engagement partner.
The external auditor is invited to attend
all meetings of the Audit and Risk
Committee and report on the plan and
approach for the full year audit.
The Audit and Risk Committee Chair
meets the auditor on a regular basis
during the year, and the Audit and Risk
Committee meets with the auditor,
without management present, at least
annually in order to allow both the
members of the Audit and Risk
Committee and the auditor to raise
any issues directly and to discuss the
auditor’s remit.
The Audit and Risk 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.
Internal Audit
The Group does not have a dedicated
internal audit function but uses its own
Finance Team and Retail Audit Team,
augmented with external specialists as
required, to provide assurance regarding
the strength of the control environment
and risk management.
The team of retail business auditors
monitor, in particular, the controls over
stock and cash in Managed pubs and
hotels across the estate.
All sites were audited at least once since
the beginning of the year. The Retail Audit
Team has developed an improved risk
dashboard to allow them to more quickly
and objectively assess each site to
support their risk based approach to audit
visits. In addition, the Team have worked
with operations to enhance training and
controls around stock management.
The function reports into the Risk
Manager who attends all meetings of
the Audit and Risk Committee to provide
an update on the activities of the Retail
Audit Team. This includes reporting on
any key control weaknesses which have
been identified and progress against
mitigating actions.
External resource is used when specialist
advice is required on any areas of risk
or controls where the Audit and Risk
Committee considers the business may
be exposed. The Audit and Risk
Committee received regular reports
covering third party audits on health
and safety and food safety matters.
For FY2025, the Audit and Risk Committee
confirmed that the existing arrangements
of internal audit remained appropriate.
Climate Risk and TCFD
Disclosure
The Audit and Risk Committee is
responsible for overseeing that
the effects and consequences of climate
change are adequately reflected in our
financial statements. Climate related risks
are presented to the Audit and Risk
Committee on an annual basis. During the
year, 3Keel, who provide sustainability
advice to the Company, presented an
annual update on climate risk and the
evolving reporting requirements.
The Audit and Risk Committee reviewed
and agreed that the TCFD disclosures
set out on pages 43 to 56 were
appropriate and that the assumptions
used in the financial statements are
consistent with these disclosures.
Whistleblowing
The Audit and Risk 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, as set out in
the Company’s Whistleblowing Policy.
The Company has in place mechanisms
for concerns to be raised in confidence
internally and anonymously through
the appointment of an independent
whistleblowing service operated
by Safecall.
Any whistleblowing reports are reported
immediately to the Audit and Risk
Committee Chair and, following
investigation, to the full Audit and Risk
Committee and, at least annually, to the
Board. A standing report is tabled at
each Audit and Risk Committee meeting
providing an update on employee
relation matters in the period, which
allows the Audit and Risk Committee to
identify any trends.
Anti-Bribery and Corruption
To prevent bribery and corruption, the
Group has a policy which all employees
and contractors must follow.
This includes guidance around the
acceptance of gifts and hospitality.
The policy sets out our commitment to
conducting business in an honest and
ethical manner and our zero-tolerance
approach to bribery and corruption from
our people and any third parties,
including customers and suppliers.
78
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
AUDIT AND RISK COMMITTEE REPORT continued
After considering these matters, the
Audit and Risk 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 23 July 2024.
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.
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 and
reviewed during the course of the year
to confirm its continued appropriateness.
The policy sets out processes for
assessing independence and objectivity,
including disclosure requirements of the
auditor, restrictions on the employment
of the auditor’s former employees
and the circumstances in which the
auditor 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 and Risk Committee, which
ensures full visibility.
In FY2024, the fees paid to EY
for audit services were £485,000
(FY2023: £465,000). No fees were paid
for non-recurring audit services
(FY2023: £nil). During the year, fees
paid to EY for non-audit services
included £10,000 for the agreed upon
procedures on the FY2024 Half Year
Results Announcement (FY2023: £45,000
in relation to the review of the FY2023
Half Year Results Announcement).
In addition, EY was paid £6,000
(FY2023: £5,000) for the completion of a
compliance certificate from the auditor
required under the terms of the 6.875%
Debenture Stock 2028 Trust Deed.
In line with the approach taken by
many companies, EY is not engaged
to provide a review opinion on the
half year results. However, the lead
engagement partner attends all
meetings of the Audit and Risk
Committee, including the discussions
to approve the half year results.
Fair, Balanced and
Understandable
The Audit and Risk Committee reviewed
whether the 2024 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 and Risk Committee took the
following into account:
• A timetable for the production of
the 2024 Annual Report was agreed
by the Finance Team and the auditor,
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
and Risk Committee
• Reports and feedback from the auditor
which were presented to the Audit and
Risk 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 and
Risk Committee confirmed to the Board
that the 2024 Annual Report was fair,
balanced and understandable, and
the Board’s statement is set out on
page 115.
JULIET TE STACEY
CH AIR OF THE AUDIT
A ND RISK COMMIT TEE
12 June 2024
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
79
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Remuneration
Committee
At a glance
• Approved the remuneration
arrangements for the appointment
of Dawn Browne, People & Talent
Director, to the Board on 3 July 2023
• Approved an invitation under the
Group’s all-employee Sharesave
(“SAYE”) Scheme for FY2024
• Completed a review of the
Remuneration Policy (the “Policy”),
last approved by shareholders at
the 2021 AGM, and agreed the Policy
being put forward to shareholders
at this year’s AGM would remain
unchanged from the current Policy
• Noted remuneration proposals for
the wider workforce for FY2025,
implemented with effect from
1 April 2024
• Reviewed the independence and
effectiveness of the Remuneration
Committee advisor, Deloitte
• Conducted an annual review of the
Remuneration Committee terms
of reference.
Members
Helen Jones (Chair), Juliette Stacey,
Robin Rowland
Number of
meetings
held
Number of
meetings
attended
Helen Jones (Chair)
6
6
Juliette Stacey
6
6
Robin Rowland
6
6
Key Duties of the Committee
• 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.
“Our goal is to appropriately
incentivise the Executive Directors
to drive forward the strategic plan
and deliver sustainable long-term
growth for the Company. Our current
Remuneration Policy remains fit
for purpose and is aligned with
shareholder interests.”
HELEN JONES
CHAIR OF THE REMUNERATION
COMMITTEE
Key Activities During the Year
• Reviewed performance under the
Long-Term Incentive Plan (“LTIP”)
including the Recovery LTIP Awards
and Executive Share Option Scheme
(“ESOS”) awards granted in 2021 and
confirmed vesting outcomes
• Set Executive Director objectives and
bonus targets for FY2024 and
approved proposals for the Executive
Team and Divisional Directors
• Agreed the targets for the annual
FY2024 LTIP awards and FY2024
ESOS awards
• Approved pay increases for FY2024
for Executive Directors, Executive
Team and Divisional Directors taking
into account the pay review for the
wider workforce
• Considered remuneration
arrangements for the wider workforce
• In conjunction with the Board,
received regular reports on Group-
wide remuneration for FY2024 and
wider workforce remuneration
arrangements and issues
• Reviewed the annual Gender Pay
Gap Report
80
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
REMUNERATION
DIRECTORS’ REMUNERATION REPORT
Dear Shareholder,
On behalf of the Board, I am pleased to
present the Remuneration Report for the
year ended 30 March 2024, which
includes our revised Directors’
Remuneration Policy (“Policy”) which
will be put to shareholders for approval
at the AGM on 23 July 2024.
Despite the high inflationary
environment, this has been an excellent
year for the Company with significant
progress and growth across the
business. Revenue grew by 7%, to
£359.1 million, like for like sales were up
11.0%, and adjusted profit before tax
increased by 61% to £20.5 million.
Remuneration for FY2024 has been
framed by this strong operational
performance which has been delivered
by the Executive and is reflected in
pay-outs being awarded against variable
elements of pay as detailed below.
Directors’ Remuneration
Policy
Our remuneration philosophy is to
incentivise management to drive business
performance to deliver sustained and
profitable growth. Our Policy was last
presented to shareholders at the AGM in
2021, where we received good support
with a vote in favour of 86.15%. During the
year, the Committee undertook a full
review of the current Policy taking into
account the Group’s strategy, culture and
values, evolving shareholder expectations
and best practice.
Following this review, the Committee
determined the current Policy remains
fit for purpose and continues to support
our strategy of achieving long-term
sustainable value creation for our
shareholders.
The Committee is not intending to make
any significant changes to the current
Policy. Only minor changes have been
made to aid operation and to increase
clarity. References to the Recovery LTIP
have been removed from the Policy as
this was a one-off award in 2021.
The proposed 2024 Policy is presented
in full in this Report, for shareholder
consideration and approval.
Remuneration Arrangements for the People & Talent Director
As previously announced, Dawn Browne, People & Talent Director, joined the Board
on 3 July 2023. Her remuneration arrangements on appointment are detailed below
and are in line with the current Policy:
Dawn Browne
Base salary = £215,000
Pension
Bonus
LTIP
7% of base salary
100% of base salary
125% of base salary
Service agreement
12 months’ notice from the Company
Recovery LTIP
In September 2021, the Committee was
concerned about the motivation and
retention of the Executive Directors and
Executive Team members in light of the
challenges faced by the business during
that time. The Committee decided to
grant a one-off Recovery LTIP award
to incentivise Executive Directors to
rebuild the business and profit levels
and provide a strong line of sight for
management during this operational
recovery. The stretching performance
targets for the award were based on
Group adjusted EBITDA (pre IFRS 16)
performance, measured over the period
to FY2024, and were set to align with the
level of performance required to return
the business to pre-Covid levels of
profitability, to incentivise management
to rebuild the business and profit levels.
During the performance period for the
Recovery LTIP, the Company has faced
exceptional macroeconomic challenges,
including the impact of the war in
Ukraine which resulted in an
unprecedented and extraordinary spike
in energy prices, with inevitable knock-
on effects across the industry and
subsequently the Group’s adjusted
EBITDA (pre IFRS 16) performance.
When the targets were set, the extent to
which energy costs would be impacted
(tenfold increases) could not have been
expected nor foreseen. The impact to
the Group’s performance due to this
exceptional incremental cost increase is
not considered by the Committee to be
reflective of the underlying performance
Incentive Outcomes for
FY2024
Annual bonus
The annual bonus for FY2024 was based
80% on Group adjusted profit before tax
(pre IFRS 16) performance and 20% on
individual strategic performance.
Group adjusted profit before tax (pre
IFRS 16) was £21.1 million, which
exceeded the maximum performance
target of £18.9 million, therefore this
element vested at 100% of maximum.
Performance against individual strategic
objectives was assessed and vested at
90% of maximum. Further details are
disclosed on page 102. Overall, therefore
an annual bonus of 98% of maximum
has been awarded to each of the
Executive Directors other than Dawn
Browne. Dawn Browne was promoted to
the Board (with effect from 3 July 2023)
and at that time her entitlement
increased from 50% to the 100%
maximum salary level. She has
therefore been awarded an annual
bonus of 83.6% of maximum for FY2024.
In the single figure table (page 101), the
bonus figure for Dawn Browne relates to
the portion of the year for which she was
an Executive Director.
LTIP
The LTIP granted in September 2021 was
based on Group adjusted EPS before tax
performance targets measured over the
period to FY2024. The EPS performance
targets for the LTIP were not met and
these awards will lapse in full.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
81
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
of the business. While adjusted EBITDA
(pre IFRS 16) performance for FY2024 of
£52.7 million is below the threshold
target of £55.0 million, the Committee
carefully evaluated the outcome against
the performance of the Company and its
competitors. Taking into account the
strong growth in like for like sales, profit
and dividend levels against the market,
and the experience of shareholders and
stakeholders, the Committee has
concluded that the performance of the
Executive Directors and Executive Team
members in driving the business
forward should be recognised and that
they should not be penalised for
external factors beyond their control.
Accordingly, the Committee has deemed
it appropriate to exercise its discretion
to allow the Recovery LTIP to vest at the
threshold level of 25%.
ESOS
No awards will vest based on performance
for the financial year FY2024.
Conclusion
The Committee considers the level of
pay-out for the incentives above are
reflective of the overall performance of
the Group over the relevant performance
period and are appropriate.
Executive Director
Remuneration for FY2025
Salary
The Remuneration Committee reviewed
carefully the approach taken for the
wider workforce when considering
salary increases for Executive Directors,
given the continued cost pressures
faced by colleagues over the last
12 months. Salary increases across
the Group consisted of increases of
between 4% and 9%. Base salaries
for Executive Directors have been
increased by 4% in line with the lowest
increase for the wider workforce.
Executive Director pay increases will
continue to be implemented with
effect from 1 June of each year.
Annual bonus
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 individual strategic objectives.
Long-term incentive awards
The maximum LTIP award will continue
to be 125% of base salary for the
Chief Executive, Retail Director and
People & Talent Director and 100% of
base salary for the Finance Director,
based on the achievement of EPS
performance for FY2027.
Awards under the ESOS will be granted
to Executive Directors with reference to
the tax efficient limit set by HMRC, to
the extent they are eligible.
Non-Executive Director Fees
Non-Executive Director fees were
reviewed in detail by the Board in
December 2023. Based on the output
and taking into account that there had
been no increase in fees for two years,
from 1 January 2024, the basic fee was
increased from £50,000 to £58,000.
This adjustment ensures the fee remains
market competitive and acknowledges
the additional time that NEDs are
expected to spend in the business, as
well as their expanding governance
obligations in an increasingly complex
legal and regulatory environment.
The increase also improves our ability to
attract and retain the best calibre NEDs
bringing industry knowledge and
specialist skills. No changes were made
to the additional fees paid for chairing or
attending a Committee or for any other
additional duties. Further details about
the additional fees are set out on page
105. The Chairman’s fee was last
reviewed by the Remuneration
Committee in 2022 and remains
unchanged for FY2025 at £210,000.
Employee Engagement
and Support
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 agreed average annual pay
increase for all employees was taken
into account by the Remuneration
Committee when agreeing pay reviews
for the Executive Directors, Executive
Team and Divisional Directors.
Shareholder Engagement
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 Remuneration
Committee Chair will endeavour to meet
with them, as appropriate, to understand
and respond to any issues they may have.
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 resolutions
on the Directors’ Remuneration Policy
and the Annual Report on Remuneration
being presented at this year’s AGM on
Tuesday 23 July 2024.
HELEN JONES
CH AIR OF THE REMUNER ATION
COMMIT TEE
12 June 2024
82
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
REMUNERATION REPORT continued
Directors’ Remuneration Policy
The pages on 84 to 97 set out our Remuneration Policy for Directors (the “Policy”). The Policy will be put forward to shareholders
for their binding approval at the Company’s AGM on 23 July 2024 and will apply to payments made from this date.
Remuneration Philosophy and Principles
In developing the Policy, the Remuneration Committee considered the key principles set out in Provision 40 of the UK Corporate
Governance Code. The Remuneration Committee believes that the Policy is clear and transparent and aligned with our culture.
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 linked to our strategy and with stretching but fair targets being set. This ensures that potential reward outcomes are clear
and aligned with performance achieved, with the Remuneration 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.
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.
+
=
SALARY
BENEFITS
PENSION
ANNUAL
BONUS
LTIP
ESOS
TOTAL
REMUNERATION
FIXED
VARIABLE
Summary of Decision-making Process and Changes to Policy
During the year, the Committee undertook a full review of the Policy to ensure that our approach remains appropriate to
support our strategy of achieving long-term sustainable shareholder value creation in line with our remuneration philosophy.
In determining the new Policy, the Committee followed a robust process which included discussions on the content of the Policy
at Remuneration Committee meetings during the year. The Committee considered input from management, as well as considering
best practice and guidance from major shareholders. Following this review, it was agreed that the current Policy remains broadly
fit for purpose and continues to ensure that our approach remains appropriate to support our strategy of achieving long-term
sustainable value creation for our shareholders and to ensure that our remuneration arrangements appropriately reflect best
practice and shareholder expectations.
The Committee is not intending to make any significant changes to the current Policy. Only minor changes have been made to aid
operation and to increase clarity. References to the Recovery LTIP have been removed from the Policy as this was a one-off award in 2021.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
83
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Executive Directors
Element
Purpose and link to strategy
Operation
Maximum opportunity
Performance measure
Base salary
To recruit, retain and
reward high calibre
Executive Directors to
deliver the Company’s
strategy. The salary will
reflect each role, the
importance of that role
to the business and the
experience the individual
brings to it.
The Committee sets base salary
taking into account:
• the individual’s skills,
experience and their
performance
• salary levels at other
companies of a similar size
and complexity
• pay and conditions elsewhere
in the Group.
Normally reviewed annually.
Any salary increases are
normally effective from 1 June.
Whilst there is no maximum
salary, increases will normally
be in line with the typical
increases awarded to other
employees in the Group.
However, increases may be
above this level in certain
circumstances such as, but
not limited to:
• where an Executive Director
has been appointed to the
Board at a lower than
typical market salary to
allow for growth in the role,
larger increases may be
awarded to move salary
positioning closer to typical
market level as the
Executive Director gains
experience
• where an Executive Director
has been promoted or has
had a change in
responsibilities
• where there has been a
significant change in market
practice or the size and
complexity of the
organisation.
Not applicable.
84
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
REMUNERATION REPORT continued
Element
Purpose and link to strategy
Operation
Maximum opportunity
Performance measure
Benefits
To provide a competitive
benefits package to help
recruit and retain high
calibre Executive
Directors and support
their wellbeing.
The Company offers Executives
a range of benefits which
include, but are not limited to:
• car allowance
• life assurance and permanent
health insurance
• private medical insurance and
regular medical check ups
• optional cash vouchers for use
in Fuller’s pubs and hotels
• subscriptions to professional
bodies or other relevant
organisations.
Executives can also participate
in Group-wide employee
benefits, such as an employee
discount which is linked to
length of service and all-
employee share plans up to
limits approved by HMRC.
The Committee may introduce
other benefits or allowances if
it is considered appropriate to
do so.
Executive Directors shall be
reimbursed for all reasonable
expenses, and the Company
may settle any tax incurred.
Where an Executive Director is
required to relocate to perform
their role, the appropriate
one-off or ongoing benefits
may be provided (e.g. housing,
schooling, etc.).
The cost of the provision
of allowances and benefits
varies from year to year
depending on the cost to
the Company and there is
no prescribed maximum limit.
However, the Committee
monitors annually the overall
cost of the benefits provided,
to ensure that it remains
appropriate. The Committee
takes into account relevant
facts including, but not
limited to, the overall costs
to the Company in securing
the benefits, individual
circumstances, benefits
provided to the wider
workforce and market
practice.
Not applicable.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
85
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Element
Purpose and link to strategy
Operation
Maximum opportunity
Performance measure
Annual bonus To incentivise Executive
Directors to deliver
annual performance
against stretching
targets in line with the
Group strategy and to
align their interests with
those of shareholders.
Bonuses are normally based on
annual performance targets set
by the Committee (typically
measured over a financial year).
Any bonus earned of up to 75%
of salary will normally be paid
in cash following the year end.
Any bonus earned in excess of
75% will normally be deferred
into shares under the Bonus and
Deferred Bonus Plan (“BDBP”)
for three years subject to
continued employment.
The Committee may decide to
pay the entire bonus in cash
where the amount to be
deferred into shares would, in
the opinion of the Committee,
be so small it is administratively
burdensome to apply deferral.
Bonuses are not pensionable.
The Committee may, in its
discretion adjust annual bonus
payments if it considers that the
outcome does not reflect the
underlying financial or non-
financial performance of the
participant or the Group over
the relevant period or that such
pay-out level is not appropriate
in the context of circumstances
that were unexpected or
unforeseen when the targets
were set. When making this
judgment, the Committee may
take into account such factors
as the Committee considers
relevant.
Malus and clawback
provisions apply, as detailed on
page 92.
Maximum annual bonus
opportunity of 100% of base
salary may be awarded in
respect of a financial year.
Normally 50% of the bonus
shall pay-out for on-target
levels of performance.
The annual bonus normally
starts to accrue for meeting
threshold levels of
performance.
The Committee retains
discretion to vary the level
of payout for threshold and
target performance if it
considers it to be appropriate.
The Committee shall
determine
performance
measures for the
bonus each year.
These may include
financial measures
(e.g. profitability) and
other metrics linked
to the delivery of the
business strategy.
Normally no less than
70% of the annual
bonus will be based
on financial
measures.
86
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
REMUNERATION REPORT continued
Element
Purpose and link to strategy
Operation
Maximum opportunity
Performance measure
Long-Term
Incentive
Plan (“LTIP”)
To align the long-term
interests of the Executive
Directors with the
Company’s objective of
creating shareholder
value and support
alignment with
shareholder interests.
To incentivise value
creation over the long
term and support
stewardship.
Awards can be in the form of
conditional shares or in such
other form that the Committee
determines has the same
economic effect. Awards can be
over ‘A’ (listed), and ‘B’ and ‘C’
(unlisted) ordinary shares and
the Committee may alter the
distribution between the
different classes of shares,
provided that there is no
increase in the aggregate
market value of the award.
Awards normally vest based
on performance assessed
over a period not shorter than
three years.
Awards granted will normally
be subject to a holding period
of two years following the end
of the performance period.
The Committee may, in its
discretion, adjust LTIP vesting
levels if it considers that the
outcome does not reflect the
underlying financial or non-
financial performance of the
participant, the Group or the
experience of shareholders or
other stakeholders over the
relevant period or such vesting
is not appropriate in the context
of circumstances that were
unexpected or unforeseen
when the targets were set.
When making this judgment,
the Committee may take into
account such factors as the
Committee considers relevant.
Malus and clawback provisions
apply, as detailed on page 92.
The maximum annual award
in respect of a financial year
is 125% of base salary.
Normally 25% of awards
vest for threshold levels of
performance, with full vesting
achieving maximum
performance. No award
normally vests for achieving
below threshold performance.
Awards granted will
vest subject to
pre-tax adjusted EPS
performance which
will normally be
measured over a
period of three years.
The Committee
may use different
performance
measures for future
awards if it is deemed
appropriate and more
reflective of the
Group’s strategy and
metrics relevant to
the business.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
87
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Element
Purpose and link to strategy
Operation
Maximum opportunity
Performance measure
Executive
Share Option
Scheme
To align the interests of
Executive Directors with
the Company’s objective
of alignment with
shareholder interests.
A tax-advantaged market value
share option plan.
Executive Directors may be
granted market value options
up to a maximum total value
set by HMRC.
Options vest based on
performance over a three
year period.
Once vested, options must be
exercised before the tenth
anniversary of grant.
Executives may be granted
and hold options up to the
maximum value set by HMRC
at any one time.
An ESOS option will vest
in full if the threshold
performance level is
achieved.
The vesting of ESOS
options is subject to
the achievement of
performance
conditions which
will normally be
measured over a
period of not less
than three years.
The Committee
intends to use
adjusted EPS as
the performance
condition.
The Committee
may, however,
use different
performance
measures if it is
deemed appropriate
and more reflective of
the Group’s strategy
and metrics relevant
to the business.
Pension
To provide Executive
Directors with long-term
pension provisions on an
appropriate basis.
The Company operates a
variety of pension benefits.
Executive Directors are either
members of the Company’s
defined contribution pension
plan or receive a salary
supplement or a mixture
of these.
For any new Executive
Director appointed to the
Board from 1 April 2020, the
pension opportunity will be
in line with the policy for the
majority of the workforce.
For Executive Directors
appointed prior to 1 April
2020, the maximum annual
pension contribution or
cash allowance remains
at 17.5% of base salary.
Executive Directors will
normally be expected to
make a net contribution of
7% of base salary themselves.
The Chief Executive is
also a member of the
main section of the defined
benefit pension plan which
is closed to future accrual.
Not applicable.
88
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
REMUNERATION REPORT continued
Element
Purpose and link to strategy
Operation
Maximum opportunity
Performance measure
Share
ownership
guidelines
Align the interests of
Executive Directors and
shareholders and
encourage long-term
shareholding and
commitment to the
Company both in and
post-employment.
Executive Directors are
expected to build and maintain
a holding of shares in the
Company equal to at least 200%
of base salary.
Executive Directors are
expected to retain 50% of any
post-tax shares that vest under
any share incentive
arrangements until this
shareholding is reached.
The Committee also has a
policy to promote interests in
shares following cessation of
employment to enable the
interest of former Executive
Directors to remain aligned with
the interests of shareholders for
an extended period after
leaving employment.
Following ceasing to be an
Executive Director, 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.
Not applicable.
Not applicable.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
89
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Non-Executive Directors
Element
Purpose and link to strategy
Operation
Maximum opportunity
Performance measure
Basic and
additional
fees
To attract and retain high
calibre Non-Executive
Directors by offering
market competitive fee
levels that recognise the
time that the Non-
Executive Directors
commit to their various
roles and reflective of the
experience they bring to
the role.
Fees are set taking into
account pay and
conditions throughout
the business.
The fees are paid in cash.
Fees are reviewed periodically.
The fees paid to the Chairman
are determined by the
Remuneration Committee.
The fees paid to the other
Non-Executive Directors are
determined by the Chairman
and the Executive Directors.
Fees are set taking into account
the time commitment required
to fulfil the role and typical
practice at other similar
companies.
The policy in relation to Non-
Executive Directors’ fees is to pay
a basic fee for membership of the
Board, and additional fees for the
Senior Independent Director and
for chairship of a Committee to
take into account the additional
responsibilities and time
commitment of these roles.
Additional fees may be paid to
reflect additional Board or
Committee responsibilities as
appropriate (such as liaising
with family shareholders).
There is no maximum fee level
other than as provided by
Article 112 of the Company’s
Articles of Association.
Not applicable.
Benefits
To provide suitable
arrangements to allow
Non-Executive Directors
to discharge their duties
effectively.
Reasonable costs in relation
to travel and accommodation
are reimbursed to the Chairman
and Non-Executive Directors.
The Company may meet any
tax liabilities that may arise on
such expenses.
The Chairman and Non-
Executive Directors do not
participate in incentive schemes.
None of the Non-Executive
Directors are members of any
Group pension scheme with the
exception of Michael Turner and
Richard Fuller who are both
pensioners of the Directors’
section of the defined benefit
pension plan.
The Chairman also receives life
assurance cover and private
medical insurance.
Additional non-significant
benefits may be introduced if
considered appropriate.
There is no maximum benefit
opportunity.
Not applicable.
90
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
REMUNERATION REPORT continued
Element
Purpose and link to strategy
Operation
Maximum opportunity
Performance measure
Share
ownership
guidelines
Align the interests of
Non-Executive Directors
and shareholders and
encourage long term
shareholding and
commitment to the
Company
Non-Executive Directors are
expected to hold a minimum
shareholding level as agreed
from time to time by the Board.
This is currently set at
£500-worth in nominal value
of ‘A’ ordinary shares,
representing 1,250 ‘A’
ordinary shares.
Not applicable.
Not applicable.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
91
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Information Supporting the Policy
Malus and clawback
Cash annual bonus payments may be clawed back for a period of three years from the date of payment. Malus and clawback
provisions apply under the BDBP and LTIP (including Recovery LTIP awards granted under the previous Policy) from award to
the third anniversary of the grant date in the case of BDBP awards and sixth anniversary of the award date for LTIP awards.
The circumstances in which malus/clawback may apply are a material misstatement of financial results, an error in assessing
performance or in the information/assumptions used, a material failure of risk management, serious reputational damage,
serious misconduct by the participant, or any other similar circumstances.
Share plan operation
The Committee will operate the annual bonus, BDBP, LTIP and ESOS in accordance with the Rules of the plans. Awards under
any of the Company’s share plans may:
• have any performance conditions applicable to them amended or substituted by the Committee in circumstances where the
Committee determines an amended or substituted performance condition would be more appropriate and not materially less
difficult to satisfy
• incorporate the right to receive an amount equal to the value of dividends which would have been paid on the shares under an
award that vests up to the time of vesting (this provision does not apply to the ESOS). This amount may be calculated
assuming that the dividends have been reinvested in the Company’s shares on a cumulative basis
• be settled in cash at the Committee’s discretion (this provision does not apply to the ESOS). For Executive Directors, this
provision will only be used in exceptional circumstances such as where for regulatory reasons it is not possible to settle
awards in shares
• be adjusted in the event of any variation of the Company’s share capital or any demerger, delisting, special dividend or other
event that may affect the Company’s share price.
Approved Payments
The Committee reserves the right to make any remuneration payments and/or payments for loss of office (including exercising
any discretions available to it in connection with such payments) notwithstanding that they are not in line with the Policy set out
above where the terms of the payment were agreed (i) before the Policy set out above came into effect, provided that the terms
of the payment were consistent with any applicable shareholder-approved Directors’ Remuneration Policy in force at the time
they were agreed or where otherwise approved by shareholders; or (ii) at a time when the relevant individual was not a Director
of the Company (or other persons to whom the Policy set out above applies) and, in the opinion of the Committee, the payment
was not in consideration for the individual becoming a Director of the Company or such other person. For these purposes
“payments” includes the Committee satisfying awards of variable remuneration and, in relation to an award over shares, the
terms of the payment are “agreed” no later than the time the award is granted. This Policy applies equally to any individual who
is required to be treated as a Director under the applicable regulations.
Selection of Performance Measures
Annual bonus
The annual bonus performance measures are intended to incentivise Executive Directors to achieve the financial objectives of
the Group and deliver the business strategy. The particular bonus metrics are selected by the Committee each year to ensure
that Executive Directors are appropriately focused on the key objectives for the next 12 months.
LTIP and ESOS
Our long-term strategic objective is to provide long-term sustainable returns for all of our shareholders. It is intended that awards
will be based on pre-tax adjusted EPS performance to provide a clear incentive for Executives to deliver on this objective.
Performance targets for the annual bonus, LTIP and ESOS are set taking into account internal budget forecasts, external
expectations and the need to ensure that targets remain motivational.
Adjustment of targets
The Committee retains the ability to adjust or set different performance measures or targets if events occur (such as a change in
strategy, a material acquisition and/or divestment of a Group business or a change in prevailing market conditions) which cause
the Committee to determine that the performance measures and/or targets are no longer appropriate and the amendment is
required so that they achieve their original purpose and are not materially less difficult to satisfy.
92
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
REMUNERATION REPORT continued
Remuneration outcomes in different performance scenarios
Based on the Policy for FY2025, the charts below provide an illustration of the proportion of total remuneration made up of each
component of the Policy by fixed and variable elements and at different levels of performance. A significant proportion is based
on performance related pay, including shares, which aligns the interests of the Executive Directors with those of shareholders.
Four performance scenarios have been illustrated for each Executive Director:
Below threshold performance
• Fixed remuneration (base salary, benefits, and pension)
• No annual bonus pay-out
• No vesting under the LTIP
In-line with expectations
• Fixed remuneration (base salary, benefits, and pension)
• 50% annual bonus pay-out
• 50% vesting under the LTIP
Maximum performance
• Fixed remuneration (base salary, benefits, and pension)
• 100% annual bonus pay-out
• 100% vesting under the LTIP
Maximum performance plus 50% share price growth
• Fixed remuneration (base salary, benefits, and pension)
• 100% annual bonus pay-out
• 100% vesting under the LTIP plus 50% share price growth
The charts have been prepared on the following basis:
• Base salary – the base salary in place at 1 June 2024
• Benefits – based on the disclosed benefits value in the single figure table for FY2024
• Pensions – based on the agreed contribution rates for the individual Executive Director
• Bonus – the normal maximum annual bonus of 100% of base salary
• LTIP – based on the maximum award of 125% for the Chief Executive, Retail Director and People & Talent Director and 100%
for the Finance Director
• ESOS has not been included on the basis that awards are not granted at regular intervals
• No payment of dividend equivalents has been assumed
• Potential benefits under all-employee share plans have not been included
• No share price growth has been assumed other than where stated.
Simon Emeny – Chief Executive
Neil Smith – Finance Director
100%
52%
35%
30%
27%
36%
46%
21%
29%
24%
Maximum plus
share price growth
(50%)
0
1,500
2,000
1,000
2,500
500
2,366
2,004
1,353
701
Maximum
In line with
expectation
Minimum
£'000s
100%
52%
36%
30%
24%
32%
42%
24%
32%
28%
0
900
1,200
600
1,500
300
1,442
1,242
841
441
£’000s
Maximum plus
share price growth
(50%)
Maximum
In line with
expectation
Minimum
Fred Turner – Retail Director
Dawn Browne – People & Talent Director
100%
53%
36%
31%
26%
36%
45%
21%
28%
24%
0
600
800
400
1,000
£'000s
200
959
815
554
294
Maximum plus
share price growth
(50%)
Maximum
In line with
expectation
Minimum
100%
50%
33%
28%
28%
37%
47%
22%
30%
25%
0
600
800
400
1,000
200
894
755
503
252
£'000s
Maximum plus
share price growth
(50%)
Maximum
In line with
expectation
Minimum
Fixed
Bonus
LTIP/Share options
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
93
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Remuneration Arrangements Throughout the Group
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 and support the delivery of the strategy and promote
long-term sustainable success.
Remuneration Policy for Newly Appointed Directors
When determining the remuneration package for a newly appointed Executive Director, the Committee would seek to apply the
following principles:
• The package should be market competitive to facilitate the recruitment of individuals of sufficient calibre to lead the business.
At the same time, the Committee would intend to pay no more than it believes is necessary to secure the required talent
• New Executive Directors will normally receive a base salary, benefits and pension contributions in line with the Policy
described on pages 84 to 91 and would also be eligible to join the bonus and equity incentive plans up to the limits set out in
the Policy
• In addition, the Committee has discretion to include any other remuneration component or award which it feels is appropriate
taking into account the specific circumstances of the recruitment, subject to the limit on variable remuneration set out below.
The key terms and rationale for any such component would be disclosed as appropriate in the Remuneration Report for the
relevant year
• Where an individual forfeits outstanding variable pay opportunities or contractual rights at a previous employer as a result
of their appointment, the Committee may offer compensatory payments or awards, in such form as the Committee considers
appropriate, taking into account all relevant factors including the form of awards, expected value and vesting timeframe of
forfeited opportunities. When determining any such “buyout”, the guiding principle would be that awards would generally
be on a “like for like” basis unless this is considered by the Committee not to be practical or appropriate
• The maximum level of variable remuneration which may normally be awarded (excluding any “buyout” awards referred to
above) in respect of recruitment is 225% of salary, which is in line with the current maximum limit under the annual bonus
and LTIP
• Where an Executive Director is required to relocate from their home location to take up their role, the Committee may provide
assistance with relocation (either via one-off or on-going payments or benefits)
• In the event that an internal candidate is promoted to the Board, legacy terms and conditions would normally be honoured,
including any accrued pension entitlements and any outstanding incentive awards.
To facilitate any buyout awards outlined above, in the event of recruitment the Committee may grant awards to a new
Executive Director relying on the exemption in the Listing Rules which allows for the grant of awards, to facilitate, in unusual
circumstances, the recruitment of an Executive Director, without seeking prior shareholder approval or under any other
appropriate Company incentive plan.
The remuneration package for a newly appointed Non-Executive Director would normally be in line with the structure set out
in the policy table for Non-Executive Directors.
REMUNERATION REPORT continued
94
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
Service Contracts and Letters of Appointment/Payments on Loss of Office
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 and 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 the Executive Directors’ service contracts and Non-Executive Directors’ dates of appointment:
Executive Directors
Date of contract
Notice period
Simon Emeny
13 January 1999
12 months
Neil Smith
16 June 2021
12 months
Fred Turner
23 May 2019
12 months
Dawn Browne
3 July 2023
12 months
Non-Executive Directors
Date of appointment
Term expires
Michael Turner1
1 July 2013
June 2025
Juliette Stacey
21 March 2018
July 2027
Sir James Fuller
1 June 2010
May 2025
Richard Fuller2
1 February 2020
January 2025
Helen Jones
12 March 2019
March 2025
Robin Rowland
23 March 2020
March 2027
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.
When determining leaving arrangements for an Executive Director, the Committee takes into account any contractual
agreements including the provisions of any incentive arrangements, typical market practice and the performance and conduct
of the individual.
The Committee may make any other payments in connection with a Director’s cessation of office or employment where the
payments are made in good faith in discharge of an existing legal obligation (or by way of damages for breach of such an
obligation) or by way of settlement of any claim arising in connection with the cessation of a Director’s office or employment.
Any such payments may include but are not limited to paying any fees for outplacement assistance and/or the Director’s legal
and/or professional advice fees in connection with their cessation of office or employment.
Annual bonus
The Committee may determine that an Executive Director may remain eligible to receive a pro-rata bonus for the financial year
in respect of the period they remained in employment. The Committee will determine the level of bonus taking into account
time in employment, the circumstances of cessation of employment and performance.
Share plan leaver rules
The treatment of leavers under the Company’s LTIPs is determined by the rules of the relevant plans.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
95
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Good leavers
Leavers in other circumstances
BDBP
If a participant dies, their BDBP award will vest.
If a participant becomes a good leaver for any
other reason, BDBP awards would normally
continue and vest in full on the normal vesting
date. The Committee may exercise discretion
to allow awards to vest at the time of cessation
of employment or to pro-rate the vesting
level to reflect the proportion of the vesting
period served.
Awards lapse.
LTIP and Recovery LTIP
If a participant becomes a good leaver, LTIP
awards will not lapse, but will normally be
pro-rated to reflect the proportion of the
performance period served and remain subject
to performance conditions (unless the
Committee determines otherwise). LTIP awards
will normally vest on the normal vesting date.
The Committee may determine that LTIP
awards should vest as soon as practical
following cessation of employment.
Awards lapse.
If a participant ceases employment during
the holding period (other than in the event of
gross misconduct) then awards will normally
continue and be released at the normal release
date. The Committee may exercise discretion
to allow awards to be released at the time of
cessation of employment.
ESOS
If a participant dies, ESOS awards will not
lapse, but may be exercised for a period of
12 months following death. If a participant
becomes a good leaver for any other reason,
ESOS awards will not lapse, but may be
exercised until six months after the third
anniversary of grant (or six months after
cessation if later). ESOS awards will continue
to be subject to performance conditions.
Awards lapse.
All-employee share plans
Leaver provisions are determined in accordance with HMRC-approved provisions.
REMUNERATION REPORT continued
96
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
Terms and Conditions for the Chairman and Non-Executive Directors
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. Letters of appointment are available
for inspection at the AGM and at the Company’s registered office.
Change of Control
In the event of a takeover or winding up of the Company, share awards may vest early, subject (where relevant) to the extent to
which performance conditions have been satisfied. Awards (other than awards under the BDBP) will normally be pro-rated for
time since award unless the Committee determines otherwise. In the case of a demerger, special dividend or similar
circumstances, awards may, at the Committee’s discretion, vest early on the same basis as for a takeover.
Consideration of Employment Conditions Elsewhere in the Company
The Committee is advised of the proposed annual pay review for the wider workforce in advance of them considering the
proposed pay reviews for Directors, so that this can be taken into account when determining Directors’ remuneration for the
relevant financial year. Salary increases will ordinarily be (in percentage terms) in line with those of the wider workforce, and
significant variances would only be expected where there had been a significant change in an individual’s responsibilities or
a market review had been conducted which suggested that an individual’s salary was no longer competitive, or where the
Committee wanted to take account of an individual’s performance or experience. The Committee would also be advised if there
were any other key changes to the terms and conditions on which the wider workforce are employed.
Consideration of Employee Views
The Committee does not formally consult directly with employees on Executive pay or in drawing up the Remuneration Policy
but does receive periodic updates from the People & Talent Director and from the Non-Executive Director responsible for
workforce engagement and takes into account any relevant feedback from employee engagement surveys. Share ownership
amongst the Company’s employees is encouraged through the SAYE Scheme. These tax-advantaged schemes allow employees
to participate as shareholders and align their interests with those of the shareholders.
Consideration of Shareholder Views
Based on the fact that no changes have been made from the Policy approved by shareholders in 2021, save for the removal
of the Recovery LTIP, and no concerns have previously been raised by shareholders, the Committee agreed that it was not
necessary to consult with shareholders. 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 Remuneration Policy, the Committee
Chairman endeavours to meet with them, as appropriate, to understand and respond to any issues they may have.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
97
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Annual Report on Remuneration
This Annual Report on Remuneration from this page to page 111 will be put to an advisory shareholder vote at the Company’s
AGM on 23 July 2024.
Summary of implementation in FY2024:
FIXED
Current Policy
Key features
Implementation in FY2024
Base salary
Reflects the importance of the role to
the business and the experience the
individual brings to it
Reviewed annually with increases
normally effective from 1 June
Increases will normally be in line with
increases across the Group
Increased by 6% from 1 June 2023 in line
with the wider workforce
• Chief Executive – £556,500
• Finance Director – £385,000
• Retail Director – £222,500
Following appointment on 3 July 2023,
the People & Talent Director’s salary was
set at £215,000
Benefits
Provides competitive benefits which
also protect the individual and provides
preventative care for them
The Company offers Executive
Directors a range of benefits consistent
with the role
Taxable benefits included:
• a car allowance
• private medical insurance
• optional cash vouchers for use in
Fuller’s pubs and hotels
Non-taxable benefits included:
• life assurance and permanent health
insurance
• Group-wide employee benefits, such
as an employee discount linked to
length of service and all-employee
share plans
Pension
Provides an appropriate level of
retirement benefits
Executive Directors are either members
of the Company’s defined contribution
plan or receive a cash allowance in lieu
of pension
Pension rates are as follows:
• Chief Executive – 17.5% of base salary
• Finance Director – 5% of base salary
• Retail Director – 17.5% of base salary
On appointment to the Board, the
pension contribution for the People &
Talent Director was set at 7% of base
salary which aligns to the pension rate
available to those employed by Fuller,
Smith & Turner P.L.C.
REMUNERATION REPORT continued
98
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
VARIABLE
Key features
Implementation in FY2024
Annual bonus
Incentivises achievement of annual
financial objectives and delivery of the
business strategy
Maximum opportunity of 100% of salary
based on annual performance targets
Any bonus earned in excess of 75% of
salary will normally be deferred into
shares for three years
The maximum bonus award for
Executive Directors was 100% of base
salary based 80% on Group pre-IFRS 16
adjusted profit before tax and 20% on
individual strategic performance
Bonus pay-out:
• Chief Executive – £545,370
• Finance Director – £377,300
• Retail Director – £218,050
• People & Talent Director – £157,446
On appointment to the Board, the bonus
opportunity for the People & Talent
Director, Dawn Browne, was increased to
100% of salary. In the single figure table
(page 101), the bonus figure for Dawn
Browne relates to the portion of the year
for which she was an Executive Director.
Performance measures and targets are
consistent with other Executive
Directors.
LTIP
Incentivises the delivery of long-term
sustainable returns for all shareholders
The maximum annual award in respect
of a financial year is 125% of base salary
Awards vest based on performance over
three financial years
Normally 25% of awards vest for
threshold levels of performance
Recovery LTIP awards (granted on a
one-off basis in 2021) have a maximum
opportunity of 250% of base salary
The Chief Executive, Retail Director and
People & Talent Director were granted
awards of 125% of salary and the Finance
Director was granted an award of 100%
of base salary
Awards were based on pre-tax adjusted
EPS performance for FY2026 of:
• Threshold – EPS of 39.78p
• Maximum – EPS of 55.90p
2021 LTIP award
EPS performance was below the
threshold target and therefore this
award lapsed.
2021 Recovery LTIP award
Adjusted EBITDA (pre IFRS 16)
performance was below the threshold
target but in recognition of the
extraordinary cost environment over the
performance period which has impacted
profitability, and management’s strong
performance, the Committee exercised
discretion to allow for 25% of the award
to vest (see page 103 for further details).
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
Options vest based on performance over
three financial years
Once vested, options must be exercised
before the tenth anniversary of grant
Awards made to Executive Directors up
to the maximum value set by HMRC at
the time of award
Awards were based on adjusted EPS
performance for FY2026 of 23.58p
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
99
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Statement of Implementation of Remuneration Policy for FY2025
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 4% in line with the lowest increase received across the wider
workforce. The Remuneration Committee reviewed carefully the approach taken for the wider workforce when considering
salary increases for Executive Directors, given the continued cost pressures faced by colleagues over the last 12 months.
Salary increases across the business consisted of increases of between 4% and 9%.
Following a change in 2022, pay increases across the wider business are now implemented with effect from 1 April of each year.
Pay increases for Executive Directors, other members of the Executive Team and Divisional Directors will continue to be
implemented with effect from 1 June of each year.
Salaries for the Executive Directors from 1 June 2024 are therefore as follows:
• Chief Executive – £579,000
• Finance Director – £400,500
• Retail Director – £231,500
• People & Talent Director – £223,500
Benefits
No changes to Executive Directors’ benefits are proposed for FY2025.
Annual Bonus
For FY2025, 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 (pre IFRS 16) 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 FY2025 Directors’ Remuneration Report, provided that these are no longer considered to be commercially sensitive at
that time.
LTIP
The Remuneration Committee intends to continue to grant LTIP awards for FY2025 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, Retail Director and People & Talent Director, and 100% of base salary to the Finance Director.
The LTIP will be based on (pre-tax) adjusted EPS performance as the Remuneration 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 FY2025 LTIP awards, EPS targets have been set as absolute pence targets for FY2027 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, for example, by 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 FY2025 awards are proposed as follows:
Threshold
(25% vesting)
Maximum
(100% vesting)
(Pre-tax) adjusted EPS in FY20271
43.00p
58.99p
1 Vesting increases on a straight-line basis between Threshold and Maximum.
These targets were set taking into account internal and external expectations of performance and the Committee considers that
these targets are appropriately stretching taking into account the macroeconomic context.
REMUNERATION REPORT continued
100
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
ESOS
The Remuneration Committee intends to grant ESOS awards to Executive Directors, to the extent they are eligible, up to the
maximum limit set by HMRC. The awards will be based on pre-tax adjusted EPS performance for FY2027 of 37.30p.
Pension and Benefits
No changes are proposed to the pension and benefits provision for Executive Directors for FY2025.
The Chief Executive and Finance Director receive an annual cash allowance in lieu of pension of 17.5% and 5% of base salary
respectively. The Retail Director and People & Talent Director receive an annual pension contribution of 17.5% and 7% of
base salary respectively. Pension entitlements are in line with the Policy that was in place at the time of appointment.
The Remuneration Committee is aware of shareholder guidance that pensions for Executive Directors should be aligned with
the wider workforce. However, where this is not the case, given the current rate represents an existing contractual commitment,
the Remuneration Committee does not consider it appropriate to make a reduction at this stage. The Remuneration 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.
Implementation of Remuneration Policy for FY2024
This part of the Directors’ Remuneration Report sets out the Directors’ remuneration paid in respect of FY2024. Sections in
the Report not specifically stated as audited are not subject to audit. The Policy operated as intended during FY2024 and pay
outcomes are considered by the Committee to be aligned with the experience of shareholders and other stakeholders.
Single Total Figure of Remuneration Table (audited)
Salary/Fees
Taxable
benefits1
Annual bonus2 LTIP/Options3
Pension
Total variable
Total fixed
Total
2024
£000
2023
£000
2024
£000
2023
£000
2024
£000
2023
£000
2024
£000
2023
£000
2024
£000
2023
£000
2024
£000
2023
£000
2024
£000
2023
£000
2024
£000
2023
£000
Simon Emeny
551
523
25
25
545
–
270
–
96
91
815
–
672
639
1,487
639
Neil Smith
381
361
23
23
377
–
145
–
19
18
522
–
423
402
945
402
Fred Turner
220
209
23
23
218
–
108
–
39
37
326
–
282
269
608
269
Dawn Browne4
162
–
14
–
157
–
43
–
11
–
200
–
187
–
387
–
Michael Turner
210
241
27
27
–
–
–
–
–
–
–
–
237
268
237
268
Juliette Stacey
82
80
–
–
–
–
–
–
–
–
–
–
82
80
82
80
Sir James Fuller
57
55
–
–
–
–
–
–
–
–
–
–
57
55
57
55
Richard Fuller
52
50
–
–
–
–
–
–
–
–
–
–
52
50
52
50
Helen Jones
72
70
–
–
–
–
–
–
–
–
–
–
72
70
72
70
Robin Rowland
62
60
–
–
–
–
–
–
–
–
–
–
62
60
62
60
1 Taxable benefits include a car allowance, family private medical insurance and cash vouchers for use in Fuller’s pubs and hotels.
2 The annual bonus earned in respect to FY2024 will be paid 75% in cash and 25% deferred into shares for three years.
3 LTIP/Options may include the value transferred to Directors from the LTIP, ESOS and SAYE Schemes. 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. The 2021 LTIP
award did not vest as the threshold performance target was not achieved. The value included in the LTIP column for 2024 relates to the
2021 Recovery LTIP which will vest and for which the performance metrics relate to the year ended 30 March 2024. The Committee
exercised discretion such that 25% of the award vested (see page 103 for further details). The value is based on vesting of 25% and the
average share price over the last three months of FY2024 of 622p. No portion of this value is attributable to share price growth. For Dawn
Browne, the value of the Recovery LTIP award on vesting included in the single figure table, is the value of 9/36 of the vesting shares,
reflecting the proportion of the three year performance period she has served as an Executive Director.
4 The figures in FY2024 above reflect Dawn Browne’s remuneration from 3 July 2023 when she was appointed to the Board.
Base salary
Executive Directors’ base salaries were increased by 6% in line with the increase received across the wider workforce,
effective 1 June 2023. Dawn Browne’s salary on appointment to the Board as People & Talent Director was £215,000.
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 REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
101
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Annual bonus (audited)
The annual bonus for the year was based 80% on Group adjusted profit before tax and 20% on individual strategic objectives.
The following sets out details of actual performance against the targets set:
Financial targets (80%)
Threshold
Target
Maximum
Measure
% of financial
target
Required
performance
% of financial
target
Required
Performance
% of financial
target
Required
performance
Actual
performance
Pay-out as %
of max
Group adjusted profit
before tax (pre IFRS 16)
10%
£16.2m
50%
£18.0m
100%
£18.9m
£21.1m
100%
Individual strategic performance (20%)
The non-financial element of the bonus for FY2024 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.
Strategic performance measure
Outcome
1. Employee engagement and satisfaction
Measured by reference to increasing the overall
response rate to the annual Happiness Index
survey and improving the overall engagement
score
Both the response rate and the overall engagement score in the annual
Happiness Index survey increased from the prior year
2. Customer satisfaction
Measured by an enhancement in Net Promoter
Score (“NPS”)
Overall NPS score in FY2024 improved against the prior year
3. Sustainability agenda
Measured with reference to a reduction in energy
usage in FY2024 and a reduction in Scope 1 and 2
emissions for FY2024
On a like for like basis electricity usage for the year was down 3.25%
and gas usage was down 6.5%
4. Food transformation
Measured by reference to an improvement
in food profitability
Significant year on year improvement in food gross profit achieved in
a challenging inflationary environment
The Remuneration Committee discussed the formulaic outturns of the financial targets and individual strategic performance
objectives in the context of the Group’s overall performance and shareholder return performance. The Remuneration Committee
noted that the Group adjusted profit of £21.1 million exceeded the maximum financial target of £18.9 million and the significant
progress that had been made against the strategic objectives, therefore an annual bonus of 98% of maximum has been awarded
to each of the Executive Directors other than Dawn Browne who was awarded an annual bonus of 83.6% of maximum.
On appointment to the Board, Dawn Browne’s annual bonus opportunity was increased to 100% of salary and the annual bonus
performance measures, weightings and targets was consistent with the other Executive Directors as disclosed above. In the
single figure table, the bonus figure relates to the portion of the year for which she was an Executive Director.
LTIP awards vesting in respect of FY2024 (audited)
LTIP awards granted in September 2021 were based on pre-tax Group adjusted EPS performance for FY2024. The EPS targets
were not met and therefore these awards will lapse. The Remuneration Committee did not exercise any discretion in relation
to the LTIP outcome.
The following sets out details of performance against targets set. As threshold target was not achieved these LTIP awards will lapse.
Target set
Performance
measure
Minimum
(25% vesting)
Maximum
(100% vesting)
Value of award
Actual
performance
Value of award
LTIP
Pre-tax Group
adjusted EPS
44.89p
54.68p
Percentage vest
of original grant:
Minimum – 25%
Maximum – 100%
34.14p
nil
REMUNERATION REPORT continued
102
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
Recovery LTIP awards vesting in respect of FY2024 (audited)
Recovery LTIP awards granted in September 2021 were based on adjusted EBITDA (pre IFRS 16) performance for FY2024.
The stretching performance targets for the award were set to align with the level of performance required to return the business
to pre-Covid levels of profitability and beyond to incentivise a full recovery of the business.
The following sets out details of performance against targets set:
Target set
Performance
measure
Minimum
(25%
vesting)
Maximum
(100%
vesting)
Value of award
Actual
performance
Vesting level
Value of award
Recovery LTIP Adjusted
EBITDA (pre
IFRS 16)
£55m
£73m
Percentage vest
of original grant:
Minimum – 25%
Maximum – 100%
£52.7m
Committee
exercised
discretion
to allow
25% of
the award
to vest
Chief Executive – £270,481
Finance Director – £144,893
Retail Director – £108,191
People & Talent Director – £40,572
During the performance period for the Recovery LTIP, the Company has faced exceptional macroeconomic challenges, including
the impact of the war in Ukraine which resulted in an unprecedented and extraordinary spike in energy prices, with inevitable
knock-on effects across the industry and subsequently the Group’s adjusted EBITDA performance. When the targets were set,
the extent to which energy costs would be impacted (tenfold increases) could not have been expected nor foreseen. The impact
to the Group’s performance due to this exceptional incremental cost increase is not considered by the Committee to be
reflective of the underlying performance of the business.
While adjusted EBITDA (pre IFRS 16) performance for FY2024 of £52.7 million is below the threshold target of £55.0 million, the
Committee considers that the Company has performed very strongly in the context of the macroeconomic environment.
Performance highlights include:
• Strong like for like Managed sales growth of 11% in FY2024 and 17.5% in FY2023
• Adjusted earnings per share increasing from 9.70p in FY2022 to 24.48p in FY2024
• A return to paying dividends to shareholders, with a dividend of 17.75p in FY2024
• £34.6 million of capital returned to shareholders over the last two years in the form of dividends and share buybacks.
The Committee carefully evaluated the outcome against the performance of the Company and its competitors. Taking into
account the strong growth in like for like sales, profit and dividend levels against the market, and the experience of shareholders
and stakeholders, the Committee has concluded that the performance of the Executive Directors and Executive Team members
in driving the business forward should be recognised and that they should not be penalised for external factors beyond their
control. Accordingly, the Committee has deemed it appropriate to exercise its discretion to allow the Recovery LTIP to vest at
the threshold level of 25%.
ESOS awards vesting in respect of FY2024 (audited)
No ESOS awards were granted in respect of FY2024.
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% of salary, in line with the Policy. Fred Turner received an annual
pension contribution of 17.5% of salary, in line with his existing contractual arrangements. Dawn Browne received an annual
pension contribution of 7% of salary following her appointment to the Board, in line with the pension rate available to those
employed by Fuller, Smith & Turner P.L.C. Executive Directors who receive a cash allowance are required to use the supplement
as part of their overall retirement planning. They are also normally expected to contribute 7% of their salary to their pension or
another investment vehicle. The Remuneration Committee considers that the Policy operated as intended during the year.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
103
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Scheme Interests Awarded During the Financial Year (audited)
In respect of the 52 week period ended 30 March 2024, the following share awards were granted:
Director
Type of award
Number of
‘A’ shares
Number of
‘B’ shares
Face value
at grant
£’000s1
Date of grant
Performance
period end2,3
% of award
grant vesting
at minimum
threshold
Simon Emeny
LTIP
95,095
237,739
712
25/07/2023
31/03/2026
25%
ESOS
10,000
–
60
25/07/2023
31/03/2026
100%
Total
105,095
237,739
772
Neil Smith
LTIP
52,631
131,578
394
25/07/2023
31/03/2026
25%
ESOS
5,000
–
30
25/07/2023
31/03/2026
100%
Total
57,631
131,578
424
Fred Turner
LTIP
38,021
95,052
285
25/07/2023
31/03/2026
25%
ESOS
9,166
–
55
25/07/2023
31/03/2026
100%
Total
47,187
95,052
340
Dawn Browne
LTIP
36,739
91,848
275
25/07/2023
31/03/2026
25%
ESOS
5,833
–
35
25/07/2023
31/03/2026
100%
SAYE
1,413
–
9
19/12/2023
n/a
n/a
Total
43,985
91,848
319
1 Face values have been calculated using the actual grant price of £5.852 per ‘A’ ordinary share and an assumed share price of £0.5852 per ‘B’
ordinary share for the LTIP, being the average share price during the five dealing days ending immediately before the date of grant, £6.00 per
‘A’ ordinary share for the ESOS, being the share price on the day immediately before the date of grant and £6.56 per ‘A’ share for the SAYE,
being the average share price during the five dealing days ending immediately before the date of grant, although options were granted at a
20% discount.
2 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 39.78p in FY2026, with 100% vesting for pre-tax adjusted EPS of
55.90p (straight-line vesting in-between).
3 The ESOS awards are subject to a pre-tax adjusted EPS performance condition, with the target set on an absolute basis and measured over
a period of three years, of 23.58p in FY2026.
Non-Executive Directors’ Fee
Non-Executive Directors receive a basic fee and additional fees for further duties and the Chairman receives a basic fee.
A review of the Non-Executive Director fee structure was conducted by the Board (excluding the conflicted Non-Executive
Directors) in December 2023. As detailed on page 82, it was agreed that with effect from 1 January 2024, the basic fee would
be increased from £50,000 to £58,000 per annum. No changes were made to the additional fees paid for chairing a committee
or for additional duties. The Chairman’s fee was last reviewed by the Remuneration Committee in 2022 and remains unchanged
for FY2025.
REMUNERATION REPORT continued
104
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
A summary of the current fee structure for the Non-Executive Directors, including the Chairman, is set out below:
Base fee
Senior
Independent
Director
Committee
Chair
Committee
member
(Audit and
Remuneration)
Family
Shareholder
Liaison
Total
Michael Turner
£210,000
–
–
–
–
£210,000
Juliette Stacey
£58,000
£10,000
£10,000
£10,000
–
£88,000
Sir James Fuller
£58,000
–
–
–
£5,000
£63,000
Richard Fuller
£58,000
–
–
–
–
£58,000
Helen Jones
£58,000
–
£10,000
£10,000
–
£78,000
Robin Rowland
£58,000
–
–
£10,000
–
£68,000
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)
No payments were made in respect of loss of office in respect of the financial year ended 30 March 2024.
Share Ownership
Executive Directors
The Company has share ownership guidelines for Executive Directors which state that they should hold shares worth at least
200% of their salary. Accordingly, until their guideline is met, Executive Directors 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 ESOS net of the cost of those options
• at least 50% of any post-tax and National Insurance vested shares under the LTIP and the BDBP.
Based on the share price on 30 March 2024 of £5.90, Simon Emeny held shares with a value of 252% of salary, Neil Smith held
shares with a value of 9% of salary, Fred Turner held shares with a value of 416% of salary and Dawn Browne held shares with a
value of 12% of salary. Simon Emeny and Fred Turner therefore meet the guidelines. Neil Smith, who joined in November 2021,
and Dawn Browne, who was appointed in July 2023, do not currently meet the guidelines.
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 Remuneration Committee retains discretion to waive this guideline if it is not considered appropriate
in the specific circumstances.
Non-Executive Directors
Non-Executive Directors are expected to hold a minimum shareholding level as agreed from time to time by the Board. This is
currently set at £500-worth in nominal value of ‘A’ ordinary shares, representing 1,250 ‘A’ ordinary shares.
As at 30 March 2024 all Non-Executive Directors held the minimum requirement.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
105
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Directors’ Shareholdings (audited)
Directors’ share interests
Beneficial
interest at
30 March
20241
Non-beneficial
interest at
30 March
20241
Beneficial
interest at
1 April
2023
Non-beneficial
interest at
1 April
2023
Michael Turner
‘A’ ordinary 40p shares
271,378
–
271,378
–
‘B’ ordinary 4p shares
3,061,390
–
3,056,388
–
‘C’ ordinary 40p shares
624,260
–
624,260
–
2nd preference £1 shares
71
–
71
–
Simon Emeny
‘A’ ordinary 40p shares
130,472
–
130,472
–
‘B’ ordinary 4p shares
1,055,684
–
1,055,684
–
‘C’ ordinary 40p shares
2,000
–
2,000
–
Neil Smith
‘A’ ordinary 40p shares
6,000
–
6,000
–
Fred Turner
‘A’ ordinary 40p shares
2,571
–
2,571
–
‘B’ ordinary 4p shares
534,223
–
502,400
–
‘C’ ordinary 40p shares
100,819
–
100,819
–
2nd preference £1 shares
4,342
–
4,342
–
Dawn Browne2
‘A’ ordinary 40p shares
4,075
2,420
–
‘B’ ordinary 4p shares
1,489
1,489
–
Juliette Stacey
‘A’ ordinary 40p shares
2,454
–
2,454
–
Sir James Fuller
‘A’ ordinary 40p shares
88,942
–
88,942
–
‘B’ ordinary 4p shares
10,486,379
–
10,486,379
–
‘C’ ordinary 40p shares
2,727,879
621,050
2,703,003
621,050
Richard Fuller
‘A’ ordinary 40p shares
15,267
893,937
15,267
893,937
‘B’ ordinary 4p shares
3,065,726
10,935,015
3,065,726
10,935,015
‘C’ ordinary 40p shares
20,000
–
20,000
–
2nd preference £1 shares
303
7,499
303
7,499
Helen Jones
‘A’ ordinary 40p shares
2,970
–
2,970
–
Robin Rowland
‘A’ ordinary 40p shares
7,165
–
7,165
–
1 There were no changes in the interests of any Director to 12 June 2024 other than Sir James Fuller whose beneficial interest in ‘A’ ordinary
40p shares, ‘B’ ordinary 4p shares and ‘C’ ordinary 40p shares was now 103,442, 9,194,079 and 2,690,813 respectively.
2 From date of appointment on 3 July 2023.
REMUNERATION REPORT continued
106
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
Scheme Interests Outstanding at the Year End (audited)
Executive Directors’ share options
Director
Scheme1,2,3
As at
1 April
2023
Granted
Exercised
Surrendered
Lapsed
As at
30 March
2024
Exercise
price
Date of
grant
Performance
period end
Exercisable
from
Expiry
date
Price at
exercise
date
Gain
£’000s
Simon
Emeny
ESOS
3,296
–
–
– (3,296)
–
£9.10 01/07/13
31/03/16
01/07/16 30/06/23
–
–
ESOS
– 10,000
–
–
– 10,000
£6.00 25/07/23
31/03/26
25/07/26 24/07/33
–
–
SAYE
6,896
–
–
–
–
6,896
£4.35 30/09/20
n/a
01/11/25 01/05/26
–
–
Total
10,192 10,000
–
(3,296) 16,896
–
–
Neil
Smith
ESOS 5,000
–
–
–
–
5,000
£6.00 05/07/22
31/03/25
05/07/25 04/07/32
–
–
ESOS
–
5,000
–
–
–
5,000
£6.00 25/07/23
31/03/26
25/07/26 24/07/33
–
–
Total
5,000
5,000
–
–
– 10,000
–
–
Fred
Turner
ESOS
2,590
–
–
(2,590)
–
–
£9.65 30/06/14
31/03/17
30/06/17 29/06/24
–
–
ESOS
834
–
–
–
–
834
£6.00 05/07/22
31/03/25
05/07/25 04/07/32
–
–
ESOS
–
9,166
–
–
–
9,166
£6.00 25/07/23
31/03/26
25/07/26 24/07/33
–
–
SAYE
6,896
–
–
–
–
6,896
£4.35 30/09/20
n/a
01/11/25 01/05/26
–
–
Total
10,320
9,166
–
(2,590)
– 16,896
–
–
Dawn
Browne
ESOS
4,167
–
–
–
–
4,167
£6.00 05/07/22
31/03/25
05/07/25 04/07/32
–
–
ESOS
–
5,833
–
–
–
5,833
£6.00 25/07/23
31/03/26
25/07/26 24/07/33
–
–
SAYE
1,655
–
(1,655)
–
–
–
£4.35 30/09/20
n/a
01/11/23 01/05/24
£6.78
4
SAYE
1,718
–
–
–
–
1,718
£4.19 16/12/22
n/a
01/02/26 01/08/26
–
–
SAYE
–
1,413
–
–
–
1,413
£5.25 19/12/23
n/a
01/02/27 01/08/27
–
–
Total
7,540
7,246
(1,655)
–
– 13,131
–
4
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 for options granted in 2020 and five days prior to grant for options granted in 2023.
3 The ESOS performance conditions are disclosed in Note 27 to the financial statements.
Executive Directors’ Long-Term Incentive Plan
Director
Total held at
1 April 2023
Awarded
Vested
Lapsed
Total held at
30 March 20241
Simon Emeny
‘A’ ordinary shares
379,818
95,095
–
(83,333)
391,580
‘B’ ordinary shares
949,546
237,739
–
(208,333)
978,952
Neil Smith
‘A’ ordinary shares
152,873
52,631
–
–
205,504
‘B’ ordinary shares
382,184
131,578
–
–
513,762
Fred Turner
‘A’ ordinary shares
151,905
38,021
–
(33,333)
156,593
‘B’ ordinary shares
379,768
95,052
–
(83,333)
391,487
Dawn Browne
‘A’ ordinary shares
65,435
36,739
–
(15,000)2
87,174
‘B’ ordinary shares
163,590
91,848
–
(37,500)2
217,938
1 Includes annual LTIP awards and the one-off Recovery LTIP awarded to Executive Directors during FY2022. The performance conditions are
disclosed in Note 27 to the financial statements.
2 The awards that lapsed during the year were granted to Dawn Browne prior to her appointment as an Executive Director.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
107
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
External Directorship Fees
The Board may give approval for Executives to hold 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 £79,950.
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 Index. The Company is a constituent
of this Index and therefore the Remuneration Committee considers that it is an appropriate choice for this Report.
2,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Fuller, Smith & Turner P.L.C.
FTSE All Share
Source: Thomson Data stream
Fuller, Smith & Turner P.L.C. 7,068
FTSE All Share 16,868
4,000
Mar 14
Mar 15
Mar 16
Mar 17
Mar 18
Mar 19
Mar 20
Mar 21
Mar 22
Mar 23
Mar 24
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:
2015
2016
2017
2018
2019
20201
20212
2022
2023
2024
Single figure total
remuneration (£’000s)
1,244
1,418
1,097
1,089
687
600
590
935
639
1,487
Annual bonus3
76%
85%
41%
48%
48%
nil
nil
61%
nil
98%
LTIP
96%
100%
100%
56%
nil
nil
nil
nil
nil
25%4
1 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 Remuneration Committee
and the Executive Directors agreed that it was not appropriate to pay this portion of the annual bonus.
2 Total remuneration includes the Chief Executive’s voluntary 25% reduction in salary from 1 April 2020 to 30 June 2020.
3 Annual bonus as a percentage of the maximum available.
4 Value included is the Recovery LTIP for which the Committee exercised their discretion such that 25% of the award vested (see page 103
for further details).
REMUNERATION REPORT continued
108
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
Percentage Change in Remuneration of Directors and Employees
The table below shows the percentage change in the remuneration (based on salary, benefits and annual bonus) of the Board of
Directors, with the exception of Dawn Browne, compared with that of the average of all employees of the Company taken as a
whole. Dawn Browne was appointed part way through the year and therefore the annual comparison from FY2023 to FY2024 is not
relevant and she has not been included in the table. The Chairman and Non-Executive Directors do not receive any variable pay.
FY2023-FY2024
FY2022-FY2023
FY2021-FY2022
FY2020-FY2021
Change in
annual
salary/
fees9
Change in
annual
taxable
benefits
Change in
annual
bonus1
Change in
annual
salary/
fees9
Change in
annual
taxable
benefits
Change in
annual
bonus1
Change in
annual
salary/
fees9
Change in
annual
taxable
benefits
Change in
annual
bonus1
Change in
annual
salary/
fees
Change in
annual
taxable
benefits
Change in
annual
bonus1
Average of all
employees2,3
7.6%
(0.3)%
257%
3.3%
(12.2)%
100%
2.3%
(17.0)%
(100)%
1.0%
(1.6)%
(1.2)%
Simon Emeny
5.5%
0.5%
100%
2.8%
0.2%
100%
8.4%
0.3%
nil%
(4.0)%
(0.1)%
nil%
Neil Smith4
5.6%
1.1%
100%
–
–
–
–
–
–
–
–
–
Fred Turner5
5.5%
1.4%
100%
2.8%
0.6%
100%
8.4%
1.0%
nil%
–
–
–
Michael Turner6
(12.8%)
1.8%
n/a
(3.7)%
0.8%
n/a
6.7%
1.3%
n/a
(6.2)%
1.5%
n/a
Juliette Stacey7
2.5%
n/a
n/a
4.9%
n/a
n/a
8.4%
n/a
n/a
(0.7)%
n/a
n/a
Sir James Fuller
3.6%
n/a
n/a
7.3%
n/a
n/a
9.3%
n/a
n/a
(6.2)%
n/a
n/a
Richard Fuller7
4.0%
n/a
n/a
8.1%
n/a
n/a
9.6%
n/a
n/a
(73.9)%
(93.8)%
n/a
Helen Jones7
2.9%
n/a
n/a
9.4%
n/a
n/a
10.1%
n/a
n/a
(4.5)%
n/a
n/a
Robin Rowland8
3.3%
n/a
n/a
6.7%
n/a
n/a
9.1%
n/a
n/a
–
n/a
n/a
1 Reflects the increase or decrease in the percentage of annual salary paid out as bonus. In the prior years, the change in annual bonus was
based on actual bonus paid to the individual in the relevant financial year. In the current financial year, the change in annual bonus is based
on bonus earned during FY2024. No bonus was paid to Executive Directors in FY2020, FY2021 and FY2023.
2 The employee comparator group excludes employees not employed by the Parent Company.
3 The change in taxable benefits is principally due to the phasing out of company cars into a car allowance benefit since 2020.
4 Neil Smith was appointed on 30 November 2021 part way through the year, therefore the annual comparison from FY2022 to FY2023
is not relevant.
5 Fred Turner was appointed on 1 June 2019.
6 Michael Turner’s fee was reduced from £250,000 to £210,000 per annum from 1 January 2023.
7 A number of Non-Executive Directors changed roles in FY2020 (Richard Fuller, Juliette Stacey and Helen Jones), which impacted the year
on year comparison.
8 Robin Rowland was appointed on 24 March 2020.
9 Board members took a voluntary pay decrease between April 2020 and June 2020. Non-Executive Director fees were increased in
January 2022 and January 2024.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
109
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
CEO Pay Ratio
The following table sets out CEO pay ratio figures, in respect of the financial year ended 30 March 2024.
Year
Method
25th percentile
pay ratio
Median
pay ratio
75th percentile
pay ratio
FY2024
Option B
59.4:1
51.5:1
43.3:1
FY2023
Option B
30.8:1
26.0:1
18.9:1
FY2022
Option B
49.1:1
43.6:1
30.7:1
FY2021
Option B
35.7:1
33.2:1
23.8:1
FY2020
Option B
33.0:1
32.6:1
31.6:1
The increase in the pay ratio between FY2024 and FY2023 is driven by the CEO being awarded a bonus in the current year
whereas no bonus was awarded in FY2023.
The relevant individuals have been identified using Option B, as defined under the relevant regulations, which the Remuneration
Committee considered to be the most appropriate methodology based on the availability of data at the time the Annual Report
was published. The respective single figure values for each individual for FY2024 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 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 percentile 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 30 March 2024, alternative employees were selected for the 25th, median and 75th percentile.
Year
Supporting information
Chief Executive
25th percentile
pay ratio
Median
pay ratio
75th percentile
pay ratio
2024
£000
2024
£000
2024
£000
2024
£000
FY2024
Salary
£551
£25
£28
£33
Total pay
£1,487
£25
£29
£34
Relative Importance of Spend on Pay
The graph below shows the total remuneration for the Group’s employees compared with other key financial indicators:
Capital
expenditure
and business
combinations2
Remuneration
Dividends
and share
buybacks
Taxes
payable to
HMRC1
0
£m
2024
2023
60
40
20
80
100
120
140
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.
REMUNERATION REPORT continued
110
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
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. Its 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. The People & Talent Director, Dawn
Browne, regularly attends Committee meetings to advise on remuneration matters of the wider workforce. Members of the
Remuneration Committee have no personal financial interest in the Company, other than as shareholders and Directors.
The Remuneration 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 will take into account any
feedback on Executive remuneration provided by the People & Talent Director and any relevant feedback from employee
surveys. As part of her role as Non-Executive Director responsible for employee engagement, the Remuneration Committee
Chair engages with employees which also provides an opportunity for feedback on remuneration matters. 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.
Independent Advisors
Deloitte LLP was appointed by the Remuneration Committee in June 2019 and, during the year under review, provided the
Remuneration 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
£9,500 (plus VAT) during FY2024 (FY2023: £7,750 (plus VAT)). During the year, Deloitte also provided other unrelated tax advice
to the Company.
The Remuneration 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 Remuneration Committee have no connections with Fuller’s or its
Directors that may impair their independence. The Remuneration 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 Remuneration Committee reviews its performance with Board members and other participants, through the annual Board
evaluation. See further information on page 73.
Statement of Voting at Annual General Meeting
The results of the shareholder votes at the AGM on 23 September 2021 in respect of the Directors’ Remuneration Policy and
at the AGM on 20 July 2023 in respect of 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 Report 2023
100,519,567
97.17%
2,927,006
2.83%
103,446,573
211,838
Approval of Remuneration Policy 2021
89,801,044
86.15%
14,436,237
13.85%
104,237,281
5,833,531
The Directors’ Remuneration Report, encompassing pages 80 to 111, was approved by the Board and signed on its behalf.
HELEN JONES
CH AIR OF THE REMUNER ATION COMMIT TEE
12 June 2024
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
111
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
The Directors present their report to
shareholders together with the audited
financial statements for the 52 weeks
ended 30 March 2024. The Directors’
Report (pages 112 to 114) and the
Strategic Report (pages 6 to 57) 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.
Annual General Meeting
The 2024 AGM will be held at 11am on
Tuesday 23 July 2024 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 60 and 61.
All Directors, apart from Dawn Browne
who was appointed on 3 July 2023,
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.
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
16 and 17
Employee engagement
Stakeholder
engagement
Sustainability Report
12
40
Engagement with suppliers,
customers and others
Stakeholder
Engagement
12
Emissions reporting
Sustainability Report
42
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 106 to 107.
Dividends
The Company paid an interim dividend
of 6.63p per ‘A’ and ‘C’ ordinary share of
40p each and 0.663p per ‘B’ ordinary
share of 4p each on 2 January 2024
(FY2023: 4.68p per A’ and ‘C’ ordinary
share of 40p each and 0.468p per ‘B’
ordinary share of 4p each). The Directors
now recommend a final dividend of
11.12p per ‘A’ and ‘C’ ordinary share of
40p each and 1.112p per ‘B’ ordinary
share of 4p each. This makes a total
dividend for the financial year of 17.75p
per ‘A’ and ‘C’ ordinary share of 40p
each and 1.775p per ‘B’ ordinary share of
4p each (FY2023: 14.68p per ‘A’ and ‘C’
ordinary share of 40p each and 1.468p
per ‘B’ ordinary share of 4p each).
The total proposed final dividend on
ordinary shares will be £6.5 million,
which together with the 2024 interim
dividend payment of £3.9 million and
the £120,000 of cumulative preference
share dividends paid in the year, will
result in total dividend payments of
£10.5 million.
112
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
DIRECTORS’ REPORT
Employees
The Company is committed to treating
all of its employees and job applicants
equally. 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.
External Auditor
The auditor, Ernst & Young LLP, was
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
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 107.
• Information about any waiver of
dividends or future dividends by a
shareholder is disclosed below in
“Share Capital”.
Political Donations
The Group does not make political
donations.
Post-Balance Sheet Events
On 29 May 2024, the Group announced
that it had agreed terms to sell a
portfolio of pubs to Admiral Taverns
Limited. See note 31 to the financial
statements for further information.
Purchase of Own Shares
At the AGM held on 20 July 2023,
the Company was given authority to
purchase up to 3,883,397 ‘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 2024 AGM.
The Company’s maximum issued
ordinary share capital during the year
was £25,381,446, comprising 41,182,339
‘A’ ordinary shares, 89,052,625 ‘B’
ordinary shares and 13,366,013 ‘C’
ordinary shares.
During the year, the Company purchased
a total of 2,017,992 ‘A’ ordinary shares at
a total cost of £12,296,547 (exclusive of
stamp duty). These share purchases
represented 1.4% of the Company’s
maximum issued ordinary share capital
and 4.9% of the Company’s ‘A’ ordinary
share capital.
126,119 ‘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
£548,617.65. As at 30 March 2024, a
total of 4,143,691 ‘A’ ordinary shares
and a total of 4,327,915 ‘B’ ordinary
shares were held as treasury shares.
Share Capital
Information on the Company’s financial
instruments, capital structure and
related restrictions is given in notes 25
and 26 to the financial statements.
Details of significant shareholdings
are set out on the following page.
As at 30 March 2024, Computershare
Trustees Limited held a total of 142,699 ‘A’
ordinary shares on behalf of employees of
the Company who are participants in its
SIP. This represents 0.3% 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 30 March 2024, 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.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
113
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Significant Agreements
The Group has entered into a number
of agreements with the major brewers
operating in the UK under which it buys
beer, 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 on pages 95 to 97.
By order of the Board
R ACHEL SPENCER
COMPA N Y SECRE TA RY
12 June 2024
Fuller, Smith & Turner P.L.C.
Pier House
86-93 Strand-on-the-Green
London W4 3NN
Registered in England under number:
241882
Substantial Shareholdings
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
% of total voting rights
As at
30 March
2024
As at
11 June
2024
Lansdowne Partners (UK) LLP
10.00
10.00
BlackRock, Inc
9.97
9.97
Ameriprise Financial, Inc. (Columbia Threadneedle)
4.68
4.68
Mr M.A. and Mrs N.D. Taylor
4.02
4.64
Azvalor Asset Management SGIIC SA
3.13
3.13
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.
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
As at
30 March
2024
As at
11 June
2024
Mr A W M Mitchell & Burges Salmon Trustees Ltd1
14.85
14.85
Mr R H F Fuller & Mr P J Turner & Mr P A Sheils1
7.66
7.66
Mr A G F Fuller
5.74
5.74
Mr R H F Fuller & Mr P A Sheils & Mr P J Turner1
4.62
4.62
Mr R D Inverarity
3.63
3.63
Dunarden Limited
3.60
3.60
Mr G F Inverarity
3.48
3.48
Mr M J Turner
3.40
3.40
Miss S M Turner
3.33
3.33
Mr R H F Fuller
3.08
3.08
Mr T J M Turner
3.00
3.00
C’ ordinary shares of 40p each
As at
30 March
2024
As at
11 June
2024
Mr A W M Mitchell & Burges Salmon Trustees Ltd1
33.56
33.56
Mr T J M Turner
6.71
6.71
Miss S M Turner
5.68
5.68
Mr P A R Carter & Sir J H F Fuller1
4.65
4.65
Sir J H F Fuller & Mr A W M Mitchell1
4.46
4.46
Mrs D M St. C Turner
3.35
3.35
Mr C D W Williams
3.27
3.27
1 Shares held for the benefit of a Trust.
114
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
DIRECTORS’ REPORT continued
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 and make any
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;
• 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.
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 include 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 60 and 61.
Director’s 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 60
and 61. Having made enquiries of fellow
Directors and of the Company’s auditor,
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
auditor is 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
auditor is aware of that information.
On behalf of the Board
MICHAEL TURNER
CH AIRM A N
12 June 2024
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
115
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
DIRECTORS’ RESPONSIBILITIES STATEMENT
116
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
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 30 March 2024 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 52 week period ended 30 March 2024 (the ‘period’) which comprise:
Group
Parent company
Group balance sheet as at 30 March 2024
Company balance sheet as at 30 March 2024
Group income statement for the 52 week period then ended
Company statement of changes in equity for the 52 week
period then ended
Group statement of comprehensive income 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 30 to the financial statements, including
material accounting policy information
Group cash flow statement for the 52 week period then ended
Related notes 1 to 30 to the financial statements, including
material accounting policy information
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.
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.
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
117
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:
• We confirmed our understanding of the Group’s going concern assessment process and Management’s related Board
memoranda;
• We validated the covenants and terms of the debt facilities in the model to executed debt agreements and reperformed the
calculation of the Net Debt and Interest cover covenants against the terms of these agreements;
• We assessed the appropriateness of the duration of the going concern review period to 28 June 2025, which is a period of at
least 12 months from the date of approval of the financial statements, and considered whether there are any known events or
conditions that will occur beyond the period;
• We obtained the cashflow forecast models (base case, downside, stress and reverse stress test) to 28 June 2025, used by the
Board in its assessment, reviewed their arithmetical accuracy, whether they have been approved by the Board and considered
the Group’s historical forecasting accuracy;
• We challenged the cashflow forecasts with reference to historical trends and considered any evidence or market forecasts
that contradicted the assumptions in management’s forecasts;
• We assessed the consistency of the base case cashflows with the cashflow forecasts used within our impairment and
deferred tax recoverability assessment;
• We challenged the integrity of the models used by re-performing calculations and testing of formulas applied throughout;
• We confirmed the calculation of the reverse stress test scenario;
• We enquired of any climate change commitments in the going concern period and challenged whether any associated cash
outflows should be included within the forecasts;
• We read the Board minutes to identify any matters that may impact the going concern assessment; and
• 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 28 June 2025.
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
the review period to 28 June 2025.
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 or Company’s ability to continue as a going concern.
Overview of our audit approach
Audit scope
• 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 2023.
Key audit matters
• Impairment of property, plant and equipment and right-of-use assets
• Management override in the recognition of revenue
Materiality
• Overall Group materiality of £1.80m which represents 0.5% of Group revenue.
118
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
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.
We take into account size, risk profile, the organisation of the Group and effectiveness of Group-wide controls, changes in the
business environment, the potential impact of climate change and other factors such as recent Internal audit results when
assessing the level of work to be performed at each company.
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 year ended 30 March 2024 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
Stakeholders are increasingly interested in 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 higher sourcing costs/supply issues for ingredients
affected by increased extreme weather events impacting harvests and the risk of increased extreme weather events (e.g.
flooding) in the UK causing reduced footfall/pub closures and impacting staff travel and wellbeing. These are explained in the
Task Force on Climate Related Financial Disclosures on pages 43 to 56 and in the principal risks and uncertainties. They have
also explained their climate commitments on page 41. All of these disclosures form part of the “Other information,” rather than
the audited financial statements. Our procedures on these unaudited 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, in line with our responsibilities on “Other information”.
In planning and performing our audit we assessed the potential impacts of climate change on the Group’s business and any
consequential material impact on its financial statements.
The Group has explained in the basis of preparation (Note 1 of the financial statements) how it has reflected the impact of
climate change in its financial statements. There are no significant judgements or estimates relating to climate change in the
notes to the financial statements.
Our audit effort in considering the impact of climate change on the financial statements was focused on evaluating
management’s assessment of the impact of climate risk, physical and transition, its climate commitments, the effects of
material climate risks disclosed on pages 44 to 48 and the significant judgements and estimates disclosed in note 1. As part
of this evaluation, we performed our own risk assessment, to determine the risks of material misstatement in the financial
statements from climate change which needed to be considered in our audit.
We also challenged the Directors’ considerations of climate change risks in their assessment of going concern and viability and
associated disclosures. Where considerations of climate change were relevant to our assessment of going concern, these are
described above.
Based on our work we have not identified the impact of climate change on the financial statements to be a key audit matter
or to impact a key audit matter.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF FULLER,
SMITH & TURNER P.L.C. continued
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
119
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 and Risk Committee
Impairment of property, plant
and equipment (PPE) and
right-of-use assets (ROUA)
Refer to the Audit and Risk
Committee Report (pages 74 to
79); Accounting policies (page
134); and Note 13 of the
Consolidated Financial
Statements (page 152)
As at 30 March 2024, the
carrying value of PPE is £581.9
million (2023: £583.3million)
and right-of-use asset is £58.7
million (2023: £66.4 million).
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.
Indicators of impairment
reversals was considered at
certain sites where actual
trading performance has been
better than the budgeted in
previous impairment
assessments.
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.
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 and confirmed the
completeness of pub listing included in the
assessment.
Below we summarise the procedures performed
in relation to the key judgements for the tangible
(PPE and ROUA) assets impairment review:
• In respect of the cost inflation and consumer
spending habit assumptions 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 also performed sensitivity analysis based on
reasonable possible changes to key assumptions
determined by management being long term
growth rate and discount 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 desk-top 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 with the
assistance of our internal valuation specialists.
Based on our audit procedures we
have concluded the net impairment
charge of £2.2 million is
appropriately determined. We
highlighted that a reasonably
possible change in certain key
assumptions including growth rate
and discount rate 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.
120
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
Risk
Our response to the risk
Key observations communicated to the
Audit and Risk Committee
The impairment charge
and reversal of previous
impairments are classified
as a separately disclosed item
in the Income Statement.
We reviewed management’s indicators of impairment
reversal; and tested management’s estimate of the
reversal value, challenging whether there has been
sufficient improved performance to support any
reversal of impairment.
We reviewed 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 considered the
disclosure as separately disclosed items by reference
to the Group’s accounting policy, industry practice
and the FRC guidance.
Management override in
the recognition of revenue
Refer to the Accounting policies
(page 132) and Note 3 of the
financial statements (page 142)
The Group recorded revenue of
£359.1 million in the period
(2023: £336.6 million), including
£325.3 million in the Managed
houses segment (2023: £306.8
million) and £33.8 million in the
Tenanted Inns segment (2023:
£29.8 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 through
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.
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.
We concluded that revenue was
reasonably stated.
We did not identify any instances
of management override in relation
to revenue.
The above key audit matters are consistent with the prior year.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF FULLER,
SMITH & TURNER P.L.C. continued
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
121
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 to be £1.80 million (2023: £1.68 million), which is 0.5% (2023: 0.5% of Group revenue.
We believe that Group revenue to be an appropriate materiality basis due to its prominence in the financial reporting the
Group’s equity and debt stakeholders in the context of the Group which has not returned to a normalised level of profit.
During the course of our audit, we reassessed initial materiality and there is no change in final materiality from original
assessment at planning.
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% (2023: 75%) of our planning materiality, namely £1.35m (2023: £1.26m). We have set
performance materiality at this percentage as we did not anticipate a significant level of audit differences following our FY23 audit.
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit and Risk Committee that we would report to them all uncorrected audit differences in excess of
£90,000 (2023: £84,000), 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.
122
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
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.
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 132;
• 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 29;
• 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 132;
• Directors’ statement on fair, balanced and understandable set out on page 115;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 117;
• The section of the annual report that describes the review of effectiveness of risk management and internal control systems
set out on page 77; and
• The section describing the work of the Audit and Risk Committee set out on page 74.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 115, 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.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF FULLER,
SMITH & TURNER P.L.C. continued
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
123
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 the reporting frameworks (UK adopted international accounting standards), the Companies Act 2006,
Money Laundering regulations, the UK Corporate Governance Code, the Listing Rules of the UK Listing Authority and UK tax
compliance regulations.
• We understood how Fuller, Smith &Turner P.L.C. is complying with those frameworks by making inquiries 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 and Risk 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, retail 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.
Other matters we are required to address
• Following the recommendation from the Audit and Risk Committee, we were appointed by the company on 27 January 2021
to audit the financial statements for the year ended 27 March 2021 and subsequent financial periods.
• The period of total uninterrupted engagement including previous renewals and reappointments is four years, covering the
years ended 27 March 2021 to 30 March 2024.
• The audit opinion is consistent with the additional report to the Audit and Risk 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 ACHEL SAVAGE
(SENIOR STAT U TORY AUDITOR)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
12 June 2024
124
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
GROUP INCOME STATEMENT
FOR THE 52 WEEKS ENDED 30 MARCH 2024
52 weeks ended 30 March 2024
53 weeks ended 1 April 2023
Note
Before
separately
disclosed
items
£m
Separately
disclosed
items
£m
Total
£m
Before
separately
disclosed
items
£m
Separately
disclosed
items
£m
Total
£m
Revenue
3
359.1
–
359.1
336.6
–
336.6
Operating costs
4,5
(324.6)
(6.8)
(331.4)
(311.5)
(14.2)
(325.7)
Operating profit
34.5
(6.8)
27.7
25.1
(14.2)
10.9
Net finance costs
5,6
(14.0)
0.7
(13.3)
(12.4)
–
(12.4)
Profit on disposal of properties
5
–
–
–
–
11.8
11.8
Profit before tax
20.5
(6.1)
14.4
12.7
(2.4)
10.3
Tax
7
(5.8)
0.5
(5.3)
(2.9)
0.5
(2.4)
Profit for the year
14.7
(5.6)
9.1
9.8
(1.9)
7.9
Earnings per share per 40p ‘A’ and ‘C’ ordinary share
Pence
Pence
Pence
Pence
Basic
8
24.48
15.16
16.10
12.98
Diluted
8
24.29
15.04
16.07
12.96
Earnings per share per 4p ‘B’ ordinary share
Basic
8
2.45
1.52
1.61
1.30
Diluted
8
2.43
1.50
1.61
1.30
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
125
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE 52 WEEKS ENDED 30 MARCH 2024
Note
52 weeks
ended
30 March
2024
£m
53 weeks
ended
1 April
2023
£m
Profit for the year
9.1
7.9
Items that may be reclassified to profit or loss in subsequent years (net of tax)
Net gains on valuation of financial assets and liabilities
25
–
0.1
Items that will not be reclassified to profit or loss in subsequent years (net of tax)
Net actuarial losses on pension schemes
22
(0.3)
(2.5)
Tax related to items that will not be reclassified to profit or loss
7
0.1
0.6
Other comprehensive losses for the year, net of tax
(0.2)
(1.8)
Total comprehensive income for the year, net of tax
8.9
6.1
126
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
GROUP BALANCE SHEET
30 MARCH 2024
Note
Group
2024
£m
Group
2023
£m
Non-current assets
Intangible assets
10
28.6
29.0
Property, plant and equipment
11
581.9
583.3
Investment properties
12
1.5
1.5
Retirement benefit obligations
22
18.7
16.1
Right-of-use assets
16
58.7
66.4
Other financial assets
14
0.1
0.1
Total non-current assets
689.5
696.4
Current assets
Inventories
17
4.0
4.2
Trade and other receivables
18
8.4
10.2
Current tax receivable
0.1
0.7
Cash and cash equivalents
21
12.2
14.1
Total current assets
24.7
29.2
Assets classified as held for sale
19
8.4
7.0
Total assets
722.6
732.6
Current liabilities
Trade and other payables
20
(59.7)
(54.6)
Provisions
24
(0.8)
(0.5)
Borrowings
21
–
(6.0)
Lease liabilities
16
(4.4)
(4.8)
Total current liabilities
(64.9)
(65.9)
Non-current liabilities
Borrowings
21
(145.3)
(140.9)
Lease liabilities
16
(61.5)
(67.0)
Retirement benefit obligations
22
(1.4)
(1.5)
Deferred tax liabilities
7
(18.2)
(14.7)
Total non-current liabilities
(226.4)
(224.1)
Net assets
431.3
442.6
Capital and reserves
Share capital
26
25.4
25.4
Share premium account
26
53.2
53.2
Capital redemption reserve
26
3.7
3.7
Own shares
26
(32.9)
(21.3)
Hedging reserve
26
–
–
Retained earnings
381.9
381.6
Total equity
431.3
442.6
Approved by the Board and signed on 12 June 2024.
M J TURNER, FCA
CH AIRM A N
Registered Number: 241882
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
127
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
COMPANY BALANCE SHEET
30 MARCH 2024
Note
Company
2024
£m
Company
2023
£m
Non-current assets
Intangible assets
10
5.3
5.7
Property, plant and equipment
11
581.9
583.3
Investment properties
12
1.5
1.5
Retirement benefit obligations
22
18.7
16.1
Right-of-use assets
16
58.6
66.0
Other financial assets
14
0.1
0.1
Investments in subsidiaries
15
108.0
108.7
Total non-current assets
774.1
781.4
Current assets
Inventories
17
4.0
4.2
Trade and other receivables
18
8.4
10.2
Current tax receivable
0.7
0.7
Cash and cash equivalents
21
12.2
14.1
Total current assets
25.3
29.2
Assets classified as held for sale
19
8.4
7.0
Total assets
807.8
817.6
Current liabilities
Trade and other payables
20
(212.8)
(197.7)
Provisions
24
(0.8)
(0.5)
Borrowings
21
–
(6.0)
Lease liabilities
16
(4.3)
(4.7)
Total current liabilities
(217.9)
(208.9)
Non-current liabilities
Borrowings
21
(145.3)
(140.9)
Lease liabilities
16
(61.2)
(66.6)
Retirement benefit obligations
22
(1.4)
(1.5)
Deferred tax liabilities
7
(18.2)
(14.7)
Total non-current liabilities
(226.1)
(223.7)
Net assets
363.8
385.0
Capital and reserves
Share capital
26
25.4
25.4
Share premium account
26
53.2
53.2
Capital redemption reserve
26
3.7
3.7
Own shares
26
(32.9)
(21.3)
Hedging reserve
26
–
–
Merger reserve
26
(1.6)
(1.6)
Retained earnings
316.0
325.6
Total equity
363.8
385.0
Loss attributable to ordinary shareholders and included in the financial statements of the Parent Company was £0.8 million
(2023: profit of £0.4 million). Approved by the Board and signed on 12 June 2024.
M J TURNER, FCA
CH AIRM A N
Registered Number: 241882
128
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE 52 WEEKS ENDED 30 MARCH 2024
Group
Share
capital
(note 26)
£m
Share
premium
account
(note 26)
£m
Capital
redemption
reserve
(note 26)
£m
Own shares
(note 26)
£m
Hedging
reserve
£m
Retained
earnings
£m
Total
£m
At 26 March 2022
25.4
53.2
3.7
(16.6)
(0.1)
383.6
449.2
Profit for the year
–
–
–
–
–
7.9
7.9
Other comprehensive income/(losses) for
the year
–
–
–
–
0.1
(1.9)
(1.8)
Total comprehensive income for the year
–
–
–
–
0.1
6.0
6.1
Shares purchased to be held in ESOT or
as treasury
–
–
–
(4.8)
–
–
(4.8)
Shares released from ESOT and treasury
–
–
–
0.1
–
–
0.1
Dividends (note 9)
–
–
–
–
–
(7.4)
(7.4)
Share-based payment credits
–
–
–
–
–
(0.4)
(0.4)
Tax credited directly to equity
–
–
–
–
–
(0.2)
(0.2)
At 1 April 2023
25.4
53.2
3.7
(21.3)
–
381.6
442.6
Profit for the year
–
–
–
–
–
9.1
9.1
Other comprehensive expense for the year
–
–
–
–
–
(0.2)
(0.2)
Total comprehensive income for the year
–
–
–
–
–
8.9
8.9
Shares purchased to be held in ESOT or as
treasury
–
–
–
(12.4)
–
–
(12.4)
Shares released from ESOT and treasury
–
–
–
0.8
–
(0.3)
0.5
Dividends (note 9)
–
–
–
–
–
(10.0)
(10.0)
Share-based payment expense
–
–
–
–
–
1.7
1.7
At 30 March 2024
25.4
53.2
3.7
(32.9)
–
381.9
431.3
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
129
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE 52 WEEKS ENDED 30 MARCH 2024
Company
Share
capital
(note 26)
£m
Share
premium
account
(note 26)
£m
Capital
redemption
reserve
(note 26)
£m
Own shares
(note 26)
£m
Hedging
reserve
£m
Merger
reserve
£m
Retained
earnings
£m
Total
£m
At 26 March 2022
25.4
53.2
3.7
(16.6)
(0.1)
(1.6)
335.1
399.1
Profit for the year
–
–
–
–
–
–
0.4
0.4
Other comprehensive income/(losses)
for the year
–
–
–
–
0.1
–
(1.9)
(1.8)
Total comprehensive income for
the year
–
–
–
–
0.1
–
(1.5)
(1.4)
Shares purchased to be held in ESOT
or as treasury
–
–
–
(4.8)
–
–
–
(4.8)
Shares released from ESOT and
treasury
–
–
–
0.1
–
–
–
0.1
Dividends (note 9)
–
–
–
–
–
–
(7.4)
(7.4)
Share-based payment credits
–
–
–
–
–
–
(0.4)
(0.4)
Tax debited directly to equity
–
–
–
–
–
–
(0.2)
(0.2)
At 1 April 2023
25.4
53.2
3.7
(21.3)
–
(1.6)
325.6
385.0
Loss for the year
–
–
–
–
–
–
(0.8)
(0.8)
Other comprehensive expense
for the year
–
–
–
–
–
–
(0.2)
(0.2)
Total comprehensive loss for the year
–
–
–
–
–
–
(1.0)
(1.0)
Shares purchased to be held in ESOT
or as treasury
–
–
–
(12.4)
–
–
–
(12.4)
Shares released from ESOT or as
treasury
–
–
–
0.8
–
–
(0.3)
0.5
Dividends (note 9)
–
–
–
–
–
–
(10.0)
(10.0)
Share-based payment credits
–
–
–
–
–
–
1.7
1.7
At 30 March 2024
25.4
53.2
3.7
(32.9)
–
(1.6)
316.0
363.8
130
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
GROUP CASH FLOW STATEMENT
FOR THE 52 WEEKS ENDED 30 MARCH 2024
Note
Group
52 weeks
ended
30 March 2024
£m
Group
53 weeks
ended
1 April 2023
£m
Profit before tax for continuing operations
14.4
10.3
Net finance costs before separately disclosed items
6
14.0
12.4
Separately disclosed items
5
6.1
2.4
Depreciation and amortisation
4
26.3
26.7
Adjusted EBITDA1
60.8
51.8
Difference between pension charge and cash paid
22
(2.6)
(2.3)
Share-based payment charge/(credit)
4
1.7
(0.4)
Change in trade and other receivables
0.6
2.5
Change in inventories
0.2
(0.6)
Change in trade and other payables
6.9
(3.0)
Cash impact of operating separately disclosed items
5
1.7
(0.5)
Cash generated from operations
69.3
47.5
Tax paid
(1.0)
–
Net cash generated from operating activities
68.3
47.5
Cash flow from investing activities
Purchase of property, plant and equipment
(27.2)
(30.7)
Sale of property, plant and equipment, right-of-use assets and assets held for sale
–
16.0
Net cash outflow from investing activities
(27.2)
(14.7)
Cash flow from financing activities
Purchase of own shares
26
(12.4)
(4.8)
Receipts on release of own shares to option schemes
26
0.5
0.1
Interest paid
(10.4)
(8.7)
Preference dividends paid
9
(0.1)
(0.1)
Equity dividends paid
9
(10.0)
(7.4)
Drawdown of bank loans
21
4.5
–
Repayment of debenture
21
(6.0)
–
Surrender of leases
–
(2.1)
Principal and interest elements of lease payments
16
(8.7)
(9.8)
Payment of loan arrangement fees
21
(0.4)
(1.5)
Net cash outflow from financing activities
(43.0)
(34.3)
Net movement in cash and cash equivalents
(1.9)
(1.5)
Cash and cash equivalents at the start of the year
21
14.1
15.6
Total cash and cash equivalents at the end of the year
21
12.2
14.1
1 Adjusted EBITDA is EBITDA excluding separately disclosed items.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
131
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
COMPANY CASH FLOW STATEMENT
FOR THE 52 WEEKS ENDED 30 MARCH 2024
Note
Company
52 weeks
ended
30 March 2024
£m
Company
53 weeks
ended
1 April 2023
£m
Profit before tax for continuing operations
3.9
3.1
Net finance costs before separately disclosed items
24.2
18.8
Separately disclosed items
6.4
3.2
Depreciation and amortisation
26.2
26.7
Adjusted EBITDA1
60.7
51.8
Difference between pension charge and cash paid
22
(2.6)
(2.3)
Share-based payment charge/(credit)
1.7
(0.4)
Change in trade and other receivables
0.8
(3.9)
Change in inventories
0.2
(0.6)
Change in trade and other payables
6.8
3.3
Cash impact of operating separately disclosed items
1.7
(0.5)
Cash generated from operations
69.3
47.4
Tax paid
(1.0)
–
Net cash generated from operating activities
68.3
47.4
Cash flow from investing activities
Purchase of property, plant and equipment
(27.2)
(30.7)
Sale of property, plant and equipment, right-of-use assets and assets held for sale
–
16.0
Net cash outflow from investing activities
(27.2)
(14.7)
Cash flow from financing activities
Purchase of own shares
26
(12.4)
(4.8)
Receipts on release of own shares to option schemes
26
0.5
0.1
Interest paid
(10.4)
(8.7)
Preference dividends paid
9
(0.1)
(0.1)
Equity dividends paid
9
(10.0)
(7.4)
Drawdown of bank loans
21
4.5
–
Repayment of debenture
21
(6.0)
–
Surrender of leases
–
(2.1)
Principal and interest elements of lease payments
16
(8.7)
(9.7)
Payment of loan arrangement fees
21
(0.4)
(1.5)
Net cash outflow from financing activities
(43.0)
(34.2)
Net movement in cash and cash equivalents
(1.9)
(1.5)
Cash and cash equivalents at the start of the year
21
14.1
15.6
Total cash and cash equivalents at the end of the year
21
12.2
14.1
1 Adjusted EBITDA is EBITDA excluding separately disclosed items.
132
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
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 30 March
2024 were authorised for issue by the Board of Directors on 12 June 2024 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 30 March
2024. 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 6 to 57. The financial position of the Company, its cash flows, net debt and borrowing
facilities and the maturity of those facilities are set out on pages 124 to 179.
In addition, there are further details in the financial statements on the Group’s financial risk management, objectives and
policies in note 25.
At 30 March 2024, the Group Balance Sheet comprises of 88% of the estate being freehold properties and available headroom
on facilities of £75.0 million and £12.2 million of cash with resulting net debt of £133.1 million. The Group has unsecured banking
facilities of £200 million, split between a revolving credit facility of £110 million and a term loan of £90 million. Under the
facilities agreement, the covenant suite (tested quarterly) consist of net debt to adjusted EBITDA (leverage) and adjusted EBITDA
to net finance charges. During the period, the Group agreed with its lenders to extend these facilities for a further year through
to May 2027. The Group repaid £6 million of its debentures during the period out of the Group’s current facilities. The remaining
debentures of £20 million are not due for repayment until 2028.
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 28 June 2025, based upon two scenarios, the “base case” and the “downside
case”. The base case is the Board approved FY2025 budget as well as the Q1 FY2026 plan which forms part of the Board-
approved three year plan. The base case assumes that sales will continue to grow, but with only modest food and drink volume
growth. The base case also assumes that food and drink inflationary pressures ease and inflation returns to manageable levels.
However, the base case assumes that staff costs will be impacted by the National Living Wage resulting in continued wage
inflation across all job roles. The base case scenario indicates that the Group will have sufficient resources to continue to settle
its debts as they fall due and operate well within its covenants for the going concern assessment period.
The Group has also modelled a “downside case” which assumes that sales volume reduces by 10% in FY2025 and 5% in FY2026
from the “base case” and that cost inflation continues at a higher rate than assumed in the “base case”. In this “downside case”,
management would implement mitigating actions such as overhead cost reduction, reduction of capital expenditure and other
property spend to essential maintenance and a decrease in bonus pay-out. Under this scenario, the Group would still have
sufficient resources to settle liabilities as they fall due and headroom on its covenants through the duration of the period.
The Group has also performed a “reverse stress case” which shows that the Group could withstand a 30% reduction in volumes
from those assessed in the “base case” throughout the going concern period before the covenants would be breached in June
FY2026. The Directors have concluded that the reduction in sales volumes required to breach the covenants is too remote and
that this scenario is therefore considered implausible.
Under both the base and downside scenarios modelled, the Group would have sufficient headroom on its facilities throughout
the going concern assessment period. Additionally, under the downside scenario there are further mitigating actions which the
Group has in its control to either improve EBITDA or reduce net debt, such as further reduction in capital expenditure to only
essential maintenance and decision not to pay dividends and all bonuses. Further mitigating actions would also include
disposals of licensed and unlicensed properties.
The Directors have also determined that, over the period of the going concern assessment, there is not expected to be a
significant impact because of climate change.
After due consideration of the matters 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 28 June 2025, and have therefore adopted the going
concern basis in the preparation of these financial statements.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
133
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
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 22.
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.
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 30 March 2024 (2023: 53 weeks ended 1 April 2023). 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.
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.
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:
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
134
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
1. Authorisation of Financial Statements and Accounting Policies continued
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
The term of the lease
Roofs
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.
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.
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.
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.
Impairment losses, and any reversal of such losses, are recognised in the Income Statement.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
135
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
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.
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 21).
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 would be restated).
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is calculated using the “Average Weighted Cost”
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.
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.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
136
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
1. Authorisation of Financial Statements and Accounting Policies continued
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 FVOCI 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.
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, and 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.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
137
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
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.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
138
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
1. Authorisation of Financial Statements and Accounting Policies continued
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.
The Group’s ordinary shares are classified as equity instruments. For the purposes of the disclosures given in note 25, 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 Supply 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.
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.
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).
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.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
139
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
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.
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.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
140
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
1. Authorisation of Financial Statements and Accounting Policies continued
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.
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 Committee have issued the
following standards and interpretations with an effective date for periods starting on or before the date on which these financial
statements start:
• International Tax reform – Pillar Two Model Rules – Amendments to IAS 12 (effected 1 January 2023)
• IFRS18 Presentation and disclosure in financial statements (effected 1 April 2024).
The adoption of the above standards have not led to material effect in the financial statements. 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.
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 6 to 57 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.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
141
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
2. Segmental Analysis continued
52 weeks ended 30 March 2024
Managed Pubs
and Hotels
£m
Tenanted
Inns
£m
Unallocated1
£m
Total
£m
Revenue
Sale of goods and services
288.1
24.1
–
312.2
Accommodation income
35.5
–
–
35.5
Total revenue from contracts with customers
323.6
24.1
–
347.7
Rental income
1.7
9.7
–
11.4
Revenue
325.3
33.8
–
359.1
Segment result
41.6
13.7
(20.8)
34.5
Operating separately disclosed items
(6.8)
Operating profit
27.7
Net finance costs
(13.3)
Profit before tax
14.4
Other segment information
Additions to property, plant and equipment
23.0
3.9
0.1
27.0
Depreciation and amortisation
22.4
3.0
0.9
26.3
Impairment of property and right-of-use assets net of reversals
5.1
3.2
–
8.3
53 weeks ended 1 April 2023
Managed Pubs
and Hotels
£m
Tenanted
Inns
£m
Unallocated1
£m
Total
£m
Revenue
Sale of goods and services
271.6
21.2
–
292.8
Accommodation income
33.7
–
–
33.7
Total revenue from contracts with customers
305.3
21.2
–
326.5
Rental income
1.5
8.6
–
10.1
Revenue
306.8
29.8
–
336.6
Segment result
30.0
13.2
(18.1)
25.1
Operating separately disclosed items
(14.2)
Operating profit
10.9
Profit on disposal of properties
11.8
Net finance costs
(12.4)
Profit before tax
10.3
Other segment information
Additions to property, plant and equipment
25.2
4.7
0.1
30.0
Depreciation and amortisation
23.4
2.3
1.0
26.7
Impairment of property, right-of-use assets and assets classified as
held for sale
12.5
1.8
–
14.3
1 Unallocated expenses represent primarily the salaries and costs of central management and support services. Unallocated capital
expenditure relates to additions to the Head Office.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
142
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
3. Revenue
Geographical Information
All of the Group’s business is within the UK and therefore the Group only has one distinct geographical market.
52 weeks
ended
30 March
2024
£m
53 weeks
ended
1 April
2023
£m
Revenue disclosed in the Income Statement is analysed as follows:
Sale of goods and services
312.2
292.8
Accommodation income
35.5
33.7
Total revenue from contracts with customers
347.7
326.5
Rental income
11.4
10.1
Revenue
359.1
336.6
4. Operating Costs
52 weeks
ended
30 March
2024
£m
53 weeks
ended
1 April
2023
(Restated1)
£m
Production costs and cost of goods used in retailing
88.0
85.0
Staff costs
129.9
119.1
Repairs and maintenance
12.5
8.5
Depreciation of property, plant and equipment and amortisation of intangible assets
20.1
19.6
Depreciation of right-of-use assets
6.2
7.1
Rental expense relating to short-term and low value leases
0.3
0.2
Variable lease payments2
3.9
3.5
Property costs
15.6
18.0
Utilities
13.6
19.6
Separately disclosed items (note 5)
6.8
14.2
Other operating costs
34.5
30.9
331.4
325.7
1 Some costs in the prior year have been reclassified to allow better comparison.
2 Variable lease payments are dependent on turnover levels.
Details of income and direct expenses relating to rental income from investment properties are shown in note 12.
a) Auditor’s Remuneration
52 weeks
ended
30 March
2024
£m
53 weeks
ended
1 April
2023
£m
Fees payable to Company’s auditors:
– Statutory audit fees of Group financial statements
0.5
0.5
0.5
0.5
Other audit related services of £6,000 (2023: £5,000) for covenant reporting, £10,000 (2023: £nil) for agreed upon procedures on
the half year announcement, and £nil (2023: £45,000) for interim review were also incurred in the period.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
143
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
b) Employee Benefit Expenses1
52 weeks
ended
30 March 2024
£m
53 weeks
ended
1 April 2023
£m
Wages and salaries1,2
116.1
102.6
Social security costs
8.5
8.7
Pension benefits
2.2
2.2
Other staff costs3
3.1
5.6
129.9
119.1
1 Includes Executive Directors.
2 Includes share-based charge of £1.7 million (2023: credit £0.4 million).
3 Includes temporary staff costs of £3.0 million (2023: £5.0 million).
c) Average Number of Employees1
The average monthly number of persons employed by the Group (including part-time staff) was as follows:
2024
Number
2023
Number
Pub, hotel and restaurant teams
5,177
5,138
Support office2
116
109
5,293
5,247
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 80 to 111.
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.
52 weeks
ended
30 March 2024
£m
53 weeks
ended
1 April 2023
£m
Amounts included in operating profit:
Reorganisation costs
–
(0.5)
Impairment of properties, right-of-use assets and assets classified as held for sale net of reversal
of impairments (note 13)
(8.3)
(14.3)
Insurance and legal claims
0.4
(0.2)
VAT provision release
1.1
0.8
Total separately disclosed items included in operating profit
(6.8)
(14.2)
Profit on disposal of properties
–
11.8
Separately disclosed finance credits:
Finance credit on net pension liabilities
0.7
0.5
Finance charge on the write down of arrangement fees
–
(0.5)
Total separately disclosed finance credits
0.7
–
Total separately disclosed items before tax
(6.1)
(2.4)
Exceptional tax:
Profit on disposal of properties
–
(1.0)
Change in tax rate
–
0.5
Other items
0.5
1.0
Total separately disclosed tax
0.5
0.5
Total separately disclosed items
(5.6)
(1.9)
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
144
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
5. Separately Disclosed Items continued
The impairment charge of £8.3 million (1 April 2023: £14.3 million) relates to an impairment charge of £10.4 million for the write
down of thirty properties and three right-of-use assets to their recoverable value (1 April 2023: 22 properties) net of reversals of
impairment of £2.1 million.
The insurance and legal claims of £0.4 million relate to three separate proceedings: a credit of £0.3 million on the part settlement
of a legal claim that the Group has brought against its insurers in relation to the pandemic. The matter is still ongoing. A credit
of £0.3 million in relation to the settlement of a class action which the Group was part of. This is net of a provision of £0.2 million
in relation to an ongoing legal claim against the Group. Further information has not been disclosed as it could prejudice the
outcome of the proceedings.
The VAT provision release of £1.1 million relates to the unwind of a provision on the settlement of a VAT claim.
There were no disposals of properties in the year (1 April 2023: £11.8 million recognised on the sale of nine properties).
The cash impact of operating separately disclosed items before tax for the 52 weeks ended 30 March 2024 was £1.7 million cash
inflow (1 April 2023: £0.5 million cash outflow).
6. Finance Costs
52 weeks
ended
30 March 2024
£m
53 weeks
ended
1 April 2023
£m
Finance Income
Interest income from financial assets
0.3
0.2
Finance costs
Interest expense arising on:
Financial liabilities at amortised cost – loans and debentures
(11.1)
(9.6)
Financial liabilities at amortised cost – preference shares
(0.1)
(0.1)
Financial liabilities at amortised cost – lease liabilities (note 16)
(3.1)
(2.9)
Net finance costs before separately disclosed items
(14.0)
(12.4)
Finance credit on net pension liabilities (note 5)
0.7
0.5
Finance charge on the write down of arrangement fees
–
(0.5)
Net finance costs after separately disclosed items
(13.3)
(12.4)
7. Taxation
Tax on Profit on Ordinary Activities
Group
52 weeks
ended
30 March 2024
£m
53 weeks
ended
1 April 2023
£m
Tax charged in the Income Statement
Current tax on profit for the year
1.7
–
Total current tax expense
1.7
–
Deferred income tax:
Origination and reversal of temporary differences
4.0
3.6
Adjustments over provided in previous years
(0.4)
(1.2)
Total deferred tax expense
3.6
2.4
Total tax charged in the Income Statement
5.3
2.4
Analysed as:
Before separately disclosed items
5.8
2.9
Separately disclosed items
(0.5)
(0.5)
5.3
2.4
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
145
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
7. Taxation continued
Reconciliation of the Total Tax Charge
The tax expense in the Income Statement for the year is higher (2023: tax expense is higher) than the standard rate of
corporation tax in the UK of 25% (2023: 19%). The differences are reconciled below:
52 weeks
ended
30 March 2024
£m
53 weeks
ended
1 April 2023
£m
Profit before tax expense
14.4
10.3
Accounting profit multiplied by the UK standard rate of corporation tax of 25% (2023: 19%)
3.6
2.0
Items not deductible for tax purposes
0.2
0.2
Deferred tax over-provided in previous years
(0.4)
(1.2)
Net movements in respect of property
1.9
1.4
Total tax charged in the Income Statement
5.3
2.4
Deferred tax charged/(credited) to the Income Statement
Deferred tax depreciation
1.2
1.5
Unrealised capital gains (on PP&E)
(1.2)
1.7
Retirement benefit obligations
0.8
1.8
Tax losses
2.9
0.7
Other
(0.1)
(3.4)
Corporate interest restriction
–
0.1
Deferred tax in the Income Statement
3.6
2.4
Tax relating to items credited to the Statement of Comprehensive Income
Deferred tax:
Net actuarial losses on pension scheme
(0.1)
(0.6)
Total tax credited in the Statement of Comprehensive Income
(0.1)
(0.6)
Tax relating to items debited directly to equity
Deferred tax:
Share-based payments
–
0.2
Total tax charged to equity
–
0.2
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
146
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
7. Taxation continued
Deferred Tax Provision
The deferred tax included in the Balance Sheet is as follows:
Deferred tax
Deferred tax asset/(liability)
Group
Retirement
benefit
obligations
£m
Tax losses
carried
forward
£m
Employee
share
schemes
£m
Decelerated
tax
depreciation
£m
Unrealised
capital
gains (on
PP&E)
£m
Pension
spreading
£m
Other1
£m
Total
£m
Balances at 26 March 2022
(3.5)
10.6
0.3
4.9
(27.1)
1.1
1.0
(12.7)
(Charge)/credit to Income Statement
(0.8)
(0.7)
(0.1)
(1.5)
(1.7)
(1.0)
3.4
(2.4)
Credit to other comprehensive income
0.6
–
–
–
–
–
–
0.6
Charge taken directly to equity
–
–
(0.2)
–
–
–
–
(0.2)
Balances at 1 April 2023
(3.7)
9.9
–
3.4
(28.8)
0.1
4.4
(14.7)
(Charge)/credit to Income Statement
(0.8)
(2.9)
0.1
(1.2)
1.2
(0.1)
0.1
(3.6)
Credit to other comprehensive income
0.1
–
–
–
–
–
–
0.1
Balances at 30 March 2024
(4.4)
7.0
0.1
2.2
(27.6)
–
4.5
(18.2)
1 Includes £4.3 million of timing difference between tax and accounting treatment of capital disposals.
2024
£m
2023
£m
Deferred tax assets
13.8
17.8
Deferred tax liabilities
(32.0)
(32.5)
(18.2)
(14.7)
Deferred tax asset/(liability)
Company
Retirement
benefit
obligations
£m
Tax losses
carried
forward
£m
Employee
share
schemes
£m
Decelerated
tax
depreciation
£m
Unrealised
capital
gains (on
PP&E)
£m
Pension
spreading
£m
Other1
£m
Total
£m
Balances at 26 March 2022
(3.5)
10.5
0.3
4.9
(27.1)
1.1
1.0
(12.8)
(Charge)/credit to Income Statement
(0.8)
(0.6)
(0.1)
(1.5)
(1.7)
(1.0)
3.4
(2.3)
Credit to other comprehensive income
0.6
–
–
–
–
–
–
0.6
Charge taken directly to equity
–
–
(0.2)
–
–
–
–
(0.2)
Balances at 1 April 2023
(3.7)
9.9
–
3.4
(28.8)
0.1
4.4
(14.7)
(Charge)/credit to Income Statement
(0.8)
(2.9)
0.1
(1.2)
1.2
(0.1)
0.1
(3.6)
Credit to other comprehensive income
0.1
–
–
–
–
–
–
0.1
Balances at 30 March 2024
(4.4)
7.0
0.1
2.2
(27.6)
–
4.5
(18.2)
1 Includes £4.3 million of timing difference between tax and accounting treatment of capital disposals.
2024
£m
2023
£m
Deferred tax assets
13.8
17.8
Deferred tax liabilities
(32.0)
(32.5)
(18.2)
(14.7)
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
147
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
8. Earnings Per Share
Group
52 weeks
ended
30 March
2024
£m
53 weeks
ended
1 April
2023
£m
Profit attributable to equity shareholders
9.1
7.9
Separately disclosed items net of tax
5.6
1.9
Adjusted earnings attributable to equity shareholders
14.7
9.8
Weighted average share capital
60,043,000
60,875,000
Dilutive outstanding options and share awards
482,000
90,000
Diluted weighted average share capital
60,525,000
60,965,000
40p ‘A’ and ‘C’ ordinary share
Pence
Pence
Basic earnings per share
15.16
12.98
Diluted earnings per share
15.04
12.96
Adjusted earnings per share
24.48
16.10
Diluted adjusted earnings per share
24.29
16.07
4p ‘B’ ordinary share
Pence
Pence
Basic earnings per share
1.52
1.30
Diluted earnings per share
1.50
1.30
Adjusted earnings per share
2.45
1.61
Diluted adjusted earnings per share
2.43
1.61
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 3,410,735
(2023: 2,134,152).
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
52 weeks
ended
30 March
2024
£m
53 weeks
ended
1 April
2023
£m
Declared and paid during the year
Equity dividends on ordinary shares:
Final dividend for 2023: 10.0p (2022: 7.41p)
6.1
4.6
Interim dividend for 2024: 6.63p (2023: 4.68p)
3.9
2.8
Equity dividends paid
10.0
7.4
Dividends on cumulative preference shares (note 6)
0.1
0.1
Proposed for approval at the Annual General Meeting
Final dividend for 2024: 11.12p (2023: 10.0p)
6.5
6.1
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.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
148
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
10. Intangible Assets
Group and Company
Goodwill
£m
IT Development
costs
£m
Group
Total
£m
Company
Total
£m
Cost
At 26 March 2022
31.8
3.0
34.8
6.6
At 1 April 2023
31.8
3.0
34.8
6.6
At 30 March 2024
31.8
3.0
34.8
6.6
Amortisation and impairment
At 26 March 2022
5.1
0.2
5.3
0.4
Provided during the year
–
0.5
0.5
0.5
At 1 April 2023
5.1
0.7
5.8
0.9
Provided during the year
–
0.4
0.4
0.4
At 30 March 2024
5.1
1.1
6.2
1.3
Net book value at 30 March 2024
26.7
1.9
28.6
5.3
Net book value at 1 April 2023
26.7
2.3
29.0
5.7
Net book value at 26 March 2022
26.7
2.8
29.5
6.2
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 finance system and are made up of consulting time and internal
employee costs. Amortisation is recognised over the useful life of the asset of seven years.
Goodwill
2024
2023
Goodwill is allocated to CGUs as follows:
Managed
£m
Tenanted
£m
Total
£m
£m
Gales estate
9.1
13.6
22.7
22.7
Jacomb Guinness estate
0.6
–
0.6
0.6
Bel & The Dragon
1.0
–
1.0
1.0
Cotswold Inns & Hotels
2.4
–
2.4
2.4
13.1
13.6
26.7
26.7
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
149
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
11. Property, Plant and Equipment
Group
Land &
buildings –
owned & used
£m
Land &
buildings –
owned &
acting as
lessor
£m
Plant,
machinery &
vehicles
£m
Fixtures &
fittings
£m
Total
£m
Cost
At 26 March 2022
493.6
109.6
6.3
179.5
789.0
Additions
12.0
2.3
–
15.7
30.0
Disposals
(1.4)
(0.3)
–
(6.6)
(8.3)
Transfer to assets held for sale (note 19)
(7.8)
–
–
(1.4)
(9.2)
At 1 April 2023
496.4
111.6
6.3
187.2
801.5
Additions
7.7
5.2
–
14.1
27.0
Disposals
(0.1)
(0.1)
–
(2.8)
(3.0)
Transfer of use1
(30.2)
30.2
–
–
–
Transfer to assets held for sale (note 19)
(1.4)
–
–
(0.3)
(1.7)
At 30 March 2024
472.4
146.9
6.3
198.2
823.8
Depreciation and impairment
At 26 March 2022
54.9
10.3
1.7
129.4
196.3
Provided during the year
4.8
1.0
–
13.3
19.1
Disposals
(0.8)
–
–
(6.3)
(7.1)
Impairment loss (note 13)
13.4
–
–
–
13.4
Transfer to assets held for sale (note 19)
(2.3)
–
–
(1.2)
(3.5)
At 1 April 2023
70.0
11.3
1.7
135.2
218.2
Provided during the year
4.9
1.7
–
13.1
19.7
Disposals
–
–
–
(2.7)
(2.7)
Transfer of use1
(4.8)
4.8
–
–
–
Impairment loss net of reversal (note 13)
3.8
3.2
–
–
7.0
Transfer to assets held for sale (note 19)
(0.1)
–
–
(0.2)
(0.3)
At 30 March 2024
73.8
21.0
1.7
145.4
241.9
Net book value at 30 March 2024
398.6
125.9
4.6
52.8
581.9
Net book value at 1 April 2023
426.4
100.3
4.6
52.0
583.3
Net book value at 26 March 2022
438.7
99.3
4.6
50.1
592.7
1 During the year, 23 sites were transferred from Managed to Tenanted.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
150
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
11. Property, Plant and Equipment continued
Company
Land &
buildings
– owned &
used
£m
Land &
buildings –
owned &
acting as
lessor
£m
Plant,
machinery &
vehicles
£m
Fixtures &
fittings
£m
Total
£m
Cost
At 26 March 2022
490.1
109.6
4.8
179.1
783.6
Additions
12.0
2.3
–
15.7
30.0
Disposals
(1.4)
(0.3)
–
(6.6)
(8.3)
Transfer to assets held for sale (note 19)
(7.8)
–
–
(1.4)
(9.2)
At 1 April 2023
492.9
111.6
4.8
186.8
796.1
Additions
7.7
5.2
–
14.1
27.0
Disposals
(0.1)
(0.1)
–
(2.8)
(3.0)
Transfer of use1
(30.2)
30.2
–
–
–
Transfer to assets held for sale (note 19)
(1.4)
–
–
(0.3)
(1.7)
At 30 March 2024
468.9
146.9
4.8
197.8
818.4
Depreciation and impairment
At 26 March 2022
50.7
10.3
2.5
127.4
190.9
Provided during the year
4.8
1.0
–
13.3
19.1
Disposals
(0.8)
–
–
(6.3)
(7.1)
Impairment loss
13.4
–
–
–
13.4
Transfer to assets held for sale (note 19)
(2.3)
–
–
(1.2)
(3.5)
At 1 April 2023
65.8
11.3
2.5
133.2
212.8
Provided during the year
4.9
1.7
–
13.1
19.7
Disposals
–
–
–
(2.7)
(2.7)
Transfer of use1
(4.8)
4.8
–
–
–
Impairment loss
3.8
3.2
–
–
7.0
Transfer to assets held for sale (note 19)
(0.1)
–
–
(0.2)
(0.3)
At 30 March 2024
69.6
21.0
2.5
143.4
236.5
Net book value at 30 March 2024
399.3
125.9
2.3
54.4
581.9
Net book value at 1 April 2023
427.1
100.3
2.3
53.6
583.3
Net book value at 26 March 2022
439.4
99.3
2.3
51.7
592.7
1 During the year, 23 sites were transferred from Managed to Tenanted.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
151
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
12. Investment Properties
Group and
Company
freehold and
leasehold
properties
£m
Cost at 26 March 2022
1.7
Disposals
(0.1)
At 1 April 2023
1.6
At 30 March 2024
1.6
Depreciation and impairment at 26 March 2022
0.1
At 1 April 2023
0.1
At 30 March 2024
0.1
Net book value at 30 March 2024
1.5
Net book value at 1 April 2023
1.5
Net book value at 26 March 2022
1.6
Fair value at 30 March 2024
6.7
Fair value at 1 April 2023
6.7
Fair value at 26 March 2022
8.4
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 30 March 2024, the Group did not impair any investment properties (2023: £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 Income Statement
relating to rental income from investment properties are as follows:
Group and Company
2024
£m
2023
£m
Rental income
0.3
0.3
Direct operating expenses
(0.1)
–
All direct operating expenses relate to properties that generate rental income.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
152
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
13. Impairment
During the year, impairment losses net of reversals of £8.3 million (2023: £14.3 million) were recognised within separately
disclosed items:
Group
2024
£m
2023
£m
Impairment losses
Property, plant and equipment
9.1
13.4
Right-of-use assets
1.3
0.5
Assets held for sale
–
0.4
Impairment reversals – Property, plant and equipment
(2.1)
–
Total net impairment charge
8.3
14.3
Company
2024
£m
2023
£m
Impairment losses
Property, plant and equipment
9.1
13.4
Right-of-use assets
1.1
0.5
Assets held for sale
–
0.4
Investment in subsidiary1
0.7
–
Impairment reversals – Property, plant and equipment
(2.1)
–
Total net impairment charge
8.8
14.3
1 Investment in Cotswold Inns & Hotels was impaired as the majority of the trade and assets has been hived up into the parent company.
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 assumptions used by management in setting the Board-approved financial budgets for the initial three year period were
as follows:
• Trading volumes and forecast growth rates: The forecasts make assumptions on trading volumes by site based on the FY2024
results, assumptions around the UK economic recovery and the on-going impact on consumer confidence
• Operating profits: The forecasts are based on historical experience of operating margins, adjusted for the impact of inflation
net of price increases
• 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
• A long-term growth rate of 2.0% (FY2023: 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) (FY2023: 10.5x (freehold 11.8x)) is used for the Managed estate and 10.9x
(FY2023: 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 10.7% (FY2023: 10.3%).
During the 52 weeks ended 30 March 2024, the Group recognised an impairment loss of £9.1 million (FY2023: £13.4 million) on
property, plant and equipment and £1.3 million (FY2023: £0.5 million) of impairment on right-of-use assets in respect of the write
down of 33 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. Net of the
impairment loss there are £2.1 million of impairment reversals recognised for pubs where either an investment has led to a
significant growth in performance or through changing the operating model from Managed to Tenanted.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
153
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Sensitivity to Changes in Assumptions
The calculation of value in use is most sensitive to the assumptions in respect of 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)
2024
£m
2023
£m
Increase discount rate by 1.5%
20.0
24.7
Decrease discount rate by 1.5%
(14.1)
(15.8)
Increase growth rate by 0.5%
(4.9)
(5.3)
Decrease growth rate by 0.5%
5.8
6.7
The value in use calculation is also sensitive to variations in the budgeted cash flows, which are impacted by 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 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 £3.9 million for the CGUs where recoverable amount has been assessed on FVLCS.
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. There was no impairment to goodwill in the 52 weeks ended 30 March 2024 (2023: £nil).
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 the discount rate would lead to an impairment of £0.5 million and a decrease in the growth of 0.5% would lead to an
impairment of £0.1 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 30 March 2024, the Group did not impair any investment properties (2023: £nil). Refer to note 12.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
154
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
14. Other Financial Assets and Liabilities
Group and Company
Group
2024
£m
Group
2023
£m
Company
2024
£m
Company
2023
£m
Interest rate cap and collar
0.1
0.1
0.1
0.1
Total financial assets within non-current assets
0.1
0.1
0.1
0.1
Details of the interest rate cap and collar and interest rate swaps are provided in note 25c (i).
15. Investments in Subsidiaries
Company
Cost
£m
Provision
£m
Net book value
£m
At 26 March 2022
120.8
(11.7)
109.1
Impairment
–
(0.4)
(0.4)
At 1 April 2023
120.8
(12.1)
108.7
Impairment
–
(0.7)
(0.7)
At 30 March 2024
120.8
(12.8)
108.0
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
100%
Non-trading subsidiary
Fuller Smith & Turner Estates Limited
£1 ordinary shares
100%
Non-trading subsidiary
Ringwoods Limited
£1 ordinary shares
100%
Non-trading subsidiary
Griffin Inns LTD.
£1 ordinary shares
100%
Non-trading subsidiary
Jacomb Guinness Limited
£1 ordinary shares
100%
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
£1 ordinary shares
100%
Holding company
B & D Country Inns II Limited
£1 ordinary shares
100%
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
£1 ordinary shares
100% (indirect)
Non-trading subsidiary
B & D (Reading) Limited
£1 ordinary shares
100% (indirect)
Non-trading subsidiary
B & D (Win) Limited
£1 ordinary shares
100% (indirect)
Non-trading subsidiary
RSH 200 Limited
£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, W4 3NN.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
155
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
16. Leases
This note provides information for leases where the Group is a lessee. For leases where the Group is a lessor, see note 28.
a) Amounts Recognised in the Balance Sheet
Group and Company
Group
2024
£m
Group
2023
£m
Company
2024
£m
Company
2023
£m
Right-of-use assets
Properties
58.6
66.2
58.5
65.8
Equipment
0.1
0.2
0.1
0.2
58.7
66.4
58.6
66.0
Lease liabilities
Current
4.4
4.8
4.3
4.7
Non-current
61.5
67.0
61.2
66.6
65.9
71.8
65.5
71.3
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:
Group
Property
£m
Equipment
£m
Vehicles
£m
Total
£m
Net carrying value as at 26 March 2022
73.1
0.6
0.1
73.8
Disposals
(1.0)
–
–
(1.0)
Lease amendments1
1.3
–
(0.1)
1.2
Depreciation
(6.7)
(0.4)
–
(7.1)
Impairment
(0.5)
–
–
(0.5)
Net carrying value as at 1 April 2023
66.2
0.2
–
66.4
Lease amendments1
(0.2)
–
–
(0.2)
Depreciation
(6.1)
(0.1)
–
(6.2)
Impairment
(1.3)
–
–
(1.3)
Net carrying value as at 30 March 2024
58.6
0.1
–
58.7
Company
Property
£m
Equipment
£m
Vehicles
£m
Total
£m
Net carrying value as at 26 March 2022
72.6
0.6
0.1
73.3
Disposals
(1.0)
–
–
(1.0)
Lease amendments1
1.3
–
(0.1)
1.2
Depreciation
(6.6)
(0.4)
–
(7.0)
Impairment
(0.5)
–
–
(0.5)
Net carrying value as at 1 April 2023
65.8
0.2
–
66.0
Lease amendments1
(0.2)
–
–
(0.2)
Depreciation
(6.0)
(0.1)
–
(6.1)
Impairment
(1.1)
–
–
(1.1)
Net carrying value as at 30 March 2024
58.5
0.1
–
58.6
1 Lease amendments include lease terminations, modifications, reassessments and extensions to existing lease agreements.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
156
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
16. Leases continued
Set out below are the carrying amounts of lease liabilities (included under interest bearing loans and borrowings) and the
movements during the period:
Group
£m
Company
£m
Net carrying value as at 26 March 2022
80.7
79.3
Disposal
(3.1)
(2.3)
Lease amendments1
1.2
1.2
Accretion of interest
2.9
2.9
Payments
(9.9)
(9.8)
Net carrying value as at 1 April 2023
71.8
71.3
Lease amendments1
(0.3)
(0.2)
Accretion of interest
3.1
3.1
Payments
(8.7)
(8.7)
Net carrying value as at 30 March 2024
65.9
65.5
1 Lease amendments include lease terminations, modifications, reassessments and extensions to existing lease agreements.
A maturity analysis of gross lease liability payments is included within note 25.
b) Amounts Recognised in the Income Statement
Group
52 weeks
ended
30 March 2024
£m
53 weeks
ended
1 April 2023
£m
Depreciation charge on right-of-use assets
Properties
6.1
6.7
Equipment
0.1
0.4
6.2
7.1
Interest charge on right-of-use assets
Interest expense (included in finance cost)
3.1
2.9
Expense relating to short-term leases and low value assets (included in operating costs)
0.3
0.2
Expense relating to variable lease payments not included in lease liabilities (included in operating costs)
3.9
3.5
Impairment of right-of-use assets
1.3
0.5
Income from sub-leasing right-of-use assets
(0.2)
(0.2)
8.4
6.9
The Group’s total cash outflow in relation to leases is included within note 21.
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 30 March 2024 were £3.9 million
(2023: £3.5 million).
17. Inventories
Group and Company
Group
2024
£m
Group
2023
£m
Company
2024
£m
Company
2023
£m
Stock at retail outlets
4.0
4.2
4.0
4.2
Amounts recognised in profit or loss
Inventories recognised as an expense during the year ended 30 March 2024 amounted to £88.0 million (2023 restated:
£85.0 million, see note 4). These were included in operating costs. Inventory is stated net of a provision for obsolete stock of
£0.3 million (2023: £0.2 million).
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
157
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
18. Trade and Other Receivables
Group
2024
£m
2023
£m
Trade receivables
2.1
1.6
Other receivables
1.7
1.4
Prepayments and accrued income
4.6
7.2
8.4
10.2
Company
2024
£m
2023
£m
Trade receivables
2.1
1.6
Other receivables
1.7
1.4
Prepayments and accrued income
4.6
7.2
8.4
10.2
At 30 March 2024, the Group has included in other receivables £0.1 million (2023: £0.3 million) in relation to lease receivables
for subleases.
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.
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 customer’s ability
to settle the amount outstanding. 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
2024
£m
2023
£m
Opening balance
0.8
0.9
Amounts released for balances written off during the year
–
(0.1)
Closing balance
0.8
0.8
The contractual ageing of the trade receivables balance is as follows:
Group and Company
Group
2024
£m
Group
2023
£m
Company
2024
£m
Company
2023
£m
Current
1.5
1.1
1.5
1.1
Overdue up to 30 days
0.4
0.5
0.4
0.5
Overdue between 30 and 60 days
0.1
0.1
0.1
0.1
Overdue between 60 and 90 days
–
–
–
–
Overdue more than 90 days
0.9
0.7
0.9
0.7
Trade receivables before loss allowance
2.9
2.4
2.9
2.4
Less provision
(0.8)
(0.8)
(0.8)
(0.8)
Trade receivables net of loss allowance
2.1
1.6
2.1
1.6
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
158
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
19. Assets Held for Sale
Group and Company
Group
£m
Company
£m
Assets held for sale as at 1 April 2023
7.0
7.0
Assets transferred from property, plant and equipment
1.4
1.4
Assets held for sale as at 30 March 2024
8.4
8.4
At 30 March 2024, nine properties have been classified as held for sale (2023: seven properties). The properties were reclassified
predominantly from property, plant and equipment as the carrying amounts of the properties identified are to be recovered
principally through sales transactions rather than through continuing use. Sale is expected within 12 months from the
reporting date.
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
Level 3.
20. Trade and Other Payables
Due within one year:
Group
2024
£m
2023
£m
Trade payables
19.2
19.0
Other tax and social security
4.6
4.7
Other payables
8.7
7.6
Accruals
23.9
19.9
Contract liabilities
3.3
3.4
59.7
54.6
Due within one year:
Company
2024
£m
2023
£m
Trade payables
19.2
19.0
Amounts due to subsidiary undertakings
153.2
143.1
Other tax and social security
4.6
4.7
Other payables
8.7
7.6
Accruals
23.8
19.9
Contract liabilities
3.3
3.4
212.8
197.7
Company amounts due to subsidiary undertakings of £153.2 million (2023: £143.1 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 to secure bookings for various events and accommodation. The remaining balance will
unwind and be recognised as revenue in the following year.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
159
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
21. Cash, Borrowings and Net Debt
Cash and Cash Equivalents
Group
2024
£m
Group
2023
£m
Company
2024
£m
Company
2023
£m
Cash at bank and in hand
12.2
14.1
12.2
14.1
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
Group
2024
£m
Group
2023
£m
Company
2024
£m
Company
2023
£m
Bank loans
123.8
119.4
123.8
119.4
Debenture stock
19.9
25.9
19.9
25.9
Preference shares
1.6
1.6
1.6
1.6
Total borrowings
145.3
146.9
145.3
146.9
Analysed as:
Borrowings within current liabilities
–
6.0
–
6.0
Borrowings within non-current liabilities
145.3
140.9
145.3
140.9
145.3
146.9
145.3
146.9
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 25.
Bank Loans
Group and Company
The Group has unsecured banking facilities of £200 million, split between a revolving credit facility of £110 million and a term
loan of £90 million. Under the facilities agreement, the covenant suite (tested quarterly) consists of net debt to adjusted EBITDA
(leverage) and adjusted EBITDA to net finance charges. During the period, the Group agreed with its lenders to extend these
facilities for a further year through to May 2027.
At 30 March 2024, £75.0 million (2023: £79.5 million) of the total of £200 million (2023: £200 million) committed bank facility was
available and undrawn.
The bank loans are repayable as follows:
2024
£m
2023
£m
In the third to fifth year inclusive
125.0
120.5
Less: bank loan arrangement fees
(1.2)
(1.1)
Non-current liabilities
123.8
119.4
Debenture Stock
The debenture stocks are secured on specified fixed and floating assets of the Company and are redeemable on maturity.
During the year, the 10.70% 1st Mortgage Debenture Stock 2023 was repaid.
Debenture stocks are repayable as follows:
2024
£m
2023
£m
On demand or within one year – 10.70% 1st Mortgage Debenture Stock 2023
–
6.0
Current liabilities
–
6.0
In the third to fifth year inclusive – 6.875% Debenture Stock 2028 (1st floating charge)
20.0
–
In greater than five years – 6.875% Debenture Stock 2028 (1st floating charge)
–
20.0
Less: discount on issue
(0.1)
(0.1)
Non-current liabilities
19.9
19.9
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
160
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
21. Cash, Borrowings and Net Debt continued
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 23 for further details of the preference shares.
Analysis of Net Debt
Group
52 weeks ended 30 March 2024
At
1 April
2023
£m
Cash flows
£m
Non-cash1
£m
At
30 March
2024
£m
Cash and cash equivalents:
Cash and short-term deposits
14.1
(1.9)
–
12.2
14.1
(1.9)
–
12.2
Financial liabilities:
Lease liabilities
(71.8)
8.7
(2.8)
(65.9)
(71.8)
8.7
(2.8)
(65.9)
Debt:
Bank loans2
(119.4)
(4.1)
(0.3)
(123.8)
Debenture stock
(25.9)
6.0
–
(19.9)
Preference shares
(1.6)
–
–
(1.6)
Total borrowings
(146.9)
1.9
(0.3)
(145.3)
Net debt
(204.6)
8.7
(3.1)
(199.0)
53 weeks ended 1 April 2023
At
26 March
2022
£m
Cash flows
£m
Non-cash1
£m
At
1 April
2023
£m
Cash and cash equivalents:
Cash and short-term deposits
15.6
(1.5)
–
14.1
15.6
(1.5)
–
14.1
Financial liabilities:
Lease liabilities
(80.7)
11.9
(3.0)
(71.8)
(80.7)
11.9
(3.0)
(71.8)
Debt:
Bank loans2
(120.0)
1.5
(0.9)
(119.4)
Debenture stock
(25.9)
–
–
(25.9)
Preference shares
(1.6)
–
–
(1.6)
Total borrowings
(147.5)
1.5
(0.9)
(146.9)
Net debt
(212.6)
11.9
(3.9)
(204.6)
1 Non-cash movements relate to the amortisation of arrangement fees, arrangement fees accrued and movements in lease liabilities.
2 Bank loans are net of arrangement fees and cash flows include the payment of arrangement fees.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
161
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Company
52 weeks ended 30 March 2024
At
1 April
2023
£m
Cash flows
£m
Non-cash1
£m
At
30 March
2024
£m
Cash and cash equivalents:
Cash and short-term deposits
14.1
(1.9)
–
12.2
14.1
(1.9)
–
12.2
Financial liabilities:
Lease liabilities
(71.3)
8.7
(2.9)
(65.5)
(71.3)
8.7
(2.9)
(65.5)
Debt:
Bank loans2
(119.4)
(4.1)
(0.3)
(123.8)
Debenture stock
(25.9)
6.0
–
(19.9)
Preference shares
(1.6)
–
–
(1.6)
Total borrowings
(146.9)
1.9
(0.3)
(145.3)
Net debt
(204.1)
8.7
(3.2)
(198.6)
53 weeks ended 1 April 2023
At
26 March
2022
£m
Cash flows
£m
Non-cash1
£m
At
1 April
2023
£m
Cash and cash equivalents:
Cash and short-term deposits
15.6
(1.5)
–
14.1
15.6
(1.5)
–
14.1
Financial liabilities:
Lease liabilities
(79.3)
11.4
(3.4)
(71.3)
(79.3)
11.4
(3.4)
(71.3)
Debt:
Bank loans2
(120.0)
1.5
(0.9)
(119.4)
Debenture stock
(25.9)
–
–
(25.9)
Preference shares
(1.6)
–
–
(1.6)
Total borrowings
(147.5)
1.5
(0.9)
(146.9)
Net debt
(211.2)
11.4
(4.3)
(204.1)
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.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
162
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
22. 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 HMRC registered pension plan and subject to standard United Kingdom pension and tax law. On 1 January
2015 the plan was closed to future accrual.
The Group also operates a 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 Group offers workplace pensions to all employees who are not members of the defined contribution stakeholder pension
plan. 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
52 weeks
ended
30 March 2024
£m
53 weeks
ended
1 April 2023
£m
Total amounts (credited)/charged in respect of pensions in the year
(Credited)/charged to Income Statement:
Defined benefit scheme – net finance credit – separately disclosed items
(0.7)
(0.5)
Defined contribution schemes and NEST – total operating charge
2.2
2.2
1.5
1.7
Charge to equity:
Defined benefit schemes – net actuarial losses
0.3
2.5
Total pension charge
1.8
4.2
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.
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 April 2023, the 2022
triennial valuation was concluded, and the Company has agreed to continue to pay contributions into the Plan in line with
the existing recovery plan. Under this plan, deficit reduction contributions started at £2.2 million per annum in July 2022.
These are payable in equal monthly instalments and increase each January in line with CPI. As of January 2023, the deficit
reduction contributions have increased to £2.4 million, increasing again to £2.6 million as at January 2024. Fixed security over
certain Company’s freehold properties (with a net book value of £30.3 million at 30 March 2024) has been provided to the Plan
as additional security, the value of which will be reviewed at each triennial valuation. The next triennial valuation is due on
30 July 2025.
The figures in the following disclosures were measured using the projected unit credit method.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
163
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
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 valuation of the Scheme are set out below:
Mortality assumptions
2024
Years
2023
Years
Current pensioners (at 65) – males
21.4
22.0
Current pensioners (at 65) – females
23.8
24.2
Future pensioners (at 65) – males
22.7
23.3
Future pensioners (at 65) – females
25.2
25.6
The Scheme is now closed to future accrual. The average age of the members who were active at closure is 58 for males and 55
for females. The average age of all non-pensioners is 57.
Key financial assumptions used in the valuation of the Scheme
2024
2023
Rate of increase in pensions in payment
3.05%
3.20%
Discount rate
4.85%
4.75%
Inflation assumption – RPI
3.10%
3.20%
Inflation assumption – CPI (pre-2030/post-2030)
2.20%/3.10%
2.3%/3.2%
The present value of the Scheme liabilities is sensitive to the assumptions used, as follows:
Impact on Scheme liabilities – increase/(decrease)1
2024
£m
2023
£m
Increase discount rate by 0.1%
(1.1)
(1.2)
Increase inflation assumption by 0.1%2
0.7
0.1
Increase life expectancies by 1 year
4.0
3.9
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
At 30 March
2024
£m
At 1 April
2023
£m
Corporate bonds
46.0
56.4
Index linked debt instruments
31.6
28.7
Overseas equities
8.0
6.6
Alternatives1
20.8
19.0
Cash
3.6
0.3
Annuities
2.3
2.4
Total market value of assets
112.3
113.4
1 Alternatives is composed of holdings in diversified growth investment funds.
2024
£m
2023
£m
Fair value of Scheme assets
112.3
113.4
Present value of Scheme liabilities
(95.0)
(98.8)
Surplus in the Scheme
17.3
14.6
Included within the total present value of Group Scheme liabilities of £95.0 million (2023: £98.8 million) are liabilities of £1.4 million
(2023: £1.5 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.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
164
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
22. Pensions continued
Defined benefit obligation
Fair value of Scheme assets
Net defined benefit surplus
2024
£m
2023
£m
2024
£m
2023
£m
2024
£m
2023
£m
Balance at beginning of the year
(98.8)
(129.6)
113.4
143.9
14.6
14.3
Included in profit and loss
Net interest cost
(4.6)
(3.9)
5.3
4.4
0.7
0.5
(4.6)
(3.9)
5.3
4.4
0.7
0.5
Included in other comprehensive
income
Actuarial gains/(losses) relating to:
Actual return less expected return on
Scheme’s assets
–
–
(4.0)
(32.0)
(4.0)
(32.0)
Experience gains/(losses) arising on
Scheme liabilities
3.7
29.5
–
–
3.7
29.5
3.7
29.5
(4.0)
(32.0)
(0.3)
(2.5)
Other
Employee contributions
–
–
2.6
2.3
2.6
2.3
Benefits paid
4.7
5.2
(4.7)
(5.2)
–
–
Administration expenses
–
–
(0.3)
–
(0.3)
–
4.7
5.2
(2.4)
(2.9)
2.3
2.3
Balance at end of the year
(95.0)
(98.8)
112.3
113.4
17.3
14.6
The weighted average duration of the Scheme’s liabilities at the end of the period is 12 years (2023: 13 years).
During the financial year ending 30 March 2024, a High Court ruling on the Virgin Media Limited vs Pension Trustees II Limited and
Others case concluded that, in relation to contracted-out rights amendments between 1997 and 2016, pension scheme amendments
relating to past and future service rights made without appropriate actuarial confirmation (section 37 confirmations) were deemed
to be void. The High Court ruling is currently undergoing an appeal process. The Group has not yet undertaken any action in relation
to the implications of this case given the case is currently being appealed. The case outcome would only be applicable to the former
Gales scheme which makes up c15% of the overall liability. Should this appeal fail, there is a possibility that a liability may arise for
this portion of the Plan’s liabilities which as of yet is not possible to reliably estimate.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
165
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
23. Preference Share Capital
Group and Company
Authorised, issued and fully paid share capital
Number authorised and in issue:
First 6%
cumulative
preference
share of
£1 each
Number 000’s
Second 8%
cumulative
preference
share of
£1 each
Number 000’s
Total
Number 000’s
At 30 March 2024 and 1 April 2023
400
1,200
1,600
Monetary amount:
£m
£m
£m
At 30 March 2024 and 1 April 2023
0.4
1.2
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.
24. Provisions
Legal claims
Group and Company
2024
£m
2023
£m
Balance at the beginning of the year
0.5
0.5
Arising during the year
0.3
–
Balance at the end of the year
0.8
0.5
Analysed as:
2024
£m
2023
£m
Due within one year
0.8
0.5
Due in more than one year
–
–
0.8
0.5
Further information has not been disclosed about the legal claims as they are ongoing disputes and could negatively impact the
outcome of the negotiations.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
166
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
25. 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 29.
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
2024
£m
2023
£m
Ordinary share capital
25.4
25.4
Share premium
53.2
53.2
Capital redemption reserve
3.7
3.7
Hedging reserve
–
–
Retained earnings
381.9
381.6
Preference shares
1.6
1.6
465.8
465.5
Company
2024
£m
2023
£m
Ordinary share capital
25.4
25.4
Share premium
53.2
53.2
Capital redemption reserve
3.7
3.7
Hedging reserve
–
–
Merger reserve
(1.6)
(1.6)
Retained earnings
316.0
325.6
Preference shares
1.6
1.6
398.3
407.9
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.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
167
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
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:
Group
2024
£m
2023
£m
Non-current assets
Derivative financial instruments used for hedging
0.1
0.1
Total current assets
0.1
0.1
Current assets
Trade and other receivables in scope of IFRS 9
2.1
1.6
Total current assets
2.1
1.6
Total financial assets
2.2
1.7
Current liabilities
Financial liabilities at amortised cost:
Trade and other payables in scope of IFRS 9
23.3
22.9
Lease liabilities
4.4
4.8
Loans
–
6.0
Total carried at amortised cost
27.7
33.7
Total current liabilities
27.7
33.7
Non-current liabilities
Financial liabilities at amortised cost:
Lease liabilities
61.5
67.0
Loans and debenture stock
143.7
139.3
Preference shares
1.6
1.6
Total carried at amortised cost
206.8
207.9
Total non-current liabilities
206.8
207.9
Total financial liabilities
234.5
241.6
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
168
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
25. Financial Instruments continued
Company
2024
£m
2023
£m
Non-current assets
Derivative financial instruments used for hedging
0.1
0.1
Total non-current assets
0.1
0.1
Current assets
Trade and other receivables in scope of IFRS 9
2.1
1.6
Total current assets
2.1
1.6
Total financial assets
2.2
1.7
Current liabilities
Financial liabilities at amortised cost:
Trade and other payables in scope of IFRS 9
176.5
166.0
Lease liabilities
4.3
4.7
Loans
–
6.0
Total carried at amortised cost
180.8
176.7
Total current liabilities
180.8
176.7
Non-current liabilities
Financial liabilities at amortised cost:
Lease liabilities
61.2
66.6
Loans and debenture stock
143.7
139.3
Preference shares
1.6
1.6
Total carried at amortised cost
206.5
207.5
Total non-current liabilities
206.5
207.5
Total financial liabilities
387.3
384.2
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 collars. 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 £19.9 million (2023: £25.9 million), net of interest paid in advance, are at fixed rates. The bank loans
totalling £200 million (2023: £200 million) are at floating rates. At the year end, after taking account of the interest rate collar,
48% (2023: 50%) of the Group’s bank loans and 56% (2023: 60%) of gross borrowings were at fixed rates or hedged.
Interest rate collar
The Group has entered into an interest rate collar agreement, where the Group sold a floor and bought a cap, in order to hedge
the risk in interest cash flows on its borrowings going higher than the cap. At the Balance Sheet date, £60 million (1 April
2023: £60 million) of the Group’s and Company’s borrowings were hedged by interest rate collar at floor and cap rate of 3.10%
and 5.00% respectively.
The interest rate collar is expected to impact the Income Statement in line with the liquidity risk table shown in section (iii)
below. The interest rate collar cash flow hedge in effect at 30 March 2024 was assessed as being highly effective. Net unrealised
gain of £nil million (2023: £0.1 million) has been recorded in other comprehensive income.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
169
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
Sensitivity – Group and Company
The Group borrows in Sterling at market rates. Three month Sterling SONIA rate during the 52 weeks ended 30 March 2024
ranged between 4.18% and 5.19%. 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:
Group
Company1
Impact on post-tax profit and net equity – increase/(decrease)
2024
£m
2023
£m
2024
£m
2023
£m
Decrease interest rate by 0.5%
0.7
0.8
1.2
1.3
Increase interest rate by 1.0%
(1.1)
(1.5)
(2.1)
(3.6)
1 The Company has substantial interest bearing payables due to subsidiary companies (note 20).
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: 1% (2023: 1%) of the Group’s borrowings
are repayable after more than five years, 99% (2023: 95%) within the first to fifth years and nil (2023: 4%) within one year.
The tables below summarise the maturity profile of the Group’s financial liabilities at 30 March 2024 based on undiscounted
contractual cash flows, including interest payable. Floating rate interest is estimated using the prevailing interest rate at the
Balance Sheet date.
Group at 30 March 2024
On
demand
£m
Less than
3 months
£m
3 to 12
months
£m
1 to 5
years
£m
6 to 10
years
£m
More than 10
years
£m
Total
£m
Interest bearing loans and borrowings
–
2.9
8.7
170.2
–
–
181.8
Preference shares1
–
–
0.1
0.5
0.6
2.8
4.0
Trade and other payables
19.2
3.3
0.8
–
–
–
23.3
Lease liabilities
–
2.1
6.3
29.0
28.0
28.3
93.7
Group at 1 April 2023
On
demand
£m
Less than
3 months
£m
3 to 12
months
£m
1 to 5
years
£m
6 to 10
years
£m
More than 10
years
£m
Total
£m
Interest bearing loans and borrowings
–
2.7
14.1
144.1
–
20.1
181.0
Preference shares1
–
–
0.1
0.5
–
3.4
4.0
Trade and other payables
19.0
3.4
0.5
–
–
–
22.9
Lease liabilities
–
2.0
6.1
29.3
29.5
32.3
99.2
1 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.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
170
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
25. Financial Instruments continued
The Company figures are as for the Group, except as follows:
Company at 30 March 2024
On
demand
£m
Less than
3 months
£m
3 to 12
months
£m
1 to 5
years
£m
6 to 10
years
£m
More than
10 years
£m
Total
£m
Amounts due to subsidiary
undertakings2
153.2
–
–
–
–
–
153.2
Trade and other payables
19.2
3.3
0.8
–
–
–
23.3
Lease liabilities
–
2.1
6.2
28.8
28.1
28.3
93.5
Company at 1 April 2023
Amounts due to subsidiary
undertakings2
143.1
–
–
–
–
–
143.1
Trade and other payables
19.0
3.4
0.5
–
–
–
22.9
Lease liabilities
–
1.9
6.0
28.9
29.5
32.3
98.6
2 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 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. Under the agreement, there is a covenant suite which consist of net
debt to adjusted EBITDA (leverage) and adjusted EBITDA to net finance charges. See further details in note 21.
d) Fair Value
Book value
Fair value
Fair
value
Level
Group
2024
£m
2023
£m
2024
£m
2023
£m
Financial assets
Interest rate collar
0.1
0.1
0.1
0.1
3
Financial liabilities
Fixed rate borrowings
(19.9)
(25.9)
(23.0)
(29.2)
3
Floating rate borrowings
(123.8)
(119.3)
(123.8)
(119.3)
3
Preference shares
(1.6)
(1.6)
(1.6)
(1.6)
3
The Company figures are the same as the Group.
Level 1 fair values are valuation techniques where inputs are quoted prices in active markets for identical assets or liabilities.
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 6% to 8%. 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 30 March 2024 and 1 April 2023.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
171
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
26. Share Capital and Reserves
a) Share Capital
Authorised, issued and fully paid
Number in issue
‘A’ ordinary
shares of
40p each
Number
000’s
‘C’ ordinary
shares of
40p each
Number
000’s
B’ ordinary
shares of
4p each
Number
000’s
Total
Number
000’s
At 1 April 2023
41,082
13,466
89,052
143,600
‘C’ to ‘A’ re-designation
100
(100)
–
–
At 30 March 2024
41,182
13,366
89,052
143,600
Proportion of total equity shares at 30 March 2024
28.7%
9.3%
62.0%
100.0%
Monetary amount
£m
£m
£m
£m
At 1 April 2023
16.4
5.4
3.6
25.4
At 30 March 2024
16.5
5.3
3.6
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 23).
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.
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.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
172
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
26. 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”). In FY2024, the Group completed a share buyback programme
to repurchase two million ‘A’ shares which were bought back for total consideration £12.4 million. A further one million ‘A’ share
buyback programme began on 25 March 2024 (FY2023: one million ‘A’ shares were bought back for total consideration of
£4.8 million). 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.
Treasury shares
LTIP ESOT
SIP ESOT
Total
Total
Number
‘A’ ordinary
40p shares
000’s
‘B’ ordinary
4p shares
000’s
‘B’ ordinary
4p shares
000’s
‘C’ ordinary
40p shares
000’s
‘A’ ordinary
40p shares
000’s
‘A’ ordinary
40p shares
000’s
‘B’ ordinary
4p shares
000’s
‘C’ ordinary
40p shares
000’s
Own
shares
000’s
At 26 March 2022
1,263
4,328
326
6
5
1,268
4,654
6
5,928
Share purchased
1,000
–
–
–
–
1,000
–
–
1,000
Shares released
(11)
–
–
–
–
(11)
–
–
(11)
At 1 April 2023
2,252
4,328
326
6
5
2,257
4,654
6
6,917
Share purchased
2,018
–
–
–
–
2,018
–
–
2,018
Shares released
(126)
–
–
–
–
(126)
–
–
(126)
At 30 March 2024
4,144
4,328
326
6
5
4,149
4,654
6
8,809
Monetary amount
£m
£m
£m
£m
£m
£m
£m
£m
£m
At 26 March 2022
11.8
4.3
0.3
0.1
0.1
11.9
4.6
0.1
16.6
Share purchased
4.8
–
–
–
–
4.8
–
–
4.8
Shares released
(0.1)
–
–
–
–
(0.1)
–
–
(0.1)
At 1 April 2023
16.5
4.3
0.3
0.1
0.1
16.6
4.6
0.1
21.3
Share purchased
12.4
–
–
–
–
12.4
–
–
12.4
Shares released
(0.8)
–
–
–
–
(0.8)
–
–
(0.8)
At 30 March 2024
28.1
4.3
0.3
0.1
0.1
28.2
4.6
0.1
32.9
Market value at 30 March 2024
24.4
2.6
1.9
–
–
24.5
2.7
–
27.3
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 arose from the hive up of Bel & The Dragon.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
173
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
27. Share Options and Share Schemes
The key points of each of the Group’s share schemes for grants up to 30 March 2024 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 pre-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 those granted during the year ended 27 March 2021, the options vest if
the set pre-tax adjusted EBITDA target is achieved. Options granted after 27 March 2021 will vest if the 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.
For options under this scheme, 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 adjusted EBITDA
(excluding IFRS 16) targets, with vesting levels on a sliding scale from 25% up to 100% dependent on the level of adjusted
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. This plan grants conditional share awards.
SIP
This plan awards free shares. An equal number of shares are awarded to each eligible employee. The maximum value of the
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). The plan has not awarded any shares since the financial year ending 30 March 2019.
Share-based payment expense recognised in the year
The benefit recognised for share-based payments in respect of employee services received during the 52 weeks ended
30 March 2024 is £1.7 million debit (2023: £0.4 million credit). The whole of the debit arises from equity settled share-based
payment transactions.
Market value
The market value of the shares at 30 March 2024 was £5.90 (2023: £4.65).
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.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
174
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
27. Share Options and Share Schemes continued
a) SAYE
2024
Number
000’s
2024
WAEP
2023
Number
000’s
2023
WAEP
Outstanding at the beginning of the year
470
£4.49
474
£4.70
Granted
136
£5.25
131
£4.29
Forfeited
(54)
£4.68
(130)
£4.78
Expired
(2)
£4.20
–
–
Exercised
(126)
£4.35
(5)
£4.35
Outstanding at the end of the year
424
£4.74
470
£4.49
Exercisable at the end of the year
13
n/a
–
n/a
Weighted average share price for options exercised in the year
£5.81
£4.79
Weighted average contractual life remaining for share options
outstanding at the year end
2.7 years
2.0 years
Weighted average share price for options granted in the year
£6.74
£5.14
Weighted average fair value of options granted during the year
£2.85
£1.98
Range of exercise prices for options outstanding at the year end
– from
£4.19
£4.19
– to
£5.43
£8.12
Outstanding share options granted to employees under the SAYE scheme are as follows:
Exercisable at
Exercise price
40p shares
£
Number of ‘A’
ordinary shares
under option
2024
000’s
Number of ‘A’
ordinary shares
under option
2023
000’s
November 2023
4.35
13
149
February 2025
5.43
38
51
November 2025
4.35
107
112
February 2026
4.19
80
99
February 2027
5.43
22
27
February 2027
5.25
116
–
February 2028
4.19
32
32
February 2029
5.25
16
–
424
470
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
175
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
b) Share Option Schemes
Executive Share Option Scheme
2024
Number
000’s
2024
WAEP
2023
Number
000’s
2023
WAEP
Outstanding at the beginning of the year
185
£7.46
184
£7.23
Granted
307
£6.00
41
£6.92
Lapsed
(153)
£6.95
(35)
£10.24
Surrendered1
(31)
£6.62
–
–
Exercised
–
–
(5)
£5.78
Outstanding at the end of the year
308
£6.00
185
£7.46
Exercisable at the end of the year
–
–
12
£9.03
Weighted average share price for options exercised in the year
n/a
£6.02
Weighted average contractual life remaining for share options
outstanding at the year end
9.29 years
7.61 years
Weighted average share price for options granted in the year
£5.80
£6.30
Weighted average fair value of options granted during the year
£1.81
£1.65
Range of exercise prices for options outstanding at the year end
– from
£6.00
£6.00
– to
£6.00
£10.90
1 During the year ended 30 March 2024, 30,640 shares were surrendered and replacement options granted, shown within the granted
number above.
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:
Executive Approved Scheme
Exercisable in/between
Exercise price
40p shares
£
Number of
‘A’ ordinary
shares under
option
2024
000’s
Number of
‘A’ ordinary
shares under
option
2023
000’s
2016 and 2023
9.10
–
7
2017 and 2024
9.65
–
5
2024 and 2031
6.92
–
137
2025 and 2032
6.00
11
36
2026 and 2033
6.00
297
–
308
185
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
176
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
27. Share Options and Share Schemes continued
c) LTIP
Shares
2024
‘A’ shares
Number
000’s
2024
‘B’ shares
Number
000’s
2023
‘A’ shares
Number
000’s
2023
‘B’ shares
Number
000’s
Outstanding at the beginning of the year
926
2,313
782
1,954
Granted
297
743
248
620
Lapsed
(167)
(418)
(104)
(261)
Outstanding at the end of the year
1,056
2,638
926
2,313
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
1.18 years
1.18 years
1.52 years
1.52 years
Weighted average share price for shares granted in the year
£5.80
£0.58
£6.30
£0.63
Weighted average fair value of shares granted during the year
£5.48
£0.55
£5.60
£0.56
All LTIPs have a vesting price of £nil. LTIP shares do not receive dividends until vested.
d) SIP
2024
Number
000’s
2023
Number
000’s
Outstanding at the beginning of the year
41
73
Released
(23)
(32)
Outstanding at the end of the year
18
41
Weighted average share price for shares released in the year
£6.26
£5.18
For shares outstanding at the year end, the weighted average contractual life remaining is
0.22 years
0.77 years
Weighted average share price for shares granted during the year
n/a
n/a
Weighted average fair value of shares granted during the year
n/a
n/a
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.
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
30 March 2024 and 53 weeks ended 1 April 2023, 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
2024
2023
2024
2023
2024
2023
Dividend yield (%)
1.9%
1.9%
1.7%-2.2%
2.2%
1.9%
1.9%
Expected share price volatility (%)
n/a
n/a
38.5%-40.0%
41.2%-45.6%
41.1%
45.1%
Risk-free interest rate (%)
4.1%
1.8%
4.1%
3.3%
4.1%
1.8%
Expected life of option/award (years)
3 years
3 years
3 to 5 years
3 to 5 years
4 years
4 years
Model used
Black Scholes Black Scholes Black Scholes Black Scholes Black Scholes 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. No shares have been awarded under this scheme since the financial year
ended 30 March 2019.
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
177
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
28. 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 30 March 2024, future minimum rentals receivable are as follows:
Investment properties
Property, plant and equipment
Group
2024
£m
2023
£m
2024
£m
2023
£m
Within one year
0.3
0.3
6.4
5.7
One to two years
0.2
0.2
4.6
1.5
Two to three years
0.2
0.2
3.3
1.3
Three to four years
0.1
0.1
2.2
0.4
Four to five years
0.1
0.1
0.1
0.1
After five years
0.3
0.5
0.4
0.5
1.2
1.4
17.0
9.5
Company
Within one year
0.3
0.3
6.4
5.7
One to two years
0.2
0.2
4.6
1.5
Two to three years
0.2
0.2
3.3
1.3
Three to four years
0.1
0.1
2.2
0.4
Four to five years
0.1
0.1
0.1
0.1
After five years
0.3
0.5
0.4
0.5
1.2
1.4
17.0
9.5
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 30 March 2024, future minimum rentals receivable under non-cancellable subleases included in the figures above were
£0.3 million (2023: £1.2 million).
b) Other Commitments
Group and Company
2024
£m
2023
£m
Capital commitments – authorised, contracted but not provided for
1.8
1.0
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
178
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
29. 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 £404,000 (2023: £304,000) 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)
52 weeks
ended
30 March
2024
£m
53 weeks
ended
1 April
2023 (restated)
£m
Short-term employee benefits
2.8
3.5
Termination benefits
–
0.1
Post-employment benefits
0.3
0.2
3.1
3.8
Prior year has been restated to align with the revised definition of key management personnel.
Company Only
During the year, the Company entered into the following related party transactions:
52 weeks ended 30 March 2024
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
Subsidiaries
–
85.6
–
10.2
(153.2)
–
53 weeks ended 1 April 2023 (restated)
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
Subsidiaries
–
79.5
–
6.4
(143.1)
–
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 £0.1 million (2023: £0.1 million).
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
179
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
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 2024 for the period ended 30 March 2024 under Section 479A of the
Companies Act 2006, all of which are fully consolidated in these financial statements:
Company
Company Number
Griffin Catering Services Limited
01577632
Jacomb Guinness Limited
02934979
George Gale and Company Limited
00026330
45 Woodfield Limited
04279254
Grand Canal Trading Limited
04271734
B & D Country Inns I Limited
07292333
B & D Country Inns II Limited
08029280
B & D (Cookham) Limited
07320065
B & D (Odiham) Limited
08377459
B & D (Reading) Limited
07309587
B & D (Win) Limited
07320245
B & D (Farnham) Limited
08392963
B & D (Kingsclere) Limited
08975762
RSH 200 Limited
12035987
Cotswold Inns & Hotels Limited
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
Company Number
Griffin Inns Ltd.
00495934
Ringwoods Limited
00178536
F.S.T. Trustee Limited
03163480
Fuller Smith & Turner Estates Limited
01831674
30. Post Balance Sheet Events
On the 29 May 2024, the Group announced that it has agreed terms to sell a portfolio of 36 pubs from its Tenanted Inns Division
and one from its Managed Pubs and Hotels Division to Admiral Taverns Limited (“Admiral”). The cash sale proceeds for the
portfolio is £18.3 million, a premium of £1.6 million to the gross asset value of £16.7 million. It is anticipated that the disposal
will complete on 25 June 2024. Following completion, Fuller’s will have 154 pubs within its Tenanted Inns Division and 178
properties in its Managed Pubs and Hotels Division.
DIRECTORS, ADVISORS AND CORPORATE INFORMATION
Chairman
Michael Turner, FCA,
Non-Executive Chairman
Executive Directors
Simon Emeny, Chief Executive
Neil Smith, ACA, Finance Director
Fred Turner, ACA, Retail Director
Dawn Browne, People & Talent Director
Non-Executive Directors
Juliette Stacey, ACA*
Sir James Fuller, Bt
Richard Fuller
Helen Jones*
Robin Rowland, OBE*
* Independent
President
Anthony Fuller, CBE
Chairman from 1982 to 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
Deutsche Numis
Deutsche Bank AG
45 Gresham Street
London EC2V 7BF
Registrars
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS13 8AE
Tel: 0370 889 4096
Email via website:
www.investorcentre.co.uk/contactus
180
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
ADDITIONAL INFORMATION
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.
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.
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.
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
13 June 2024
FY2024 Full year results announcement
23 July 2024
Annual General Meeting (11am)
13 November 2024
FY2025 Half year results announcement
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
181
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.
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” below.
Adjusted 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.
LTSA – Long term supply agreement
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.
Net debt – this comprises cash, bank loans, debenture stock, preference shares and lease liabilities net of debt issue costs.
NPS – Net Promoter Score, a metric used to measure customer satisfaction.
Operating profit – this is profit before finance costs and tax and profit on disposal of properties.
PPA – Power purchase agreement is a contract that secures the long-term supply of renewable energy.
RevPAR – calculated by dividing total room revenue by the total number of rooms available in the period being measured.
SAYE – Savings Related Share Option Scheme.
SIP – Share Incentive Plan.
TCFD – Task Force on Climate-related Financial Disclosures, a framework developed by the Financial Stability Board for
companies to report on how climate change will affect their business.
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).
182
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
GLOSSARY
O V E R V I E W – 1 - 5
S T R A T E G I C R E P O R T – 6 - 5 7
G O V E R N A N C E – 5 8 - 1 1 5
F I N A N C I A L S T A T E M E N T S – 1 1 6 - 1 7 9
A D D I T I O N A L I N F O R M A T I O N – 1 8 0 - 1 8 3
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
183
FIVE YEARS’ PROGRESS
Group Income Statement1
2024
£m
2023
£m
2022
£m
2021
£m
Restated
2020
£m
Revenue and other income
359.1
336.6
253.8
73.4
319.7
Operating profit before separately disclosed items
34.5
25.1
18.5
(40.3)
27.0
Finance costs before separately disclosed items
(14.0)
(12.4)
(11.3)
(8.4)
(7.6)
Adjusted profit/(loss) before tax
20.5
12.7
7.2
(48.7)
19.4
Exceptional items and discontinued operations
(6.1)
(2.4)
4.3
(10.5)
146.8
Profit/(loss) before tax
14.4
10.3
11.5
(59.2)
166.2
Taxation
(5.3)
(2.4)
(4.4)
9.6
(5.3)
Profit/(loss) after tax
9.1
7.9
7.1
(49.6)
160.9
Adjusted EBITDA
60.8
51.8
44.3
(13.1)
53.9
1 Continuing operations only.
Assets employed
Non-current assets
689.5
696.4
713.8
702.5
757.1
Inventories
4.0
4.2
3.6
2.1
4.0
Other current assets
8.5
10.9
11.3
15.5
18.6
Assets classified as held for sale
8.4
7.0
5.4
9.6
2.6
Cash and cash equivalents
12.2
14.1
15.6
17.1
20.3
722.6
732.6
749.7
746.8
802.6
Current borrowings
–
(6.0)
(120.0)
(207.7)
(171.7)
Other current liabilities
(64.9)
(59.9)
(64.5)
(39.4)
(50.7)
657.7
666.7
565.2
499.7
580.2
Non-current borrowings
(145.3)
(140.9)
(27.5)
(27.5)
(27.5)
Other non-current liabilities
(81.1)
(83.2)
(88.5)
(92.7)
(122.9)
Net assets
431.3
442.6
449.2
379.5
429.8
2024
2023
2022
2021
2020
Per 40p ‘A’ ordinary share
Adjusted earnings
24.48p
16.10p
9.79p
(73.00)p
20.50p
Basic earnings
15.16p
12.98p
11.59p
(89.84)p
291.89p
Dividends (interim and proposed final)2
17.75p
14.68p
11.31p
–
132.80p
Net assets
£7.18
£7.27
£7.27
£6.87
£7.80
Net debt (£ million)3
(199.0)
(204.6)
(212.6)
(308.0)
(291.8)
Gross capital expenditure (£ million)
27.2
30.7
25.8
16.5
84.5
Average number of employees
5,293
5,247
4,240
4,219
5,166
2 2020 includes ‘D’ share dividend.
3 Net debt includes amounts relating to leases under IFRS 16.
184
ANNUAL REPORT AND ACCOUNTS 2024 FULLER, SMITH & TURNER P.L.C.
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
Find us online
www.fullers.co.uk