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DJ Thwaites (Daniel) Plc Annual Financial Report

 
TIDMTHW 
 
CHAIRMAN'S STATEMENT 
 
The Company has had a good year and sales have increased in all areas. We have 
come to the end of several long-term projects and completed a three-year period 
of investment. As a result of this our businesses are in extremely good order, 
and they are in a strong position to continue to grow their sales. 
 
Our pubs and inns both posted strong performance and growth in the year, partly 
as a result of a long period of hot summer weather and the Football World Cup. 
However, the hotels and spas faced more of a challenge, experiencing 
significant cost headwinds, as well as disruption from Brexit, a weakening in 
corporate demand and room rate pressure in an increasingly competitive hotel 
market. Overall, the growth in one area has balanced the challenges in the 
other. 
 
The challenges we face from increasing costs, particularly the national living 
wage, auto enrolment and fixed charge levies on green energy have led us to 
look at ways to increase productivity. We have taken various steps to deal with 
these including restructuring the teams in our hotels in the first half of the 
year. Our objective is to improve performance by focusing on increasing sales 
and the quality of service delivery in our front of house teams. Whilst there 
was inevitably some disruption as a result of this, we are pleased with the new 
structure which is now bedded in and starting to deliver the benefits that we 
were looking for. 
 
Our strategy of investing in our core pub estate, inns and hotels, whilst 
continuing to sell poorer quality properties to recycle capital into higher 
returning and more sustainable assets is a successful one, which has 
significantly improved the quality of our asset base over the past few years, 
and allowed the business to grow. 
 
Financial Results 
 
Turnover for the year to 31 March 2019 grew by 5.0% to GBP96.9m (2018: 
GBP92.2m). The primary driver of growth was in our inns, which are experiencing 
strong like for like growth as well as the benefit of investment. 
 
Underlying operating profit (before GMP equalisation) is level with last year 
at GBP12.9m (2018: GBP12.9m). The performance of the hotels has suffered year 
on year, offsetting gains elsewhere. 
 
Profit before tax was GBP4.5m (2018: GBP9.8m) and suffered from an adverse mark 
to market valuation on our swap contracts of GBP2.5m and one-off pension costs 
of GBP1.2m associated with legislation to equalise historic pension benefits. 
When these non-operating items are excluded, underlying profit before tax is 
GBP8.2m (2018: GBP8.5m).  Since the year end the swap costs have continued to 
be volatile, reflecting the current political and economic uncertainty. 
 
Cash generation has continued to be strong, with EBITDA increasing to GBP20.5m 
(2018: GBP20.2m). With a capital investment programme of GBP22.5m (2018: 
GBP30.8m), net debt increased in the year from GBP63.7m at 31 March 2018 to 
GBP69.7m at 31 March 2019. 
 
Acquisitions, Developments and Disposals 
 
We have continued to invest in developing our properties and have completed 
several large projects, including the GBP6.5m refurbishment of the Beverley 
Arms and the completion of our new brewery and offices. In addition, we 
substantially completed the accelerated programme of refurbishment in our 
hotels as well as the usual number of schemes in the tenanted estate. Overall 
the investments that we have made in the year continue to exceed our hurdle 
rates and are performing well. 
 
We acquired the Funny Girls business from the Administrators but did not 
acquire any new properties in the year and will only do so where outstanding 
opportunities present themselves. We continued to divest of pubs that no longer 
suit our requirements with nine properties sold in the year. 
 
Dividend 
 
An interim dividend of 1.10p (2018: 1.10p) was paid in January 2019 and the 
Board recommends a final dividend of 3.36p (2018: 3.36p). The Board will keep 
the level of dividend under review, and assess the level of future dividends in 
light of company performance. 
 
Board 
 
At the end of the financial year, Ann Yerburgh stepped down as Chairman. During 
her 19 years in this role she has overseen many changes and helped to steer the 
Company through some very challenging times, including the smoking ban and the 
2009 financial crisis. She has encouraged and supported the move away from 
wholesaling beer towards leisure and hospitality, including the building up of 
our inns and hotels. I would like to thank her for the unwavering support that 
she has given me in my role as Chief Executive and I am delighted that she will 
remain on the board as a non-executive director where we will continue to 
benefit from her experience and grounded perspective. 
 
John Barnes retired as a non-executive at the end of December. John's 
contribution over four years has been hugely valuable and we thank him for his 
support. 
 
Andrew Stothert joined the Board as a non-executive director in January. Andrew 
is the founder of Brand Vista, an international brand consultancy based in 
Manchester. His experience in helping to build genuinely differentiated brands, 
that deliver through customer experience will be invaluable to us. 
 
Following the appointment of Nick Mackenzie as Chief Executive Officer of 
Greene King, he stood down as a non-executive director at the end of the 
financial year. 
 
I am delighted that Mark Fisher agreed to join us as a non-executive director 
from 1 June 2019. Mark is currently Chief Development Officer of Merlin 
Entertainments plc, where he has been a senior member of the management team 
for over 18 years, throughout a period of impressive growth. Originally Group 
Marketing Director, he has also held the Managing Director role in all of 
Merlin's Operating Divisions.  I look forward to working with Mark and I am 
excited by the new perspective that he will bring. 
 
People 
 
There is no doubt that the steps that we have taken over the last few years to 
provide development pathways within the business have helped us to attract and 
retain great team members. This has been recognised once again by a number of 
our businesses being recognised in the Sunday Times Best Companies to Work For. 
 
We are a strong business with a long track record and excellent reputation as 
an employer of choice in our local markets. However, the current nature of the 
labour market means that we cannot afford to be complacent. Our family values 
are an important part of our proposition, but offering an exciting career with 
the prospect of development and progression is even more important and we are 
well placed to do this. 
 
I would like to thank all our staff, customers, suppliers and shareholders for 
their support over the past year and look forward to the year ahead. 
 
Outlook 
 
There is much uncertainty in the country which stems from a lack of political 
leadership, cohesion and direction and this has unsurprisingly seeped into both 
business and consumer confidence. This lack of confidence means that for us, 
now is a time to be cautious. After some years of significant capital 
investment this next year is a time for consolidation and for us to focus on 
fine tuning our core business. We have a reduced capital investment programme, 
but are ever mindful to maintain the quality of our properties. 
 
In the current environment the trading patterns of our business seem to have 
become more seasonal, event and weather driven. The excellent weather over 
Easter and in the early part of our new financial year means that we have got 
off to a good start, which is encouraging. 
 
The business is in good health with talented and motivated teams, and we are 
well positioned to grow and make further progress in the year to come. 
 
R A J Bailey 
Chairman 
11 June 2019 
 
 
OPERATING REVIEW 
 
Overview 
 
The issues that have overshadowed the last few years persist, with the common 
theme being increasing costs in most areas. This is most acute in labour and 
utilities and we continue to make sure that where possible these are as 
flexible as possible, although there is a fixed element to our cost base. The 
compounding effect of increases to the National Living Wage and pension costs 
are having a major structural change on hospitality businesses, and with 
limited scope to increase prices we have to find new ways to enhance the 
overall level of sales through increasing value, developing our customer 
proposition and harnessing technology. 
 
The first half of the year was encouraging, with an extended period of hot 
sunny weather helping the pubs and the inns to get off to an excellent start. 
The pattern of trade seems to have become more variable and unpredictable than 
ever with consumers and corporate demand changing on what would appear to be 
small variations in sentiment or weather.  In particular, October and November 
were extremely weak months with lower levels of activity than the year before. 
Christmas was a strong period, but overall some of the gains made in the first 
half of the year were eroded in the second half of the year. 
 
Sales have increased by 5%, and on a like for like basis, excluding 
acquisitions, they increased by 4%. Continued refurbishments have been an 
important factor in supporting this growth. Despite pressure on food and labour 
margins, EBITDA has increased by 1.5% to GBP20.5m (2018: GBP20.2m), whilst 
group operating profit, before GMP equalisation (a one-off charge relating to 
historic pension liabilities), has remained level at GBP12.9m (2018: GBP12.9m). 
 
Early in the year we relaunched our websites, with the objective of bringing 
them up to date and also encouraging people to book directly with us rather 
than through online agents. This has been partially successful, and we have 
seen the rate of increase in our online commissions slow year on year. This 
year we will be looking at our loyalty programmes which have not been refreshed 
for some time to address this same area from another angle. 
 
In the summer we launched 'The House of Daniel Thwaites' as a way of 

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DJ Thwaites (Daniel) Plc Annual Financial Report -2-

collectively marketing our hotels and inns. For the last few years we have been 
working on the individuality and character of our properties and the House of 
Daniel Thwaites builds on this. We do not want our properties to be another 
corporate collection, more a collective, a family of different properties that 
share common service levels, and represent different places where our guests 
can feel comfortable and at home. We will continue to develop this theme over 
the coming year. 
 
In September, we took on the operation of Funny Girls in Blackpool under 
licence from the administrator. The business includes a cabaret show venue, a 
nightclub and two pubs. We have been involved with Funny Girls for over twenty 
years as it was historically a free trade customer. When we sold our Beer Co to 
Marston's in 2015, we retained this account and its associated loan. The 
business entered administration in September and was marketed for sale. No 
buyer was found, and so we assumed ownership of it in January in settlement of 
our outstanding loan. The business has made a loss in the period, as we have 
worked to resolve some of the issues that resulted in its financial 
difficulties. We have made good progress in stabilising the operation and have 
a plan in place to put the business on a firmer footing for the future. We 
expect that it will be profitable in the financial year to 31 March 2020. 
 
Our core strategy remains to focus on our pubs, inns and hotels and we have 
plans to continue to invest in them to secure our future growth. 
 
 
Pubs and Inns 
 
Pubs 
 
Our freehold estate of tenanted pubs numbers approximately 240 properties, and 
we have continued to dispose of pubs that no longer suit our requirements. Our 
pub estate encompasses community locals to destination food led pubs in both 
rural and town centre locations, ranging geographically from Cumbria to the 
Midlands, and from North Wales to Yorkshire. 
 
We have a well-established approach to our tenanted pub business, focused on 
investing alongside proven operators to expand and improve the premises with a 
focus on establishing good quality food offerings and where there is demand, 
the development and refurbishment of bedrooms. Our strategy has been focused on 
creating an estate of high quality, sustainable, growth businesses with 
multiple income streams. 
 
Our tenanted pubs got off to a very strong start of the year aided by both good 
weather and the Football World Cup, where England performed strongly and 
reached the latter rounds of the competition - which boosted drinks sales. As a 
result, by the half year we were well ahead of last year. Through the second 
half of the year there were ups and downs in the trading performance, 
particularly through October and November which were weaker, however Christmas 
was strong and as a result we were able to hold on to the gains made in the 
first half of the year. We disposed of nine pubs the year, despite which 
operating profit increased by 6% year on year, and average EBITDA per pub 
increased by 9%. 
 
Once more we have participated in the annual tenanted pub company survey, which 
provides an industry benchmark against our peers. This year the survey was 
carried out by a new company, who have produced what is now known as The 
Licensee Index. This new survey gives more detailed guidance on ways that we 
can improve our service and delivery. We were pleased once again to receive a 
high placing in this benchmarking exercise against our peers, improving our 
ranking from third to second out of 14 participants. 
 
The costs pressure that we are experiencing first hand in our own managed 
business are also being felt by our tenanted pubs. As a result, during the year 
we saw an increase in tenant churn which meant that at the year-end we had 19 
pubs (8% of the estate) which were looking for new tenants compared to 14 pubs 
last year. 
 
During the year we completed 18 development projects at a cost of GBP2.3m, and 
we continued to make returns ahead of our hurdle rate of 20%. Major projects in 
the year have been completed at the Millstone in Darwen, the Queen Anne in 
Bury, the Britannia in Oswaldtwistle and the Holcombe Tap in Ramsbottom. 
 
We did not acquire any tenanted pubs in the year, however if the opportunity 
arises we would be interested in adding new tenanted pubs to our estate. 
 
Brewery 
 
Our new craft brewery launched in July last year. After a very short settling 
in period running the new equipment, we have been very happy with the quality 
of the beers that it has produced and have received excellent feedback from our 
customers. 
 
We were delighted that our cask ales were singled out in the high-profile 
International Brewing Awards, in Burton upon Trent where we received a gold 
medal. 
 
The costs that were associated with our old site in Blackburn have now largely 
fallen away and the demolition of the old brewery is currently under way. 
 
Inns 
 
We own and manage a growing portfolio of inns and continue to seek high quality 
properties in outstanding locations to develop this part of our business. Our 
Inns have a busy bar at the hub, a home cooked food offering and high quality, 
comfortable accommodation - they focus on providing outstanding hospitality and 
offer an attractive and more personal alternative to the mid-market hotel 
chains. 
 
This segment of the market has seen increased competition with a number of new 
operators expanding their presence over the past few years. However, the market 
has proven to be strong, benefiting from the same factors that drove the 
performance of our pubs. Sales in the current year increased to GBP19.3m (2018: 
GBP16.1m) an increase of 20%, operating profits have increased by 35%. 
 
The landmark event of the year for the inns was the launch of the Beverley 
Arms, a project that has been underway since we acquired it in 2016. After a 
complicated build programme, we launched the new Beverley Arms in July 2018. We 
are delighted with the results, and the property has exceeded our expectations. 
Customer feedback has been extremely positive and we were pleased that the 
property has won a number of awards, including being highlighted in the Sunday 
Times Cool Hotel Guide, winning the RICS 2019 Hospitality and Leisure Award and 
winning the East Riding Chairman's Award for Heritage. 
 
Elsewhere we undertook a major refurbishment of the bedrooms at the Fleece, 
Cirencester and are pleased with the increases in room rate that we have been 
able to achieve following their launch. The Millstone in Mellor underwent a 
bedroom refurbishment after Christmas. 
 
The performance of the inns is encouraging and we continue to look for new 
acquisition opportunities where we believe we can add value. 
 
 
Hotels & Spas 
 
We own and operate ten hotels which are spread across England. Our hotels are 
positioned towards the premium end of the market and most have leisure and spa 
facilities. They are all different, and we wish to develop them to promote the 
individual character of each hotel in its local area, supported by a great food 
and drink offering with local nuances. Our vision, similar to our Inns, is to 
create a collection of interesting, characterful contemporary hotels, that are 
the best in their local area. 
 
The provincial hotel market has faced challenges over the past year and our 
hotels were no exception, and in two locations in particular, Bristol and 
Fareham our properties faced particularly difficult markets. Overall, the total 
provincial hotel market increased in value by 1.5%, with our hotels increasing 
their sales by 1.4%. In conjunction with this the hotels have seen increases to 
their costs, in particular wages and utilities, which grew by over 5%. 
 
At the start of the year we restructured our hotel teams with the objective of 
mitigating some of these cost increases and improving the focus on service and 
sales, particularly to our front of house teams. It took us longer than we 
would have hoped to fill some of the new roles that we created and this 
inevitably led to some disruption. Now that things have settled down, we are 
pleased with the new structure. 
 
We continued the accelerated programme of refurbishment in the hotels, which 
has largely now come to an end. The hotels are in materially better condition 
than they were a few years ago, although these refurbishments have increased 
the depreciation charges. In the current year we will see less disruption as we 
have very few schemes planned.  We are currently finalising our development 
plans for Langdale Chase, which we acquired in 2017, and subject to planning 
permission the work will start in early 2020. 
 
In March we implemented a new Customer Relationship Management system, which 
will allow us to talk directly with our customers in a more informed and 
targeted manner. We hope that this will improve cross selling between our 
different properties and encourage more customers to book direct. 
 
The performance of the hotels has been disappointing with a combination of 
increased costs and various factors contributing to disruption, this together 
with increasing competition in Bristol and Southampton, meant that operating 
profits dropped by 20%. In response to this and the other challenges we see in 
the market place we are looking at every area of the business to find ways to 
streamline costs and grow sales. 
 
 
Summary and future developments 
 
The pubs and the inns each had a strong year which was offset by the 
performance of the hotels and spas. Despite the issues that we face, we are not 
prepared to compromise the quality of offering that we provide our guests. The 
government's wage agenda is forcing us to find different ways of operating, as 
top line sales growth in the current economic and political environment is 
difficult to pin down. 
 
The changes and disruption that we have faced, particularly in the hotels this 
year has been painful, and in the emerging political landscape may not be 
behind us. Above inflation increases to our cost base means we will continue to 

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seek innovative ways to do business, through developing our operational 
processes and harnessing technology. The work that we have undertaken with our 
teams this last year and the training programmes that we have built over the 
past few years mean that we are in a strong position to attract and retain high 
quality team members. 
 
We are very aware of the issues that face us and they have our full attention. 
 
 
 
FINANCIAL REVIEW 
 
 
Results 
 
Turnover for the year ended 31 March 2019 increased by 5% to GBP96.9m (2018: 
GBP92.2m). Operating profit, before the highlighted item (GMP adjustment of 
GBP1.2m), is level with last year at GBP12.9m (2018: GBP12.9m). 
 
The measurement of the interest rate swaps at fair value resulted in a charge 
of GBP2.5m (2018: a profit of GBP1.3m). 
 
Profit before taxation for the year was GBP4.5m (2018: GBP9.8m). 
 
Business Review 
 
The key issues facing the Group are covered in the Chairman's Statement and 
Strategic Report. The KPIs used by the Group to monitor its overall financial 
position can be summarised as follows: 
 
                                                              2019        2018 
 
Group                                                        GBP'm       GBP'm 
 
Turnover                                                      96.9        92.2 
 
EBITDA                                                        20.5        20.2 
 
Depreciation                                                   7.6         7.3 
 
Operating profit (before highlighted item)                    12.9        12.9 
 
Profit before tax                                              4.5         9.8 
 
Net debt                                                      69.7        63.7 
 
Earnings per share (pence)                                     5.9        13.8 
 
Pubs and Inns 
 
                                                             GBP'm       GBP'm 
 
Turnover                                                      52.7        48.6 
 
EBITDA                                                        17.9        16.5 
 
Depreciation                                                   3.6         3.8 
 
Operating profit (before Group central charges)               14.3        12.7 
 
Average number 
Tenanted                                                       238         255 
Managed                                                         13          11 
 
Hotels & Spas 
 
                                                             GBP'm       GBP'm 
 
Turnover                                                      44.2        43.6 
 
EBITDA                                                         9.8        11.1 
 
Depreciation                                                   3.5         3.2 
 
Operating profit (before Group central charges)                6.3         7.9 
 
Average number 
Hotels                                                           8           8 
Lodges                                                           2           2 
 
The principal non-financial indicators monitored by management are: 
 
Pubs and Inns 
 
Utility consumption, health and safety incidents, beer volumes and tenant 
recruitment. 
 
Hotels 
 
Room occupancy rates, customer complaints, health and safety incidents, spa 
memberships and wedding and event numbers. 
 
 
GMP adjustment for past service 
 
This highlighted item relates to the cost of adjustments to guaranteed minimum 
pension (GMP) requirements following a 2018 court judgement in respect of a 
Lloyds Bank pension scheme. The Daniel Thwaites 1959 Scheme was contracted out 
of the State Earnings Related Pension Scheme (SERPS) and as a result granted 
its members a GMP benefit in compensation. The Lloyds Bank case established 
that schemes should equalise GMP such that people with the same salary and 
length of service will receive the same benefit whether they are male or 
female. Whilst the detailed calculations have not yet been performed, we have 
put an estimated cost, provided by our actuary Barnett Waddingham, of GBP1.2m 
into the accounts. This is treated as a cost in the current year as it is seen 
as an enhancement to a past entitlement which has not been recognised 
previously. 
 
Interest rate swaps measured at fair value 
 
The Group has interest rate swaps for GBP55m which are recognised as a 
financial liability. During the year ended 31 March 2019 there was significant 
volatility in future interest rate expectations due to the political and 
economic uncertainty arising from Brexit, as a result the movement in the fair 
value of the interest rate swaps was a charge to the profit and loss account of 
GBP2.5m (2018: a credit of GBP1.3m). 
 
Interest payable 
 
Net interest payable was GBP3.9m (2018: GBP3.5m) as loan capital increased from 
GBP66.5m at the start of the year to GBP73.5m at the end of the year. 
 
Taxation 
 
The tax charge on profit for the year was GBP1.0m, an effective rate of 22.2%. 
 
Earnings per share 
 
The earnings per share was 5.9p (2018: 13.8p). 
 
Dividends 
 
An interim dividend of 1.10p has been paid and the Board recommends a final 
dividend of 3.36p, which will make a total of 4.46p for 2019 (2018: 4.46p). 
 
Cash flow and financing 
 
The Group's net borrowing increased by GBP6.0m, from GBP63.7m at 31 March 2018 
to GBP69.7m at 31 March 2019 due to capital expenditure. 
 
The Group made deficit contributions to the defined benefit pension schemes of 
GBP1.8m (2018: GBP2.2m). Whilst these schemes were closed in August 2009, the 
Group is committed to funding the deficit on the scheme which was GBP24.8m, 
before tax, at 31 March 2019, a decrease of GBP10.1m from GBP34.9m at 31 March 
2018. 
 
The Group has GBP45m of long-term debt, GBP28.5m of bank loans and cash 
balances of GBP3.8m at 31 March 2019. The Group has three-year bank facilities 
of GBP30m which are due to be renewed at the end of 2019, which is less than 12 
months from the date of the balance sheet. Consequently, our bank loans are 
shown within current liabilities resulting in a net current liabilities 
position on the balance sheet at 31 March 2019. 
 
Property 
 
During the year we sold nine pubs and four ancillary properties for a total of 
GBP4.9m generating a profit against book value, after disposal costs, of 
GBP0.1m. 
 
In line with our accounting policy, 20% of our properties were subject to a 
formal revaluation, and additionally an impairment review was carried out on 
the rest of our property estate. This resulted in a reduction in the total 
value of our property portfolio of GBP3.0m, which was deducted from the 
revaluation reserve. 
 
Treasury policy and financial risk management 
 
Treasury policies are subject to Board approval. All borrowings are in sterling 
and comprise a mixture of fixed interest loans and facilities carrying LIBOR 
related floating rates. The Group has interest rate swaps for GBP55m where it 
is committed to pay the difference between LIBOR and fixed interest rates. At 
31 March 2019 a financial liability of GBP18.9m has been recognised in respect 
of these interest rate swap contracts. 
 
Kevin Wood 
 
Finance Director 
 
11 June 2019 
 
 
 
 
EXTRACT FROM AUDITED FULL FINANCIAL STATEMENTS FOR THE YEAR ENDED 
 
31 MARCH 2019 
 
 
GROUP PROFIT AND LOSS ACCOUNT 
 
                                                                                  2019    2018 
                                                                                 GBP'm   GBP'm 
 
 
                                                                                 Total   Total 
 
Turnover                                                                          96.9    92.2 
 
Cost of sales                                                                   (72.8)  (68.1) 
 
Gross profit                                                                      24.1    24.1 
 
Distribution costs                                                               (3.7)   (3.7) 
 
Administrative expenses                                                          (7.5)   (7.5) 
 
Operating profit before                                                           12.9    12.9 
highlighted item 
 
Highlighted item - GMP                                                           (1.2)       - 
adjustment for past service 
 
Operating profit                                                                  11.7    12.9 
 
Property disposals                                                                 0.1     0.1 
 
Operating profit before                                                           11.8    13.0 
interest 
 
Net interest payable                                                             (3.9)   (3.5) 
(Loss) profit on interest rate                                                   (2.5)     1.3 
swaps measured at fair value 
 
Finance charge on pension                                                        (0.9)   (1.0) 
liability 
 
Profit on ordinary activities                                                      4.5     9.8 
before taxation 
 
Taxation on profit for the                                                       (1.0)   (1.7) 
year 
 
Profit on ordinary activities                                                      3.5     8.1 
after taxation 
 
 
 
 
Dividends :                                           2019                        2018 
 
Ordinary paid per share 1.10p (2018 - 1.10p)           0.6                         0.6 
 
Ordinary recommended per 25p share 3.36p (2018 -       2.0                         2.0 
3.36p) 
 
Earnings per ordinary share                           5.9p                       13.8p 
 
The final dividend of 3.36p per ordinary share in respect of the year ended 31 
March 2019 will be paid on 23 July 2019 to shareholders on the register at 28 
June 2019. 
 
 
 
DANIEL THWAITES PLC 
 
GROUP BALANCE SHEET 
At 31 March 2019                                                            2019     2018 
                                                                           GBP'm    GBP'm 
 
______________________________________________________________________   _______  _______ 
 

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Fixed Assets 
 
Tangible assets                                                            298.0    289.5 
 
Investments                                                                  0.8      3.1 
______________________________________________________________________   _______  _______ 
 
                                                                           298.8    292.6 
 
Current assets 
 
Stocks                                                                       0.7      0.6 
 
Trade and other debtors                                                      9.8     12.6 
 
Cash at bank and in hand                                                     3.8      2.8 
______________________________________________________________________   _______  _______ 
 
Creditors due within one year                                               14.3     16.0 
 
Trade and other creditors                                                 (15.2)   (14.7) 
 
Loan capital                                                              (28.5)        - 
______________________________________________________________________   _______  _______ 
 
                                                                          (43.7)   (14.7) 
 
 
Net current (liabilities) assets                                          (29.4)      1.3 
______________________________________________________________________   _______  _______ 
 
Total assets less current liabilities                                      269.4    293.9 
 
Creditors due after one year                                              (63.9)   (84.8) 
______________________________________________________________________    ______  _______ 
 
 
Net assets excluding pension liability                                     205.5    209.1 
______________________________________________________________________   _______  _______ 
 
 
Pension liability                                                         (24.8)   (34.9) 
______________________________________________________________________   _______  _______ 
 
Net assets                                                                 180.7    174.2 
______________________________________________________________________   _______  _______ 
 
Capital and reserves 
 
Called up share capital                                                     14.7     14.7 
 
Capital redemption reserve                                                   1.1      1.1 
 
Revaluation reserve                                                         74.1     77.5 
 
Profit and loss account                                                     90.8     80.9 
 
______________________________________________________________________   _______  _______ 
 
 
Equity shareholders' funds                                                 180.7    174.2 
______________________________________________________________________  ________ ________ 
 
 
 
DANIEL THWAITES PLC 
 
GROUP CASH FLOW STATEMENT 
 
For the year ended 31 March 2019 
 
                                                                                2019      2018 
                                                                               GBP'm     GBP'm 
__________________________________________________________________________   _______   _______ 
 
 
Cash flow from operating activities                                             19.2      19.5 
 
Tax paid                                                                       (2.1)     (0.1) 
 
Cash flow from financing activities                                              1.2      10.9 
 
Cash flow from investing activities                                           (14.7)    (27.3) 
 
Equity dividends paid                                                          (2.6)     (2.6) 
__________________________________________________________________________   _______   _______ 
 
 
Increase in cash and cash equivalents                                            1.0       0.4 
Cash and cash equivalents at beginning of year                                   2.8       2.4 
__________________________________________________________________________   _______   _______ 
Cash and cash equivalents at end of year                                         3.8       2.8 
Loan capital                                                                  (73.5)    (66.5) 
__________________________________________________________________________   _______   _______ 
Net debt                                                                      (69.7)    (63.7) 
 
Reconciliation of net cash flow to movement in net debt 
 
Increase in cash                                                                 1.0       0.4 
 
Cash flow from increase in debt                                                (7.0)    (16.5) 
___________________________________________________________________________  _______   _______ 
 
                                                                               (6.0)    (16.1) 
 
Net debt at beginning of year                                                 (63.7)    (47.6) 
___________________________________________________________________________  _______   _______ 
 
 
Net debt at end of year                                                       (69.7)    (63.7) 
__________________________________________________________________          ________  ________ 
 
 
 
Notice of Meeting 
 
Notice is hereby given that the Annual General Meeting of the Company will be 
held at Daniel Thwaites, Myerscough Road, Mellor Brook, Blackburn, Lancashire, 
BB2 7LB on Thursday 18 July 2019 at 12.00 noon for the transaction of the 
following business: 
 
Ordinary Business 
 
To consider, and if thought fit, pass the following resolutions which will be 
proposed as ordinary resolutions. 
 
1.    To receive and adopt the accounts for the year ended 31 March 2019 and 
the reports of the directors and the auditor, and to approve and declare a 
final dividend for the year ended 31 March 2019 
 
2.    To re-elect Kevin Wood as a director 
 
3.    To re-elect Andrew Stothert as a director 
 
4.    To re-elect Mark Fisher as a director 
 
5.    To approve and confirm the remuneration of the directors for the year 
ended 31 March 2019 
 
6.    To reappoint BDO LLP as auditor and authorise the directors to determine 
their remuneration 
 
 
Special Business 
 
To consider, and if thought fit, pass the following resolutions of which 
resolutions 7 and 9 will be proposed as ordinary resolutions and resolution 8 
as a special resolution. 
 
7.    THAT, for the purposes of section 551 of the Companies Act 2006 (the Act) 
the directors of the Company be and are hereby generally and unconditionally 
authorised to exercise all powers of the Company to allot equity securities 
(within the meaning of section 560 of the Act) up to an amount equal to the 
aggregate nominal amount of the authorised but unissued share capital of the 
Company provided that this authority shall expire (unless previously renewed, 
varied or revoked by the Company in general meeting) at the conclusion of the 
next annual general meeting of the Company, save that the Company may before 
such expiry make an offer or agreement which would or might require relevant 
securities to be allotted after such expiry and the directors of the Company 
may allot relevant securities in pursuance of such an offer or agreement as if 
the authority conferred hereby had not expired. 
 
This authority is in substitution for any and all authorities previously 
conferred upon the directors for the purposes of section 551 of the Act, 
without prejudice to any allotments made pursuant to the terms of such 
authorities. 
 
8.    THAT, subject to the passing of resolution 7 above, the directors of the 
Company be and are hereby empowered pursuant to section 570 of the Act to allot 
equity securities (within the meaning of section 560 of the Act) pursuant to 
the authority conferred by resolution 7 above as if section 561 of the Act did 
not apply to any such allotment provided that the power conferred by this 
resolution shall be limited to: 
 
        i. the allotment of equity securities for cash in connection with an 
issue or offer of equity securities (including, without limitation, under a 
rights issue, open offer or similar arrangement) to holders of equity 
securities in proportion (as nearly as may be practicable) to their respective 
holdings of equity securities subject only to such exclusions or other 
arrangements as the directors of the Company may consider necessary or 
expedient to deal with fractional entitlements or legal or practical problems 
under the laws of any territory, or the requirements of any regulatory body or 
stock exchange in any territory; and 
 
        ii.                the allotment (otherwise than pursuant to resolution 
8.1) of equity securities for cash up to an aggregate nominal amount of 
GBP735,343. 
 
 The power conferred by this resolution 8 shall expire (unless previously 
renewed, revoked or varied by the Company in general meeting), at such time as 
the general authority conferred on the directors of the Company by resolution 7 
above expires, except that the Company may at any time before such expiry make 
any offer or agreement which would or might require equity securities to be 
allotted after such expiry and the directors of the Company may allot equity 
securities in pursuance of such an offer or agreement as if the authority 
conferred hereby had not expired. 
 
9.    To authorise the Company generally and unconditionally to make market 
purchases (within the meaning of section 693(4) of the Companies Act 2006) of 
ordinary shares of 25 pence each in the capital of the Company provided that: 
 
        i. the maximum aggregate number of ordinary shares that may be 
purchased is 5,882,750. Representing 10% of the issued share capital of the 
Company; 
 
        ii.                the minimum price (excluding expenses) which may be 
paid for each ordinary share is 25 pence. 
 
        iii.               the maximum price (excluding expenses) which may be 

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DJ Thwaites (Daniel) Plc Annual Financial Report -5-

paid for each ordinary share is an amount equal to 105 per cent of the average 
of the middle market quotations for an ordinary share of the Company (as 
derived from the NEX Exchange website) for the five business days immediately 
preceding the day on which the purchase is made; and 
 
        iv.               unless previously renewed, varied or revoked, the 
authority conferred by this resolution shall expire at the earlier of the 
conclusion of the Company's next Annual General Meeting and the date which is 
six months from the end of the Company's next financial year save that the 
Company may, before the expiry of the authority granted by this resolution, 
enter into a contract to purchase ordinary shares which will or may be executed 
wholly or partly after the expiry of such authority. 
 
 
 
NOTES 
 
Resolution 7 - Authority to allot relevant securities 
 
The Company requires the flexibility to allot shares from time to time. The 
directors are limited as to the number of shares they can at any time allot 
because allotment authority continues to be required under the Companies Act 
2006 (the Act). 
 
Accordingly, resolution 7 would grant this authority (until the next Annual 
General Meeting or unless such authority is revoked or renewed prior to such 
time) by authorising the directors (pursuant to section 551 of the Act) to 
allot relevant securities up to an amount equal to the aggregate nominal amount 
of the authorised but unissued share capital of the Company as at 31 March 
2019. The directors believe it to be in the interests of the Company for the 
Board to be granted this authority, to enable the Board to take advantage of 
appropriate opportunities which may arise in the future. 
 
Resolution 8 - Disapplication of statutory pre-emption rights 
 
This resolution seeks to disapply the pre-emption rights provisions of section 
561 of the Act in respect of the allotment of equity securities for cash 
pursuant to rights issues and other pre-emptive issues, and in respect of other 
issues of equity securities for cash up to an aggregate nominal value of 
GBP735,343, being an amount equal to approximately 5 per cent of the current 
issued share capital of the Company. If given, this power will expire at the 
same time as the authority referred to in resolution 6. The directors consider 
this power desirable due to the flexibility afforded by it. 
 
Resolution 9 - Authority to make market purchases of shares 
 
Resolution 9 seeks authority for the Company to make market purchases of its 
own ordinary shares. If passed, the resolution gives authority for the Company 
to purchase up to 5,882,750 of its ordinary shares, representing 10 per cent of 
the Company's issued ordinary share capital. 
 
Resolution 9 specifies the minimum and maximum prices which may be paid for any 
ordinary shares purchased under this authority. The authority will expire at 
the conclusion of the Company's next Annual General Meeting in 2020 or, if 
earlier, the date which is six months from the end of the Company's financial 
year which commenced on 1 April 2019. 
 
Any shares purchased under this authority will be cancelled. As a member of the 
Company entitled to attend and vote at the meeting convened by this notice you 
are entitled to appoint another person as your proxy to exercise all or any of 
your rights to attend and to speak and vote in your place at the meeting. Your 
proxy need not be a member of the Company. 
 
You may appoint more than one proxy in relation to the meeting convened by this 
notice provided that each proxy is appointed to exercise the rights attached to 
a different share or shares held by you. You may not appoint more than one 
proxy to exercise rights attached to any one share. 
 
 
 
By order of the Board Susan Woodward, A.C.I.S. 
Secretary 
 
11 June 2019 
 
 
 
END 
 

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