HEAVITREE BREWERY PLC — Earnings Release 2015

Jun 29, 2015

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RNS Number : 4821R

Heavitree Brewery PLC

29 June 2015

The Heavitree Brewery PLC

Trood Lane

Matford

Exeter EX2 8YP

Date:                29 June 2015

Contact:           Graham Crocker - Managing Director - 01392 217733

Nicola McLean - Company Secretary - 01392 217733

Pascal Keane - Shore Capital - 0207 468 7995

Following a meeting by a duly authorised committee of the Board of Directors held today, 29 June 2015, the Directors announce the interim results for the six months ended 30 April 2015.

Chairman's statement

The Company has returned an operating profit of £507,000 for the period under review which is 18% down on the previous year but slightly ahead of our expectations.  The drop in operating profit is as a result of a number of factors.  Firstly, there was an increase in administration costs which included the cost of an agency operating a house over the winter months before it was returned to a tenancy.  Secondly, an extra £20,000 valuation cost was incurred in our successful renewal of our banking facility for a new five year term.  Thirdly, there was an increase in superannuation and pension scheme costs of £14,000. Finally, a number of houses, mostly owing to the substantial works being undertaken at each, have not contributed in the half year under review.

Results

The Group operating profit is £507,000 (2014 - £619,000), an 18% decrease on last year.   After allowing for finance costs of £117,000 which includes £23,000 in respect of the IAS19 calculation referring to the final salary Pension Scheme (2014 - £156,000 and £53,000 respectively), the Group profit before taxation is £395,000 (2014 - £592,000). Heavitree Inc. returned a loss of £7,000 (2014 - profit of £13,000) and it is also worth noting that we sold four unlicensed properties during the corresponding period last year returning a profit of £129,000.

Dividend

The Directors have resolved to pay an interim dividend of 3.675p per Ordinary Share and 'A' Limited Voting Ordinary Share (2014 - 3.675p).  The dividend will be paid on 07 August 2015 to shareholders on the Register at the close of business on 24 July 2015.

Prospects

The second half of the year will see the opening of the George and Dragon in Dartmouth and the Oddfellows (previously called the Heavitree) in Exmouth after major refurbishments and we look forward to seeing the increase in contribution from these two sites.   Also, the Pen Inn opened in May after a major refurbishment by Mitchells and Butler to whom we have leased the pub.   The additional income stream from these houses and the continued performance from the rest of our estate of fine pubs should stand us in good stead for the second half of the year.

N H P TUCKER

Chairman

Group income statement (unaudited)

For the six months ended 30 April 2015

		6 months to 30 April 2015	6 months to 30 April 2014	Audited 12 months to 31 October 2014
	Note	£' 000	£' 000	£' 000
Revenue		3,277	3,304	7,198
Change in stocks		-	-	-
Other operating income		113	125	230
Purchase of inventories		(1,405)	(1,417)	(3,127)
Staff costs		(562)	(526)	(1,144)
Depreciation of property, plant and equipment		(108)	(127)	(227)
Other operating charges		(808)	(740)	(1,526)
		(2,770)	(2,685)	(5,794)
Group operating profit		507	619	1,404
Profit on sale of property, plant and equipment		5	129	466
Group profit before finance costs and taxation		512	748	1,870
Finance income		5	9	17
Finance costs		(99)	(112)	(203)
Other finance costs-pensions		(23)	(53)	(42)
		(117)	(156)	(228)
Profit before taxation		395	592	1,642
Tax (expense)		(103)	(155)	(261)
Profit for the period		292	437	1,381
Earnings per share - basic - diluted	2	6.0p 6.0p	8.8p 8.8p	28.0p 28.0p

Group statement of comprehensive income (unaudited)

For the six months ended 30 April 2015

		6 months to 30 April 2015	6 months to 30 April 2014	Audited 12 months  to 31 October 2014
		£' 000	£' 000	£' 000
Profit for the period		292	437	1,381
Items that will not be reclassified to profit or loss Actuarial gains/(losses) on defined benefit pension plans Tax relating to items that will not be reclassified		411              (82) 329	15              (3) 12	(415)                84 (331)
Items that may be reclassified to profit or loss Cash flow hedges Fair Value adjustment Exchange rate differences on translation of subsidiary undertaking Tax relating to items that may be reclassified		20 1 (2)                - 19	16 - -               (4) 12	28 8 1               (6) 31
Other comprehensive income for the year, net of tax		640	461	1,081
Total comprehensive income attributable to: Equity holders of the parent		640	461	1,081

Dividends

The Directors declare an interim dividend of 3.675p per share (2014 - 3.675p) on the Ordinary and 'A' Limited Voting Ordinary Shares. This dividend will be paid on 07 August 2015 to shareholders on the register at 24 July 2015.

Group balance sheet (unaudited)

at 30 April 2015

		30 April 2015 £' 000	30 April 2014 £' 000	Audited 31 October 2014 £'000
Non-current assets
Property, plant and equipment		16,077	14,701	15,043
Financial assets		37	31	35
Deferred tax asset		50	155	237
		16,164	14,887	15,315
Current assets
Trade and other receivables		1,785	1,850	1,245
Inventories		10	10	10
Cash and short-term deposits		114	122	112
		1,909	1,982	1,367
Assets held for sale		-	71	-
Total assets		18,073	16,940	16,682
Current liabilities
Trade and other payables		(1,055)	(1,032)	(954)
Financial liabilities		(1,580)	(1,165)	(4,858)
Income tax payable		(184)	(99)	(184)
		(2,819)	(2,296)	(5,996)
Non-current liabilities
Other payables		(241)	(226)	(234)
Financial liabilities		(5,011)	(4,762)	(11)
Deferred tax liabilities		(200)	(212)	(200)
Defined benefit pension plan		(249)	(739)	(1,158)
		(5,701)	(5,939)	(1,603)
Total liabilities		(8,520)	(8,235)	(7,599)
Net assets		9,553	8,705	9,083
Capital and reserves
Equity share capital		264	264	264
Capital redemption reserve		673	673	673
Treasury shares		(1,190)	(1,134)	(1,202)
Fair value adjustments reserve		17	12	16
Cash flow hedging reserve		-	(30)	(20)
Currency translation		5	6	7
Retained earnings		9,784	8,914	9,345
Total equity		9,553	8,705	9,083

Group statement of cash flows (unaudited)

for the six months ended 30 April 2015

		6 months to 30 April 2015	6 months to 30 April 2014	Audited 12 months  to 31 October 2014
		£' 000	£' 000	£' 000
# Profit for the period Tax expense Net finance costs		292 103 117	437 155 156	1,381 261 228
Profit on disposal of non-current assets and assets held for sale		(5)	(129)	(466)
Depreciation and impairment of property, plant and equipment		108	127	227
(Increase)/decrease in trade and other receivables		(651)	(486)	120
Increase  in trade and other payables		104	184	113
Net pension charge		(522)	(507)	(507)
Cash generated from operations		(454)	(63)	1,357
Income taxes paid		-	(5)	(36)
Interest paid		(98)	(112)	(203)
Net cash (outflow)/inflow from operating activities		(552)	(180)	1,118
Investing activities
Interest received		5	9	17
Proceeds from sale of property, plant and equipment and assets held for sale		24	955	1,381
Payments to acquire property, plant and equipment		(1,050)	(189)	(649)
Net cash(outflow)/inflow from investing activities		(1,021)	775	749
Financing activities
Preference dividend paid		(1)	(1)	(1)
Equity dividends paid		(179)	(184)	(354)
Consideration received by EBT on sale of shares		30	36	37
Consideration paid by EBT on purchase of shares		(21)	(176)	(245)
Movement in long term borrowing		250	(250)	(250)
Net cash inflow/(outflow) from financing activities		79	(575)	(813)
(Decrease)/increase in cash and cash equivalents		(1,494)	20	1,054
Cash and cash equivalents at the beginning of the period		28	(1,026)	(1,026)
Cash and cash equivalents at the period end.		(1,466)	(1,006)	28

Group reconciliation of movements in equity (unaudited)

6 months to	Equity	Capital		Fair		Cashflow
30 April 2015	share	redemption	Treasury	value	Currency	hedge	Retained	Total
	capital	reserve	shares	adjustment	translation	reserve	earnings	equity
	£' 000	£' 000	£' 000	£' 000	£' 000	£' 000	£' 000	£' 000
At 1November  2014	264	673	(1,202)	16	7	(20)	9,345	9,083
Profit for the period	-	-	-	-	-	-	292	292
Other comprehensive income for the period, net of income tax	-	-	-	1	(2)	20	329	348
Total     comprehensive income
for the period	-	-	-	1	(2)	20	621	640
Consideration received by EBT on sale of shares	-	-	30	-	-	-	-	30
Consideration paid
by EBT on purchase of
shares	-	-	(21)	-	-	-	-	(21)
Loss by EBT on sale
of shares	-	-	3	-	-	-	(3)	-
Equity dividend  paid	-	-	-	-	-	-	(179)	(179)
At 30 April 2015	264	673	(1,190)	17	5	-	9,784	9,553

6 months to	Equity	Capital		Fair		Cashflow
30 April 2014	share	redemption	Treasury	value	Currency	hedge	Retained	Total
	capital	reserve	shares	adjustment	translation	reserve	earnings	equity
	£' 000	£' 000	£' 000	£' 000	£' 000	£' 000	£' 000	£' 000
At 1 November  2013	264	673	(1,002)	8	6	(42)	8,657	8,564
Profit for the period	-	-	-	-	-	-	437	437
Other comprehensive income for the period net of income tax	-	-	-	4	-	12	12	28
Total     comprehensive income
for the period	-	-	-	4	-	12	449	465
Consideration received by EBT on sale of shares	-	-	36	-	-	-	-	36
Consideration paid by EBT on purchase of shares	-	-	(176)	-	-	-	-	(176)
Loss by EBT on sale of shares	-	-	8	-	-	-	(8)	-
Equity dividend  paid	-	-	-	-	-	-	(184)	(184)
At 30 April 2014	264	673	(1,134)	12	6	(30)	8,914	8,705

12 months to	Equity	Capital		Fair		Cashflow
31 October 2014	share	redemption	Treasury	value	Currency	hedge	Retained	Total
Audited	capital	reserve	shares	adjustment	translation	reserve	earnings	equity
	£' 000	£' 000	£' 000	£' 000	£' 000	£' 000	£' 000	£' 000
At 1 November  2013	264	673	(1,002)	8	6	(42)	8,657	8,564
Profit for the year	-	-	-	-	-	-	1,381	1,381
Other comprehensive income for the year, net of income tax	-	-	-	8	1	22	(331)	(300)
Total     comprehensive income
for the year	-	-	-	8	1	22	1,050	1,081
Consideration received by EBT on sale of shares	-	-	37	-	-	-	-	37
Consideration paid by EBT on purchase of shares	-	-	(245)	-	-	-	-	(245)
Loss by EBT on sale of shares	-	-	8	-	-	-	(8)	-
Equity dividend  paid	-	-	-	-	-	-	(354)	(354)
At 31 October 2014	264	673	(1,202)	16	7	(20)	9,345	9,083

Equity share capital

The balance classified as share capital includes the total net proceeds (both nominal value and share premium) on issue of the Company's equity share capital, comprising 5p Ordinary and 'A' Limited Voting Ordinary Shares.

Treasury shares

Treasury shares represent the cost of The Heavitree Brewery PLC shares purchased in the market and held by The Heavitree Brewery PLC Employee Benefit Trust ('EBT').

Notes to the interim results

1.  Basis of preparation

These unaudited interim condensed and consolidated financial statements do not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006.  They have been prepared on the basis of the accounting policies that were complied with in the annual financial statements for the year ended 31 October 2014. The accounting policies are drawn up in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

These unaudited financial statements were approved and authorised for issue by a duly appointed and authorised committee of the Board of Directors on 29 June 2015.

2.  Basic and diluted earnings per share

The calculation of basic earnings per ordinary share is based on earnings of £292,000 (2014: £437,000), being profit after taxation for the period, and on 4,868,704 (2014: 4,977,646) shares being the weighted average number of Ordinary and 'A' Limited Voting Ordinary Shares in issue during the period after excluding the shares owned by The Heavitree Brewery PLC Employee Benefits Trust and those shares under option pursuant to the Employee Share Option Scheme. Employee share options could potentially dilute basic earnings per share in the future but are not included in the interim calculation of dilutive earnings per share because they are antidilutive for the period presented. The Ordinary Shares and the 'A' Limited Voting Ordinary Shares have equal dividend rights and therefore no separate calculation of earnings per share for the different classes has been given.

3.  Segment information

Primary reporting format - Business segments

The primary segmental reporting format is determined to be business segments as the Group's risks and rates of return are affected predominantly by differences in the products and services provided.

During the year the Group operated in one business segment-leased estate.

Leased estate represents properties which are leased to tenants to operate independently from the Group.

4.  Interim report

Copies of this announcement are available from the Company at Trood Lane, Matford, Exeter EX2 8YP. The Company's interim report for the six months ended 30 April 2015 has been posted to shareholders today and will be available on our website at www.heavitreebrewery.co.uk.

Ends. 

This information is provided by RNS

The company news service from the London Stock Exchange

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