HEAVITREE BREWERY PLC

Earnings Release • Jun 29, 2017

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RNS Number : 5687J

Heavitree Brewery PLC

29 June 2017

The Heavitree Brewery PLC

Trood Lane

Matford

Exeter EX2 8YP

Date:                29 June 2017

Contact:           Graham Crocker - Managing Director - 01392 217733

Nicola McLean - Company Secretary - 01392 217733

Patrick Castle /Anita Ghanekar - Shore Capital - 0207 408 4052

Following a meeting by a duly authorised committee of the Board of Directors held today, 29 June 2017, the Directors announce the interim results for the six months ended 30 April 2017.

Chairman's statement

The Group has increased operating profit against the corresponding period last year by 10.79% to £698,000.  This has been achieved by increases in all areas of contribution apart from machine income. 

Results

The Group has returned an operating profit of £698,000 (2016: £630,000) which reflects a 10.79% increase against the same period in the previous year.  After allowing for finance costs of £140,000 (2016: £124,000), which include a £41,000 interest cost in respect of the IAS 19 calculation applied to the final salary Pension Scheme (2016: £28,000), the Group Profit before taxation is £558,000 (2016: £505,000).  This shows a 10.49% increase on the previous year.

Dividend

The Directors have resolved to pay an interim dividend of 3.675p per Ordinary Share and 'A' Limited voting Ordinary Share (2016: 3.675p).  The dividend will be paid on 4 August 2017 to shareholders on the Register at the close of business on 21 July 2017.

Property

There were no property sales during the period under review but three houses were being actively marketed for sale.  Those houses are the Crown and Sceptre in Newton St.Cyres, the Bell Inn in Cullompton and the Pen and Quill in Taunton. 

The Pen and Quill has sold since the closure of the half year period and a book loss has been mostly absorbed by the impairment that was shown in last year's accounts.  Also, since the end of the period under review, The King's Arms in Strete has been added to the list of those pubs being marketed for sale.

The Dartmoor Halfway in Bickington opened in May after a total refurbishment completed in partnership with Buccaneer Inns who have taken the tenancy of this exciting new pub. Trading has started well and the Directors wish Buccaneer Inns and the management team at the pub every success in the future.

Prospects

I am pleased to be reporting these good numbers at the half-year.  The quality of our houses and operators means that we are well set up to take advantage of good trading conditions in the second half of the financial year but also to remain resilient to the effects of the immense uncertainties that 2017 continues to deliver. 

N H P TUCKER

Chairman

Group income statement (unaudited)

For the six months ended 30 April 2017

		6 months to 30 April 2017	6 months to 30 April 2016	Audited 12 months to 31 October 2016
	Note	£' 000	£' 000	£' 000
Revenue		3,351	3,312	7,155
Change in stocks		-	-	-
Other operating income		134	117	241
Purchase of inventories		(1,318)	(1,322)	(2,955)
Staff costs		(625)	(600)	(1,301)
Depreciation of property, plant and equipment		(113)	(103)	(208)
Other operating charges		(731)	(774)	(1,512)
		(2,653)	(2,682)	(5,735)
Group operating profit		698	630	1,420
(Loss)/profit on sale of property, plant and equipment		-	(1)	585
Movements in valuation of estate and related assets		-	-	(163)
Group profit before finance costs and taxation		698	629	1,842
Finance income		3	8	6
Finance costs		(102)	(104)	(152)
Other finance costs-pensions		(41)	(28)	(43)
		(140)	(124)	(189)
Profit before taxation		558	505	1,653
Tax expense		(159)	(128)	(288)
Profit for the period		399	377	1,365
Earnings per share - basic - diluted	2	7.9p 7.9p	7.7p 7.7p	28.0p 28.0p

Group statement of comprehensive income (unaudited)

For the six months ended 30 April 2017

		6 months to 30 April 2017	6 months to 30 April 2016	Audited    12months     to  31 October       2016
		£' 000	£' 000	£' 000
Profit for the period		399	377	1,365
Items that will not be reclassified to profit or loss Actuarial (losses)/gains on defined benefit pension plans Tax relating to items that will not be reclassified		(69)              12    (57)	350              (70) 280	(1,195)              203 (992)
Items that may be reclassified to profit or loss Fair value adjustment Exchange rate differences on translation of subsidiary undertaking Tax relating to items that may be reclassified		1 -                   - 1	3 (3)                   - -	7 10                   - 17
Other comprehensive income for the year, net of tax		343	657	390
Total comprehensive income attributable to: Equity holders of the parent		343	657	390

Dividends

The Directors declare an interim dividend of 3.675p per share (2016 - 3.675p) on the Ordinary and 'A' Limited Voting Ordinary Shares. This dividend will be paid on 04 August 2017 to shareholders on the register at 21 July 2017.

Group balance sheet (unaudited)

at 30 April 2017		30 April 2017 £' 000	30 April 2016 £' 000	Audited 31 October 2016 £'000
Non-current assets
Property, plant and equipment		18,380	16,950	18,012
Financial assets		41	37	40
Deferred tax asset		284	100	359
		18,705	17,087	18,411
Current assets
Trade and other receivables		1,750	1,312	1,585
Inventories		10	10	10
Cash and short-term deposits		62	93	57
		1,822	1,415	1,652
Assets held for sale		552	1,408	219
Total assets		21,079	19,910	20,282
Current liabilities
Trade and other payables		(1,064)	(821)	(980)
Financial liabilities		(2,267)	(2,349)	(1,332)
Income tax payable		(223)	(106)	(149)
		(3,554)	(3,276)	(2,461)
Non-current liabilities
Other payables		(264)	(275)	(274)
Financial liabilities		(6,011)	(6,011)	(6,057)
Deferred tax liabilities		(335)	(305)	(335)
Defined benefit pension plan		(1,667)	(500)	(2,111)
		(8,277)	(7,091)	(8,777)
Total liabilities		(11,831)	(10,367)	(11,238)
Net assets		9,248	9,543	9,044
Capital and reserves
Equity share capital		264	264	264
Capital redemption reserve		673	673	673
Treasury shares		(1,212)	(1,201)	(1,254)
Fair value adjustments reserve		17	17	21
Currency translation		22	4	17
Retained earnings		9,484	9,786	9,323
Total equity		9,248	9,543	9,044

Group statement of cash flows (unaudited)

for the six months ended 30 April 2017

		6 months to 30 April 2017	6 months to 30 April 2016	Audited 12months  to 31 October 2016
Operating activities		£' 000	£' 000	£' 000
# Profit for the period		399	377	1,365
Tax expense		159	128	288
Net finance costs		140	124	189
Loss/(profit) on disposal of non-current assets and assets held for sale		-	1	(585)
Depreciation and impairment of property, plant and equipment		130	103	371
Exchange gain on cash, liquid resources and loan		-	-	4
Difference between pension contributions paid and recognised in the income statement		(554)	(591)	(538)
Decrease/(increase) in trade and other receivables		(165)	62	(226)
Increase/(decrease) in trade and other payables		78	79	238
Cash generated from operations		187	283	1,106
Income taxes paid		-	(6)	(79)
Interest paid		(102)	(104)	(152)
Net cash inflow from operating activities		85	173	875
Investing activities
Interest received		3	8	6
Proceeds from sale of property, plant and equipment and assets held for sale		-	4	1,205
Payments to acquire property, plant and equipment		(832)	(594)	(1,275)
Net cash outflow from investing activities		(829)	(582)	(64)
Financing activities
Preference dividend paid		(1)	(1)	(1)
Equity dividends paid		(183)	(179)	(358)
Consideration received by EBT on sale of shares		44	40	40
Consideration paid by EBT on purchase of shares Capital element of finance lease rental payments		-               (4)	(5)                 -	(58)            (2)
Net cash outflow from financing activities		(144)	(145)	(379)
Decrease in cash and cash equivalents		(888)	(554)	432
Cash and cash equivalents at the beginning of the period		(1,270)	(1,702)	(1,702)
Cash and cash equivalents at the period end.		(2,158)	(2,256)	(1,270)

Group reconciliation of movements in equity (unaudited)

6 months to	Equity	Capital		Fair		Cashflow
30 April 2017	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  2016	264	673	(1,254)	21	17	-	9,323	9,044
Profit for the period	-	-	-	-	-	-	399	399
Other comprehensive income for the period, net of income tax	-	-	-	1	-	-	(57)	(56)
Total     comprehensive income for the period	-	-	-	1	-	-	342	343
Consideration Received by EBT on sale of shares	-	-	44	-	-	-	-	44
Consideration paid by EBT on purchase of shares	-	-	-	-	-	-	-	-
Gain by EBT on sale of shares	-	-	(2)	-	-	-	2	-
Equity dividend  paid	-	-	-	-	-	-	(183)	(183)
At 30 April 2017	264	673	(1,212)	22	17	-	9,484	9,248

Group reconciliation of movements in equity (unaudited) - continued

6 months to	Equity	Capital		Fair		Cashflow
30 April 2016	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  2015	264	673	(1,235)	14	7	-	9,307	9,030
Profit for the period	-	-	-	-	-	-	377	377
Other comprehensive income for the period, net of income tax	-	-	-	3	( 3)	-	280	280
Total     comprehensive income for the period	-	-	-	3	(3)	-	657	657
Consideration Received by EBT on sale of shares	-	-	40	-	-	-	-	40
Consideration paid by EBT on purchase of shares	-	-	(5)	-	-	-	-	(5)
Gain by EBT on sale  of shares	-	-	(1)	-	-	-	1	-
Equity dividend  paid	-	-	-	-	-	-	(179)	(179)
At 30 April 2016	264	673	(1,201)	17	4	-	9,786	9,543

Group reconciliation of movements in equity (unaudited) - continued

12 months to 31 October 2016 Audited	Equity share capital £000	Capital redemption reserve £000	Treasury shares £000	Fair value adjustment reserve £000	Currency translation £000	Cash flow hedge reserve £000	Retained earnings £000	Total equity £000
At 1 November 2015	264	673	(1,235)	14	7	-	9,307	9,030
Profit for the year	-	-	-	-	-	-	1,365	1,365
Other comprehensive income for the year net of income tax	-	-	-	7	10	-	(992)	(975)
Total comprehensive
income for the year	-	-	-	7	10	-	373	390
Consideration received by EBT on sale of shares	-	-	40	-	-	-	-	40
Consideration paid by
EBT on purchase of shares	-	-	(58)	-	-	-	-	(58)
Gain by EBT on sale of shares	-	-	(1)	-	-	-	1	-
Equity dividends paid	-	-	-	-	-	-	(358)	(358)
At 31 October 2016	264	673	(1,254)	21	17	-	9,323	9,044

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 have been prepared in accordance with IAS34 "interim financial reporting" and 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 2016. The accounting policies are drawn up in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as adopted by the European Union.

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 2017.

2.  Basic and diluted earnings per share

The calculation of basic earnings per ordinary share is based on earnings of £399,000 (2016: £377,000), being profit after taxation for the period, and on 5,064,830 (2016: 4,872,387) 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 2017 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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