HEAVITREE BREWERY PLC

Earnings Release • Jun 28, 2018

National Storage Mechanism | Additional information

You don't have Javascript enabled. For full functionality this page requires javascript to be enabled.

RNS Number : 8891S

Heavitree Brewery PLC

28 June 2018

The Heavitree Brewery PLC

Trood Lane

Matford

Exeter EX2 8YP

Date:                28 June 2018

Contact:           Graham Crocker - Managing Director - 01392 217733

Nicola McLean - Company Secretary - 01392 217733

Patrick Castle /Anita Ghanekar - Shore Capital - 0207 408 4090

Following a meeting by a duly authorised committee of the Board of Directors held today, 28 June 2018, the Directors announce the interim results for the six months ended 30 April 2018.

Chairman's statement

Turnover for the period under review has increased by £47,000 (1.40%) against the corresponding period last year.  However there has been a 9.60% decrease in operating profit to £631,000 (2017: £698,000) predominantly due to an increase in costs associated with the Group's final salary Pension Scheme of £48,000 and a cost of £20,000 caused by the write down of old inventory items which have been moved from some of our houses over previous years and are now being held in storage. 

Results

The Group has returned an operating profit of £631,000.  After allowing for finance costs of £132,000 (2017: £140,000) which include a £41,000 interest cost in respect of the IAS 19 calculation applied to the final salary Pension Scheme (2017: £41,000) and a book profit mostly generated by the sale of four properties (£830,000), the Group Profit before taxation is £1,329,000 (2017: £558,000).  This shows an increase of 138.17% on the previous year.

Dividend

The Directors have resolved to pay an unchanged interim dividend of 3.675p per Ordinary Share and 'A' Limited Voting Ordinary Share (2017: 3.675p).  The Dividend will be paid on 3 August 2018 to shareholders on the Register at the close of business on 20 July 2018.

Property

The King of Prussia in Bovey Tracey completed on 27 November for £275,000.  We understand that the site will be converted into a community facility incorporating a small cinema.

The sale of The King's Arms in Strete completed on 9 March for £275,000.  We have retained a small cottage with a garden, a further small pocket of land and some parking on the site. 

The sale of The Crown and Sceptre in Newton St.Cyres completed on 23 April for £280,000. 

The sale of the flats which we built in 2012 at the old St.Loye's Hotel site completed on 26 April for £595,000.

At the time of writing, two unlicensed properties in Exeter and another in the South Hams are being marketed for sale.  One of the Exeter properties is sold subject to contract.  I hope to report further on these at the year-end.

Prospects

The sales of The King of Prussia, The King's Arms and The Crown and Sceptre, all of which had been closed for some time and had been incurring various consequential costs, will have a positive effect for the Group in terms of revenue. The proceeds from the sales have also reduced our level of debt which the Board considers to be a prudent goal in these uncertain times.

Trading has remained ahead of budget at the end of the first half of the year.  The trading effect of the FIFA World Cup looks promising and, together with the prolonged period of favourable weather which our region is currently enjoying, we believe that the Company is well placed going into the second half of the year.

N H P TUCKER

Chairman

Group income statement (unaudited)

For the six months ended 30 April 2018

		6 months to 30 April 2018	6 months to 30 April 2017	Audited 12 months to 31 October 2017
	Note	£' 000	£' 000	£' 000
Revenue		3,398	3,351	7,299
Change in stocks		-	-	-
Other operating income		139	134	384
Purchase of inventories		(1,342)	(1,318)	(2,968)
Staff costs		(697)	(625)	(1,353)
Depreciation of property, plant and equipment		(115)	(113)	(248)
Other operating charges		(752)	(731)	(1,336)
		(2,767)	(2,653)	(5,521)
Group operating profit		631	698	1,778
Profit on sale of property, plant and equipment		830	-	6
Movements in valuation of estate and related assets		-	-	-
Group profit before finance costs and taxation		1,461	698	1,784
Finance income		2	3	7
Finance costs		(93)	(102)	(182)
Other finance costs-pensions		(41)	(41)	(55)
		(132)	(140)	(230)
Profit before taxation		1,329	558	1,554
Tax expense		(189)	(159)	(226)
Profit for the period		1,140	399	1,328
Earnings per share - basic - diluted	2	23.4p 23.4p	7.9p 7.9p	27.0p 27.0p

Group statement of comprehensive income (unaudited)

For the six months ended 30 April 2018

		6 months to 30 April 2018	6 months to 30 April 2017	Audited    12months     to  31 October       2017
		£' 000	£' 000	£' 000
Profit for the period		1,140	399	1,328
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		(254)              99    (155)	(69)              12 (57)	428              (74) 354
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		(5) (6)               - (11)	1 -                   - 1	6 -                   - 6
Other comprehensive income for the year, net of tax		974	343	1,688
Total comprehensive income attributable to: Equity holders of the parent		974	343	1,688

Dividends

The Directors declare an interim dividend of 3.675p per share (2017 - 3.675p) on the Ordinary and 'A' Limited Voting Ordinary Shares. This dividend will be paid on 03 August 2018 to shareholders on the register at 20 July 2018.

Group balance sheet (unaudited)

at 30 April 2018		30 April 2018 £' 000	30 April 2017 £' 000	Audited 31 October 2017 £'000
Non-current assets
Property, plant and equipment		18,163	18,380	18,116
Financial assets		47	41	46
Deferred tax asset		230	284	221
		18,440	18,705	18,383
Current assets
Trade and other receivables		1,861	1,750	1,696
Inventories		10	10	10
Cash and short-term deposits		113	62	56
		1,984	1,822	1,762
Assets held for sale		328	552	890
Total assets		20,752	21,079	21,035
Current liabilities
Trade and other payables		(747)	(1,064)	(871)
Financial liabilities		(529)	(2,267)	(1,624)
Income tax payable		(281)	(223)	(190)
		(1,557)	(3,554)	(2,685)
Non-current liabilities
Other payables		(319)	(264)	(256)
Financial liabilities		(6,011)	(6,011)	(6,045)
Deferred tax liabilities		(345)	(335)	(345)
Defined benefit pension plan		(1,352)	(1,667)	(1,300)
		(8,027)	(8,277)	(7,946)
Total liabilities		(9,584)	(11,831)	(10,631)
Net assets		11,168	9,248	10,404
Capital and reserves
Equity share capital		264	264	264
Capital redemption reserve		673	673	673
Treasury shares		(1,240)	(1,212)	(1,223)
Fair value adjustments reserve		22	17	27
Currency translation		11	22	17
Retained earnings		11,438	9,484	10,646
Total equity		11,168	9,248	10,404

Group statement of cash flows (unaudited)

for the six months ended 30 April 2018

		6 months to 30 April 2018	6 months to 30 April 2017	Audited 12months  to 31 October 2017
Operating activities		£' 000	£' 000	£' 000
# Profit for the period		1,140	399	1,328
Tax expense		189	159	151
Net finance costs		132	140	231
(Profit) on disposal of non-current assets and assets held for sale		(830)	-	(6)
Depreciation and impairment of property, plant and equipment		115	130	248
Exchange gain on cash, liquid resources and loan		5	-	(3)
Difference between pension contributions paid and recognised in the income statement		(240)	(554)	(438)
(Increase) in trade and other receivables		(131)	(165)	(76)
(Decrease)/increase in trade and other payables		(60)	78	(170)
Cash generated from operations		320	187	1,265
Income taxes paid		(8)	-	(110)
Interest paid		(93)	(102)	(182)
Net cash inflow from operating activities		219	85	973
Investing activities
Interest received		2	3	6
Proceeds from sale of property, plant and equipment and assets held for sale		1,441	-	193
Payments to acquire property, plant and equipment		(249)	(832)	(1,117)
Net cash inflow from investing activities		1,194	(829)	(918)
Financing activities
Preference dividend paid		(1)	(1)	(1)
Equity dividends paid		(211)	(183)	(333)
Consideration received by EBT on sale of shares		53	44	49
Consideration paid by EBT on purchase of shares Capital element of finance lease rental payments		(68)               (7)	(4)	(15)            (21)
Net cash outflow from financing activities		(234)	(144)	(321)
Increase in cash and cash equivalents		(1,179)	(888)	(266)
Cash and cash equivalents at the beginning of the period		(1,536)	(1,270)	(1,270)
Cash and cash equivalents at the period end		(357)	(2,158)	(1,536)

Group reconciliation of movements in equity (unaudited)

6 months to	Equity	Capital		Fair		Cashflow
30 April 2018	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 2017	264	673	(1,223)	27	17	-	10,646	10,404
Profit for the period	-	-	-	-	-	-	1,140	1,140
Other comprehensive income for the period, net of income tax	-	-	-	(5)	(6)	-	(155)	(166)
Total     comprehensive income for the period	-	-	-	(5)	(6)	-	985	974
Consideration received by EBT on sale of shares	-	-	53	-	-	-	-	53
Consideration paid by EBT on purchase of shares	-	-	(68)	-	-	-	-	(68)
Gain by EBT on sale of shares	-	-	(2)	-	-	-	2	-
Equity dividend paid	-	-	-	-	-	-	(195)	(195)
At 30 April 2018	264	673	(1,240)	22	11	-	11,438	11,168

Group reconciliation of movements in equity (unaudited) - continued

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

12 months to 31 October 2017 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 2016	264	673	(1,254)	21	17	-	9,323	9,044
Profit for the year	-	-	-	-	-	-	1,328	1,328
Other comprehensive income for the year net of income tax	-	-	-	6	-	-	354	360
Total comprehensive
income for the year	-	-	-	6	-	-	1,682	1,688
Consideration received by EBT on sale of shares	-	-	49	-	-	-	-	49
Consideration paid by
EBT on purchase of shares	-	-	(15)	-	-	-	-	(15)
Gain by EBT on sale of shares	-	-	(3)	-	-	-	3	-
Equity dividends paid	-	-	-	-	-	-	(362)	(362)
At 31 October 2017	264	673	(1,223)	27	17	-	10,646	10,404

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 2017. 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 28 June 2018.

2.  Basic and diluted earnings per share

The calculation of basic earnings per ordinary share is based on earnings of £1,140,000 (2017: £399,000), being profit after taxation for the period, and on 4,876,995 (2017: 5,064,830) 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 2018 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 news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

IR SESSAAFASEFM