HEAVITREE BREWERY PLC

Quarterly Report • Jul 6, 2016

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RNS Number : 3862D

Heavitree Brewery PLC

06 July 2016

The Heavitree Brewery PLC

Trood Lane

Matford

Exeter EX2 8YP

Date:                6 July 2016

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, 6 July 2016, the Directors announce the interim results for the six months ended 30 April 2016.

Chairman's statement

The Company has returned an operating profit of £630,000 (2015: £507,000) for the period under review.  Last year's corresponding operating profit for the period was affected by a number of factors including some extraordinary costs such as a properties' valuation cost before our new banking facility, an agency cost for the operation of a tenancy over the winter period plus a lack of contribution from two houses where major refurbishments were being carried out.  These houses are now operational again and together with some improved rental terms on some new tenancy agreements, I am pleased to be able to report a 24% increase in operating profit on the previous year.

Results

The Group operating profit is £630,000 (2015: £507,000), a 24% increase on the previous year.  After allowing for finance costs of £124,000 (2015: £117,000) which includes a £28,000 interest cost in respect of the IAS19 calculation referring to the final salary Pension Scheme (2015: £23,000), the Group Profit before taxation is £505,000 (2015: £395,000) which shows a 28% 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 (2015: 3.675p).  The dividend will be paid on 5 August 2016 to shareholders on the Register at the close of business on 22 July 2016.

Property

In respect of the properties previously reported as being marketed for sale; the sale of one of the new houses on Topsham Road in Exeter on the former site of the Country House Inn completed on 29 June and the sale of the Hole in the Wall in Dawlish completed on 24 May.

The Maltster's Arms in Harbertonford has been taken off the market and is now open and trading after a new lease was granted to an experienced local operator.

Having received notice from the incumbent tenant, the Carpenter's Arms in Ilsington, a small house best suited to an owner operator, was placed on the market in April. An acceptable offer was received in very short order and the sale completed on 24 June.

Prospects

Work has commenced on the refurbishment of the Dolphin Inn in Torquay which closed earlier in the year.  We look forward to reopening this house in August 2016. Following a long closure, development work is also planned to start shortly on the Dartmoor Halfway Inn in Bickington. When completed, both should add significantly to our income stream.

In line with our expectations we have made a solid start to trading in the second half of the year and the Company is well positioned before the beginning of the summer season.

N H P TUCKER

Chairman

Group income statement (unaudited)

For the six months ended 30 April 2016

6 months

to

30 April

2016

6 months

to

30 April

2015

Audited

12 months

to

31  October

2015

Note

£' 000

£' 000

£' 000

Revenue

3,312

3,277

7,082

Change in stocks

-

-

-

Other operating income

117

113

229

Purchase of inventories

(1,322)

(1,405)

(2,986)

Staff costs

(600)

(562)

(1,172)

Depreciation of property, plant and equipment

(103)

(108)

(218)

Other operating charges

(774)

(808)

(1,523)

(2,682)

(2,770)

(5,670)

Group operating profit

630

507

1,412

(Loss)/profit on sale of property, plant and equipment

(1)

5

5

Movements in valuation of estate and related assets

-

-

(47)

Group profit before finance costs and taxation

629

512

1,370

Finance income

8

5

8

Finance costs

(104)

(99)

(170)

Other finance costs-pensions

(28)

(23)

(35)

(124)

(117)

(197)

Profit before taxation

505

395

1,173

Tax (expense)

(128)

(103)

(258)

Profit for the period

377

292

915

Earnings per share

- basic

- diluted

2

7.7p

7.7p

6.0p

6.0p

18.8p

18.8p

Group statement of comprehensive income (unaudited)

For the six months ended 30 April 2016

		6 months to 30 April 2016	6 months to 30 April 2015	Audited    12months     to  31 October       2015
		£' 000	£' 000	£' 000
Profit for the period		377	292	915
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		350              (70) 280	411              (82) 329	(740)              147 (593)
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		- 3 (3)                   - -	20 1 (2)                   - 19	24 (2) -                  (4) 18
Other comprehensive income for the year, net of tax		657	640	340
Total comprehensive income attributable to: Equity holders of the parent		657	640	340

Dividends

The Directors declare an interim dividend of 3.675p per share (2015 - 3.675p) on the Ordinary and 'A' Limited Voting Ordinary Shares. This dividend will be paid on 05 August 2016 to shareholders on the register at 22 July 2016.

Group balance sheet (unaudited)

at 30 April 2016		30 April 2016 £' 000	30 April 2015 £' 000	Audited 31 October 2015 £'000
Non-current assets
Property, plant and equipment		16,950	16,077	17,242
Financial assets		37	37	34
Deferred tax asset		100	50	282
		17,087	16,164	17,558
Current assets
Trade and other receivables		1,312	1,785	1,359
Inventories		10	10	10
Cash and short-term deposits		93	114	51
		1,415	1,909	1,420
Assets held for sale		1,408	-	645
Total assets		19, 910	18,073	19,623
Current liabilities
Trade and other payables		(821)	(1,055)	(759)
Financial liabilities		(2,349)	(1,580)	(1,753)
Income tax payable		(106)	(184)	(96)
		(3,276)	(2,819)	(2,608)
Non-current liabilities
Other payables		(275)	(241)	(258)
Financial liabilities		(6,011)	(5,011)	(6,011)
Deferred tax liabilities		(305)	(200)	(305)
Defined benefit pension plan		(500)	(249)	(1,411)
		(7,091)	(5,701)	(7,985)
Total liabilities		(10,367)	(8,520)	(10,593)
Net assets		9,543	9,553	9,030
Capital and reserves
Equity share capital		264	264	264
Capital redemption reserve		673	673	673
Treasury shares		(1,201)	(1,190)	(1,235)
Fair value adjustments reserve		17	17	14
Cash flow hedging reserve		-	-	-
Currency translation		4	5	7
Retained earnings		9,786	9,784	9,307
Total equity		9,543	9,553	9,030

Group statement of cash flows (unaudited)

for the six months ended 30 April 2016

		6 months to 30 April 2016	6 months to 30 April 2015	Audited 12months  to 31 October 2015
		£' 000	£' 000	£' 000
# Profit for the period Tax expense Net finance costs		377 128 124	292 103 117	915 258 197
Loss/(profit) on disposal of non-current assets and assets held for sale		1	(5)	(5)
Depreciation and impairment of property, plant and equipment		103	108	265
Decrease/(increase) in trade and other receivables		62	(651)	(114)
Increase/(decrease)  in trade and other payables		79	104	(171)
Net pension charge		(591)	(522)	(522)
Cash generated from operations		283	(454)	823
Income taxes paid		(6)	-	(143)
Interest paid		(104)	(98)	(170)
Net cash inflow/(outflow) from operating activities		173	(552)	510
Investing activities
Interest received		8	5	8
Proceeds from sale of property, plant and equipment and assets held for sale		4	24	20
Payments to acquire property, plant and equipment		(594)	(1,050)	(3,124)
Net cash outflow from investing activities		(582)	(1,021)	(3,096)
Financing activities
Preference dividend paid		(1)	(1)	(1)
Equity dividends paid		(179)	(179)	(358)
Consideration received by EBT on sale of shares		40	30	30
Consideration paid by EBT on purchase of shares		(5)	(21)	(65)
Movement in long term borrowing		-	250	1,250
Net cash(outflow)/ inflow from financing activities		(145)	79	856
Decrease in cash and cash equivalents		(554)	(1,494)	(1,730)
Cash and cash equivalents at the beginning of the period		(1,702)	28	28
Cash and cash equivalents at the period end.		(2,256)	(1466)	(1,702)

Group reconciliation of movements in equity (unaudited)

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

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 1 November  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

Group reconciliation of movements in equity (unaudited) - continued

12 months to	Equity	Capital					Fair				Cashflow
31 October 2015	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  2014	264		673	(1,202)		16		7		(20)		9,345		9,083
Profit for the year	-		-	-		-		-		-		915		915
Other comprehensive income for the year, net of income tax	-		-	-		(2)		-		20		(593)		(575)
Total     comprehensive income
for the year	-		-	-		(2)		-		20		322		340
Consideration received by EBT on sale of shares	-		-	30		-		-		-		-		30
Consideration paid by EBT on purchase of shares	-		-	(65)		-		-		-		-		(65)
Loss by EBT on sale of shares	-		-	2		-		-		-		(2)		-
Equity dividend  paid	-		-	-		-		-		-		(358)		(358)
At 31 October 2015	264		673	(1,235)		14		7		-		9,307		9,030

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 2015. 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 6 July 2016.

2.  Basic and diluted earnings per share

The calculation of basic earnings per ordinary share is based on earnings of £377,000 (2015: £292,000), being profit after taxation for the period, and on 4,872,387 (2015: 4,868,704) 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 2016 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

END

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