REG - Heavitree Brewery - Interim Announcement
29/06/2022 15:00
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RNS Number : 6656Q Heavitree Brewery PLC 29 June 2022
The Heavitree Brewery PLC
Trood Lane
Matford
Exeter EX2 8YP
Date: 29 June 2022
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, 29 June 2022, the Directors announce the interim results for the
six months ended 30 April 2022.
Chairman's statement
I am satisfied to report that the Company has begun to move on from the
intensely difficult and much reported upon trading environments of the
previous two years. Although there remains much to be cautious about in the
months ahead, at this half-year under review, we have returned to a
performance level on a par with 2019 before the various measures implemented
to combat the Covid 19 pandemic impacted the whole of our sector. Having
reported a small operating loss at the previous year-end, this half-year has
generated a turnover of £3,290,000 and returned an operating profit of
£522,000. The turnover figure has been reduced by £109,000 due to the IFRS
16 Lease Accounting unwind corresponding to the positive write back effect in
previous years. I have explained the mechanics of this accounting standard in
previous statements.
Results
The Group has returned an operating profit of £522,000 (2021: an operating
loss of £647,000) at the half-year. Profit before tax is £1,063,000 (2021:
a loss before tax of £76,000) after a book profit of £601,000 (2021: a book
profit £647,000) was achieved on Property sales.
Dividend
The Directors do not recommend the payment of a dividend at the half-year.
The Board considers the payment of dividends to be an intrinsic part of our
business and we are determined to resume the payment of dividends at the
earliest possible time but only when the Directors are confident about
generating cash through a sustainable operating profit. The payment of a
future dividend remains under continual review.
Property
The Company has continued to pursue the policy of the sale of non-core assets.
The following properties have been sold during the period under review:
Two cottages on the site adjoining the Exeter Inn in Honiton Clyst.
The Marshalls Hotel in Barnstaple.
The Victoria Inn and an adjoining cottage in Ashburton.
The Maltsters Arms, the converted skittle alley and the adjoining development
site in Clyst St Mary.
In line with the Board's strategy of reducing debt and following these sales,
three prepayments against the term loan held with Barclays have been made
during the period under review, totalling £1,750,000.
Personnel
I am very sad to report the passing of Andy Paver, our tenant at The Dewdrop
Inn in Kingsteignton. He died shortly after his deteriorating health had
forced him to retire from the tenancy in April after nearly thirty years as
the licensee. He ran the pub with impeccable standards and a natural charm
that made the pub a very special place under his stewardship. He was also
held in the highest esteem by all at head office and he will be greatly
missed.
Prospects
Whilst pleased with the rebound in trade across our houses in the preliminary
months of the year and the boost in sales enjoyed by many pubs during the long
Jubilee weekend, I am acutely aware of the two-fold strain to the trade caused
by the cost of living hikes to our customers and the cost of doing business
hikes faced by our operators. The Directors are, of course, concerned as to
how these pressures might manifest themselves across the estate, particularly
come this Autumn and Winter. We shall continue to monitor the situation as
it develops.
N H P TUCKER
Chairman
Group income statement (unaudited)
For the six months ended 30 April 2022
Audited
6 months 6 months 12 months
to to to
30 April 30 April 31 October
2022
2021 2021
Note £' 000 £' 000 £' 000
Revenue 3,290 846 4,618
Change in stocks - - -
Other operating income 110 183 310
Purchase of inventories (1,312) (253) (1,909)
Staff costs (714) (655) (1,349)
Depreciation of property, plant and equipment (98) (77) (177)
Other operating charges (754) (691) (1,552)
(2,768) (1,493) (4,677)
Group operating profit/(loss) 522 (647) (59)
Profit on sale of property, plant and equipment 601 647 1,318
Group Profit before finance costs and taxation 1,123 - 1,259
Finance income - - -
Finance costs (60) (76) (145)
(60) (76) (145)
Profit/(loss) before taxation 1,063 (76) 1,114
Tax expense (208) (10) (313)
Profit/(loss) for the period 855 (86) 801
Earnings per share 4
- basic 15.4p (1.8)p 16.6p
- diluted
15.4p
(1.8)p
16.6p
Group statement of comprehensive income (unaudited)
For the six months ended 30 April 2022
Audited
6 months 6 months 12months
to to to
30 April 30 April 31 October
2022
2021 2021
£' 000 £' 000 £' 000
Profit/loss for the period 855 (86) 801
Items that will not be reclassified to profit or loss
Fair value adjustment on investment in equity - 4 5
Actuarial (losses)/gains on defined benefit pension plans - - -
Tax relating to items that will not be reclassified
- 4 5
Items that may be reclassified to profit or loss
Exchange rate differences on translation of subsidiary undertaking 9 - -
Tax relating to items that may be reclassified
-
- -
-
-
-
Other comprehensive income/ (loss) for the year, net of tax 864 (82) 806
Total comprehensive income/ (loss) attributable to:
Equity holders of the parent 864 (82) 806
Group balance sheet (unaudited)
at 30 April 2022 Audited
30 April 30 April 31 October 2021
2022 2021 £'000
£' 000 £' 000
Non-current assets
Property, plant and equipment 17,798 18,743 17,997
Financial assets 34 33 34
Deferred tax asset 16 16 16
17,848 18,792 18,047
Current assets
Trade and other receivables 1,996 1,852 1,936
Inventories 10 10 10
Cash and short-term deposits 35 66 52
2,041 1,928 1,998
Assets held for sale 371 211 883
Total assets 20,260 20,931 20,928
Current liabilities
Trade and other payables (1,274) (619) (984)
Financial liabilities (1,051) (2,162) (1,158)
Income tax payable (318) (98) (108)
(2,643) (2,879) (2,250)
Non-current liabilities
Other payables (325) (279) (318)
Financial liabilities (2,187) (4,508) (4,069)
Deferred tax liabilities (734) (536) (734)
Defined benefit pension plan (92) (92) (92)
(3,338) (5,415) (5,213)
Total liabilities (5,981) (8,294) (7,463)
Net assets 14,279 12,637 13,465
Capital and reserves
Equity share capital 264 264 264
Capital redemption reserve 673 673 673
Treasury shares (1,579) (1,502) (1,529)
Fair value adjustments reserve 10 9 10
Currency translation 22 13 13
Retained earnings 14,889 13,180 14,034
Total equity 14,279 12,637 13,465
Dividends
The Directors do not recommend a dividend to be paid at the half-year.
Group statement of cash flows (unaudited)
for the six months ended 30 April
2022
Audited
6 months 6 months 12months
to to to
30 April 30 April 31 October
2022
2021 2021
Operating activities £' 000 £' 000 £' 000
Profit/(loss) for the period 855 (86) 801
Tax expense 208 10 313
Net finance costs 60 76 145
(Profit) on disposal of non-current assets and assets held for sale
(601) (647) (1,200)
Depreciation and impairment of property, plant and equipment 98 97 177
Exchange gain on cash, liquid resources and loan - - -
(Increase)/decrease in trade and other receivables (80) (338) (442)
Increase/(decrease) in trade and other payables 274 (58) 353
Impairment of assets - - -
Cash generated from operations 814 (946) 147
Income taxes paid - (245)
(150)
Interest paid (60) (76) (145)
Net cash inflow / (outflow) from operating activities 754 (1,172) (243)
Investing activities
Interest received - - -
Proceeds from sale of property, plant and equipment and assets held for sale 1,402 584 1,411
Payments to acquire property, plant and equipment (153) (209) (473)
Net cash Inflow/outflow from investing activities 1,249 375 938
Financing activities
Preference dividend paid (1) (1) (1)
Equity dividends paid - - -
Consideration received by EBT on sale of shares - 41 41
Consideration paid by EBT on purchase of shares (50) (54) (81)
Capital element of finance lease rental payments (4) (7) (25)
Repayment of bank borrowings (1,892) (27) (187)
Mortgage Receipts 21 - 35
Net cash outflow from financing activities (1,926) (48) (218)
Increase/(decrease) in cash and cash equivalents 77 (845) 477
Cash and cash equivalents at the beginning of the period (755) (1,232) (1,232)
Cash and cash equivalents at the period end (678) (2,077) (755)
Group statement of cash flows (unaudited) (continued)
for the six months ended 30 April
2022
Represented by:
Cash and short term deposits 35 66 52
Overdraft (713) (2,143) (807)
(678) (2,077) (755)
Group reconciliation of movements in equity (unaudited)
6 months to Equity Capital Fair
30 April 2022 share redemption Treasury value Currency Retained Total
capital reserve shares adjustment translation earnings equity
£' 000 £' 000 £' 000 £' 000 £' 000 £' 000 £' 000
At 1November 2021 264 673 (1,529) 10 13 14,034 13,465
Profit for the period - - - - - 855 855
Other comprehensive income for the period, net of income tax - - - - 9 - 9
Total comprehensive income for the period - - - - 9 855 864
Consideration
received by EBT on sale of
shares
- - - - - - -
Consideration paid by EBT on purchase of shares - - (50) - - - (50)
Loss by EBT on sale of shares - - - - - - -
Equity dividend paid - - - - - - -
At 30 April 2022 264 673 (1,579) 10 22 14,889 14,279
Group reconciliation of movements in equity (unaudited) - continued
6 months to Equity Capital Fair
30 April 2021 share redemption Treasury value Currency Retained Total
capital reserve shares adjustment Translation earnings equity
£' 000 £' 000 £' 000 £' 000 £' 000 £' 000 £' 000
At 1November 2020 264 673 (1,522) 5 13 13,266 12,699
(Loss) for the period - - - - - (86) (86)
Other comprehensive income for the period, net of income tax - - - 4 - - 4
Total comprehensive income for the period - - - 4 - (86) (82)
Consideration
received by EBT on sale of shares
- - 41 - - - 41
Consideration paid by EBT on purchase of shares - - (54) - - - (54)
Loss by EBT on sale of shares - - 33 - - - 33
Equity dividend paid - - - - - - -
At 30 April 2021 264 673 (1,502) 9 13 13,180 12,637
Group reconciliation of movements in equity (unaudited) - continued
Equity share capital Capital redemption reserve Fair value adjustment reserve
£000 £000 Treasury shares £000 Currency Retained earnings Total equity
12 months to 31 October 2021 £000 Translation £000 £000
Audited £000
At 1 November 2020 264 673 (1,522) 5 13 13,266 12,699
Profit for the year - - - - - 801 801
Other comprehensive income for the year - - - 5 - - 5
net of income tax
Total comprehensive
income for the year - - - 5 - 801 806
Consideration received by EBT on sale of shares
- - 41 - - - 41
Consideration paid by
EBT on purchase of shares - - (81) - - - (81)
Loss by EBT on sale of shares - - 33 - - (33) -
Equity dividends paid - - - - - - -
At 31 October 2021 264 673 (1,529) 10 13 14,034 13,465
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'). Shares held at half-year 444,155.
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 as defined in section 434 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 2021. The accounting policies are drawn up in accordance with
International Accounting Standards (IAS) and International Financial Reporting
Standards (IFRS) as adopted by the United Kingdom.
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
2022.
2. Going concern
While Covid restrictions are no longer in place, there are concerns around the
general increase in costs including the hike in energy prices, which we have
not yet seen the impact of in our half year results. The Board has continued
to review and adjust forecasts to take into account any possible impact this
may have on trading in the second half of the year. The Group remains well
within its forecasts to April 2023 with minimum headroom of £2.1m on the £3m
overdraft, and three prepayments to the term loan have been made totalling
£1,750,000. The Board continues to focus attention on the long-term trading
position of the Group. The acceleration of the Group's programme of non-core
asset sales is continuing and in line with targets set, achieving £1.4m of
sales within the first six months of the financial year. The current trading
performance of the Group also shows that it will be able to operate within
the level of its facilities for the foreseeable future. With the value in the
Estate being realised over time and with the support from the bank there are
no material uncertainties. For this reason, the Group continues to adopt the
going concern basis in preparing its financial statements.
3. Key Estimates
The key assumptions concerning the future and other key sources of estimation
uncertainty at the balance sheet date, that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within
the next financial period are discussed below:
Impairment of assets
The Directors assess impairment of assets at each reporting date on a property
by property basis. The Directors take into consideration trade performance
during the year and open market value as to whether there is an indication
that an asset may be permanently impaired. When necessary external
valuations are carried out. Within this trading period the Directors conclude
that there were no impairments.
4. Basic and diluted earnings per share
The calculation of basic earnings per ordinary share is based on earnings of
£855,000 (2021: £(86,000)), being profit/(loss) after taxation for the
period, and on 4,818,652 (2021: 4,819,991) 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.
5. 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.
Within our Financial statements year ended 31 October 2021 a presentation
error occurred in the segment information section. This was a cross casting
error due to a late balance sheet adjustment. The balance sheet at the year
end and the split in the assets held in the United States were correct.
6. 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 2022 has been posted to shareholders today and will be available on
our website at www.heavitreebrewery.co.uk (http://www.heavitreebrewery.co.uk)
.
Ends.
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