REG - Heavitree Brewery - Preliminary Announcement
The Heavitree Brewery PLC
Trood Lane
Matford
Exeter EX2 8YP
Date: 13 February 2019
Contact: Graham Crocker - Managing Director - 01392 217733
Nicola McLean - Company Secretary - 01392 217733
Patrick Castle /Anita Ghanekar - Shore Capital - 0207 408 4052
Following a Board Meeting held today, 13 February 2019, the Directors announce the preliminary statement of results for the year ended 31 October 2018.
ISIN: GB0004182720 for 'A' Limited Voting Ordinary Shares
ISIN: GB0004182506 for Ordinary Shares
Chairman's statement
Turnover for the Group has increased by £315,000 to £7,614,000 returning a Group operating profit of £1,632,000 for the year under review. This is a reduction in Group operating profit of £146,000 against the previous year. When making a comparison with the previous year, it should be noted that the Group operating profit line in 2017 had been increased by over 25% as a result of one-off transactions which included £104,000 from the sale of development land held by Heavitree Inc., £107,000 for a write back after an over provision in expense for bad debts and a further £36,000 for compensation and a repayment of legal fees following a land dispute.
Having considered these one-off transactions to the previous year before making comparisons, I am pleased with the results in this report.
Results
Group Turnover increased by £315,000 to £7,614,000. Group Operating Profit has decreased by £146,000 to £1,632,000.
Heavitree Inns remained dormant throughout the year.
Heavitree Inc. generated an operating profit of £12,000 (2017 - £104,000).
Key Performance Indicators
Group operating profit before Taxation of £1,632,000 was down 8.21% on last year.
Interest costs were covered 9.60 times.
Dividend
The Directors recommend a 6.25% increase in the final dividend to 4.25p per Ordinary and 'A' Limited Voting Ordinary Share (2017 - 4.00p) making a total for the year of 7.925p (2017-7.675p). The dividend will be paid on 18 April 2019, subject to shareholder approval at the Annual General Meeting on 10 April 2019, to those shareholders on the Register at 22 March 2019.
Sale of Property
The King of Prussia in Bovey Tracey was sold in November 2017, The Kings Arms in Strete was sold in March 2018, The Crown and Sceptre in Newton St.Cyres was sold in April 2018 together with a small block of four flats in Exeter. I reported on these at the half year. The total book profit realised on the sale of these sites was £814,000.
A house on the same site as the above-mentioned block of flats has been sold subject to contract and I hope to report further on this at the upcoming half year.
Capital Investments
Significant investments during the year include £85,000 on improvements and upgrades to the kitchen, lavatories and baby-changing facilities at The Cleave in Lustleigh, £30,000 on a new bar and installation of a central heating system at The Green Dragon in Stoke Fleming and £158,000 on part one of a refurbishment of The Church House in Stokenham.
Pension Scheme
Following the completion of the actuarial triennial valuation of the Final Salary Pension Scheme deficit that had fallen due in December 2016, a new set of correction payments were issued and approved in March 2018. These correction payments were to start at £588,000 and be subject to a 3% uplift year on year. Since the approval of this new set of correction payments three deferred members have transferred out of the scheme as detailed in note 30. Consequently, the Scheme's independent actuary has issued a replacement schedule of correction payments and this confirms that the Company is no longer required to make contributions to fund the Scheme's deficit.
The Company continues to operate the Scheme for the remaining retired members and their dependants.
Repurchase of shares
The Company did not repurchase any of its own shares during the year under review but the Directors intend to seek shareholder approval at the forthcoming Annual General Meeting for the continuing authority to do so.
Outlook
Another pleasing performance of good progress has created the platform for a further increase in the final Dividend.
At the time of writing it is hard to avoid making mention of the political uncertainty the Country is facing. Despite this, the quality of our houses and of our tenants and leaseholders who operate them and the dedicated support they receive from all of our staff at Head Office, have combined to help deliver this year's strong set of results.
N H P TUCKER
Chairman13 February 2019
Group income statement
for the year ended 31 October 2018
Notes
Total
2018
£000
Total
2017
£000
Revenue
7,614
7,299
Other operating income
279
384
Purchase of inventories
(3,109)
(2,968)
Staff costs
(1,407)
(1,353)
Depreciation of property, plant and equipment
(235)
(248)
Other operating charges
(1,510)
(1,336)
(5,982)
(5,521)
Group operating profit
1,632
1,778
Profit on sale of property plant and equipment
824
6
Group profit before finance costs and taxation
2,456
1,784
Finance income
5
7
Finance costs
(175)
(182)
Other finance costs - pensions
(35)
(55)
(205)
(230)
Profit before taxation
2,251
1,554
Tax expense
(324)
(226)
Profit for the year attributable to equity holders of the parent
1,927
1,328
Basic earnings per share
2
39.6p
27.0p
Diluted earnings per share
2
39.6p
27.0p
All amounts in 2018 and 2017 relate to continuing operations.
Group statement of comprehensive income
for the year ended 31 October 2018
2018
£000
2017
£000
Profit for the year
1,927
1,328
Items that will not be reclassified to profit or loss
Actuarial (losses)/gains on defined benefit pension plans
(248)
428
Tax relating to items that will not be reclassified
42
(74)
(206)
354
Items that may be reclassified to profit or loss
Fair value adjustments
(4)
6
Exchange rate differences on translation of subsidiary undertaking
(2)
-
(6)
6
Other comprehensive income for the year, net of tax
1,715
1,688
Total comprehensive income attributable to:
Equity holders of the parent
1,715
1,688
Group balance sheet
at 31 October 2018
2018
£000
2017
£000
Non-current assets
Property, plant and equipment
17,812
17,022
Investment property
1,094
1,094
18,906
18,116
Financial assets
47
46
Deferred tax asset
38
221
18,991
18,383
Current assets
Inventories
10
10
Trade and other receivables
1,292
1,696
Cash and cash equivalents
44
56
1,346
1,762
Assets held for sale
62
890
Total assets
20,399
21,035
Current liabilities
Trade and other payables
(1,078)
(871)
Financial liabilities
(818)
(1,624)
Income tax payable
(131)
(190)
(2,027)
(2,685)
Non-current liabilities
Other payables
(311)
(256)
Financial liabilities
(6,067)
(6,045)
Deferred tax liabilities
(300)
(345)
Defined benefit pension plan deficit
(39)
(1,300)
(6,717)
(7,946)
Total liabilities
(8,744)
(10,631)
Net assets
11,655
10,404
Capital and reserves
Equity share capital
264
264
Capital redemption reserve
673
673
Treasury shares
(1,317)
(1,223)
Fair value adjustments reserve
23
27
Currency translation
15
17
Retained earnings
11,997
10,646
Total equity
11,655
10,404
Group statement of cash flows
for the year ended 31 October 2018
2018
£000
2017
£000
Operating activities
Profit for the year
1,927
1,328
Tax expense
324
151
Net finance costs
206
231
Profit on disposal of non-current assets and assets held for sale
(824)
(6)
Depreciation and impairment of property, plant and equipment
235
248
Difference between pension contributions paid and amounts
5
(3)
recognised in the income statement
(1,544)
(438)
Decrease/(increase) in trade and other receivables
284
(76)
Increase/(decrease) in trade and other payables
380
(170)
Cash generated from operations
993
1,265
Income taxes paid
(188)
(110)
Interest paid
(176)
(182)
Net cash flow from operating activities
629
973
Investing activities
Interest received
6
6
Proceeds from sale of property, plant and equipment and assets held for sale
1,454
193
Payments to acquire property, plant and equipment
(777)
(1,117)
Net cash inflow/(outflow) from investing activities
683
(918)
Financing activities
Preference dividend paid
(1)
(1)
Equity dividends paid
(373)
(333)
Consideration received by EBT on sale of shares
54
49
Consideration paid by EBT on purchase of shares
Capital element of finance lease rental payments
(145)
(68)
(15)
(21)
New long-term borrowings
-
-
Net cash flow from financing activities
(533)
(321)
Increase/(decrease) in cash and cash equivalents
779
(266)
Cash and cash equivalents at the beginning of the year
(1,536)
(1,270)
Cash and cash equivalents at the year end
(757)
(1,536)
Group statement of changes in equity
for the year ended 31 October 2018
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)
Loss 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
£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 2017
264
673
(1,223)
27
17
-
10,646
10,404
Profit for the year
-
-
-
-
-
-
1,927
1,927
Other comprehensive
income for the year
net of income tax
-
-
-
(4)
(2)
-
(206)
(212)
Total comprehensive
income for the year
-
-
-
(4)
(2)
-
1,721
1,715
Consideration received
by EBT on sale of
shares
-
-
54
-
-
-
-
54
Consideration paid by
EBT on purchase of shares
-
-
(145)
-
-
-
-
(145)
Gain by EBT on sale
of shares
-
-
(3)
-
-
-
3
-
Equity dividends paid
-
-
-
-
-
-
(373)
(373)
At 31 October 2018
264
673
(1,317)
23
15
-
11,997
11,655
Equity share capital
The balance classified as share capital includes the total net proceeds (nominal amount only) arising or deemed to arise on the issue of the Company's equity share capital, comprising Ordinary Shares of 5p each and 'A' Limited Voting Ordinary Shares of 5p each.
Capital redemption reserve
The capital redemption reserve arises on the re-purchase and cancellation by the Company of 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 Benefits Trust and Employee Share Option Scheme ('EBT').
At 31 October 2018 the Group held 146,082 Ordinary Shares and 262,885 'A' Limited Voting Ordinary Shares (2017: 142,082 Ordinary Shares and 232,643 'A' Limited Voting Ordinary Shares) of its own shares. During the year there were purchases of 4,000 Ordinary Shares and 55,352 'A 'Limited Voting ordinary Shares and sales of 25,110 'A; Limited Voting Ordinary Shares.
Fair value adjustments reserve
The fair value adjustments reserve is used to record differences in the market value of the available-for-sale investment year on year.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries.
Notes to the preliminary announcement
1. Basis of preparation
These figures do not constitute full accounts within the meaning of Section 396 of the Companies Act 2006. They have been extracted from the statutory financial statements for the year ended 31 October 2018. The statutory financial statements have not yet been delivered to the Registrar of Companies.
The financial information in this statement has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the European Union. The accounting policies have been consistently applied and are described in full in the statutory financial statements for the year ended 31 October 2018, which are expected to be mailed to shareholders on 7 March 2019. The financial statements will also be available on the Group's website www.heavitreebrewery.co.uk.
The Directors are of the opinion that the Group has adequate resources to continue in operational existence for the foreseeable future and continue to adopt the going concern basis in preparing the financial statements.
2. Earnings per share
Basic earnings per share amounts are calculated by dividing profit for the year attributable to ordinary equity holders of the parent by the weighted average number of Ordinary shares and 'A' Limited Voting Ordinary shares outstanding during the year.
The following reflects the income and shares data used in the basic and diluted earnings per share
Computation:
2018
£000
2017
£000
Profit for the year
1,927
1,328
2018
No.
(000)
2017
No.
(000)
Basic weighted average number of shares (excluding treasury shares)
4,866
4,877
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of completion of these financial statements.
3. Dividends paid and proposed
2018
£000
2017
£000
Declared and paid during the year:
Equity dividends on ordinary shares:
Final dividend for 2017: 4.00p (2016: 3.675p)
211
198
First dividend for 2018: 3.675p (2017: 3.675p)
198
194
Less dividend on shares held within employee share schemes
(36)
(30)
Dividends paid
373
362
Proposed for approval at AGM
(not recognised as a liability as at 31 October)
Final dividend for 2018 4.25p (2017: 4.00p)
Cumulative preference dividends
224
1
211
1
4. Segment information
Primary reporting format - business segments
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, under tied tenancies.
Secondary reporting format - geographical segments
The following tables present revenue, expenditure and certain asset information regarding the Group's geographical segments for the years ended 31 October 2018 and 2017. Revenue is based on the geographical location of customers and assets are based on the geographical location of the asset.
Segment information
Year ended 31 October 2018
UK
£000
United States
£000
Total
£000
Revenue
Sales to external customers
7,614
-
7,614
Other segment information
Segment assets
20,542
43
20,585
Total Assets
20,542
43
20,585
Capital expenditure
Property, plant and equipment
839
-
839
Year ended 31 October 2017
UK
£000
United States
£000
Total
£000
Revenue
Sales to external customers
7,299
-
7,299
Other segment information
Segment assets
20,885
150
21,035
Total Assets
20,885
150
21,035
Capital expenditure
Property, plant and equipment
1,117
-
1,117
5. General information
The 2018 Annual Report and Financial Statements will be published and posted to shareholders on 7th March 2019. Further copies may be obtained by contacting the Company Secretary at The Heavitree Brewery PLC, Trood Lane, Matford, Exeter EX2 8YP. The 2018 Annual Report and Financial Statements will also be available on the Company's website at http://www.heavitreebrewery.co.uk/financial/
The Annual General Meeting will be held at the Registered Office on 10 April 2019 at 11.30am.
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.ENDFR CKNDKKBKDDBD
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