REG - Heavitree Brewery - Preliminary Announcement
19/02/2026 15:01
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RNS Number : 6981T Heavitree Brewery PLC 19 February 2026
The Heavitree Brewery PLC
Trood Lane
Matford
Exeter EX2 8YP
Date: 19 February 2026
Contact: Terry Wheatley Managing Director - 01392 217733
Nicola McLean Finance Director-Company Secretary - 01392 217733
Patrick Castle /Anita Ghanekar - Shore Capital - 0207 408 4052
Following a Board Meeting held today, 19 February 2026, the Directors announce
the preliminary statement of results for the year ended 31 October 2025.
ISIN: GB0004182720 for 'A' Limited Voting Ordinary Shares
ISIN: GB0004182506 for Ordinary Shares
Chairman's statement
There is an element of repetition in my year-end and interim statements over
recent years as I have warned of the many challenges facing pubs and our
sector as a whole. Although this Company has once again ridden the storm and
returned a satisfactory set of results for the period, none of the
much-reported pressures being felt by our tenants and leaseholders operating
our pubs have gone away. In fact, the list has been added to following the
November Budget. The resilience shown by our landlords and landladies, and
their staff, to encourage trade and remain busy is commendable and I have been
genuinely pleased by the levels of trade shown on my recent visits to some of
our houses. However, the Board is under no illusions as to how much profit
margins are being squeezed from many directions and how, in turn, our
operators are putting in long and exhaustive hours themselves to mitigate the
cost of doing business.
Turnover has increased in the year by 1.7% to £7,628,000 (2024: £7,498,000).
Operating profit has decreased slightly by 3.3% to £1,377,000 (2024:
£1,424,000). This is due to an increase in payroll costs during the
transition period following Terry Wheatley's appointment as Managing Director
and Nicky McLean's appointment as Finance Director in February 2025 going hand
in hand with Graham Crocker stepping back from both these roles but continuing
as a full-time executive until April 2026, all as detailed in last year's
statement. Our programme of repairs this year has resulted in a reduced
spend of £801,000 compared with the previous year (2024: £890,000).
Dividend
The Board recommends an unchanged final dividend of 3.85p (2024: 3.85p) for
the year ended 31 October 2025 per Ordinary and "A" Ordinary Limited Voting
Share to those shareholders on the register on 13th March 2026. This final
dividend is cautious for the reasons explained above but when added to the
increased dividend paid at the half-year, represents an increase for the year
of 8.1% which, subject to shareholder approval at the Annual General Meeting
to be held on 15th April 2026, will be paid on 24th April 2026.
Chairman's statement (continued)
Property
A cash settlement has been received from insurers for the Jolly Sailor in East
Ogwell which was destroyed by fire in 2020. Planning permission for the site
has been approved and the Company continues to liaise with representatives of
the Parish Council to establish the best way to proceed and I look forward to
reporting further at the half-year.
A fire damaged the stores and beer cellar at The Cleave in Lustleigh in
October. The installation of a temporary cellar unit has meant that there
has not been an interruption to trading and our team is in conversation with
insurers and the National Park Conservation Officer to ensure a rebuild can be
carried out as soon as possible. The Board is most grateful for the prompt
action of both staff at the pub and the Fire Service who undoubtedly prevented
the fire extending to the main body of the building.
Combined fixed assets sales, mainly comprising of the sale of the Locomotive
Inn in Exeter which I reported on at the half-year, has resulted in a profit
of £1,056,000. Consideration of the carrying value at the old Heavitree
Arms in Exmouth has resulted in an impairment of £200,000.
Five changes of tenancy and a lease assignment have completed during the year
under review. The Board wishes all these operators every success with their
new ventures. At the time of writing, we have just two tenancies available
with interest being shown by potential new tenants at both sites.
Pension Scheme
As I reported at the half-year, the wind-up process of the Company's final
salary pension scheme continues to move towards completion but frustratingly
slowly. The delay has been caused by the pace of work of the insurance
companies who are charged with transferring annuities into individual member's
own names. Further frustration has been caused as the delay has resulted in
the necessity to produce a full set of accounts for the scheme and with them,
of course, comes the associated cost. I know I have reported the same
before, but we really are very close to the finish line.
Personnel
Michael Jordan retired in January from his role as Contracts' Manager of our
building maintenance department having joined the Company in 2005. Mike has
combined his skills, dedication and leadership whilst fulfilling his role and
has always been immensely popular both at Head Office and throughout the
estate. He leaves after a year of expertly controlled spending for the
department and our pubs looking their best. I am sure all shareholders would
like to join the Board in thanking Mike and wishing him an extremely happy
retirement.
Mike's retirement means the Board would like to extend the warmest of welcomes
to Jason Hartnell who has joined the Company to lead the department. I would
also like to thank both Mike and Jason for achieving such a smooth transition
in this part of our business.
Prospects
A customer might walk into a well-frequented local and enjoy a wonderful
experience, and perhaps reflect afterwards that the pub was as good and busy
as ever, so what are they worrying about? The concerns are for the
multi-pronged attack on their business: there is an RPI indexed alcohol duty
increase coming soon, there are pressures from energy and food costs and
increased employer's national insurance, and also new legislation connected to
worker's rights and an increase in the minimum wage. Perhaps top of the list
was the threat of an increase in business rates which was thinly disguised as
a reduction when it was announced in the November budget. The resulting uproar
afterwards followed by intense lobbying from trade bodies resulted in the
announcement of a climbdown. We then had many weeks of speculation as to
what the Treasury was going to announce next as it tried to make amends. The
uncertainty alone was most unhelpful.
N H P TUCKER
Chairman
19 February 2026
Income Statement
for the year ended 31 October 2025
Total Total
2025 2024
Notes £000 £000
Revenue 7,628 7,498
Other operating income 285 294
Purchase of inventories (3,006) (2,982)
Staff costs (1,650) (1,505)
Depreciation of property, plant and equipment
(172) (222)
Other operating charges (1,708) (1,659)
(6,251) (6,074)
Operating profit 1,377 1,424
Profit on sale of property plant and equipment
Impairment of fixed assets 1,056 308
Insurance receipt (Jolly Sailor) (200) -
877 -
Profit before finance costs and taxation 3,110 1,732
finance costs (92) (172)
(92) (172)
Profit before taxation 3,018 1,560
Tax expense (396) (242)
Profit for the year attributable to equity holders
2,622 1,318
Basic earnings per share 2 54.2p 27.2p
Diluted earnings per share 2 54.2p 27.2p
Statement of Comprehensive Income
for the year ended 31 October 2025
2025 2024
£000 £000
Profit for the year 2,622 1,318
Other comprehensive income for the year, net of tax 2,622 1,318
Total comprehensive income attributable to:
Equity holders 2,622 1,318
Balance Sheet
at 31 October 2025
2025 2024
£000 £000
Non-current assets
Property, plant and equipment 17,582 17,261
Investment property 2,258 2,258
Right of use asset 74 116
19,914 19,635
Financial assets 764 436
Deferred tax asset - 16
20,678 20,087
Current assets
Inventories 10 10
Trade and other receivables 1,060 1,217
Cash and cash equivalents 2,308 754
3,378 1,981
Assets held for sale - 504
Total assets 24,056 22,572
Current liabilities
Trade and other payables (1,018) (1,013)
Financial liabilities (341) (746)
Income tax payable (289) (347)
(1,648) (2,106)
Non-current liabilities
Other payables (385) (326)
Financial liabilities (1,294) (1,638)
Deferred tax liabilities (979) (875)
Defined benefit pension plan deficit - (92)
(2,658) (2,931)
Total liabilities (4,306) (5,037)
Net assets 19,750 17,535
Capital and reserves
Equity share capital 251 251
Capital redemption reserve 686 686
Own share reserve (1,135) (1,049)
Fair value adjustments reserve 10 10
Retained earnings 19,938 17,637
Total equity 19,750 17,535
Statement of Cashflows
for the year ended 31 October 2025
2025 2024
£000 £000
Operating activities
Profit for the year 2,622 1,318
Tax expense 396 242
Net finance costs 92 172
Profit on disposal of non-current assets and assets held for sale (1,056) (308)
Depreciation and impairment of property, plant and equipment
172 222
Decrease in trade and other receivables 157 11
Decrease/(increase) in trade and other payables 66 (73)
Impairment of fixed assets 200 -
Mortgage receipts received 37 33
Insurance receipt (877) -
Cash generated from operations 1,809 1,617
Income taxes paid (350) (135)
Interest paid (127) (200)
Net cash inflow from operating activities 1,332 1,282
Investing activities
Proceeds from sale of property, plant and equipment and assets held for sale
1,294 370
Payments to acquire property, plant and equipment (828) (1,138)
Interest received 35 28
Insurance receipt 877 -
Net cash (outflow)/inflow from investing activities 1,378 (740)
Financing activities
Preference dividend paid (1) (1)
Equity dividends paid (320) (277)
Consideration received by EBT on sale of shares 70 67
Consideration paid by EBT on purchase of shares (156) (75)
Capital element of finance lease rental payments (54) (29)
Loan repayment (695) (246)
Other loans received - 400
Net cash outflow from financing activities (1,156) (161)
Increase/(decrease)/increase in cash and cash equivalents 1,554 381
Cash and cash equivalents at the beginning of the year 754 373
Cash and cash equivalents at the year end 2,308 754
Statement of changes in equity
for the year ended 31 October 2025
Equity share capital Capital redemption reserve Own share reserve Fair value adjustment reserve
£000 £000 £000 £000 Retained earnings Total equity
£000 £000
At 1 November 2023 251 686 (1,041) 10 16,596 16,502
Profit for the year - - - - 1,318 1,318
Other comprehensive
income for the year - - - - - -
net of income tax
Total comprehensive
income for the year - - - - 1,318 1,318
Consideration received
by EBT on sale of
shares - - 67 - - 67
Consideration paid by
EBT on purchase of shares - - (75) - - (75)
Equity dividends paid
- - - - (277) (277)
At 31 October 2024 251 686 (1,049) 10 17,637 17,535
Equity share capital Capital Own share reserve Fair value adjustment reserve
£000 redemption reserve £000 £000 Retained earnings Total equity
£000 £000 £000
At 1 November 2024 251 686 (1,049) 10 17,637 17,535
Profit for the year - - - - 2,622 2,622
Other comprehensive
income for the year - - - - - -
net of income tax
Total comprehensive
income for the year - - - - 2,622 2,622
Consideration received
by EBT on sale of
shares - - 70 - - 70
Consideration paid by
EBT on purchase of shares - - (156) - - (156)
Equity dividends paid - - - - (321) (321)
At 31 October 2025 251 686 (1,135) 10 19,938 19,750
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.
Own share reserve
Own share reserve represents the cost of The Heavitree Brewery PLC shares
purchased in the market and held by The Heavitree Brewery PLC Employee
Benefits Trust ('EBT').
At 31 October 2025 the Company held 107,294 Ordinary Shares and 96,626 'A'
Limited Voting Ordinary Shares (2024: 98,938 Ordinary Shares and 51,156 'A'
Limited Voting Ordinary Shares) of its own shares. During the year there were
purchases of 89,957 and sales of 44,487 'A' Limited Voting Ordinary Shares.
Fair value adjustments reserve
The fair value adjustments reserve is used to record differences in the year
on year fair value of the investment classified as fair value through other
comprehensive income.
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 2025. The statutory
financial statements have not yet been delivered to the Registrar of
Companies.
The auditors, PKF Francis Clark, have reported on the accounts for the years
ended 31 October 2025 and 31 October 2024. Their audit reports in both years
were unqualified, did not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying their report and
did not contain a statement under Section 498 (2) or (3) of the Companies Act
2006 in respect of those accounts.
The financial information in this statement has been prepared in accordance
with UK adopted international accounting standards as applied in accordance
with the Companies Act 2006. The accounting policies have been consistently
applied and are described in full in the statutory financial statements for
the year ended 31 October 2025, which are expected to be mailed to
shareholders on 05 March 2026. The financial statements will also be
available on the Company's website www.heavitreebrewery.co.uk
(http://www.heavitreebrewery.co.uk) .
Going Concern
The Directors continue to closely monitor the Company's financial resources.
This included a continual review of the medium-term financial plan, along with
sensitised cash flow forecasts for 12 months from the date of approval of
these financial statements.
With another Government budget bringing difficulties for the industry in the
coming year, the level of business rates which the pubs will have to pay with
the allowance of business rates being phased out being the major concern,
another rise in minimum wage, this year's increase in costs from National
Insurance (NI) and continued increases in food inflation, will undoubtedly
bring about more difficulties in an already stretched sector. We will have to
wait and see if any of the pressure coming from the sector will result in any
changes to proposed business rates from April 2026. These factors have the
potential to lead to more tenant vacancies which would have a knock on impact
on the Company's rental and wet sales income. With this in mind a sensible
and prudent approach when forecasting wet sales revenue and rental revenue for
the coming year is included within the forecast for the period to April 2027.
These forecasts leave the Company with minimum headroom of over £2.5m on an
overdraft facility of £3m. The Board will continue to review cashflows as
part of its ongoing strategy.
The Board took the decision a few years ago to accelerate the paying down of
its £4.5m term loan by the selling of non-core assets to secure its current
position and the long-term trading position of the Company. There are no
forecasted capital sales in the coming year as the Board has looked at the
estate and the current level of borrowing. The process of disposal and assets
being identified will be evaluated again over the next twelve months. This
year the Company has sold two (2024:one) of the non-core assets resulting in
profits of £1,056,000 being realised from these and other minor asset sales,
leaving the balance of the Term Loan at 31 October 2025 of £1,524,000.
The Board has negotiated a cash settlement on the Insurance cover for the fire
at the Jolly Sailor Inn, this has resulted in a cash sum into the business of
£877,000, this has been invested in a deposit account, so that a decision can
be made on the re-building or sale of the land with planning permission.
The Board continues to liaise with the bank on a regular basis for trading
updates. The Board negotiated a new 5 year banking facility including the Term
Loan and the £3m overdraft facility at the beginning of this financial year.
The overdraft facility terms remain the same with no increase on interest rate
over the base rate. A small reduction in interest rate on the Term Loan over
bank of England base rate has been achieved with an adjustment in the debt
service covenant which is now an EBITDA calculation only. The forecasts
indicate that the Company will be able to operate within its new covenants and
facilities.
The Directors are satisfied that the Company's forecasts and projections have
included the anticipated cost increases which may impact the Estate. This has
been reflected in the budgets with a decrease percentage 3.5% built in on wet
revenue and 3% on rental revenue. The current trading performance of the
Company also shows that it will be able to operate within the level of its
facilities and covenant testing for the 12 months from the date of these
financial statements. With the support from the bank there are no material
uncertainties in relation to going concern. For this reason, the Company
continues to adopt the going concern basis in preparing its financial
statements.
2. Earnings per share
Basic earnings per share amounts are calculated by dividing profit for the
year attributable to ordinary equity holders 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:
2025 2024
£000 £000
Profit for the year 2,622 1,318
2025 2024
N(o). N(o).
(000) (000)
Basic weighted average number of shares (excluding own shares) 4,838 4,840
3. Dividends paid and proposed
2025 2024
£000 £000
Declared and paid during the year:
Equity dividends on ordinary shares:
Final dividend for 2024: 3.85p (2023: 3.5) 193 188
First dividend for 2025: 2.75p (2024: 2.75) 138 113
Less dividend on shares held within employee share schemes (12) (12)
Dividends paid 319 289
Proposed for approval at AGM
(not recognised as a liability as at 31 October 2025)
193 193
Final dividend for 2025 3.85p (2024 : 3.85p) 193 193
Cumulative preference dividends 1 1
4. Segment information
Primary reporting format - business segments
During the year the Company operated in one business segment - leased estates.
Leased estate represents properties which are leased to tenants to operate
independently from the Company, under tied and free of tie tenancies.
Secondary reporting format - geographical segments
Revenue is based on the geographical location of customers. All revenue is
generated in, and all assets are held in the United Kingdom.
5. General information
The 2025 Annual Report and Financial Statements will be published and posted
to shareholders on 5th March 2026 Further copies may be obtained by contacting
the Company Secretary at The Heavitree Brewery PLC, Trood Lane, Matford,
Exeter EX2 8YP. The 2025 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 15 April
2026 at 11.30am.
Ends.
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