Heavitree Brewery - Preliminary Statement of Results

Heavitree Brewery

12/02/2016 15:00

RNS Number : 6605O

Heavitree Brewery PLC

12 February 2016

The Heavitree Brewery PLC

Trood Lane

Matford

Exeter EX2 8YP

Date: 12 February 2016

Contact: Graham Crocker - Managing Director - 01392 217733

Nicola McLean - Company Secretary - 01392 217733

Pascal Keane - Shore Capital - 0207 408 4090

Following a Board Meeting held today, 12 February 2016, the Directors announce the preliminary statement of results for the year ended 31 October 2015.

ISIN: GB0004182720 for 'A' Limited Voting Ordinary Shares

ISIN: GB0004182506 for Ordinary Shares

Chairman's statement

Profitability (operating profit) for the year under review has increased by 0.56% despite a small drop in turnover. There was an impairment cost of 47,000 (2014 - Nil) relating to the Pen and Quill which has been transferred to assets held for sale. There was also a small profit from the sale of non-current assets of 5,000 compared to 466,000 in the previous year.

Results

Turnover for the Group decreased by 116,000 (1.6%) to 7,082,000. Group Operating Profit increased by 0.56% (8,000) on the previous year.

Heavitree Inns remained dormant throughout the year.

Heavitree Inc. generated an operating loss of 13,000 (2014 - profit of 6,000).

Key Performance indicators

Adjusted Operating Profit before Taxation of 1,412,000 was up 0.56% on last year.

Interest costs were covered 8.71 times.

Dividend

The Directors recommend a final dividend of 3.675p per Ordinary and 'A' Limited Voting Ordinary Share (2014 - 3.675p) making an unchanged total for the year of 7.35p. The dividend will be paid on 22 April 2016, subject to shareholder approval at the Annual General Meeting on 14 April 2016, to shareholders on the Register at 29 March 2016.

Sale of Property

The Hole in the Wall in Dawlish, the Exeter Inn in Dawlish, the Pen and Quill in Taunton, the Maltsters Arms in Harbertonford and the Bell Inn in Cullompton are each being marketed for sale. We have achieved planning permission for the Hole in the Wall, the Exeter Inn and the Pen and Quill for various schemes of change of use following a number of years of closure. The Maltsters Arms is currently closed but the Bell Inn is open and trading.

Purchase of Property

In October we purchased a closed pub in Teignmouth called the Queensbury Arms for 330,000.

Capital Investments

The conversion of the Red Lion Inn in Ashburton into four flats and a retail unit and the development of the Country House Inn site in Exeter into three detached houses are close to completion. I shall report further on these at the half-year.

The substantial capital investments at the Oddfellows in Exmouth and the George and Dragon in Dartmouth have been completed. The Oddfellows opened in August and The George and Dragon opened in November. Both are trading well and we look forward to significant contributions from these two houses. Our tenants at both these pubs brought great vision and operational skill and detail to the styles that have been achieved and we wish both Yvan and Faye Williams at the Oddfellows and Adrian, Leigh and Sophie Ovens at the George and Dragon every success and a long and happy partnership with this Company.

The Dartmoor Halfway Inn in Bickington remains closed but a redevelopment plan which will deliver a bigger and better pub has been approved by Teignbridge District Council; at the time of writing costings are being sought. An informal agreement has been reached with a favoured operator and we look forward to work getting underway at this site. Again, I shall report further at the half-year.

Pension Scheme

The Company continues to meet its funding obligations to its closed final salary Pension Scheme. Following the triennial valuation of the Scheme which fell due on 1 January 2014 and which was completed earlier in the year under review, a revised schedule of deficit repayment contributions extending to 2022 has been agreed by the trustees with the Scheme's actuary. The next valuation falls due on 1 January 2017 with anticipated completion in early 2018; but required by 31 March 2018 at the latest.

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

I once again find myself drawing attention to the uncertainties which overshadow the trade whilst the economic recovery in our trading area slowly moves forward. There has been much debate about possible interest rate increases and the effects on small businesses, such as pub operators, of the introduction of the national living wage. Most recently, the new, well publicised guidance on alcohol consumption from the UK Chief Medical Officer has added to the list of issues faced by today's Licensee. With all these pressures very much in mind, we continue to attract great operators by offering a combination of stability with our new agreements; both tenancy and leasehold, an expanding choice of products and strong support from the head office team to all our houses.

N H P TUCKER
Chairman

12 February 2016

Group income statement

for the year ended 31 October 2015

Notes
Total
2015
000
Total
2014
000
Revenue
7,082
7,198
Change in stocks
-
-
Other operating income
229
230
Purchase of inventories
(2,986)
(3,127)
Staff costs
(1,172)
(1,144)
Depreciation of property, plant and equipment
(218)
(227)
Other operating charges
(1,523)
(1,526)
(5,670)
(5,794)
Group operating profit
1,412
1,404
Profit on sale of property plant and equipment
5
466
Movements in valuation of estate and related assets
(47)
-
Group profit before finance costs and taxation
1,370
1,870
Finance income
8
17
Finance costs
(170)
(203)
Other finance costs - pensions
(35)
(42)
(197)
(228)
Profit before taxation
1,173
1,642
Tax expense
(258)
(261)
Profit for the year attributable to equity holders of the parent
915
1,381
Basic earnings per share
2
18.8p
28.0p
Diluted earnings per share
2
18.8p
28.0p

All amounts in 2015 and 2014 relate to continuing operations.

Group statement of comprehensive income

for the year ended 31 October 2015

2015
000
2014
000
Profit for the year
915
1,381
Items that will not be reclassified to profit or loss
Actuarial losses on defined benefit pension plans
(740)
(415)
Tax relating to items that will not be reclassified
147
84
(593)
(331)
Items that may be reclassified to profit or loss
Cash flow hedges
24
28
Fair value adjustments
(2)
8
Exchange rate differences on translation of subsidiary undertaking
-
1
Tax relating to items that may be reclassified
(4)
(6)
18
31
Other comprehensive income for the year, net of tax
340
1,081
Total comprehensive income attributable to:
Equity holders of parent
340
1,081

Group balance sheet

at 31 October 2015

2015
000
2014
000
Non-current assets
Property, plant and equipment
16,779
14,580
Investment property
463
463
17,242
15,043
Financial assets
34
35
Deferred tax asset
282
237
17,558
15,315
Current assets
Inventories
10
10
Trade and other receivables
1,359
1,245
Cash and cash equivalents
51
112
1,420
1,367
Assets held for sale
645
-
Total assets
19,623
16,682
Current liabilities
Trade and other payables
(759)
(954)
Financial liabilities
(1,753)
(4,858)
Income tax payable
(96)
(184)
(2,608)
(5,996)
Non-current liabilities
Other payables
(258)
(234)
Financial liabilities
(6,011)
(11)
Deferred tax liabilities
(305)
(200)
Defined benefit pension plan deficit
(1,411)
(1,158)
(7,985)
(1,603)
Total liabilities
(10,593)
(7,599)
Net assets
9,030
9,083
Capital and reserves
Equity share capital
264
264
Capital redemption reserve
673
673
Treasury shares
(1,235)
(1,202)
Fair value adjustments reserve
14
16
Cash flow hedging reserve
-
(20)
Currency translation
7
7
Retained earnings
9,307
9,345
Total equity
9,030
9,083

Group statement of cash flows

for the year ended 31 October 2015

2015
000
2014
000
Operating activities
Profit for the year
915
1,381
Tax expense
258
261
Net finance costs
197
228
Profit on disposal of non current assets and assets held for sale
(5)
(466)
Depreciation and impairment of property, plant and equipment
265
227
Difference between pension contributions paid and amounts
recognised in the income statement
(522)
(507)
(Increase)/decrease in trade and other receivables
(114)
120
(Decrease)/increase in trade and other payables
(171)
113
Cash generated from operations
823
1,357
Income taxes paid
(143)
(36)
Interest paid
(170)
(203)
Net cash flow from operating activities
510
1,118
Investing activities
Interest received
8
17
Proceeds from sale of property, plant and equipment and assets held for sale
20
1,381
Payments to acquire property, plant and equipment
(3,124)
(649)
Net cash (outflow)/inflow from investing activities
(3,096)
749
Financing activities
Preference dividend paid
(1)
(1)
Equity dividends paid
(358)
(354)
Consideration received by EBT on sale of shares
30
37
Consideration paid by EBT on purchase of shares
(65)
(245)
New long-term borrowings
1,250
(250)
Net cash flow from financing activities
856
(813)
(Decrease)/increase in cash and cash equivalents
(1,730)
1,054
Cash and cash equivalents at the beginning of the year
28
(1,026)
Cash and cash equivalents at the year end
(1,702)
28

Group statement of changes in equity

for the year ended 31 October 2015

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 2013
264
673
(1,002)
8
6
(42)
8,657
8,564
Profit for the year
-
-
-
-
-
-
1,381
1,381
Other comprehensive
income for the year
net of income tax
-
-
-
8
1
22
(331)
(300)
Total comprehensive
income for the year
-
-
-
8
1
22
1,050
1,081
Consideration received
by EBT on sale of
shares
-
-
37
-
-
-
-
37
Consideration paid by
EBT on purchase of shares
-
-
(245)
-
-
-
-
(245)
Loss by EBT on sale
of shares
-
-
8
-
-
-
(8)
-
Equity dividends paid
-
-
-
-
-
-
(354)
(354)
At 31 October 2014
264
673
(1,202)
16
7
(20)
9,345
9,083

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 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 dividends 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 (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 2015 the Group held 139,102 Ordinary Shares and 266,676 'A' Limited Voting Ordinary Shares (2014: 128,672 Ordinary Shares and 273,479 'A' Limited Voting Ordinary Shares) of its own shares at an average cost of 2.71 (2014: 2.98). The market value of these shares as at 31 October 2015 was 1,247,421 (2014: 916,880).

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.

Cash flow hedging reserve

The cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in fair value of the hedging instruments that are recognised and accumulated under the heading of cash flow hedging reserve will be re-classified to profit or loss only when the hedged transaction affects the profit or loss.

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 2015. The statutory financial statements have not yet been delivered to the Registrar of Companies.

The financial information is 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 2015, which are expected to be mailed to shareholders on 11 March 2016. 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:

2015
000
2014
000
Profit for the year
915
1,381
2015
No.
(000)
2014
No.
(000)
Basic weighted average number of shares (excluding treasury shares)
4,874
4,939

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. Dividendspaid and proposed

2015
000
2014
000
Declared and paid during the year:
Equity dividends on ordinary shares:
Final dividend for 2014: 3.675p (2013: 3.5p)
194
185
First dividend for 2015: 3.675p (2014: 3.675p)
194
194
Less dividend on shares held within employee share schemes
(30)
(25)
Dividends paid
358
354
Proposed for approval at AGM
(not recognised as a liability as at 31 October)
Final dividend for 2015: 3.675p (2014: 3.675p)
Cumulative preference dividends
194
1
194
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 2015 and 2014. 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 2015
UK
000
United States
000
Total
000
Revenue
Sales to external customers
7,082
-
7,082
Other segment information
Segment assets
19,598
25
19,623
Total Assets
19,598
25
19,623
Capital expenditure
Property, plant and equipment
3,124
-
3,124
Year ended 31 October 2014
UK
000
United States
000
Total
000
Revenue
Sales to external customers
7,198
-
7,198
Other segment information
Segment assets
16,624
58
16,682
Total Assets
16,624
58
16,682
Capital expenditure
Property, plant and equipment
649
-
649

5. General information

The 2015 Annual Report and Financial Statements will be published and posted to shareholders on 11 March 2016. Further copies may be obtained by contacting the Company Secretary at The Heavitree Brewery PLC, Trood Lane, Matford, Exeter EX2 8YP. The 2015 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 14 April 2016 at 11.30am.

Ends.

This information is provided by RNS

The company news service from the London Stock Exchange

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