Heavitree Brewery - Preliminary Statement of results

Heavitree Brewery

14/02/2018 15:00

RNS Number : 8569E

Heavitree Brewery PLC

14 February 2018

The Heavitree Brewery PLC

Trood Lane

Matford

Exeter EX2 8YP

Date: 14 February 2018

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, 14 February 2018, the Directors announce the preliminary statement of results for the year ended 31 October 2017.

ISIN: GB0004182720 for 'A' Limited Voting Ordinary Shares

ISIN: GB0004182506 for Ordinary Shares

Chairman's statement

I am pleased to report that operating profit for the year under review has increased by 25.21% (358,000) after a 2.01% increase in turnover on the previous year. About half of the development land in Houston in which Heavitree Inc. holds a 5.26% interest was sold returning a profit of 104,000. Compensation and a pay back of legal fees following a land dispute at one of our houses added 36,000 to the operating profit line; as did a 107,000 reduction in the expense for bad debts. Our team, of course, always works hard year on year on cash management, but this is a particularly impressive result and it is a most welcome addition to an already strong contribution performance.

Results

Group Turnover increased by 144,000 to 7,299,000. Group Operating Profit has increased by 358,000 to 1,778,000.

Heavitree Inns has remained dormant throughout the year.

Heavitree Inc. generated an operating profit of 104,000 (2016 - loss of 16,000).

Key Performance Indicators

Adjusted operating profit before Taxation of 1,778,000 was up 25.21% on last year.

Interest costs were covered 10.16 times.

Dividend

The Directors recommend a 6.67 % increase in the final dividend to 4.00p per Ordinary and 'A' Limited Voting Ordinary Share (2016 - 3.75p) making a total for the year of 7.675p. The dividend will be paid on 20 April 2018, subject to shareholder approval at the Annual General Meeting on 11 April 2018, to those shareholders on the Register at 23 March 2018.

Sale of Property

The Pen and Quill in Taunton was sold generating a small loss in the year of 5,000. Impairments on this site had been absorbed in the accounts of previous years. Since this year's accounts were finalised The King of Prussia in Bovey Tracey has been sold. This house was closed in 2009 with a small rental income retained from the letting of the flat. The pub will be converted into a community facility.

At the time of writing a small residential property on Topsham Road in Exeter, The Crown and Sceptre in Newton St.Cyres (which closed in June 2017) and The Kings Arms in Strete (which closed in September 2016) are on the market with sales agreed, subject to contract on the two pub sites. Also, four flats and a house which are part of the residential development at the old St.Loye's Hotel site in Exeter which was completed in 2012 have been marketed for sale. Here too a sale has been agreed, subject to contract, for all of these units. I shall report further on these at the Half-Year.

Capital Investments

I reported the successful completion of the development of the Dartmoor Halfway in Bickington at the Half-Year. Further improvements to the camping facilities and caravan pitches have been carried out to make the house ready for the season in 2018. No further major developments are planned for the present year.

Pension Scheme

At the time of writing, draft figures for the triennial valuation which fell due on 1 January 2017 have been received. The accounts that accompany this report include the previously signed off numbers and, as stated before, the Company remains committed to the funding of its obligations to its closed final salary scheme.

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 am extremely grateful to our team at Head Office and to all the personnel in each of our houses for the hard work and innovation that has helped produce the numbers which are reported in these accounts. I can report that the new year has started satisfactorily as well.

I look forward to reporting on the sales of the properties mentioned above. With uncertainty in the market place caused by Brexit and interest rates beginning to rise, reduction of debt would seem the sensible way forward.

N H P TUCKER
Chairman

14 February 2018

Group income statement

for the year ended 31 October 2017

Notes
Total
2017
000
Total
2016
000
Revenue
7,299
7,155
Change in stocks
-
-
Other operating income
384
241
Purchase of inventories
(2,968)
(2,955)
Staff costs
(1,353)
(1,301)
Depreciation of property, plant and equipment
(248)
(208)
Other operating charges
(1,336)
(1,512)
(5,521)
(5,735)
Group operating profit
1,778
1,420
Profit on sale of property plant and equipment
6
585
Movements in valuation of estate and related assets
-
(163)
Group profit before finance costs and taxation
1,784
1,842
Finance income
7
6
Finance costs
(182)
(152)
Other finance costs - pensions
(55)
(43)
(230)
(189)
Profit before taxation
1,554
1,653
Tax expense
(226)
(288)
Profit for the year attributable to equity holders of the parent
1,328
1,365
Basic earnings per share
2
27.0p
28.0p
Diluted earnings per share
2
27.0p
28.0p

All amounts in 2017 and 2016 relate to continuing operations.

Group statement of comprehensive income

for the year ended 31 October 2017

2017
000
2016
000
Profit for the year
1,328
1,365
Items that will not be reclassified to profit or loss
Actuarial gains/(losses) on defined benefit pension plans
428
(1,195)
Tax relating to items that will not be reclassified
(74)
203
354
(992)
Items that may be reclassified to profit or loss
Cash flow hedges
-
-
Fair value adjustments
6
7
Exchange rate differences on translation of subsidiary undertaking
-
10
Tax relating to items that may be reclassified
-
-
6
17
Other comprehensive income for the year, net of tax
1,688
390
Total comprehensive income attributable to:
Equity holders of parent
1,688
390

Group balance sheet

at 31 October 2017

2017
000
2016
000
Non-current assets
Property, plant and equipment
17,022
16,700
Investment property
1,094
1,312
18,116
18,012
Financial assets
46
40
Deferred tax asset
221
359
18,383
18,411
Current assets
Inventories
10
10
Trade and other receivables
1,696
1,585
Cash and cash equivalents
56
57
1,762
1,652
Assets held for sale
890
219
Total assets
21,035
20,282
Current liabilities
Trade and other payables
(871)
(980)
Financial liabilities
(1,624)
(1,332)
Income tax payable
(190)
(149)
(2,685)
(2,461)
Non-current liabilities
Other payables
(256)
(274)
Financial liabilities
(6,045)
(6,057)
Deferred tax liabilities
(345)
(335)
Defined benefit pension plan deficit
(1,300)
(2,111)
(7,946)
(8,777)
Total liabilities
(10,631)
(11,238)
Net assets
10,404
9,044
Capital and reserves
Equity share capital
264
264
Capital redemption reserve
673
673
Treasury shares
(1,223)
(1,254)
Fair value adjustments reserve
27
21
Currency translation
17
17
Retained earnings
10,646
9,323
Total equity
10,404
9,044

Group statement of cash flows

for the year ended 31 October 2017

2017
000
2016
000
Operating activities
Profit for the year
1,328
1,365
Tax expense
151
288
Net finance costs
231
189
Profit on disposal of non-current assets and assets held for sale
(6)
(585)
Depreciation and impairment of property, plant and equipment
248
371
Difference between pension contributions paid and amounts
(3)
4
recognised in the income statement
(438)
(538)
Increase in trade and other receivables
(76)
(226)
(Decrease)/increase in trade and other payables
(170)
238
Cash generated from operations
1,265
1,106
Income taxes paid
(110)
(79)
Interest paid
(182)
(152)
Net cash flow from operating activities
973
875
Investing activities
Interest received
6
6
Proceeds from sale of property, plant and equipment and assets held for sale
193
1,205
Payments to acquire property, plant and equipment
(1,117)
(1,275)
Net cash outflow from investing activities
(918)
(64)
Financing activities
Preference dividend paid
(1)
(1)
Equity dividends paid
(333)
(358)
Consideration received by EBT on sale of shares
49
40
Consideration paid by EBT on purchase of shares
Capital element of finance lease rental payments
(15)
(21)
(58)
(2)
New long-term borrowings
-
-
Net cash flow from financing activities
(321)
(379)
(Decrease)/increase in cash and cash equivalents
(266)
432
Cash and cash equivalents at the beginning of the year
(1,270)
(1,702)
Cash and cash equivalents at the year end
(1,536)
(1,270)

Group statement of changes in equity

for the year ended 31 October 2017

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 2015
264
673
(1,235)
14
7
-
9,307
9,030
Profit for the year
-
-
-
-
-
-
1,365
1,365
Other comprehensive
income for the year
net of income tax
-
-
-
7
10
-
(992)
(975)
Total comprehensive
income for the year
-
-
-
7
10
-
373
390
Consideration received
by EBT on sale of
shares
-
-
40
-
-
-
-
40
Consideration paid by
EBT on purchase of shares
-
-
(58)
-
-
-
-
(58)
Loss by EBT on sale
of shares
-
-
(1)
-
-
-
1
-
Equity dividends paid
-
-
-
-
-
-
(358)
(358)
At 31 October 2016
264
673
(1,254)
21
17
-
9,323
9,044

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)
Gain 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

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 2017 the Group held 142,082 Ordinary Shares and 252,097 'A' Limited Voting Ordinary Shares (2016: 142,082 Ordinary Shares and 268,652 'A' Limited Voting Ordinary Shares) of its own shares. During the year there were purchases of 6,846 and sales of 23,401 '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 2017. 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 2017, which are expected to be mailed to shareholders on 8 March 2018. 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:

2017
000
2016
000
Profit for the year
1,328
1,365
2017
No.
(000)
2016
No.
(000)
Basic weighted average number of shares (excluding treasury shares)
4,877
4,879

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

2017
000
2016
000
Declared and paid during the year:
Equity dividends on ordinary shares:
Final dividend for 2016: 3.75p (2015: 3.675p)
198
194
First dividend for 2017: 3.675p (2016: 3.675p)
194
194
Less dividend on shares held within employee share schemes
(30)
(30)
Dividends paid
362
358
Proposed for approval at AGM
(not recognised as a liability as at 31 October)
Final dividend for 2017 4.00p (2016: 3.75p)
Cumulative preference dividends
211
1
198
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 2017 and 2016. 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 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
Year ended 31 October 2016
UK
000
United States
000
Total
000
Revenue
Sales to external customers
7,155
-
7,155
Other segment information
Segment assets
20,249
33
20,282
Total Assets
20,249
33
20,282
Capital expenditure
Property, plant and equipment
1,275
-
1,275

5. General information

The 2017 Annual Report and Financial Statements will be published and posted to shareholders on 8th March 2018. Further copies may be obtained by contacting the Company Secretary at The Heavitree Brewery PLC, Trood Lane, Matford, Exeter EX2 8YP. The 2017 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 11 April 2018 at 11.30am.

Ends.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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