REG - Heavitree Brewery - Half-year Report
27/06/2024 14:00
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RNS Number : 1379U Heavitree Brewery PLC 27 June 2024
The Heavitree Brewery PLC
Trood Lane
Matford
Exeter EX2 8YP
Date: 27 June 2024
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, 27 June 2024, the Directors announce the interim results for the
six months ended 30 April 2024.
Chairman's statement
Results
The Company performed well in the first half of this year against the same
period last year despite the combination of weeks of cold and wet weather
conditions and a very early Easter weekend which one would expect to have an
adverse effect on number comparisons. Turnover has in fact increased by 2.1%
to £3,396,000 (2023: £3,326,000). As reported in recent years, the
turnover figure for this period was again reduced by the IFRS 16 Lease
Accounting unwind. This equated to a reduction of £39,500.
The Group has returned an operating profit of £540,000 (2023: operating
profit of £523,000), a 3% improvement on the previous year. In turn, profit
before tax is £761,000 (2023: £947,000) which includes the book profit of
£300,000 realised on the sale of non-core assets (2023 non-core assets :
£503,000). The reduction in profit before tax reflects greater non-core asset
sales for the corresponding period of 2023.
Dividend
The Directors recommend the payment of an increased interim dividend at a rate
of 2.25p (2023: 2.0p) per Ordinary and 'A' Ordinary share to those
shareholders on the register on 12 July 2024. The dividend will be payable
on 02 August 2024.
Property
In accordance with the disposal programme of non-core assets, The Exeter Inn
in Honiton Clyst was sold.
The new accommodation block at The Ley Arms in Kenn is finished offering
quality bedrooms at this very popular pub.
Heavitree Inc.
I reported at this year's Annual General Meeting that we were awaiting the
issue of a 'certificate of good standing' from the Texas Secretary of State
before being able to further move towards terminating our American
subsidiary. The certificate was duly received and a 'certificate of
termination' subsequently issued and filed with the Secretary of State and
Texas Comptroller of Tax. The wind-up was officially concluded on 04 June
2024, ending our involvement in the United States which began in 1982.
Final Salary Pension Scheme.
I had hoped to be updating conclusively concerning the wind up of the final
salary pension scheme. I reported at the Annual General Meeting that the
process has been protracted as we remain beholden to the pace of work of the
relevant insurance companies which will be supplying annuity reassignments so
that future payments can be made directly to individual members. Matters
appear to be moving forward with all but one company at the time of writing
which means that I am reasonably confident the wind up can be achieved during
the second part of the year.
Prospects
A retirement planned for the end of this year of one of our longstanding
tenants has meant that we have just one pub under notice with no further
vacancies within the estate. This should position us well for the second
half of the year and we hope for a boost in sales from the Euros football
competition and the summer Olympics, both of which will be broadcast at times
favourable to licensed hours. The Board's confidence for the second half of
the year is reflected in the increase to the interim dividend.
N H P TUCKER
Chairman
Group income statement (unaudited)
For the six months ended 30 April 2024
Audited
6 months 6 months 12 months
to to to
30 April 30 April 31 October
2024
2023 2023
Note £' 000 £' 000 £' 000
Revenue 3,396 3,326 7,346
Change in stocks - - -
Other operating income 106 103 215
Purchase of inventories (1,281) (1,271) (2,991)
Staff costs (694) (669) (1,483)
Depreciation of property, plant and equipment (106) (98) (236)
Other operating charges (881) (868) (1,809)
(2,856) (2,803) (6,304)
Group operating profit 540 523 1,042
Profit on sale of property, plant and equipment 300 503 1,065
Impairment - - (150)
Group Profit before finance costs and taxation 840 1,026 1,957
Finance income - - -
Finance costs (79) (79) (131)
(79) (79) (131)
Profit/(loss) before taxation 761 947 1,826
Tax expense (192) (213) (327)
Profit for the period 569 734 1,499
Earnings per share 4
- basic 11.8p 15.3p 31.0p
- diluted
11.8p
15.3p
31.0p
Group statement of comprehensive income (unaudited)
For the six months ended 30 April 2024
Audited
6 months 6 months 12months
to to to
30 April 30 April 31 October
2024
2023 2023
£' 000 £' 000 £' 000
Profit for the period 569 734 1,499
Items that will not be reclassified to profit or loss
Fair value adjustment on investment in equity - - -
Actuarial (losses)/gains on defined benefit pension plans - - -
Tax relating to items that will not be reclassified
- - -
Items that may be reclassified to profit or loss
Exchange rate differences on translation of subsidiary undertaking 1 - 5
Tax relating to items that may be reclassified
- - -
-
-
-
Other comprehensive income/ (loss) for the year, net of tax 570 734 1,504
Total comprehensive income/ (loss) attributable to:
Equity holders of the parent 570 734 1,504
Group balance sheet (unaudited)
at 30 April 2024 Audited
30 April 30 April 31 October 2023
2024 2023 £'000
£' 000 £' 000
Non-current assets
Property, plant and equipment 20,058 18,291 19,223
Financial assets 453 465 469
Deferred tax asset 16 16 16
20,527 18,772 19,708
Current assets
Trade and other receivables 1,583 1,715 1,170
Inventories 10 10 10
Cash and short-term deposits 66 566 373
1,659 2,291 1,553
Assets held for sale 29 125 70
Total assets 22,215 21,188 21,331
Current liabilities
Trade and other payables (1,228) (1,296) (1,005)
Financial liabilities (560) (35) (2,101)
Income tax payable (454) (552) (263)
(2,242) (1,883) (3,369)
Non-current liabilities
Other payables (327) (299) (338)
Financial liabilities (1,721) (2,126) (97)
Deferred tax liabilities (852) (784) (852)
Defined benefit pension plan (92) (92) (92)
(2,992) (3,301) (1,379)
Total liabilities (5,234) (5,184) (4,748)
Net assets 16,981 16,004 16,583
Capital and reserves
Equity share capital 251 251 251
Capital redemption reserve 685 686 686
Own share reserve (1,044) (946) (1,041)
Fair value adjustments reserve 10 10 10
Currency translation 22 14 19
Retained earnings 17,057 15,989 16,658
Total equity 16,681 16,004 16,583
Dividends
The Directors recommend a dividend of 2.25p to be paid at the half-year.
Group statement of cash flows (unaudited)
for the six months ended 30 April
2024
Audited
6 months 6 months 12months
to to to
30 April 30 April 31 October
2024
2023 2023
Operating activities £' 000 £' 000 £' 000
Profit/(loss) for the period 569 734 1,499
Tax expense 192 213 327
Net finance costs 79 78 132
(Profit) on disposal of non-current assets and assets held for sale
(300) (503) (1,065)
Depreciation and impairment of property, plant and equipment 106 98 236
Impairment of property - - 150
(Increase)/decrease in trade and other receivables (413) (452) 133
Increase/(decrease) in trade and other payables 213 (38) (130)
Impairment of assets - - -
Cash generated from operations 446 130 1,282
Income taxes paid - - (335)
Interest paid (93) (78) (166)
Net cash Inflow/(outflow) from operating activities 353 52 781
Investing activities
Interest received 14 - -
Proceeds from sale of property, plant and equipment and assets held for sale 341 564 1,202
Payments to acquire property, plant and equipment (940) (577) (1,774)
Net cash (outflow) from investing activities (585) (13) (572)
Financing activities
Preference dividend paid (1) (1) (1)
Equity dividends paid (170) (171) (267)
Consideration received by EBT on sale of shares 67 636 61
Consideration paid by EBT on purchase of shares (69) (45) (140)
Own Share buyback - (575) -
Capital element of finance lease rental payments (20) (27) (76)
Repayment of bank borrowings (99) (100) (252)
Mortgage Receipts 15 22 51
Net cash outflow from financing activities (277) (261) (624)
(Decrease) in cash and cash equivalents (509) (222) (415)
Cash and cash equivalents at the beginning of the period 373 788 788
Cash and cash equivalents at the period end (136) 566 373
Group statement of cash flows (unaudited) (continued)
for the six months ended 30 April
2024
Represented by:
Cash and short term deposits 66 566 373
Overdraft (202) - -
Cash and cash equivalents (136) 566 373
Group reconciliation of movements in equity (unaudited)
6 months to Equity Capital Own Fair
30 April 2024 share redemption share value Currency Retained Total
capital reserve reserve adjustment translation earnings equity
£' 000 £' 000 £' 000 £' 000 £' 000 £' 000 £' 000
At 1November 2023 251 686 (1,041) 10 19 16,658 16,583
Profit for the period - - - - - 569 569
Other comprehensive income for the period, net of income tax - - - - 1 - 1
Total comprehensive income for the period - - - - 1 569 570
Consideration
received by EBT on sale of
shares
- - 67 - - - 67
Consideration paid by EBT on purchase of shares - - (69) - - - (69)
Buy back and cancellation of own shares - - - - - - -
Loss by EBT on sale of shares - - - - - - -
Equity dividend paid - - - - - (170) (170)
At 30 April 2024 251 686 (1,043) 10 20 17,057 16,981
Group reconciliation of movements in equity (unaudited)
6 months to Equity Capital Own Fair
30 April 2023 share redemption share value Currency Retained Total
capital reserve reserve adjustment translation earnings equity
£' 000 £' 000 £' 000 £' 000 £' 000 £' 000 £' 000
At 1November 2022 264 673 (1,537) 10 14 16,001 15,425
Profit for the period - - - - - 734 734
Other comprehensive income for the period, net of income tax - - - - - - -
Total comprehensive income for the period - - - - - 734 734
Consideration
received by EBT on sale of
shares
- - 61 - - - 61
Consideration paid by EBT on purchase of shares - - (45) - - - (45)
Buy back and cancellation of own shares (13) 13 575 - - (575) -
Loss by EBT on sale of shares - - - - - - -
Equity dividend paid - - - - - (171) (171)
At 30 April 2023 251 686 (946) 10 14 15,989 16,004
Group reconciliation of movements in equity (unaudited) - continued
Equity share capital Capital redemption reserve Own Fair value adjustment reserve
£000 £000 share reserves £000 Currency Retained earnings Total equity
12 months to 31 October 2023 £000 Translation £000 £000
Audited £000
At 1 November 2022 264 673 (1,537) 10 14 16,001 15,425
Profit for the year - - - - - 1,499 1,499
Other comprehensive income for the year - - - - 5 - 5
net of income tax
Total comprehensive
income for the year - - - - 5 1,499 1,504
Consideration received by EBT on sale of shares
- - 61 - - - 61
Consideration paid by
EBT on purchase of shares - - (140) - - - (140)
Buy back of own shares (13) 13 575 - - (575) -
Equity dividends paid - - - - - (267) (267)
At 31 October 2023 251 686 (1,041) 10 19 16,658 16,583
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.
Own share reserve
Own shares reserve represents 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 146,957.
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 2023 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 27 June
2024.
2. Going concern
The cost of living crisis was taken into account when forecasting for this
financial year, as this continues to affect all areas of the hospitality
sector. We have seen a steady start to the first half of the financial year
and have exceeded budget expectations, while this is a positive start the
factors affecting the industry continue and with this in mind the Board
continues with its cautious approach in the second half of the financial year.
The Group remains well within its forecasts to April 2025 with £2.8M
overdraft available as at April 2024 and the term loan has been decreased in
the year by £99k. 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
£300k 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
£569,000 (April 2023:£734,000), being profit after taxation for the period,
and on 4,822,277 (April 2023: 4,794,270) 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.
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 2024 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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