REG - Heavitree Brewery - Interim Announcement Half year Results

Heavitree BreweryAnnouncement

24/06/2021 13:05

RNS Number : 8883C
  
Heavitree Brewery PLC
  
24 June 2021
  
 

The Heavitree Brewery PLC
Trood Lane
Matford
Exeter EX2 8YP
 
Date:               24 June 2021
 
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, 24 June 2021, the Directors announce the interim results for the six months ended 30 April 2021.
 
 
Chairman's statement
 
In my statement accompanying the accounts for the previous financial year, I warned that the next half year results would be further impacted by the trading restrictions and lockdown of our sector as the Government battled this country's second wave of infection of Covid-19.  Despite a write back of rent in the period of £344,000 caused by the peculiarity of the IFRS 16 Lease Accounting calculations which I explained in my year-end statement as at 31 October 2020, turnover has reduced by 67.77% to £846,000 (2020: £2,623,000).  This turnover figure is predominantly comprised of a discounted rental income from our licensed properties for December 2020 only and some income from tied products from the trading under restrictions before Christmas.
 
Results
 
The Group has returned an Operating Loss of £647,000 (2020: £243,000 Profit).  There is a Loss Before Tax of £76,000 (2020: £184,000 Profit Before Tax).
 
Dividend
 
The Directors do not recommend the payment of a dividend at the half-year.  As disruption and uncertainty within our sector continues, the Board will not consider the payment of a dividend during the current financial year.  When trading does return to some sort of normality, the Board will be able to review future dividend payments.
 
 
 
 
Property
 
The sale of some non-core assets has been achieved during the period under review:
 A small parcel of land in Abbotskerswell was sold for £20,000.
A flat on the site of the old St.Loye's Hotel site was sold for £185,000.
The closed Maltster's Arms and adjoining cottage in Harbertonford was sold for £225,000.
The Castle Inn in Holcombe was sold for £425,000.
 
Prospects
 
The reopening of the garden areas and, in turn the reopening of indoor trading areas under restrictions is an early step on the road to a recovery. We have tenants in all our pubs and the feedback from our houses and the support from our customers shows great promise for the summer months and for future trading.  The Company's cashflow forecasts continue to show that we are able to trade within our banking facility and as I reported at the year-end, Barclays Bank has waived the testing of our banking covenants until April 2022.  The Board is most grateful for the patience, support and determination shown by all stakeholders in the Company's business.
 
 
N H P TUCKER
Chairman
 
Group income statement (unaudited)
For the six months ended 30 April 2021




 


 


 
6 months
to
30 April

2021


 
6 months
to
30 April
2020


Audited
12 months
to
31 October
2020




 


Note


£' 000


£' 000


£' 000




Revenue


 


          846


  2,623


  5,019




Change in stocks


 


-


-


-




Other operating income


 


183


136


317




Purchase of inventories


 


(253)


(995)


(2,065)




Staff costs


 


(655)


(713)


(1,310)




Depreciation of property, plant and equipment


 


(77)


(87)


(177)




Other operating charges


 


          (691)


          (721)


       (1,245)




 


 


       (1,493)


       (2,380)


       (4,480)




Group operating Loss/ profit


 


(647)


243


539




Profit on sale of property, plant and equipment


 


647  


             15


          293 




Movements in valuation of estate and related assets


 


             -


           -   


          (279)




Group Loss/profit before finance costs and taxation


 


-


258


553




Finance income


 


-


2


2




Finance costs


 


(76)


(76)


(141)




Other finance costs-pensions


 


            -


            -


            -




 


 


          (76)


          (74)


          (139)




Loss/profit before taxation


 


(76)


184


414




Tax expense


 


          (10)


          (42)


          (300)




Loss/profit for the period


 


         (86)


          142


          114




Earnings per share
- basic

- diluted


2


 
(1.8)p

(1.8)p


 
3.0p

3.0p


 
2.4p

2.4p




 
 
 
 
Group statement of comprehensive income (unaudited)
For the six months ended 30 April 2021




 


 


 
6 months
to
30 April

2021


 
6 months
to
30 April
2020


    Audited
   12months
    to
 31 October
      2020




 


 


£' 000


  £' 000


       £' 000




Loss/profit for the period


 


 (86)


 142


 114




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
 


 


 
4
-  


 
(9)
-


 
(12)
-




 


 


4


(9)


(12) 




Items that may be reclassified to profit or loss
Exchange rate differences on translation of subsidiary undertaking
Tax relating to items that may be reclassified
 
 


 


 
-
 
-
     
-


 
(2)
 
-
 
(2)


 
(4)
 
-
 
(4)




 


 


 


 


 




Other comprehensive income for the year, net of tax


 


 (82)


 131


 98




Total comprehensive income attributable to:
Equity holders of the parent


 


 
 (82)


 
 131


 
 98




 


 


 


 


 




 
 
 
 
 
 
Group balance sheet (unaudited)




at 30 April 2021


 


 
30 April
2021
£' 000


 
30 April
2020
£' 000


Audited
31 October 2020
£'000




Non-current assets


 


 


 


 




Property, plant and equipment
 


 


18,743
 


19,364


18,745




Financial assets


 


33


32


30
 




Deferred tax asset


 


       16   


       16


       16




 


 


18,792


19,412


18,791




Current assets


 


 


 


 




Trade and other receivables


 


1,852


915


1,277




Inventories


 


10


10


10




Cash and short-term deposits


 


  66


     45


     49




 


 


1,928


970


1,336




Assets held for sale


 


211


-
 


219




Total assets


 


20,931


 20,382


 20,346




Current liabilities


 


 


 


 




Trade and other payables


 


(619)


(452)


(666)




Financial liabilities


 


(2,162)


(1,681)


(1,520)




Income tax payable


 


   (98)


   (267)


   (237)




 


 


(2,879)


(2,400)


(2,423)




Non-current liabilities


 


 


 


 




Other payables


 


(279)


(296)


(274)




Financial liabilities


 


(4,508)


(4,531)


(4,322)




Deferred tax liabilities


 


(536)


(394)


(536)




Defined benefit pension plan


 


 (92)


(92)


 (92)




 


 


(5,415)


(5,313)


(5,224)




Total liabilities


 


(8,294)


(7,713)


(7,647)




Net assets


 


12,637


12,669


12,699




Capital and reserves


 


 


 


 




Equity share capital


 


264


264


264




Capital redemption reserve


 


673


673


673




Treasury shares


 


(1,502)


(1,585)


(1,522)




Fair value adjustments reserve


 


9


8


5




Currency translation


 


13


15


13




Retained earnings


 


13,180


13,294


13,266




Total equity


 


12,637


12,669


12,699




 
Dividends
 
The Directors do not recommend a dividend to be paid at the half-year.  
 
 
 
 
 
 
Group statement of cash flows (unaudited)
for the six months ended 30 April 2021                                                           




 


 


 
6 months
to
30 April

2021


 
6 months
to
30 April
2020


Audited
12months
 to
31 October
2020




Operating activities


 


£' 000


£' 000


£' 000




(Loss)/profit for the period


 


(86)


142


114




Tax expense


 


10


42


301




Net finance costs


 


76


74


139




(Profit) on disposal of non-current assets and assets held for sale


 


 
(647)


 
(15)


 
(293)




Depreciation and impairment of property, plant and equipment


 


97


87


177




Exchange gain on cash, liquid resources and loan


 


-


-


-




Difference between pension contributions paid and recognised in the income statement


 


 
-


 
-


 
-




(Increase)/decrease in trade and other receivables


 


(338)


416


   220




(Decrease)/increase in trade and other payables
Impairment of assets


 


(58)
-


           (528)
-


(274)
279




Cash generated from operations


 


(946)


218


663




Income taxes paid


 


(150) 


              -   


         (151)   




Interest paid


 


(76) 


 (76)   


(141)




Net cash(outflow)/ inflow from operating activities


 


 (1,172) 


  142   


 371




Investing activities


 


 


 


 




Interest received


 


-


2


2




Proceeds from sale of property, plant and equipment and assets held for sale


 


584


15


186




Payments to acquire property, plant and equipment


 


(209)


(262)


(315) 




Net cash(outflow)/ inflow from investing activities


 


375


(245)


  (127)  




Financing activities


 


 


 


 




Preference dividend paid


 


(1)


(1)


(1)




Equity dividends paid


 


-


-


-




Consideration received by EBT on sale of shares


 


41


-


62




Consideration paid by EBT on purchase of shares


 


(54)


(23)


(25)




Capital element of finance lease rental payments


 


(7)


(6)


(9)




Repayment of bank borrowings


 


(27)


(6,000)


(1,500)




Draw down of bank borrowings


 


-


4,500


-




Net cash outflow from financing activities


 


   (48) 


 (1,530)


 (1,473)




(Decrease)/increase in cash and cash equivalents


 


(845)


(1,633)


(1,229)




Cash and cash equivalents at the beginning of the period


 


 (1,232)


 (3)  


(3)  




Cash and cash equivalents at the period end


 


 (2,077) 


 (1,636)


 (1,232) 




 
Group statement of cash flows (unaudited) (continued)
 
for the six months ended 30 April 2021                               


 


 


 


 




Represented by:


 


 


 


 




Cash and short term deposits


 


66


45


49




Overdraft


 


(2,143)


(1,681)


(1,281)




 


 


(2,077)


(1,636)


(1,232)




 
 
Group reconciliation of movements in equity (unaudited)
 
 
 




6 months to


Equity


Capital


 


Fair


 


 


 




30 April 2021


share


redemption


Treasury


value


Currency


Retained


Total




 


capital


reserve


shares


adjustment


translation


earnings


equity




 


£' 000


£' 000


 £' 000


£' 000


£' 000


£' 000


£' 000




 


 


 


 


 


 


 


 




At 1November 2020


264


673


(1,522)


5


13


13,266


12,699




(Loss) for the period


-


-


-


-


-


(86)


(86)




Other comprehensive income for the period, net of income tax


-


-


-


4


-


-


4




Total     comprehensive income for the period


-


-


-


4


-


(86)


(82)




Consideration
received by EBT on sale of shares                                 


 
 
 
-


 
 
 
-


 
 
 
41


 
 
 
-


 
 
 
-


 
 
 
-


 
 
 
41




Consideration paid by EBT on purchase of shares


-


-


(54)


-


-


-


(54)




 


 


 


 


 


 


 


 




Loss by EBT on sale of shares


-


-


33


-


-


-


33




Equity dividend paid


-


-


-


-


-


-


-




 


 


 


 


 


 


 


 




At 30 April 2021


264


673


(1,502)


9


13


13,180


12,637




 
 
 
 
 
Group reconciliation of movements in equity (unaudited) - continued
 




6 months to


Equity


Capital


 


Fair


 


 


 




30 April 2020


share


redemption


Treasury


value


Currency


Retained


Total




 


capital


reserve


shares


adjustment


Translation


earnings


equity




 


£' 000


£' 000


 £' 000


£' 000


£' 000


£' 000


£' 000




 


 


 


 


 


 


 


 




At 1November 2019


264


673


(1,562)


17


      17


13,152


12,561




Profit for the period


-


-


          -


         -


        -


      142


      142




Other comprehensive income for the period, net of income tax


-


-


          -


  (9)


     (2)


      -


     (11)




Total     comprehensive income for the period


-


-


-


(9)


(2)


142


131




Consideration
received by EBT on sale of shares    


 
 
 
-


 
 
 
-


 
 
 
-


 
 
 
-


 
 
 
-


 
 
 
-


 
 
 
-




Consideration paid by EBT on purchase of shares


-


-


(23)


-


-


-


(23)




Gain by EBT on sale of shares


-


-


-


-


-


-


-




 


 


 


 


 


 


 


 




Equity dividend paid


-


-


-


-


-


-


-




 


 


 


 


 


 


 


 




At 30 April 2020


264


673


(1,585)


8


15


13,294


12,669




 
 


Group reconciliation of movements in equity (unaudited) - continued
 
 




 
 
12 months to 31 October 2020
Audited
 
 


Equity share capital
£000


Capital redemption reserve
£000


 
Treasury shares
£000


Fair value adjustment reserve
£000


 
Currency
Translation
£000


 
Retained earnings
£000


 
Total equity 
£000




At 1 November 2019


264


673


(1,562)


17


17


13,152


12,561




 


 


 


 


 


 


 


 




Profit for the year


-


-


-


-


-


114


114




Other comprehensive income for the year
net of income tax


-


-


-


(12)


(4)


-


(16)




Total comprehensive


 


 


 


 


 


 


 




income for the year


-


-


-


(12)


(4)


114


98




Consideration received by EBT on sale of shares


 
-


 
-


 
62


 
-


 
-


 
-


 
62




Consideration paid by


 


 


 


 


 


 


 




EBT on purchase of shares        


-


-


-


-


-


-


-




Loss by EBT on sale of shares


-


-


(24)


-


-


-


(24)




Equity dividends paid


-


-


2


-


-


-


2




At 31 October 2020


264


673


(1,522)


5


13


13,266


12,699




                                                                
 
 
 
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.
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 Benefit Trust ('EBT'). Shares held at half-year 415,975.
 
 
 
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 2020. The accounting policies are drawn up in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as adopted by the European Union.
 
These unaudited financial statements were approved and authorised for issue by a duly appointed and authorised committee of the Board of Directors on 24 June 2021.
 
2. Going concern
 
With the continued uncertainty of the Covid-19 pandemic the Directors have continued to review the Group's financial resources including a continued review of the medium-term financial plan, along with a range of cash flow forecasts, the Group has positive cash generation from its operations and the gearing remains low. These forecasts include the rent concessions which have been given to the end of May 2021 for Tenants including and factoring in any further lockdowns. As reported in the year end Chairman's Statement the Board has taken the decision to accelerate its programme of non-core asset sales and in the first half of the financial year four of these assets have been sold. The Board continues to monitor and control costs and where possible and have claimed on the Governments Furlough Scheme and will continue to review cashflows as guidance from Government changes.
As reported in the Chairman's Statement a waiver of covenants has been agreed by Barclays Bank until April 2022, the Bank continues to be satisfied with the Group's forecasts and projections, which take account any future changes which may come about as a direct result of the Covid-19 pandemic and shows that the Group will be able to operate within its facilities. 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. 
 
 
 
 
Notes to the interim results - continued
 
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.  The impact of the ongoing Covid-19 pandemic on the pub trade and the wider UK economy could have ramifications for the valuation of the Group's estate.  Given the current significant and unprecedented levels of uncertainty, the Directors' view is that it is not possible to quantify any potential impact at this time, and as such the values in these interim financial statements have not been adjusted to take into account the impact of the pandemic.
 
4.  Basic and diluted earnings per share
The calculation of basic earnings per ordinary share is based on earnings of £(86,000) (2020: £142,000), being (loss)/profit after taxation for the period, and on 4,819,991 (2020: 4,777,939) 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 2021 has been posted to shareholders today and will be available on our website at www.heavitreebrewery.co.uk.
 
Ends.

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