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Heavitree Brewery PLC  -  HVT   

Half-year Report

Released 16:00 28-Jun-2018

RNS Number : 8891S
Heavitree Brewery PLC
28 June 2018
 

The Heavitree Brewery PLC

Trood Lane

Matford

Exeter EX2 8YP

 

Date:                28 June 2018

 

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, 28 June 2018, the Directors announce the interim results for the six months ended 30 April 2018.

 

 

Chairman's statement

 

Turnover for the period under review has increased by £47,000 (1.40%) against the corresponding period last year.  However there has been a 9.60% decrease in operating profit to £631,000 (2017: £698,000) predominantly due to an increase in costs associated with the Group's final salary Pension Scheme of £48,000 and a cost of £20,000 caused by the write down of old inventory items which have been moved from some of our houses over previous years and are now being held in storage. 

 

Results

 

The Group has returned an operating profit of £631,000.  After allowing for finance costs of £132,000 (2017: £140,000) which include a £41,000 interest cost in respect of the IAS 19 calculation applied to the final salary Pension Scheme (2017: £41,000) and a book profit mostly generated by the sale of four properties (£830,000), the Group Profit before taxation is £1,329,000 (2017: £558,000).  This shows an increase of 138.17% on the previous year.

Dividend

 

The Directors have resolved to pay an unchanged interim dividend of 3.675p per Ordinary Share and 'A' Limited Voting Ordinary Share (2017: 3.675p).  The Dividend will be paid on 3 August 2018 to shareholders on the Register at the close of business on 20 July 2018.

Property

 

The King of Prussia in Bovey Tracey completed on 27 November for £275,000.  We understand that the site will be converted into a community facility incorporating a small cinema.

 

The sale of The King's Arms in Strete completed on 9 March for £275,000.  We have retained a small cottage with a garden, a further small pocket of land and some parking on the site. 

The sale of The Crown and Sceptre in Newton St.Cyres completed on 23 April for £280,000. 

The sale of the flats which we built in 2012 at the old St.Loye's Hotel site completed on 26 April for £595,000.

At the time of writing, two unlicensed properties in Exeter and another in the South Hams are being marketed for sale.  One of the Exeter properties is sold subject to contract.  I hope to report further on these at the year-end.

 

Prospects

 

The sales of The King of Prussia, The King's Arms and The Crown and Sceptre, all of which had been closed for some time and had been incurring various consequential costs, will have a positive effect for the Group in terms of revenue. The proceeds from the sales have also reduced our level of debt which the Board considers to be a prudent goal in these uncertain times.

 

Trading has remained ahead of budget at the end of the first half of the year.  The trading effect of the FIFA World Cup looks promising and, together with the prolonged period of favourable weather which our region is currently enjoying, we believe that the Company is well placed going into the second half of the year.

 

 

N H P TUCKER

Chairman

 

 

Group income statement (unaudited)

For the six months ended 30 April 2018

 

 

6 months

to

30 April
2018

 

6 months

to

30 April

2017

Audited

12 months

to

31 October

2017

 

Note

£' 000

£' 000

£' 000

Revenue

 

    3,398

         3,351

          7,299

Change in stocks

 

-

-

-

Other operating income

 

139

134

384

Purchase of inventories

 

(1,342)

(1,318)

(2,968)

Staff costs

 

(697)

(625)

(1,353)

Depreciation of property, plant and equipment

 

(115)

(113)

(248)

Other operating charges

 

          (752)

          (731)

       (1,336)

 

 

       (2,767)

       (2,653)

       (5,521)

Group operating profit

 

631

698

1,778

Profit on sale of property, plant and equipment

 

   830              

              -

           6     

Movements in valuation of estate and related assets

 

                 -

                  -

          -

Group profit before finance costs and taxation

 

1,461

698

1,784

Finance income

 

2

3

7

Finance costs

 

(93)

(102)

(182)

Other finance costs-pensions

 

            (41)

            (41)

            (55)

 

 

          (132)

          (140)

          (230)

Profit before taxation

 

1,329

558

1,554

Tax expense

 

          (189)

          (159)

          (226)

Profit for the period

 

         1,140

             399

          1,328

Earnings per share

- basic
- diluted

2

 

23.4p
23.4p

 

      7.9p
7.9p

 

    27.0p
27.0p

 

 

 

 

Group statement of comprehensive income (unaudited)

For the six months ended 30 April 2018

 

 

 

6 months

to

30 April
2018

 

6 months

to

30 April

2017

    Audited

   12months

    to

 31 October

      2017

 

 

£' 000

  £' 000

       £' 000

Profit for the period

 

        1,140

           399

          1,328

Items that will not be reclassified to profit or loss

Actuarial (losses)/gains on defined benefit pension plans

Tax relating to items that will not be reclassified

 

 

 

(254)

             99

   (155)

 

(69)

             12

(57)

 

428

             (74)

354

 

Items that may be reclassified to profit or loss

Fair value adjustment

Exchange rate differences on translation of subsidiary undertaking

Tax relating to items that may be reclassified

 

 

 

 

(5)

 

(6)

              -

(11)

 

1

 

-

                  -

1

 

6

 

-

                  -

6

 

 

 

 

 

Other comprehensive income for the year, net of tax

 

            974

             343

         1,688

Total comprehensive income attributable to:

Equity holders of the parent

 

 

             974

 

             343

 

          1,688

 

 

 

 

 

 

 

 

 

Dividends

The Directors declare an interim dividend of 3.675p per share (2017 - 3.675p) on the Ordinary and 'A' Limited Voting Ordinary Shares. This dividend will be paid on 03 August 2018 to shareholders on the register at 20 July 2018.

 

 

 

Group balance sheet (unaudited)

at 30 April 2018

 

 

30 April

2018

£' 000

 

30 April

2017

£' 000

Audited

31 October 2017

£'000

Non-current assets

 

 

 

 

Property, plant and equipment

 

 

18,163

 

18,380

18,116

Financial assets

 

47

41

46

 

Deferred tax asset

 

        230

              284

             221

 

 

       18,440

          18,705

        18,383

Current assets

 

 

 

 

Trade and other receivables

 

1,861

1,750

1,696

Inventories

 

10

10

10

Cash and short-term deposits

 

          113

               62

               56

 

 

         1,984

            1,822

          1,762

Assets held for sale

 

328

552

 

890

Total assets

 

      20,752

          21,079

        21,035

Current liabilities

 

 

 

 

Trade and other payables

 

(747)

(1,064)

(871)

Financial liabilities

 

(529)

(2,267)

(1,624)

Income tax payable

 

         (281)

            (223)

           (190)

 

 

      (1,557)

         (3,554)

        (2,685)

Non-current liabilities

 

 

 

 

Other payables

 

(319)

(264)

(256)

Financial liabilities

 

(6,011)

(6,011)

(6,045)

Deferred tax liabilities

 

(345)

(335)

(345)

Defined benefit pension plan

 

      (1,352)

         (1,667)

        (1,300)

 

 

      (8,027)

         (8,277)

        (7,946)

Total liabilities

 

    (9,584)

       (11,831)

      (10,631)

Net assets

 

    11,168

            9,248

        10,404

Capital and reserves

 

 

 

 

Equity share capital

 

264

264

264

Capital redemption reserve

 

673

673

673

Treasury shares

 

(1,240)

(1,212)

(1,223)

Fair value adjustments reserve

 

22

17

27

Currency translation

 

11

22

17

Retained earnings

 

11,438

            9,484

        10,646

Total equity

 

      11,168

            9,248

       10,404

 

 

 

Group statement of cash flows (unaudited)

for the six months ended 30 April 2018

                                                           

 

 

 

6 months

to

30 April
2018

 

6 months

to

30 April

2017

Audited

12months

 to

31 October

2017

Operating activities

 

£' 000

£' 000

£' 000

Profit for the period

 

1,140

399

1,328

Tax expense

 

189

159

151

Net finance costs

 

132

140

231

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

 

 

(830)

 

-

 

(6)

Depreciation and impairment of property, plant and equipment

 

115

130

248

Exchange gain on cash, liquid resources and loan

 

5

-

(3)

Difference between pension contributions paid and recognised in the income statement

 

 

(240)

 

(554)

 

(438)

(Increase) in trade and other receivables

 

(131)

(165)

(76)

(Decrease)/increase in trade and other payables

 

         (60)

           78

          (170)

Cash generated from operations

 

320

187

1,265

Income taxes paid

 

(8) 

          - 

         (110)

Interest paid

 

      (93) 

        (102)

          (182)

Net cash inflow from operating activities

 

          219 

          85 

             973

 

Investing activities

 

 

 

 

Interest received

 

2

3

6

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

 

1,441

-

193

Payments to acquire property, plant and equipment

 

   (249)

       (832)

  (1,117)

Net cash inflow from investing activities

 

       1,194

       (829)

 (918) 

Financing activities

 

 

 

 

Preference dividend paid

 

(1)

(1)

(1)

Equity dividends paid

 

(211)

(183)

(333)

Consideration received by EBT on sale of shares

 

53

44

49

Consideration paid by EBT on purchase of shares

Capital element of finance lease rental payments                                             

 

(68)

              (7)

  (4)  

(15)

           (21)

 

 

 

 

 

Net cash outflow from financing activities

 

     (234)

         (144)

        (321)

 

 

 

 

 

Increase in cash and cash equivalents

 

(1,179)

(888)

(266)

Cash and cash equivalents at the beginning of the period

 

 (1,536)

      (1,270)

      (1,270)

Cash and cash equivalents at the period end

 

   (357)

    (2,158)

 (1,536)

 

 

Group reconciliation of movements in equity (unaudited)

 

 

 

6 months to

Equity

Capital

 

Fair

 

Cashflow

 

 

30 April 2018

share

redemption

Treasury

value

Currency

hedge

Retained

Total

 

capital

reserve

shares

adjustment

Translation

reserve

earnings

equity

 

£' 000

£' 000

 £' 000

£' 000

£' 000

£' 000

£' 000

£' 000

 

 

 

 

 

 

 

 

 

At 1November 2017

264

673

(1,223)

27

17

-

10,646

10,404

Profit for the period

-

-

-

-

-

-

1,140

1,140

Other comprehensive income for the period, net of income tax

-

-

-

(5)

(6)

-

(155)

(166)

Total     comprehensive income for the period

-

-

-

(5)

(6)

-

985

974

Consideration

received by EBT on sale of shares                                  

 

 

 

-

 

 

 

-

 

 

 

53

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

53

Consideration paid by EBT on purchase of shares

-

-

(68)

-

-

-

-

(68)

 

 

 

 

 

 

 

 

 

Gain by EBT on sale of shares

-

-

(2)

-

-

-

2

-

Equity dividend paid

-

-

-

-

-

-

(195)

(195)

 

 

 

 

 

 

 

 

 

At 30 April 2018

264

673

(1,240)

22

11

-

11,438

11,168

 

 

 

 

 

Group reconciliation of movements in equity (unaudited) - continued

 

6 months to

Equity

Capital

 

Fair

 

Cashflow

 

 

30 April 2017

share

redemption

Treasury

value

Currency

hedge

Retained

Total

 

capital

reserve

shares

adjustment

Translation

reserve

earnings

equity

 

£' 000

£' 000

 £' 000

£' 000

£' 000

£' 000

£' 000

£' 000

 

 

 

 

 

 

 

 

 

At 1November 2016

264

673

(1,254)

21

      17

-

9,323

9,044

Profit for the period

-

-

          -

         -

        -

-

      399

      399

Other comprehensive income for the period, net of income tax

-

-

          -

  1 

     -

 -

      (57)

     (56)

Total     comprehensive income for the period

-

-

-

1

-

    -

342

343

Consideration

received by EBT on sale of shares    

 

 

 

-

 

 

 

-

 

 

 

44

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

44

Consideration paid by EBT on purchase of shares

-

-

-

-

-

-

-

-

Gain by EBT on sale of shares

-

-

(2)

-

-

-

2

-

 

 

 

 

 

 

 

 

 

Equity dividend paid

-

-

-

-

-

-

(183)

(183)

 

 

 

 

 

 

 

 

 

At 30 April 2017

264

673

(1,212)

22

17

-

9,484

9,248

 

 

 

 

 

 

 

Group reconciliation of movements in equity (unaudited) - continued

 

 

 

 

12 months to 31 October 2017

Audited

 

 

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 (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').

 

 

 

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 within the meaning of section 435 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 2017. 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 28 June 2018.

 

 

2.  Basic and diluted earnings per share

The calculation of basic earnings per ordinary share is based on earnings of £1,140,000 (2017: £399,000), being profit after taxation for the period, and on 4,876,995 (2017: 5,064,830) 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.

 

3.  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.

 

4.  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 2018 has been posted to shareholders today and will be available on our website at www.heavitreebrewery.co.uk.

 

Ends.


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