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Heavitree Brewery PLC   -  HVT   

Preliminary Announcement

Released 16:00 13-Feb-2020

RNS Number : 9574C
Heavitree Brewery PLC
13 February 2020
 

The Heavitree Brewery PLC

Trood Lane

 Matford

 Exeter EX2 8YP

 

Date:                13 February 2020

 

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, 13 February 2020, the Directors announce the preliminary statement of results for the year ended 31 October 2019.

 

ISIN: GB0004182720 for 'A' Limited Voting Ordinary Shares

ISIN: GB0004182506 for Ordinary Shares

 

 

Chairman's statement

Although Turnover for the Group has decreased by £86,000 to £7,528,000, I am pleased to report that Group Operating Profit has increased by £207,000 to £1,839,000.  The drop in Turnover has, in most part, been as a result of rents not being received at two houses which are being operated by external management companies while new tenants are being sought.  These houses are The Lysley Arms in Pewsham, near Chippenham and The Traveller's Rest in Whitestone, near Exeter. A new Tenant has now been found for The Traveller's Rest.  

The increase in Group Operating Profit has been aided by a reduction in the bad debt provision of £68,000 following another year of efficient credit control. There has also been a reduction in Superannuation costs against the previous year of £86,000.

 

Results

Group Turnover decreased by £86,000 to £7,528,000.  Group Operating Profit has increased by £207,000 to £1,839,000, an increase of 12.68% on the previous year.

Heavitree Inns remained dormant throughout the year.

Heavitree Inc. generated an operating profit of £30,000 following the sale of a small parcel of development land during the year under review (2018 - £12,000).

Dividend

The Directors recommend a final dividend of 4.25p per Ordinary and 'A' Limited Voting Ordinary Share (2018 - 4.25p) making a total for the year of 7.925p (2018 - 7.925p).  The dividend will be paid on 17 April 2020, subject to shareholder approval at the Annual General Meeting on 15 April 2020, to those shareholders on the Register at 20 March 2020.

Sale of Property

Since the end of the financial year The Maltsters Arms in Harbertonford and the adjoining cottage, Bridge House, and also Rose Cottage in Strete have been marketed for sale. The Maltsters Arms has been closed since September 2018 and is subject to an Asset of Community Value listing. I hope to report further on these properties at the half-year.

Capital Investments

Listed Building consent and Planning Permission has been granted at The Ley Arms in Kenn to demolish the function room area and build a block of eight bedrooms to allow for an offer of bed and breakfast.  This is a wonderful house being traded exceptionally well by our tenant Karen Bayliss.  The addition of bedrooms will obviously compliment the quality offer at this house and contractors' quotes for the project are currently being sought.

 

Corporate Governance

The Board adopted the Corporate Governance Code of the Quoted Companies Alliance in September 2018 when this became a requirement under AIM Rules. I, and the other Members of our Board, are collectively accountable to you, the shareholders for ensuring good corporate governance. My specific role and responsibility as Chairman is to make sure that all aspects of corporate governance are covered and adhered to. Historically this Company has always strived to conduct business responsibly to the benefit of all stakeholders. The Code gives the Directors a structure to help them to deliver good governance to all shareholders and, in turn, to all our tenants and employees.

Personnel

It was announced to the London Stock Exchange on 29th August 2019 that Chris Bush had been appointed to the Board as an Independent Non-Executive Director and it gave me great pleasure at the time to extend my personal welcome.  He commenced his role with us on 1st September 2019.  Chris is an Institute of Chartered Accountants in England and Wales professional and he has many years' experience in leadership roles within audit practice.  He also fills the Independent Non-Executive role required by our QCA Corporate Governance Code with specific responsibility for Corporate Governance and Audit oversight.

Pension Scheme

The Company continues to operate its Final Salary Pension Scheme for retired Members and their dependents.  As I reported last year the final three deferred Members transferred out of the Scheme during the previous financial year. Since then, and following the High Court's ruling in October 2018 that all Guaranteed Minimum Pension (GMP) benefits in UK pension plans must be equalised for male and female members, the Scheme's actuary has been working on establishing the GMP liability to the Scheme. This process is not yet complete but as at 31 October 2019 the liability has been estimated at £52,000 and this has been accrued in the financial statements for the year under review.

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 pleased to report that since the year end our expiring banking facilities with Barclays, with whom we have enjoyed an excellent relationship and who have provided us with facilities for nearly 40 years, have been revised and renewed for a further term of five years.

After the prolonged period of political uncertainty endured by business and the country as a whole. The hope has to be that the result of the December General Election will deliver some much needed stability. While we await this and monitor the effects of the departure from the European Union, the Directors feel it prudent to leave the final Dividend unchanged from the previous year.

 

N H P TUCKER
Chairman

13 February 2020

 

 

 

 

 

 

Group income statement

for the year ended 31 October 2019

 

 

 

 

 

Notes

 

Total

2019

£000

 

Total

2018

£000

Revenue

 

7,528

7,614

Other operating income

 

302

279

Purchase of inventories

 

(3,100)

(3,109)

Staff costs

 

(1,385)

(1,407)

Depreciation of property, plant and equipment

 

 

(222)

 

(235)

Other operating charges

 

(1,284)

(1,510)

 

 

(5,689)

(5,982)

Group operating profit

 

1,839

1,632

 

Profit on sale of property plant and equipment

 

 

185

 

824

Group profit before finance costs and taxation

 

   2,042

  

     2,456

Finance income

 

4

5

Finance costs

 

(184)

(175)

Other finance costs - pensions

 

-

(35)

 

 

(180)

(205)

 

 

 

 

Profit before taxation

 

1,844

2,251

Tax expense

 

(313)

(324)

 

 

 

 

Profit for the year attributable to equity holders of the parent

 

 

1,531

 

1,927

 

 

 

 

Basic earnings per share

2

32.0p

39.6p

 

 

 

 

Diluted earnings per share

2

32.0p

39.6p

 

 

 

 

 

 

 

Group statement of comprehensive income

for the year ended 31 October 2019

 

2019

£000

2018

£000

Profit for the year

 

1,531

1,927

Items that will not be reclassified to profit or loss

 

 

Fair value adjustment on investment in equity                                   

Actuarial (losses) on defined benefit scheme

(6)

-

(4)

    (248)

Tax relating to items that will not be reclassified

-

42

 

(6)

(210)

 

Items that may be reclassified to profit or loss

 

 

Exchange rate differences on translation of subsidiary undertaking

 

2

 

(2)

 

2

(2)

 

 

 

Other comprehensive income for the year, net of tax

1,527

1,715

 

Total comprehensive income attributable to:

Equity holders of the parent                                                          

 

          1,527

 

1,715

 

 

 

 

 

 

 

 

Group balance sheet

at 31 October 2019

 

 

 

2019

£000

 

 

2018

£000

Non-current assets

 

 

 

 

Property, plant and equipment

 

17,692

 

17,812

Investment property

 

1,485

 

1,094

 

 

19,177

 

18,906

Financial assets

 

41

 

47

Deferred tax asset

 

16

 

38

 

 

19,234

 

18,991

Current assets

 

 

 

 

Inventories

 

10

 

10

Trade and other receivables

 

1,344

 

1,292

Cash and cash equivalents

 

51

 

44

 

 

1,405

 

1,346

Assets held for sale

 

-

 

62

Total assets

 

20,639

 

20,399

Current liabilities

 

 

 

 

Trade and other payables

 

(953)

 

(1,078)

Financial liabilities

 

(6,087)

 

(818)

Income tax payable

 

(231)

 

(131)

 

 

(7,271)

 

(2,027)

Non-current liabilities

 

 

 

 

Other payables

 

(284)

 

(311)

Financial liabilities

 

(37)

 

(6,067)

Deferred tax liabilities

 

(394)

 

(300)

Defined benefit pension plan deficit

 

(92)

 

(39)

 

 

(807)

 

(6,717)

Total liabilities

 

(8,078)

 

(8,744)

Net assets

 

12,561

 

11,655

Capital and reserves

 

 

 

 

Equity share capital

 

264

 

264

Capital redemption reserve

 

673

 

673

Treasury shares

 

(1,562)

 

(1,317)

Fair value adjustments reserve

 

17

 

23

Currency translation

 

17

 

15

Retained earnings

 

13,152

 

11,997

Total equity

 

12,561

 

11,655

 

Group statement of cash flows

for the year ended 31 October 2019

 

 

 

 

 

 

 

2019

£000

 

 

 

2018

£000

Operating activities

 

 

 

 

Profit for the year

 

1,531

 

1,927

Tax expense

 

313

 

324

Net finance costs

 

180

 

206

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

 

(185)

 

(824)

Depreciation and impairment of property, plant and equipment

Exchange gain on cash, liquid resources and loans                                      

 

222

-

 

235

5

Difference between pension contributions paid and amounts

 

 

 

 

 recognised in the income statement

 

52

 

(1,544)

(Increase)/decrease in trade and other receivables

 

(72)

 

284

(Decrease)/increase in trade and other payables

 

 (145)

 

380

 

 

 

 

 

Cash generated from operations

 

1,896

 

993

Income taxes paid

 

  (97)

 

  (188)

Interest paid

 

  (184)

 

  (176)

 

 

 

 

 

Net cash inflow from operating activities

 

1,615

 

629

 

 

 

 

 

Investing activities

 

 

 

 

Interest received

 

4

 

6

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

 

 

278

 

 

1,454

Payments to acquire property, plant and equipment

 

(506)

 

(777)

 

 

 

 

 

Net cash (outflow)/inflow from investing activities

 

(224)

 

683

 

 

 

 

 

Financing activities

 

 

 

 

Preference dividend paid

 

(1)

 

(1)

Equity dividends paid

 

(379)

 

(373)

Consideration received by EBT on sale of shares

 

56

 

54

Consideration paid by EBT on purchase of shares

Capital element of finance lease rental payments                                                    

 

(298)

(15)

 

(145)

(68)

 

 

 

 

 

Net cash outflow from financing activities

 

(637)

 

(533)

 

 

 

 

 

Increase in cash and cash equivalents

 

754

 

779

Cash and cash equivalents at the beginning of the year

 

(757)

 

(1,536)

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at the year end

 

(3)

 

(757)

 

 

 

Group statement of changes in equity

for the year ended 31 October 2019

 

 

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 2017

264

673

(1,223)

27

17

10,646

10,404

 

 

 

 

 

 

 

 

Profit for the year

-

-

-

-

-

1,927

1,927

Other comprehensive

 

 

 

 

 

 

 

income for the year

net of income tax

-

-

-

(4)

(2)

(206)

(212)

Total comprehensive

 

 

 

 

 

 

 

income for the year

-

-

-

(4)

(2)

1,721

1,715

Consideration received

 

 

 

 

 

 

 

 by EBT on sale of

shares

 

-

 

-

 

54

 

-

 

-

 

-

 

54

Consideration paid by

 

 

 

 

 

 

 

EBT on purchase of shares        

-

-

(145)

-

-

-

(145)

Loss by EBT on sale

 

 

 

 

 

 

 

 of shares

-

-

(3)

-

-

3

-

Equity dividends paid

-

-

-

-

-

(373)

(373)

At 31 October 2018

264

673

(1,317)

23

15

11,997

11,655

 

 

 

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 2018

264

673

(1,317)

23

15

11,997

11,655

 

 

 

 

 

 

 

 

Profit for the year

-

-

-

-

-

1,531

1,531

Other comprehensive

 

 

 

 

 

 

 

income for the year

net of income tax

-

-

-

(6)

2

-

(4)

Total comprehensive

 

 

 

 

 

 

 

income for the year

-

-

-

(6)

2

1,531

1,527

Consideration received

 

 

 

 

 

 

 

 by EBT on sale of

shares

 

-

 

-

 

56

 

-

 

-

 

-

 

56

Consideration paid by

 

 

 

 

 

 

 

EBT on purchase of shares        

-

-

(298)

-

-

-

(298)

Loss by EBT on sale

 

 

 

 

 

 

 

 of shares

-

-

(3)

-

-

3

-

Equity dividends paid

-

-

-

-

-

(379)

(379)

At 31 October 2019

264

673

(1,562)

17

17

13,152

12,561

                                                               

 

 

 

 

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 2019 the Group held 179,053 Ordinary Shares and 300,002 'A' Limited Voting Ordinary Shares (2018: 146,082 Ordinary Shares and 262,885 'A' Limited Voting Ordinary Shares) of its own shares. During the year there were purchases of 32,971 Ordinary Shares and 62,737 'A 'Limited Voting ordinary Shares  and sales of 25,620 'A; Limited Voting Ordinary Shares.

Fair value adjustments reserve

The fair value adjustments reserve is used to record differences in the year on year fair value of the investment classified as fair value through other comprehensive income.

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 2019. The statutory financial statements have not yet been delivered to the Registrar of Companies.

 

The auditors, PKF Francis Clark, have reported on the accounts for the years ended 31 October 2019 and 31 October 2018. Their audit reports in both years were unqualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006 in respect of those accounts.

 

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 2019, which are expected to be mailed to shareholders on 10 March 2020.  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:

 

 

2019

£000

2018

£000

Profit for the year

1,531

1,927

 

 

 

 

2019

No.

(000)

2018

No.

(000)

Basic weighted average number of shares (excluding treasury shares)

4,786

4,866

 

 

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

 

 

2019

£000

2018

£000

Declared and paid during the year:

 

 

Equity dividends on ordinary shares:

 

 

   Final dividend for 2018: 4.25p (2017: 4.00p)

224

211

   First dividend for 2019: 3.675p (2018: 3.675p)

194

198

   Less dividend on shares held within employee share schemes

(39)

(36)

 

 

 

Dividends paid

379

373

 

 

 

Proposed for approval at AGM

 

 

(not recognised as a liability as at 31 October)

 

 

 

 

 

   Final dividend for 2019 4.25p (2018: 4.25p)

  

   Cumulative preference dividends

 

224

 

1

224

 

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 and free of tie 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 2019 and 2018. 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 2019

UK

£000

United States

£000

Total

£000

Revenue

 

 

 

Sales to external customers

7,528

-

7,528

 

 

 

 

 

 

 

 

Other segment information

 

 

 

Segment assets

20,596

43

20,639

 

Total Assets

20,596

43

20,639

Capital expenditure

 

 

 

Property, plant and equipment

505

-

505

 

 

 

 

Year ended 31 October 2018

UK

£000

United States

£000

Total

£000

Revenue

 

 

 

Sales to external customers

7,614

-

7,614

 

 

 

 

Other segment information

 

 

 

Segment assets

 

 

 

 

20,356

43

20,399

 

Total Assets

20,356

43

20,399

Capital expenditure

 

 

 

Property, plant and equipment

839

-

839

 

 

 

 

5. General information

The 2019 Annual Report and Financial Statements will be published and posted to shareholders on 10th March 2020 Further copies may be obtained by contacting the Company Secretary at The Heavitree Brewery PLC, Trood Lane, Matford, Exeter EX2 8YP. The 2019 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 15 April 2020 at 11.30am.

 

 

 

Ends. 


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Preliminary Announcement - RNS