LONDON (Alliance News) - Heavitree Brewery PLC Wednesday said profit was 28% higher in the first half of the current financial year as the independent pub operator kept its interim dividend flat.
Heavitree reported a pretax profit of GBP377,000 in the six months to the end of April, rising from GBP292,000 a year earlier as revenue came in broadly flat at GBP3.3 million.
The gross profit in the period was slightly lower at GBP2.6 million from GBP2.8 million but the lift in pretax profit was the result of a higher operating profit of GBP630,000 compared to GBP507,000 in the previous year as operating costs declined to GBP774,000 from GBP808,000.
The company's interim dividend remained flat year-on-year at 3.675 pence.
"Last year's corresponding operating profit for the period was affected by a number of factors including some extraordinary costs such as a properties' valuation cost before our new banking facility, an agency cost for the operation of a tenancy over the winter period plus a lack of contribution from two houses where major refurbishments were being carried out," said the company.
"These houses are now operational again and together with some improved rental terms on some new tenancy agreements, I am pleased to be able to report a 24% increase in operating profit on the previous year," the company added.
Heavitree said it completed the sale of the Hole in the Wall in Dawlish in May and completed the disposal of a new house on Topsham Road in Exeter on the former site of the Country House Inn in June.
The Carpenter's Arms in Ilsington, a small house best suited to an owner operator, was placed on the market in April after Heavitree "received no notice from the incumbent tenant" and that sale was also completed in June.
The Maltster's Arms in Harbertonford has been taken off the market and is now open and trading after a new lease was granted to an experienced local operator.
Looking into the second half of the year, Heavitree said work has commenced on the refurbishment of the Dolphin Inn in Torquay which closed earlier in the year and should be reopened in August. Following a long closure, development work is also planned to start shortly on the Dartmoor Halfway Inn in Bickington.
Heavitree said those two properties will "add significantly" to the income stream once they are operational.
"In line with our expectations we have made a solid start to trading in the second half of the year and the company is well positioned before the beginning of the summer season," said Heavitree.
Heavitree shares were untraded on Wednesday, last trading at 215.0 pence.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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Heavitree (HVT)