Heavitree Regulatory News (HVT)

The Heavitree Brewery PLC

Trood Lane

Matford

Exeter EX2 8YP

Date: 15 February 2011

Contact: Graham Crocker - Managing Director - 01392 217733

Rod Glanville - Director and Company Secretary - 01392 217733

Pascal Keane - Shore Capital - 0207 408 4090

Following a Board Meeting held today, 15 February 2011, the Directors announce the preliminary statement of results for the year ended 31 October 2010.

ISIN: GB0004182720 for 'A' Limited Voting Ordinary Shares

ISIN: GB0004182506 for Ordinary Shares

Chairman's statement

Turnover has dropped considerably against the previous year but this is as a direct result of the cessation in turnover from retail sales in 2009 from the last of the Managed Houses before they were returned to tenancy. In 2010 turnover arose solely from the operation of a tenanted and leased estate. It is very pleasing to be able to report a substantial increase in operating profit for the Group.

Results

Turnover for the Group decreased against last year by 19.78% to £7,388,000 (2009: £9,210,000) but generated an increased Group Operating Profit of £1,427,000 (2009: £1,046,000) after consolidation adjustments.

Heavitree Inc. generated an Operating Loss of £15,000 (2009: Loss of £13,000).

Heavitree Inns ceased trading in the previous year so has been dormant throughout the period under review (2009: Loss of £279,000).

Group Profit before Taxation decreased by £28,000 (2.23%) to £1,225,000. However, it should be remembered that last year's figure included both a profit of £781,000 on the disposal of assets (2010: £32,000) as well as costs of £370,000 arising from the restructure and refinancing of the Group (2010: £nil)

Key Performance Indicators

·; Adjusted Operating Profit before Taxation of £1,427,000 was £102,000 (7.7%) ahead of last year.

·; Interest Costs were covered 13.46 times.

Dividend

The Directors recommend a final dividend of 3.5p per Ordinary and 'A' Limited Voting Ordinary Share (2009: 3.5p) making an overall total for the year of 7p, which is unchanged from last year. The dividend will be paid on 20 April 2011, subject to shareholder approval at the Annual General Meeting on 15 April 2011 to those shareholders on the Register at 18 March 2011.

Capital Investments

An extension at The Cricket Inn at Beesands to create a larger dining area and four further letting bedrooms was completed in May 2010.

Pension Scheme

The Company continues to meet its funding obligations to its closed final salary Pension Scheme. Following completion, in September 2009, of the triennial actuarial valuation of the Scheme as at 1 January 2008, an annualised deficit correction payment was agreed, with the last payment being due in February 2018.

The next Scheme triennial valuation is as at 1 January 2011. This should be completed by the end of the year.

Repurchase of Shares

The Company did not purchase any of its own shares during the year under review, but the Directors intend to seek shareholder approval at the forthcoming AGM for the continuing authority to do so.

Outlook

We have continued to support our tenants and leaseholders during the present difficult trading environment. This we shall continue to do in the year ahead. The increase in the rate of VAT in January, the promise of another Excise Duty increase, wholesale price increases and the treacherous weather conditions at the start of the new financial year have applied further pressure on all pubs. I am most grateful for the performance of both our operators and our head office staff whose skills and hard work have combined to produce this year's pleasing set of results. In the present climate it will be vital to continue with a similar focus.

N H P TUCKER

Chairman

Group income statement

for the year ended 31 October 2010

All amounts in 2010 relate to continuing operations.

Group statement of comprehensive income

for the year ended 31 October 2010

Group balance sheet

at 31 October 2010

Group statement of cash flows

for the year ended 31 October 2010

Group reconciliation of movements in equity

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 represents 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 2010 the Group held 58,779 Ordinary Shares and 74,592 'A' Limited Voting Ordinary Shares (2009: 58,779 Ordinary Shares and 87,332 'A' Limited Voting Ordinary Shares) of its own shares at an average cost of £6.18 (2009: £5.82). The market value of these shares as at 31 October 2010 was £333,000 (2009: £359,000).

Fair value adjustments reserve

The fair value adjustments reserve is used to record differences in the market value of the available-for-sale investment year on year.

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 2010. The statutory financial statements have not yet been delivered to the Registrar of Companies.

The financial information is 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 2010, which are expected to be mailed to shareholders on 09 March 2011. 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. Basic and diluted 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.

Diluted earnings per share amounts are calculated by dividing the profit 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 as diluted for the share options in issue.

The following reflects the income and shares data used in the basic and diluted earnings per share computations:

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.

Employee share options could potentially dilute basic earnings per share in the future but are not included in the 2010 calculation of dilutive earnings per share because they are antidilutive for the period presented.

3. Dividends paid and proposed

4. Segment information Primary reporting format - business segments

IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief executive to allocate resources to the segments and to assess their performance.

During the year the Group operated in one business segment - leased estate.

In the prior year the Group operated in two business segments - leased estate and managed estate. The managed estate was discontinued in the previous year.

Leased estate represents properties which are leased to tenants to operate independently from the Group.

Managed estate represents properties which were owned, operated and maintained by the Group and represents the discontinued operations.

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 2010 and 2009. Revenue is based on the geographical location of customers and assets are based on the geographical location of the asset.

5. General information

The 2010 Annual Report and Financial Statements will be published and posted to shareholders on 9 March 2011. Further copies may be obtained by contacting the Company Secretary at The Heavitree Brewery PLC, Trood Lane, Matford, Exeter EX2 8YP. The 2010 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 2011 at 11.30am.

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Ends.