Heavitree Regulatory News (HVT)

18 Feb 2008 15:00

Heavitree Brewery PLC18 February 2008 The Heavitree Brewery PLC Trood Lane Matford Exeter EX2 8YP Contact: Mr G.J.Crocker - Managing and Finance Director 01392 217733 Mr R.J.Glanville - Director and Company Secretary 01392 217733 Mr A. Borrelli-- - Nominated Advisor 020 7408 4090 Date: 18 February 2008 Following a Board Meeting held today, 18 February 2008, the Directors announcethe preliminary results for the year ended 31 October 2007. ISIN: GB0004182720 for 'A' Limited Voting Ordinary SharesISIN: GB0004182506 for Ordinary Shares Chairman's statement Introduction The problems in our market caused by the fallout from the smoking ban and themiserable weather which hit this year's season for the South West have beenfurther exacerbated by the economic squeeze now being experienced. A lack ofconfidence in central Government has only fanned the flames of uncertainty forthe consumer. In spite of this, I am able to report that the Company hasachieved satisfactory results for the year ended 31 October 2007, and remainswell positioned to face the pressures within our industry. Results Turnover for the Group has decreased slightly for the period by 0.86%, andgenerated an operating profit of £1,652,000 against a restated operating profitfor the previous year of £1,846,000. This shows a drop of 10.51%. Whilst incomeremains stable and costs continue to rise, our energies are concentrated ondriving trade and controlling costs. The Managed House subsidiary, Heavitree Inns, produced an operating profit of£508,000 against last year's £522,000 which we recognised at the time as anextremely hard fought performance. Heavitree Incorporated, our American subsidiary, produced an operating loss of£6,000 which was the same as the previous year. A small piece of land was soldin the year for which we have received £28,000 on account. Our Agent in Houstonreports continuing interest in land for development. Dividend The Directors recommend an unchanged final dividend of 7p per Ordinary and 'A'Limited Voting Ordinary Share. This, together with the interim dividend of 4.5pper share, makes a total dividend of 11.5p per share (2006 - 11p). The dividendwill be paid on 14 April 2008, subject to shareholder approval at the AnnualGeneral Meeting on 11 April 2008, to shareholders on the Register at 7 March2008. Property Sales We have sold four pubs this year. This is in accordance with the Company'scontinuing strategy of focusing our investment and expertise on operations whichbest position us in the marketplace. The houses we have sold are The EagleTavern in Exeter, The Royal Standard in Shaldon, Judge Jefferies in Exeter andThe Bird in Hand in Witney. We also sold two unlicensed properties. In total, agross book profit, before tax, of £1,426,000 was realised. We are currentlymarketing another four houses in line with this strategy, together with a smallnumber of unlicensed properties. Pension Scheme The final salary scheme is still in the process of being wound up following theCompany's decision to close it to future accrual. At the time of writing, ourscheme actuary is still seeking quotes for securing the benefits accrued underthe scheme through the purchase of bulk annuity contracts. I hope to have moreinformation on this, and be able to report further as to the actual cost of thepurchase of these annuities, at the half-year. Capital Investment The main investments during the year were expended on extending The Anchor Innat Cockwood into the next door property, which we purchased in 2005, enlargingthe kitchens at The Otter Inn at Weston, completing the roll-out of the cellarmanagement systems across the whole estate and the strategic purchase of acottage next door to one of our pubs in advance of a possible major development. One such major development is currently taking place at The Church House Inn atStokenham, which is due to re-open prior to Easter. The estate will benefit fromfurther refurbishments which are planned to take place this year. The Company remains committed to acquiring houses in strategic positionsthroughout the West Country. Repurchase of Shares The Company has continued to exercise its right to buy back its own shares,purchasing a further 79,000 'A' Limited Voting Ordinary and 28,000 OrdinaryShares, at an aggregate cost of £1,191,550, in the year. As reported andexplained in detail at the half-year, this policy continues to return greatvalue to shareholders. Personnel I would like to thank all our tenants and staff for their efforts in achievingthis year's results. N H P TUCKER Chairman 18 February 2008 Group profit and loss accountfor the year ended 31 October 2007 As restated 2007 2006 Notes £000 £000 Turnover 13,296 13,412 Operating profit 1,652 1,846Profit/(loss) on sale of tangible fixed assets 1,435 (74)Profit on sale of fixed asset investments - 842Income from other fixed asset investments 1 1 Profit on ordinary activities before interestand taxation 3,088 2,615Other interest receivable 6 10Interest payable (403) (371)Other finance charges - FRS 17 (38) (59)Profit on ordinary activities before taxation 2,653 2,195Taxation on profit on ordinary activities (601) (384)Profit attributable to shareholders 2,052 1,811 Dividends - equity dividends paid 2 (607) (533) Basic earnings per share 3 38.9p 34.0p Diluted earnings per share 3 38.7p 33.9p All revenues and costs relate to continuing operations. Group statement of total recognised gains and lossesfor the year ended 31 October 2007 As restated 2007 2006 £000 £000Profit attributable to shareholders 2,052 1,811Exchange difference on retranslation of net assets of subsidiary 1 (3)undertakingActuarial gain recognised on pension scheme 572 174Deferred tax relating to actuarial gain on pension scheme (160) (52)Deferred tax relating to change in tax rates on deferred tax on (43) -pension schemeTotal recognised gains and losses relating to the year and since 2,422 1,930last annual reportPrior year adjustment (6) 2,416 Reconciliation of shareholders' fundsfor the year ended 31 October 2007 Note As restated 2007 2006 £000 £000At 1 November 7,598 6,891 Total recognised gains and losses relating to the year 2,422 1,930 Dividends 2 (607) (533) Consideration received by EBT on sale of shares 313 63 Consideration paid by EBT on purchase of shares (481) (759) Reserve credit for share-based payment plans 5 6At 31 October 9,250 7,598 Group balance sheetat 31 October 2007 2007 2006 £000 £000Fixed assetsTangible assets 15,263 16,650Investments 20 20 15,283 16,670Current assetsStocks 210 142Assets held for sale 733 -Debtors 1,384 1,493Cash at bank and in hand 738 435 3,065 2,070Creditors: amount falling due within one year (7,510) (9,067)Net current liabilities (4,445) (6,997)Total assets less current liabilities 10,838 9,673Creditors: amount falling due after more than one year (283) (296) Provisions for liabilities and chargesDeferred taxation (243) (262)Net assets excluding pension liability 10,312 9,115Pension liability (1,062) (1,517) 9,250 7,598Capital and reservesCalled up share capital 273 278Capital redemption reserve 664 659Other reserves 70 69Own shares reserve (963) (1,335)Profit and loss account 9,206 7,927Total shareholders' funds 9,250 7,598 Group statement of cash flowsfor the year ended 31 October 2007 2007 2006 Note £000 £000 Net cash inflow from operating activities 4 1,923 2,543 Returns on investments and servicing of financeInterest paid (403) (371)Interest received 6 10Dividends received 1 1Preference dividend paid (1) (1)Net cash outflow from returns on investmentsand servicing of finance (397) (361) TaxationCorporation tax paid (380) (316) Capital expenditure and financial investmentPayments to acquire tangible fixed assets (1,558) (1,764)Receipts from sales of tangible fixed assets 2,972 222Receipts from sales of fixed asset investments - 1,017 1,414 (525) Equity dividends paid (607) (533) FinancingConsideration received by EBT on sale of shares 314 63Consideration paid by EBT on purchase of shares (481) (760)Repayment of Directors' loans (2) (7)Loans from Directors 20 - (149) (704)Increase in cash 1,804 104 Reconciliation of net cash flow to movement in net debtfor the year ended 31 October 2007 2007 2006 £000 £000Increase in cash in the year 1,804 104Cash (inflow)/outflow resulting from decrease in debt (18) 7Net debt at 1 November (6,506) (6,617)Net debt at 31 October (4,720) (6,506) Notes to the preliminary announcement 1 Financial information These figures do not constitute full accounts within the meaning of Section 240of the Companies Act 1985. They have been extracted from the statutory financialstatements for the year ended 31 October 2007, on which the auditors have issuedan unqualified audit report. The statutory financial statements have not yetbeen delivered to the Registrar of Companies. In preparing the financial statements for the current year, the Group hasadopted FRS 20, 'Share-based payment'. The adoption of FRS 20 has resulted in achange of accounting policy for share-based payment transactions. The mainimpact of FRS 20 on the Group is the recognition of an expense and acorresponding entry to equity for employees' share options. The Group has applied FRS 20 retrospectively and has taken advantage of thetransitional provisions for FRS 20 in respect of equity settled awards. As aresult, the Group has applied FRS 20 only to equity settled awards granted after7 November 2002 that had not vested on 1 November 2006. Comparative figures for the year ended 31 October 2006, set out within thisannouncement, have been restated to apply the provisions of FRS 20, increasingexpenses and consequently decreasing operating profit for that period as shownbelow: 2006 £000 Operating profit as previously reported 1,852Prior year adjustment - FRS 20 (6)Operating profit as restated 1,846 2 Dividends 2007 2006 £000 £000Declared and paid during the yearEquity dividends on Ordinary and 'A' Limited Voting Ordinary Shares Final dividend for 2006 - 7p (2005 - 6p) 389 321 First dividend for 2007 - 4.5p (2006 - 4p) 248 237 Less: dividends on shares held within employee share schemes (30) (25) 607 533 Proposed for approval at AGM (not recognised as a liability at 31 October)Equity dividends on Ordinary and 'A' Limited Voting Ordinary Shares Final dividend for 2007 - 7p (2006 - 7p) 371 370 3 Basic and diluted earnings per share The calculation of basic earnings per ordinary share is based on earnings of£2,052,000 (2006 restated - £1,811,000), being profit after taxation for theyear, on 5,279,211 (2006 - 5,323,113) shares, being the weighted average numberof Ordinary and 'A' Limited Voting Ordinary Shares in issue during the yearafter excluding those shares owned by The Heavitree Brewery PLC EmployeeBenefits Trust and by the Employee Share Option Scheme. The calculation of diluted earnings per ordinary share is based on earnings of£2,052,000 (2006 restated - £1,811,000), being profit after taxation for theyear, on 5,307,220 (2006 - 5,349,453) shares, being the weighted average numberof Ordinary and 'A' Limited Voting Ordinary Shares in issue during the year, asdiluted for the share options in issue. The Ordinary Shares and the 'A' Limited Voting Ordinary Shares have equaldividend rights and therefore no separate calculation of earnings per share forthe different classes has been given. 4 Group statement of cash flows Reconciliation of operating profit to net cash inflow from operating activities: As restated 2007 2006 £000 £000 Operating profit 1,652 1,846Depreciation 661 654(Increase)/decrease in stocks (53) 7Decrease/(increase) in operating debtors 109 (195)(Decrease)/increase in operating creditors (293) 337Net pension charge (158) (112)Share-based payment 5 6Net cash inflow from continuing operating activities 1,923 2,543 5 General information The 2007 Annual Report and Financial Statements will be published and posted toshareholders on 12 March 2008. Further copies may be obtained by contacting theCompany Secretary at The Heavitree Brewery PLC, Trood Lane, Matford, Exeter EX28YP. The Annual General Meeting will be held at the Registered Office on 11 April2008 at 11.30am. Ends. This information is provided by RNS The company news service from the London Stock Exchange