Last checked at 20 Jul 2009 16:30
The Heavitree Brewery PLCTrood Lane
Matford
Exeter EX2 8YP
Date: 20 July 2009
Contact: Graham Crocker - Managing Director - 01392 217733
Rod Glanville - Director and Company Secretary - 01392 217733
Pascal Keane - Shore Capital - 0207 468 7995
Following a meeting by a duly authorised committee of the Board of Directors held today, 20 July 2009, the Directors announce the interim results for the six months ended 30 April 2009.
Chairman's statement
I reported at this year's Annual General Meeting that following our decision to restructure the business and to close our Managed House operation (Heavitree Inns), the challenge was then to return the pubs operated by Heavitree Inns to tenancy or leasehold as efficiently as possible. I am pleased to report that at the time of writing only one of these houses remains under the Heavitree Inns umbrella and a lease contract has now been agreed. Completion is expected to be imminent. This in the present climate is an excellent achievement by the Managing Director and the operational team and we look forward to a long and mutually beneficial relationship with the new operators of these houses.
RESULTS.
Turnover for the Group decreased against last year by 18% to £4,944,000. This was expected because as the number of Managed Houses has reduced so the associated retail sales have been lost to turnover. Group Operating Profit is £269,000 (2008: £130,000 loss). Profit before taxation for the six month period was £387,000 after restructuring costs of £256,000 to date, finance costs and the sale of three properties and a small piece of land (2008 : £185,000).
DIVIDEND.
The Directors recommend an interim dividend of 3.5p per Ordinary and 'A' Limited Voting Ordinary Share (2008 - Nil).
PROPERTIES.
The King's Arms in South Zeal, The Old Rydon in Kingsteignton, and The Heavitree Arms in Bideford were sold. Also a small piece of land at Sandford was sold. These transactions realised a book profit before tax totalling £503,000.
Since 30 April 2009 the Company has accepted an offer on, and completed the sale of The Hub in Exeter.
PENSION SCHEME.
The triennial actuarial funding review has been completed and the deficit for the closed final salary Pension Scheme stands at £4.5 m at the 1 May 2009. This is not a fixed figure as every 3 years further valuations will be required. However, it is a lesser figure than previously feared and I can confirm that the Directors have informed the Trustees that the Company will meet its funding obligations through annualised deficit correction payments.
AUDITORS
It was resolved at the Annual General Meeting to re-elect Messrs Ernst and Young LLP to serve as the Company's auditors. Following a restructure of their business Messrs Ernst and Young LLP have resigned and Messrs Francis Clark Chartered Accountants have been appointed as the Company's auditors in their place.
BOARD CHANGES.
Matthew Pease-Watkin resigned from the Board of Directors on 8 May 2009 owing to external commitments. Matthew joined the Board in June 1999 and his dedication and contribution to the Company will be missed. The Board would like to extend its gratitude for his 10 years of service.
Katherine Pease-Watkin has been appointed as a non-executive director as of 1 July 2009 and will stand for election at the next Annual General Meeting.
PROSPECTS.
The decisions that the Company made after last year's strategic review have resulted in a steady performance for the half-year. The interim dividend reflects this whilst recognising that caution is still needed at a time when the winds of uncertainty continue to buffet our industry as a whole.
N H P TUCKER
Chairman
Consolidated income statement (unaudited)
for the six months ended 30 April 2009
| 2009 | 2008 | |||
| Note | £ '000 | £ '000 | ||
| Revenue | 4,944 | 6,054 | ||
| Change in stocks | (74) | (14) | ||
| Other operating income | 40 | 25 | ||
| Purchase of inventories | (1,866) | (2,210) | ||
| Staff Costs | (1,305) | (1,893) | ||
| Depreciation of property, plant and equipment | (225) | (278) | ||
| Other operating charges | (1,245) | (1,814) | ||
| (4,675) | (6,184) | |||
| Group operating profit/ (loss) | 269 | (130) | ||
| Profit on disposal of non-current assets | 503 | 566 | ||
| Group profit before finance costs, taxation and restructuring costs | 772 | 436 | ||
| Restructuring Costs | (256) | - | ||
| Group profit before finance costs and taxation | 516 | 436 | ||
| Finance income | 10 | 4 | ||
| Finance costs | (81) | (209) | ||
| Other finance costs-pensions | (58) | (46) | ||
| (129) | (251) | |||
| Profit before taxation | 387 | 185 | ||
| Tax (expense) | (55) | (31) | ||
| Profit for the period | 332 | 154 | ||
| Earnings per share - basic - diluted | 2 | 6.5p6.5p | 2.94p 2.94p |
Group statement of total recognised income and expense (unaudited)
for the six months ended 30 April 2009
| 2009 £ '000 | 2008 £ '000 | |||
| Income and expense recognised directly in equity | ||||
| Exchange differences on translation of foreign operations | - | 1 | ||
| Actuarial (losses) on defined benefit pension plans | (400) | (147) | ||
| (400) | (146) | |||
| Tax on items taken directly to or transferred from equity | 112 | 41 | ||
| Net (expense) recognised directly in equity | (288) | (105) | ||
| Profit for the period | 332 | 154 | ||
| Total recognised income and expense for the period | 44 | 49 | ||
Dividends
The Directors declare an interim dividend of 3.5p per share (2008 - Nil) on the Ordinary and 'A' Limited Voting Ordinary Shares. This dividend will be paid on 21 August 2009 to shareholders on the register at 31 July 2009.
Consolidated balance sheet (unaudited)
at 30 April 2009
| 2009 £ '000 | 2008 £ '000 | |||
| Non-current assets | ||||
| Property, plant and equipment | 14,521 | 15,912 | ||
| Financial assets | 46 | 77 | ||
| Deferred tax asset | 389 | 429 | ||
| 14,956 | 16,418 | |||
| Current assets | ||||
| Trade and other receivables | 1,901 | 2,259 | ||
| Inventories | 89 | 196 | ||
| Cash and short-term deposits | 574 | 441 | ||
| Assets held for sale | 285 | 594 | ||
| Total assets | 17,805 | 19,908 | ||
| Current liabilities | ||||
| Trade and other payables | (1,430) | (2,370) | ||
| Financial liabilities | (6,181) | (8,313) | ||
| Income tax payable | (142) | (210) | ||
| Provisions | - | - | ||
| (7753) | (10,893) | |||
| Non-current liabilities | ||||
| Other payables | (265) | (251) | ||
| Financial liabilities | (11) | (11) | ||
| Deferred tax liabilities | (368) | (263) | ||
| Defined benefit pension plan | (1,343) | (1,510) | ||
| (1,987) | (2,035) | |||
| Total liabilities | (9,740) | (12,928) | ||
| Net assets | 8,065 | 6,980 | ||
| Capital and reserves | ||||
| Equity share capital | 264 | 264 | ||
| Capital redemption reserve | 673 | 673 | ||
| Treasury shares | (994) | (1,227) | ||
| Fair value adjustments reserve | 26 | 57 | ||
| Currency translation | 3 | - | ||
| Retained earnings | 8,093 | 7,211 | ||
| Total equity | 8,065 | 6,980 |
Group statement of cash flows (unaudited)
for the six months ended 30 April 2009
| 2009 | 2008 | |||
| £ '000 | £ '000 | |||
| Operating activities | ||||
| Profit/(loss) for the period | 269 | (130) | ||
| Adjustments to reconcile operating profit/loss for the period to net cash inflow/ outflow from operating activities | ||||
| Depreciation and impairment of property, plant and equipment | 225 | 278 | ||
| Restructuring Costs | 256 | - | ||
| Share based payments | 7 | - | ||
| Decrease in inventories | 74 | 14 | ||
| (Increase) in trade and other receivables | (105) | (762) | ||
| (Decrease)/Increase in trade and other payables | (118) | 694 | ||
| Net pension charge | (120) | (158) | ||
| Cash generated from operations | 488 | (64) | ||
| Income taxes paid | - | (311) | ||
| Net cash inflow/(outflow) from operating activities | 488 | (375) | ||
| Investing activities | ||||
| Interest received | 10 | 4 | ||
| Proceeds from sale of property, plant and equipment | 712 | 801 | ||
| Payments to acquire property, plant and equipment | (273) | (986) | ||
| Net cash inflow/ (outflow) from investing activities | 449 | (181) | ||
| Financing activities | ||||
| Interest paid | (81) | (208) | ||
| Preference dividend paid | (1) | (1) | ||
| Equity dividends paid | (356) | (370) | ||
| Consideration received by EBT on sale of shares | 49 | 145 | ||
| Consideration paid by EBT on purchase of shares | - | (345) | ||
| Repurchase of shares | - | (1,899) | ||
| Net cash (outflow) from financing activities | (389) | (2,678) | ||
| Increase/(decrease) in cash and cash equivalents | 548 | (3,234) | ||
| Cash and cash equivalents at the beginning of the period | (6,155) | (4,638) | ||
| Cash and cash equivalents at the period end. | (5,607) | (7,872) |
Group reconciliation of movements in equity (unaudited)
| | Equity | Capital | | Fair | | | |
| | share | redemption | Treasury | value | Currency | Retained | Total |
| | capital | reserve | shares | adjustment | translation | earnings | equity |
| | £ ’000 | £ ‘000 | ‘£000 | £ ‘000 | £ ‘000 | £ ‘000 | £ ‘000 |
| | | | | | | | |
| At 31 October 2008 | 264 | 673 | (1248) | 38 | 3 | 8,603 | 8,333 |
| Total recognised income and | | | | | | | |
| expense for the period | - | - | - | - | - | 44 | 44 |
| | | | | | | | |
| Consideration received | | | | | | | |
| by EBT on sale of | | | | | | | |
| shares | - | - | 49 | - | - | - | 49 |
| | | | | | | | |
| Gain by EBT on sale | | | | | | | |
| of shares | - | - | 205 | - | - | (205) | - |
| | | | | | | | |
| | | | | | | | |
| Equity dividend paid | - | - | - | - | - | (356) | (356) |
| Fair value adjustment | - | - | - | (12) | - | - | (12) |
| | | | | | | | |
| Share based payment | | | | | | 7 | 7 |
| | | | | | | | |
| At 30 April 2009 | 264 | 673 | (994) | 26 | 3 | 8,093 | 8,065 |
| | | | | | | | |
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 represents 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 interim condensed and consolidated financial statements 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 will be complied with in the annual financial statements. The accounting policies are drawn up in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. These unaudited financial statements were approved and authorised for issue by a duly appointed and authorised committee of the Board of Directors on 20 July 2009.
2. Basic and diluted earnings per share
The calculation of basic earnings per ordinary share is based on earnings of £332,000 (2008 :£154,000), being profit after taxation for the period, and on 5,102,365 (2008 : 5,232,443) shares being the weighted average number of Ordinary and 'A' Limited Voting Ordinary Shares in issue during the year 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.
The Group operates in two business segments; leased estate and managed estate. Leased estate represents properties which are leased to tenants to operate independently from the Group. Managed estate represents properties which are owned, operated and maintained by the Group.
| | 30 April 2009 | 30 April 2008 | ||
| | Revenue £ ‘000 | Profit/(loss) £ ‘000 | Revenue £ ‘000 | Profit/(loss) £ ‘000 |
| Leased | 3,448 | 163 | 3,585 | (31) |
| Managed | 1,806 | (150) | 3,062 | (99) |
| Intra group sales | (310) | - | (593) | - |
| Common Costs | - | (129) | - | (251) |
| Sale of non-current assets | - | 503 | - | 566 |
| | 4,944 | 387 | 6,054 | 185 |
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 2009 has been posted to shareholders today and will be available on our website at www.heavitreebrewery.co.uk.
Ends.