Heavitree Regulatory News (HVT)

The Heavitree Brewery PLC

Trood Lane

Matford

Exeter EX2 8YP

Date: 26 June 2019

Contact: Graham Crocker - Managing Director - 01392 217733

Nicola McLean - Company Secretary - 01392 217733

Patrick Castle /Anita Ghanekar - Shore Capital - 0207 408 4090

Following a meeting by a duly authorised committee of the Board of Directors held today, 26 June 2019, the Directors announce the interim results for the six months ended 30 April 2019.

Chairman's statement

Turnover for the period under review has increased by £29,000 (0.9%) against the corresponding period last year. However there has been a reduction in operating profit of 1.1% to £624,000 (2018: £631,000). This has been as a result of increased costs associated with external management services at three houses which were traded over a period before new tenants were signed up. In turn, there has been an impact on our rental revenue (a reduction of 2.6% on the previous year) during this period between tenants.

Results

The Group has returned an operating profit of £624,000 (2018: 631,000). After allowing for finance costs of £92,000 (2018: £132,000) and book profit mostly generated by the sale of one unlicensed property (£173,000), the Group Profit before taxation is £705,000 (2018: £1,329,000). Although this reflects a significant decrease on the previous year it needs to be remembered that 2018's half year Group Profit contained a book profit of £830,000 as a result of the sale of four properties in that period.

Dividend

The Directors have resolved to pay an unchanged interim dividend of 3.675p per Ordinary Share and 'A' Limited Voting Ordinary Share (2018: 3.675p). The dividend will be paid on 2 August 2019 to shareholders on the register at the close of business on 19 July 2019.

Property

A house on the old St.Loye's Hotel site in Exeter has been sold having completed on 19 February 2019. Following the sale of a small block of flats on the site last year, the sale of this last house completes the sale of the properties developed on the garden area of the pub in 2012.

The second phase of our refurbishment of the Church House Inn in Stokenham comprising of a new bar, a small extension and a new fire escape for bed and breakfast rooms has been completed. We look forward to a healthy contribution from this house over the summer months.

Prospects

I am pleased with this steady performance for the half year with the Company trading in line with last year and I feel, despite the continuing political uncertainty, we are well-positioned going into the second half of the year.

N H P TUCKER

Chairman

Group income statement (unaudited)

For the six months ended 30 April 2019

Group statement of comprehensive income (unaudited)

For the six months ended 30 April 2019

Dividends

The Directors declare an interim dividend of 3.675p per share (2018 - 3.675p) on the Ordinary and 'A' Limited Voting Ordinary Shares. This dividend will be paid on 02 August 2019 to shareholders on the register at 19 July 2019.

Group balance sheet (unaudited)

Group statement of cash flows (unaudited)

for the six months ended 30 April 2019

Group reconciliation of movements in equity (unaudited)

Group reconciliation of movements in equity (unaudited) - continued

Group reconciliation of movements in equity (unaudited) - continued

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 represent 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 unaudited interim condensed and consolidated financial statements have been prepared in accordance with IAS34 "interim financial reporting" and do not constitute statutory accounts as defined in section 434 of the Companies Act 2006. They have been prepared on the basis of the accounting policies that were complied with in the annual financial statements for the year ended 31 October 2018 except for the adoption of new accounting standards as set out below. The accounting policies are drawn up in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as adopted by the European Union.

These unaudited financial statements were approved and authorised for issue by a duly appointed and authorised committee of the Board of Directors on 26 June 2019.

The following new standards have been adopted, both effective from 1 November 2018:

IFRS15: Revenue from contracts with customers. The Group's revenue primarily consists of drink and food sales to the leased estate, together with rental income from both the leased estate and investment properties. Rental income is outside the scope of IFRS15. The Directors have concluded that the existing method for recognising revenue from drink and food sales is in accordance with IFRS15, being the point in time at which control of those goods is passed to the customer. There is therefore no impact upon adoption of the new standard.

IFRS9: Financial instruments. The Group does not hold any complex financial instruments, and financial assets consist primarily of short term trade and other receivables. IFRS9 introduces a new expected loss approach for determining impairment of financial assets. The Directors have considered this against the current method for bad debt provisioning and no material change has been required.

2. Basic and diluted earnings per share

The calculation of basic earnings per ordinary share is based on earnings of £564,000 (2018: £1,140,000), being profit after taxation for the period, and on 4,786,818 (2018: 4,876,995) shares being the weighted average number of Ordinary and 'A' Limited Voting Ordinary Shares in issue during the period 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.

Notes to the interim results - continued

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.

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.

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 2019 has been posted to shareholders today and will be available on our website at www.heavitreebrewery.co.uk.

Ends.