Heavitree Regulatory News (HVT)

29 Jun 2007 15:00

Heavitree Brewery PLC29 June 2007 The Heavitree Brewery PLCTrood LaneMatfordExeter EX2 8YP Date: 29 June 2007 Contact: Graham Crocker - Managing Director - 01392 217733 Rod Glanville - Director and Company Secretary - 01392 217733 Alex Borrelli - Shore Capital - 0207 468 7932 Following a Board Meeting held today, 29 June 2007, the Directors announce thehalf-year results for the six months ended 30 April 2007. Chairman's statement Results Turnover has slightly increased on last year giving an operating profit of£790,000 which reflects a 53.1% increase. Excluding FRS 17 operational chargeadjustments a 21.7% increase in operating profit can still be reported. Theprofit before taxation for the half-year is £796,000. This includes the profiton the sale of a house and compares to last year's profit before taxation of£1,137,000 (restated) which included the windfall profit from the sale of ourshares in George Gale and Company Limited. A like-for-like comparison, excludingprofits on sales of properties and fixed asset investments, shows a satisfactoryimprovement of £266,000. The Company continues to perform well thanks to growth in our Managed HouseSubsidiary, improved margins and good controls in this period. Board restructure It was reported to the Stock Exchange on 18 April 2007 that my father, BillTucker, had decided to give up the Chairmanship of this Company with effect from1 May 2007. This has in turn, led to a restructuring of the Board with myselfassuming the position of Chairman, Graham Crocker becoming Managing Director andRod Glanville becoming Company Secretary. My father became Chairman in November 1974 following the retirement of hisfather. During his 33 years in the Chair, he has overseen the continuedindependence of this Company in an ever changing market. His policy ofredemption of shares has seen 21.7% of the Ordinary issued shares and 37.6% ofthe 'A' Ordinary issued shares being cancelled at an average cost per share of£2.17. This equates to 32.3% of the ordinary share capital. This successfulpolicy has returned great value to shareholders and he leaves the Chair with theCompany in good health. I am delighted to be able to report that he has agreedto remain on the Board as a Non-executive Director. Share buy-backs In April, and in keeping with the Company's policy of being able to buy-back itsown shares, 45,000 'A' Limited Voting Ordinary Shares were bought at a price of£11.00 per share and cancelled. Properties The Eagle Tavern in Exeter was sold giving a pre-taxation profit of £230,000. Pension scheme As reported in previous statements, our final salary pension scheme is closedand now in the process of being wound up. The Company still awaits the finalvaluation of the deficit from the scheme's actuary. I hope to report further onthis matter at the year end. Accounting treatment for share based payment FRS 20 (Relating to the accounting treatment for share based payments) havingtaken effect for accounting periods commencing on or after 1 January 2006 hasbeen implemented in the period. The Group has recognised a charge of £3,000 inthese accounts relating to share options issued on or after 2 November 2002.The comparable accounts have been adjusted by way of a prior year adjustment. Dividend The Directors are declaring an increased interim dividend of 4.5p per Ordinaryand 'A' Limited Voting Ordinary Share. This reflects a 12.5% increase of 0.5pand the dividend will be paid on 28 July 2007 to shareholders on the register at13 July 2007. Prospects The imminent Smoking Ban has given further focus on the policy of improving thequality and style of our estate. As already reported, The Eagle Tavern was soldin January and I can report that contracts have been exchanged on the sale ofThe Royal Standard in Shaldon and Judge Jefferies in Exeter since the end of thehalf-year. These further sales should realise a pre-taxation profit ofapproximately £795,000. We look forward to a further satisfactory performance for the year as a whole. N H P TUCKERChairman Group profit and loss accountfor the six months ended 30 April 2007 As restated 2007 2006 Note £000 £000 Turnover 6,202 6,136 Operating profit 790 516Profit on sale of tangible fixed assets 235 -Profit on disposal of fixed asset investments - 842 Profit on ordinary activities before interestand taxation 1,025 1,358Other interest receivable 4 4Interest payable (212) (183)Other finance charges - FRS 17 (21) (42) Profit on ordinary activities before taxation 796 1,137Taxation on profit on ordinary activities (250) (242) Profit attributable to shareholders 546 895 Basic earnings per share 3 10.3p 16.7p Diluted earnings per share 3 10.3p 16.6p All revenues and costs relate to continuing operations. Group statement of total recognised gains and lossesfor the six months ended 30 April 2007 As restated 2007 2006 £000 £000 Profit attributable to shareholders 546 895Exchange difference on retranslation of subsidiary 2 1Actuarial loss on pension scheme (120) (74)Deferred tax relating to actuarial loss on pension scheme 36 22 Total recognised gains and losses relating to period and since 464 844last annual report Group statement of movement on shareholders' fundsfor the six months ended 30 April 2007 2007 2006 Note £000 £000 At 1 November as previously reported 7,598 6,581Prior year adjustment - FRS 21 - 317Prior year adjustment - FRS 25 - (12) At 1 November as restated 7,598 6,886Total recognised gains and losses relating to the period 464 844Dividends (370) (319)Consideration received by EBT on sale of shares 518 63Consideration paid by EBT on purchase of shares (108) (605)Reserve arising from the fair value of options granted - FRS 20 2 3 3Buy-back of own shares (495) - At 30 April 7,610 6,872 Dividends The Directors declare an interim dividend of 4.5p per share (2006 - 4.0p) on theOrdinary and 'A' Limited Voting Ordinary Shares. This dividend will be paid on28 July 2007 to shareholders on the register at 13 July 2007. Group balance sheetAt 30 April 2007 As restated 2007 2006 £000 £000Fixed assetsTangible assets 16,912 16,503Investments 20 20 16,932 16,523 Current assetsStocks 154 168Debtors 1,926 1,664Cash at bank and in hand 467 647 2,547 2,479Creditors: amount falling due within one year (9,818) (9,805) Net current liabilities (7,271) (7,326) Total assets less current liabilities 9,661 9,197 Creditors: amount falling due after more than one year (284) (288) Provisions for liabilities and chargesDeferred taxation (262) (283) Net assets excluding pension liability 9,115 8,626Pension liability (1,505) (1,754) 7,610 6,872 Capital and reservesCalled up share capital 276 279Capital redemption reserve 661 658Other reserves 69 73Own shares reserve (1,172) (1,306)Profit and loss account 7,776 7,168 Total shareholders' funds - equity 7,610 6,872 Group statement of cash flowsfor the six months ended 30 April 2007 2007 2006 Note £000 £000 Net cash flow from operating activities 4 557 1,496 Returns on investments and servicing of financeInterest paid (212) (225)Interest received 4 4Preference dividend paid (1) (1) Net cash outflow from returns on investmentsand servicing of finance (209) (222) TaxationCorporation tax paid (123) (186) Capital expenditure and financial investmentPayments to acquire tangible fixed assets (678) (975)Receipts from sales of tangible fixed assets 289 -Receipts from sale of fixed assets investments - 1,017 (389) 42 Equity dividends paid (369) (318) FinancingConsideration received by EBT on sale of shares 23 63Consideration paid by EBT on purchase of shares (108) (605) (85) (542) (Decrease)/ Increase in cash (618) 270 Reconciliation of net cash flow to movement in net debtfor the six months ended 30 April 2007 2007 2006 £000 £000 (Decrease)/Increase in cash (618) 270 Change in net debt arising from cash flows being movement in net (618) 270debtNet debt at beginning of period (6,442) (6,546) Net debt at end of period (7,060) (6,276) Notes to the interim results 1 These figures for the six months ended 30 April 2007 are unaudited. 2 The accounting policies are consistent with the previous year except for the adoption of Financial Reporting Standard No 20 'Share Based Payment'. The Group is required to adopt FRS 20 'Share Based Payment' for the first timefor accounting periods commencing on or after 1 January 2006. FRS 20 requiresthe Group to recognise an expense in respect of the granting of options overshares to employees and directors. This expense, which is calculated byreference to the fair value of the options granted, is recognised on a straightline basis over the performance period based upon the Group's estimate ofoptions that will eventually vest. The adoption of this standard has no overalleffect on the Group's retained reserves. The adoption of FRS 20 has had noeffect on the Group's cash flows. Management have used a binomial option pricing model to estimate the value ofthe options granted in the current and prior periods. The key input to themodel was the assumed share price volatility which management estimate to beapproximately 17% based upon the Group's historic share price volatility. Theexpected option life used to estimate the fair value of the options is 3 yearsfrom the date of grant. Comparative figures for the 6 months ended 30 April 2006 have been restated toapply the provisions of FRS 20, increasing expenses and consequently decreasingoperating profits for that period as shown below: 2006 £000Operating profit as previously reported 519FRS 20 share option charge (3)Operating profit as restated 516 3 Basic and diluted earnings per share The calculation of basic earnings per ordinary share is based on earnings of£546,000 (2006 restated: £895,000), being profit after taxation for the period,and on 5,283,727 (2006 - 5,352,674) shares being the weighted average number ofOrdinary and 'A' Limited Voting Ordinary Shares in issue during the year afterexcluding the shares owned by The Heavitree Brewery PLC Employee Benefits Trustand those shares under option pursuant to the Employee Share Option Scheme. The calculation of diluted earnings per ordinary share is based on earnings of£546,000 (2006 restated: £895,000), being profit after taxation for the period,and on 5,309,965 (2006 - 5,377,479) shares being the weighted average number ofOrdinary and 'A' Limited Voting Shares in issue during the period, as dilutedfor 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 790 516Depreciation 362 308(Increase) in stocks (12) (19)(Increase) in operating debtors (433) (365)Increase in operating creditors 3 974Net pension change (158) 78Fair value of options granted 3 3Exchange gain on cash 2 1 Net cash inflow from continuing operating activities 557 1,496 Ends. 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