Heavitree Regulatory News (HVT)

30 Jul 2008 16:00



The Heavitree Brewery PLCTrood Lane

Matford

Exeter EX2 8YP

Date: 30 July 2008

Contact: Graham Crocker - Managing Director - 01392 217733

Rod Glanville - Director and Company Secretary - 01392 217733

Pascal Keane - Shore Capital - 0207 468 7995

Following a Board Meeting held today, 30 July 2008, the Directors announce the half-year results for the six months ended 30 April 2008. 

Chairman's statement

At the Annual General Meeting in April, I informed shareholders that, although I was reporting satisfactory results for the previous year, we would not be immune to the pressures facing our industry going forward. The economic squeeze has combined with these pressures to affect adversely and significantly the Company's performance for the Half Year. On 27 June 2008 the Board issued a trading statement in relation to the six month period to 30 April 2008 and announced its decision not to pay an interim dividend. Furthermore, the Board announced that it was to conduct a strategic review of its business. To aid the review Ernst and Young LLP has been appointed to advise on how to secure best value for shareholders.

RESULTS

The Company now prepares accounts in accordance with International Financial 

Reporting Standards (IFRS). Consequently, comparatives have been restated to reflect 

this change as set out in the Group's IFRS Restatement Announcement issued on 

the 22 July 2008.

Turnover for the Group has dropped against last year by 2.38 %. Due to the increased costs incurred from the management of temporary holding arrangements, an increase in the cost of building repairs and an accrual for holiday pay under new accounting standards, I have to report an operating loss for the six month period to 30 April 2008 of £130,000 (2007: profit of £784,000). The profit before taxation at the half-year is £185,000 after interest and the sale of three properties (2007: £790,000).

Heavitree Inns, our Managed House subsidiary, showed an operating loss of £99,000 against last year's profit of £148,300 for the same period.

PROPERTIES

The Heavitree Arms in Newton Abbot, The Windsor Castle in Exeter and a small unlicensed property were sold during the period, realising a book profit of £570,000.

PENSION SCHEME

We are still awaiting the final cost of securing the annuities and completing the wind up process of the Company's final salary scheme.

SHARES

Further shares were purchased for cancellation in the early part of the year at a cost of £1.9 million.

PROSPECTS

What was anticipated to be a difficult and challenging year has so far proved to be that and more. The strategic review is ongoing and is being undertaken at a time when  the Company has a strong balance sheet. The outcome will help the Board to decide on the best course of action to follow during these uncertain trading and economic times.

N H P TUCKER

Chairman

Consolidated Income Statement (unaudited)

for the six months ended 30 April 2008

		2008		Asrestated2007
	Note	£000		£000
Revenue		6,054		6,202
Change in stocks		(14)		12
Other operating income		25		37
Purchase of inventories		(2,210)		(2,246)
Staff Costs		(1,893)		(1,487)
Depreciation of property ,plant and equipment		(278)		(281)
Other operating charges		(1,814)		(1,453)
		(6,184)		(5,418)
Group operating (loss)/ profit		(130)		784
Profit on disposal of non-current assets		566		235
Group profit before finance costs and taxation		436		1,019
Finance income		4		4
Finance costs		(209)		(212)
Other finance costs-pensions		(46)		(21)
		(251)		(229)
Profit before taxation		185		790
Tax (expense)		(31)		(246)
Profit for the period		154		544
Earnings per share - basic - diluted		2.94p 2.94p		10.25p 10.19p

  Group statement of total recognised income and expense (unaudited)

for the six months ended 30 April 2008

		2008 £000		Asrestated2007 £000
Income and expense recognised directly in equity
Exchange differences on translation of foreign operations		1		2
Actuarial (losses) on defined benefit pension plans		(147)		(120)
		(146)		(118)
Tax on items taken directly to or transferred from equity		41		36
Net (expense) recognised directly in equity		(105)		(82)
Profit for the period		154		544
Total recognised income and expense for the period		49		462

Dividends

The Directors declare no dividend.

Consolidated Balance Sheet (unaudited)

at 30 April 2008

		2008 £000		As restated 2007 £000
Non-current assets
Property, plant and equipment		15,912		15,790
Financial assets		77		127
Deferred tax asset		429		653
		16,418		16,570
Current assets
Trade and other receivables		2,259		2,063
Inventories		196		154
Cash and short-term deposits		441		467
Assets held for sale		594		1,089
Total assets		19,908		20,343
Current liabilities
Trade and other payables		(2,370)		(1,954)
Financial liabilities		(8,313)		(7,527)
Income tax payable		(210)		(401)
Provisions		-		-
		(10,893)		(9,882)
Non-current liabilities
Other payables		(251)		(273)
Financial liabilities		(11)		(11)
Deferred tax liabilities		(263)		(286)
Defined benefit pension plan		(1,510)		(2,150)
		(2,035)		(2,720)
Total liabilities		(12,928)		(12,602)
Net assets		6,980		7,741
Capital and reserves
Equity share capital		264		276
Capital redemption reserve		673		661
Treasury shares		(1,227)		(1,172)
Fair value adjustments reserve		57		107
Currency translation		2		-
Retained earnings		7,211		7,869
Total equity		6,980		7,741

  Group statement of cash flows (unaudited)

for the six months ended 30 April 2008

		2008		2007
		£000		£000
Operating activities
(Loss)/profit for the period		(130)		784
Adjustments to reconcile operating profit for the period to net cash outflow from operating activities
Depreciation and impairment of property, plant and equipment		278		281
Fair value of options granted		-		3
Exchange gain on cash		-		2
Decrease/(increase) in inventories		14		(12)
(Increase) in trade and other receivables		(762)		(409)
Increase  in trade and other payables		694		66
Net pension charge		(158)		(158)
Cash generated from operations		(64)		557
Income taxes paid		(311)		(123)
Net cash (outflow)/inflow from operating activities		(375)		434
Investing activities
Interest received		4		4
Proceeds from sale of property, plant and equipment		801		289
Payments to acquire property, plant and equipment		(986)		(678)
Net cash (outflow) from investing activities		(181)		(385)
Financing activities
Interest paid		(208)		(212)
Preference dividend paid		(1)		(1)
Equity dividends paid		(370)		(369)
Consideration received by EBT on sale of shares		145		23
Consideration paid by EBT on purchase of shares		(345)		(108)
Repurchase of shares		(1,899)		-
Net cash (outflow) from financing activities		(2,678)		(667)
(Decrease) in cash and cash equivalents		(3,234)		(618)
Cash and cash equivalents at the beginning of the period		(4,638)		(6,442)
Cash and cash equivalents at the period end.		(7,872)		(7,060)

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 2007	273	664	(963)	92	1	9,368	9,435
Total  recognised income and
expense for the period	-	-	-	-	-	154	154
Transfer in respect of the
buy back of own shares	(9)	9	-	-	-	(1,899)	(1,899)
Consideration paid by
EBT on purchase of
shares	-	-	(345)	-	-	-	(345)
Consideration received
by EBT on sale of
shares	-	-	145	-	-	-	145
Gain by EBT on sale
of shares	-	-	(64)	-	-	64	-
Exchange difference
on retranslation of  net assets
of subsidiary
undertaking	-	-	-	-	1	-	1
Equity dividend  paid	-	-	-	-	-	(370)	(370)
Fair value adjustment	-	-	-	(35)	-	-	(35)
Actuarial loss on pension
scheme (net of deferred)
tax	-	-	-	-	-	(106)	(106)
	______	______	______	______	______	______	______
At 30 April 2008	264	673	(1,227)	57	2	7,211	6,980
	______	______	______	______	______	______	______

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 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') to satisfy future exercise of options under the Group's share options scheme.

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 240 of the Companies Act 1985. They have been prepared on the basis of the accounting policies that the directors anticipate will be complied with in the annual financial statements and as set out in the Group's IFRS Restatement Announcement issued on 22 July 2008, and which is available upon request. Further disclosure concerning the impact of IFRS on the financial statements of the Group can also be found in that document including the reconciliations required by IFRS 1 'First Time Adoption of International Financial Reporting Standards'. 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 30 July 2008.

2. Basic and diluted earnings per share

The calculation of basic earnings per ordinary share is based on earnings of £154,000 (2007 restated: £544,000), being profit after taxation for the period, and on 5,232,443 (2007 - 5,283,727) 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. The calculation of diluted earnings per ordinary share is based on earnings of £154,000 (2007 restated: £544,000), being profit after taxation for the period, and on 5,231,690 (2007 - 5,309,965) shares being the weighted average number of Ordinary and 'A' Limited Voting Shares in issue during the period, as diluted for the share options in issue. 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.

	30th April 2008		30th April 2007
	Revenue '000	Profit/(loss) '000	Revenue '000	Profit/(loss) '000
Leased	3,585	(31)	3,908	636
Managed	3,062	(99)	2,831	148
Intra group sales	(593)	-	(537)	-
Common Costs	-	(251)	-	(229)
Sale of non-current assets	-	566		235
	6,054	185	6,202	790

Ends. 

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