Last checked at 13 Feb 2019 17:00
The Heavitree Brewery PLC
Trood Lane
Matford
Exeter EX2 8YP
Date: 13 February 2019
Contact: Graham Crocker - Managing Director - 01392 217733
Nicola McLean - Company Secretary - 01392 217733
Patrick Castle /Anita Ghanekar - Shore Capital - 0207 408 4052
Following a Board Meeting held today, 13 February 2019, the Directors announce the preliminary statement of results for the year ended 31 October 2018.
ISIN: GB0004182720 for 'A' Limited Voting Ordinary Shares
ISIN: GB0004182506 for Ordinary Shares
Chairman's statement
Turnover for the Group has increased by £315,000 to £7,614,000 returning a Group operating profit of £1,632,000 for the year under review. This is a reduction in Group operating profit of £146,000 against the previous year. When making a comparison with the previous year, it should be noted that the Group operating profit line in 2017 had been increased by over 25% as a result of one-off transactions which included £104,000 from the sale of development land held by Heavitree Inc., £107,000 for a write back after an over provision in expense for bad debts and a further £36,000 for compensation and a repayment of legal fees following a land dispute.
Having considered these one-off transactions to the previous year before making comparisons, I am pleased with the results in this report.
Results
Group Turnover increased by £315,000 to £7,614,000. Group Operating Profit has decreased by £146,000 to £1,632,000.
Heavitree Inns remained dormant throughout the year.
Heavitree Inc. generated an operating profit of £12,000 (2017 - £104,000).
Key Performance Indicators
Group operating profit before Taxation of £1,632,000 was down 8.21% on last year.
Interest costs were covered 9.60 times.
Dividend
The Directors recommend a 6.25% increase in the final dividend to 4.25p per Ordinary and 'A' Limited Voting Ordinary Share (2017 - 4.00p) making a total for the year of 7.925p (2017-7.675p). The dividend will be paid on 18 April 2019, subject to shareholder approval at the Annual General Meeting on 10 April 2019, to those shareholders on the Register at 22 March 2019.
Sale of Property
The King of Prussia in Bovey Tracey was sold in November 2017, The Kings Arms in Strete was sold in March 2018, The Crown and Sceptre in Newton St.Cyres was sold in April 2018 together with a small block of four flats in Exeter. I reported on these at the half year. The total book profit realised on the sale of these sites was £814,000.
A house on the same site as the above-mentioned block of flats has been sold subject to contract and I hope to report further on this at the upcoming half year.
Capital Investments
Significant investments during the year include £85,000 on improvements and upgrades to the kitchen, lavatories and baby-changing facilities at The Cleave in Lustleigh, £30,000 on a new bar and installation of a central heating system at The Green Dragon in Stoke Fleming and £158,000 on part one of a refurbishment of The Church House in Stokenham.
Pension Scheme
Following the completion of the actuarial triennial valuation of the Final Salary Pension Scheme deficit that had fallen due in December 2016, a new set of correction payments were issued and approved in March 2018. These correction payments were to start at £588,000 and be subject to a 3% uplift year on year. Since the approval of this new set of correction payments three deferred members have transferred out of the scheme as detailed in note 30. Consequently, the Scheme's independent actuary has issued a replacement schedule of correction payments and this confirms that the Company is no longer required to make contributions to fund the Scheme's deficit.
The Company continues to operate the Scheme for the remaining retired members and their dependants.
Repurchase of shares
The Company did not repurchase any of its own shares during the year under review but the Directors intend to seek shareholder approval at the forthcoming Annual General Meeting for the continuing authority to do so.
Outlook
Another pleasing performance of good progress has created the platform for a further increase in the final Dividend.
At the time of writing it is hard to avoid making mention of the political uncertainty the Country is facing. Despite this, the quality of our houses and of our tenants and leaseholders who operate them and the dedicated support they receive from all of our staff at Head Office, have combined to help deliver this year's strong set of results.
N H P TUCKERChairman
13 February 2019
Group income statement
for the year ended 31 October 2018
|
Notes |
Total 2018 £000 |
Total 2017 £000 |
Revenue |
| 7,614 | 7,299 |
Other operating income |
| 279 | 384 |
Purchase of inventories |
| (3,109) | (2,968) |
Staff costs |
| (1,407) | (1,353) |
Depreciation of property, plant and equipment |
|
(235) |
(248) |
Other operating charges |
| (1,510) | (1,336) |
|
| (5,982) | (5,521) |
Group operating profit |
| 1,632 | 1,778
|
Profit on sale of property plant and equipment |
| 824 | 6
|
|
|
|
|
Group profit before finance costs and taxation |
|
2,456 |
1,784 |
Finance income |
| 5 | 7 |
Finance costs |
| (175) | (182) |
Other finance costs - pensions |
| (35) | (55) |
|
| (205) | (230) |
|
|
|
|
Profit before taxation |
| 2,251 | 1,554 |
Tax expense |
| (324) | (226) |
|
|
|
|
Profit for the year attributable to equity holders of the parent |
|
1,927 |
1,328 |
|
|
|
|
Basic earnings per share | 2 | 39.6p | 27.0p |
|
|
|
|
Diluted earnings per share | 2 | 39.6p | 27.0p |
All amounts in 2018 and 2017 relate to continuing operations.
Group statement of comprehensive income
for the year ended 31 October 2018
| 2018 £000 | 2017 £000 |
Profit for the year
| 1,927 | 1,328 |
Items that will not be reclassified to profit or loss |
|
|
Actuarial (losses)/gains on defined benefit pension plans | (248) | 428 |
Tax relating to items that will not be reclassified | 42 | (74) |
| (206) | 354 |
Items that may be reclassified to profit or loss |
|
|
Fair value adjustments | (4) | 6 |
Exchange rate differences on translation of subsidiary undertaking | (2) | - |
| (6) | 6 |
|
|
|
Other comprehensive income for the year, net of tax | 1,715 | 1,688
|
Total comprehensive income attributable to: Equity holders of the parent | 1,715 | 1,688 |
Group balance sheet
at 31 October 2018
|
|
2018 £000 |
|
2017 £000 |
Non-current assets |
|
|
|
|
Property, plant and equipment |
| 17,812 |
| 17,022 |
Investment property |
| 1,094 |
| 1,094 |
|
| 18,906 |
| 18,116 |
Financial assets |
| 47 |
| 46 |
Deferred tax asset |
| 38 |
| 221 |
|
| 18,991 |
| 18,383 |
Current assets |
|
|
|
|
Inventories |
| 10 |
| 10 |
Trade and other receivables |
| 1,292 |
| 1,696 |
Cash and cash equivalents |
| 44 |
| 56 |
|
| 1,346 |
| 1,762 |
Assets held for sale |
| 62 |
| 890 |
Total assets |
| 20,399 |
| 21,035 |
Current liabilities |
|
|
|
|
Trade and other payables |
| (1,078) |
| (871) |
Financial liabilities |
| (818) |
| (1,624) |
Income tax payable |
| (131) |
| (190) |
|
| (2,027) |
| (2,685) |
Non-current liabilities |
|
|
|
|
Other payables |
| (311) |
| (256) |
Financial liabilities |
| (6,067) |
| (6,045) |
Deferred tax liabilities |
| (300) |
| (345) |
Defined benefit pension plan deficit |
| (39) |
| (1,300) |
|
| (6,717) |
| (7,946) |
Total liabilities |
| (8,744) |
| (10,631) |
Net assets |
| 11,655 |
| 10,404 |
Capital and reserves |
|
|
|
|
Equity share capital |
| 264 |
| 264 |
Capital redemption reserve |
| 673 |
| 673 |
Treasury shares |
| (1,317) |
| (1,223) |
Fair value adjustments reserve |
| 23 |
| 27 |
Currency translation |
| 15 |
| 17 |
Retained earnings |
| 11,997 |
| 10,646 |
Total equity |
| 11,655 |
| 10,404 |
Group statement of cash flows
for the year ended 31 October 2018
|
|
2018 £000 |
|
2017 £000 |
Operating activities |
|
|
|
|
Profit for the year |
| 1,927 |
| 1,328 |
Tax expense |
| 324 |
| 151 |
Net finance costs |
| 206 |
| 231 |
Profit on disposal of non-current assets and assets held for sale |
| (824) |
| (6) |
Depreciation and impairment of property, plant and equipment |
| 235 |
| 248 |
Difference between pension contributions paid and amounts |
| 5 |
| (3) |
recognised in the income statement |
| (1,544) |
| (438) |
Decrease/(increase) in trade and other receivables |
| 284 |
| (76) |
Increase/(decrease) in trade and other payables |
| 380 |
| (170) |
|
|
|
|
|
Cash generated from operations |
| 993 |
| 1,265 |
Income taxes paid |
| (188) |
| (110) |
Interest paid |
| (176) |
| (182) |
|
|
|
|
|
Net cash flow from operating activities |
| 629 |
| 973 |
|
|
|
|
|
Investing activities |
|
|
|
|
Interest received |
| 6 |
| 6 |
Proceeds from sale of property, plant and equipment and assets held for sale |
|
1,454 |
|
193 |
Payments to acquire property, plant and equipment |
| (777) |
| (1,117) |
|
|
|
|
|
Net cash inflow/(outflow) from investing activities |
| 683 |
| (918) |
|
|
|
|
|
Financing activities |
|
|
|
|
Preference dividend paid |
| (1) |
| (1) |
Equity dividends paid |
| (373) |
| (333) |
Consideration received by EBT on sale of shares |
| 54 |
| 49 |
Consideration paid by EBT on purchase of shares Capital element of finance lease rental payments |
| (145) (68) |
| (15) (21) |
New long-term borrowings |
| - |
| -
|
|
|
|
|
|
Net cash flow from financing activities |
| (533) |
| (321) |
|
|
|
|
|
Increase/(decrease) in cash and cash equivalents |
| 779 |
| (266) |
Cash and cash equivalents at the beginning of the year |
| (1,536) |
| (1,270) |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the year end |
| (757) |
| (1,536) |
Group statement of changes in equity
for the year ended 31 October 2018
| Equity share capital £000 | Capital redemption reserve £000 |
Treasury shares £000 | Fair value adjustment reserve £000 |
Currency translation £000 | Cash flow hedge reserve £000 |
Retained earnings £000 |
Total equity £000 |
At 1 November 2016 | 264 | 673 | (1,254) | 21 | 17 | - | 9,323 | 9,044 |
|
|
|
|
|
|
|
|
|
Profit for the year | - | - | - | - | - | - | 1,328 | 1,328 |
Other comprehensive |
|
|
|
|
|
|
|
|
income for the year net of income tax | - | - | - | 6 | - | - | 354 | 360 |
Total comprehensive |
|
|
|
|
|
|
|
|
income for the year | - | - | - | 6 | - | - | 1,682 | 1,688 |
Consideration received |
|
|
|
|
|
|
|
|
by EBT on sale of shares |
- |
- |
49 |
- |
- |
- |
- |
49 |
Consideration paid by |
|
|
|
|
|
|
|
|
EBT on purchase of shares | - | - | (15) | - | - | - | - | (15) |
Loss by EBT on sale |
|
|
|
|
|
|
|
|
of shares | - | - | (3) | - | - | - | 3 | - |
Equity dividends paid | - | - | - | - | - | - | (362) | (362) |
At 31 October 2017 | 264 | 673 | (1,223) | 27 | 17 | - | 10,646 | 10,404 |
| Equity share capital £000 | Capital redemption reserve £000 |
Treasury shares £000 | Fair value adjustment reserve £000 |
Currency translation £000 | Cash flow hedge reserve £000 |
Retained earnings £000 |
Total equity £000 |
At 1 November 2017 | 264 | 673 | (1,223) | 27 | 17 | - | 10,646 | 10,404 |
|
|
|
|
|
|
|
|
|
Profit for the year | - | - | - | - | - | - | 1,927 | 1,927 |
Other comprehensive |
|
|
|
|
|
|
|
|
income for the year net of income tax | - | - | - | (4) | (2) | - | (206) | (212) |
Total comprehensive |
|
|
|
|
|
|
|
|
income for the year | - | - | - | (4) | (2) | - | 1,721 | 1,715 |
Consideration received |
|
|
|
|
|
|
|
|
by EBT on sale of shares |
- |
- |
54 |
- |
- |
- |
- |
54 |
Consideration paid by |
|
|
|
|
|
|
|
|
EBT on purchase of shares | - | - | (145) | - | - | - | - | (145) |
Gain by EBT on sale |
|
|
|
|
|
|
|
|
of shares | - | - | (3) | - | - | - | 3 | - |
Equity dividends paid | - | - | - | - | - | - | (373) | (373) |
At 31 October 2018 | 264 | 673 | (1,317) | 23 | 15 | - | 11,997 | 11,655 |
Equity share capital
The balance classified as share capital includes the total net proceeds (nominal amount only) arising or deemed to arise on the issue of the Company's equity share capital, comprising Ordinary Shares of 5p each and 'A' Limited Voting Ordinary Shares of 5p each.
Capital redemption reserve
The capital redemption reserve arises on the re-purchase and cancellation by the Company of 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 Benefits Trust and Employee Share Option Scheme ('EBT').
At 31 October 2018 the Group held 146,082 Ordinary Shares and 262,885 'A' Limited Voting Ordinary Shares (2017: 142,082 Ordinary Shares and 232,643 'A' Limited Voting Ordinary Shares) of its own shares. During the year there were purchases of 4,000 Ordinary Shares and 55,352 'A 'Limited Voting ordinary Shares and sales of 25,110 'A; Limited Voting Ordinary Shares.
Fair value adjustments reserve
The fair value adjustments reserve is used to record differences in the market value of the available-for-sale investment year on year.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries.
Notes to the preliminary announcement
1. Basis of preparation
These figures do not constitute full accounts within the meaning of Section 396 of the Companies Act 2006. They have been extracted from the statutory financial statements for the year ended 31 October 2018. The statutory financial statements have not yet been delivered to the Registrar of Companies.
The financial information in this statement has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the European Union. The accounting policies have been consistently applied and are described in full in the statutory financial statements for the year ended 31 October 2018, which are expected to be mailed to shareholders on 7 March 2019. The financial statements will also be available on the Group's website www.heavitreebrewery.co.uk.
The Directors are of the opinion that the Group has adequate resources to continue in operational existence for the foreseeable future and continue to adopt the going concern basis in preparing the financial statements.
2. Earnings per share
Basic earnings per share amounts are calculated by dividing profit for the year attributable to ordinary equity holders of the parent by the weighted average number of Ordinary shares and 'A' Limited Voting Ordinary shares outstanding during the year.
The following reflects the income and shares data used in the basic and diluted earnings per share
Computation:
| 2018 £000 | 2017 £000 |
Profit for the year | 1,927 | 1,328 |
|
|
|
| 2018 No. (000) | 2017 No. (000) |
Basic weighted average number of shares (excluding treasury shares) | 4,866 | 4,877 |
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of completion of these financial statements.
3. Dividends paid and proposed
| 2018 £000 | 2017 £000 |
Declared and paid during the year: |
|
|
Equity dividends on ordinary shares: |
|
|
Final dividend for 2017: 4.00p (2016: 3.675p) | 211 | 198 |
First dividend for 2018: 3.675p (2017: 3.675p) | 198 | 194 |
Less dividend on shares held within employee share schemes | (36) | (30) |
|
|
|
Dividends paid | 373 | 362 |
|
|
|
Proposed for approval at AGM |
|
|
(not recognised as a liability as at 31 October) |
|
|
|
|
|
Final dividend for 2018 4.25p (2017: 4.00p) Cumulative preference dividends | 224 1 | 211 1 |
4. Segment information
Primary reporting format - business segments
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, under tied tenancies.
Secondary reporting format - geographical segments
The following tables present revenue, expenditure and certain asset information regarding the Group's geographical segments for the years ended 31 October 2018 and 2017. Revenue is based on the geographical location of customers and assets are based on the geographical location of the asset.
Segment information |
|
|
|
Year ended 31 October 2018 | UK £000 | United States £000 | Total £000 |
Revenue |
|
|
|
Sales to external customers | 7,614 | - | 7,614 |
|
|
|
|
|
|
|
|
Other segment information |
|
|
|
Segment assets | 20,542 | 43 | 20,585
|
Total Assets | 20,542 | 43 | 20,585 |
Capital expenditure |
|
|
|
Property, plant and equipment | 839 | - | 839 |
|
|
|
|
Year ended 31 October 2017 | UK £000 | United States £000 | Total £000 |
Revenue |
|
|
|
Sales to external customers | 7,299 | - | 7,299 |
|
|
|
|
Other segment information |
|
|
|
Segment assets |
|
|
|
| 20,885 | 150 | 21,035
|
Total Assets | 20,885 | 150 | 21,035 |
Capital expenditure |
|
|
|
Property, plant and equipment | 1,117 | - | 1,117 |
5. General information
The 2018 Annual Report and Financial Statements will be published and posted to shareholders on 7th March 2019. Further copies may be obtained by contacting the Company Secretary at The Heavitree Brewery PLC, Trood Lane, Matford, Exeter EX2 8YP. The 2018 Annual Report and Financial Statements will also be available on the Company's website at http://www.heavitreebrewery.co.uk/financial/
The Annual General Meeting will be held at the Registered Office on 10 April 2019 at 11.30am.
Ends.