Last checked at 12 Feb 2013 16:00
The Heavitree Brewery PLC
Trood Lane
Matford
Exeter EX2 8YP
Date: 12 February 2013
Contact: Graham Crocker - Managing Director - 01392 217733
Nicola McLean - Company Secretary - 01392 217733
Pascal Keane - Shore Capital - 0207 408 4090
Following a Board Meeting held today, 12 February 2013, the Directors announce the preliminary statement of results for the year ended 31 October 2012.
ISIN: GB0004182720 for 'A' Limited Voting Ordinary Shares
ISIN: GB0004182506 for Ordinary Shares
Chairman's statement
A similar performance to last year has been achieved. Last year I reported that it had been a satisfactory performance bearing in mind the economic environment in which we were trading. That environment has changed very little and, together with the adverse weather conditions during the summer season and the floods experienced towards the year end, public houses have had a lot to contend with once again. Despite these factors we have again returned a steady set of results.
Results
Turnover for the Group decreased from last year by £84,000 (1.14%) to £7,268,000 and generated a Group operating profit of £1,245,000 (2011 - £1,408,000) after consolidation adjustments. Gross margins and rental income held up extremely well; but heavy repair costs in the year, combined with additional costs directly attributable to dealing with a small number of problematic houses, account for the reduced profitability. Group profit before taxation has been further impacted by an exceptional impairment cost of £244,000 arising on the transfer of non-current assets to assets held for sale.
Heavitree Inns remained dormant throughout the year.
Heavitree Inc. generated an operating profit of £10,000 (2011 - £9,000).
Key Performance Indicators
Adjusted operating profit before taxation of £1,245,000 was down 11.57% on last year. Interest costs were covered 8.76 times.
Details of the key performance indicators used by the Board to measure the performance of the Group's business can be found in the Directors' report on page 7.
Dividend
The Directors recommend a final dividend of 3.5p per Ordinary and 'A' Limited Voting Ordinary Share (2011 - 3.5p) making a total for the year of 7p, which is unchanged from last year. The dividend will be paid on 19 April 2013, subject to shareholder approval at the Annual General Meeting on 12 April 2013, to shareholders on the Register at 22 March 2013.
Capital Investments
At the time of writing the conversion into six flats of the old St.Loyes pub in Exeter is nearing completion. These flats will be marketed for sale in the coming months.
Phase one work has started at The Maltsters Arms site in Clyst St.Mary converting the old skittle alley into a detached house.
The upgrade of The Heart of Oak in Pinhoe was completed in December 2012.
The extension of the trading area at The Half Moon in Clyst St.Mary was also completed in December 2012.
Pension Scheme
The Company continues to meet its funding obligations to its closed final salary Pension Scheme.
Following completion, in April 2012, of the triennial valuation of the Scheme as at 1 January 2011, a continuing annualised deficit correction payment was agreed, with the last payment now being due in February 2020.
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.
Personnel
Rod Glanville retired as Company Secretary and from the Board on 19 June 2012, having joined the Company in 1981. At last year's Annual General Meeting, on behalf of the Board of Directors and the shareholders, I thanked Rod for his years of invaluable service to the Company and wished him a long and happy retirement.
Nicky McLean, I am delighted to report, has become Company Secretary having been Assistant to Rod before his retirement.
Outlook
The Government has announced that it is now minded to introduce a statutory Code of Practice for Public House companies and has decided to commence a consultation period to be completed by spring this year. There is no suggestion that the Beer Tie itself will be abolished, in fact quite the reverse, but the Government's proposals will seek to enshrine the principle that 'a tied licensee should be no worse off than a free of tie licensee'. Although it is currently considered this statutory Code will only apply to companies with more than five hundred tied tenanted and/or leased houses, it is inevitable that the effects will be felt by all companies in the sector. We have worked to our own voluntary code since December 2010, and have always taken great pride in the positive relationship that has always existed between the Company and our Tenants.
The Government has also chosen not to act to remove the beer duty escalator about which I spoke at last year's Annual General Meeting. As a result we can only anticipate further above-inflation duty increases.
Despite the expectation that trading conditions will remain difficult, perhaps for years to come, the key to our future success will continue to be the result of the strong relationships between Head Office and our Landlords and Landladies.
N H P TUCKERChairman
Group income statement
for the year ended 31 October 2012
|
Notes |
Total 2012 £000 |
Total 2011 £000 |
Revenue |
| 7,268 | 7,352 |
Change in stocks |
| - | - |
Other operating income |
| 144 | 113 |
Purchase of inventories |
| (3,097) | (3,134) |
Staff costs |
| (1,211) | (1,194) |
Depreciation of property, plant and equipment |
|
(293) |
(295) |
Other operating charges |
| (1,566) | (1,434) |
|
| (6,023) | (5,944) |
Group operating profit |
| 1,245 | 1,408 |
Exceptional items |
| (121) | 10 |
Group profit before finance costs and taxation |
|
1,124 |
1,418 |
Finance income |
| 26 | 33 |
Finance costs |
| (168) | (138) |
Other finance costs - pensions |
| (55) | (81) |
|
| (197) | (186) |
|
|
|
|
Profit before taxation |
| 927 | 1,232 |
Tax expense |
| (296) | (389) |
|
|
|
|
Profit for the year attributable to equity holders of the parent |
|
631 |
843 |
|
|
|
|
Basic earnings per share | 2 | 12.5p | 16.4p |
|
|
|
|
Diluted earnings per share | 2 | 12.5p | 16.4p |
All amounts in 2012 and 2011 relate to continuing operations.
Group statement of comprehensive income
for the year ended 31 October 2012
2012 £000 | 2011 £000 | |
Profit for the year
| 631 | 843 |
Other comprehensive income | ||
Actuarial (losses)/gains on defined benefit pension plans | (868) | 130 |
Cash flow hedges | (75) | - |
Tax credit on items taken directly to or transferred from equity | 226 | (33) |
Fair value adjustment | (26) | 4 |
(743) | 101 | |
Total comprehensive income for the year
Total comprehensive income attributable to: Equity holders of the parent | (112)
(112) | 944
944 |
Group balance sheet
at 31 October 2012
|
|
2012 £000 |
|
2011 £000 |
Non-current assets |
| |||
Property, plant and equipment |
| 14,833 | 15,225 | |
Financial assets |
| 28 | 54 | |
Deferred tax asset |
| 417 | 325 | |
|
| 15,278 | 15,604 | |
Current assets |
| |||
Inventories |
| 10 | 10 | |
Trade and other receivables |
| 1,362 | 1,262 | |
Cash and cash equivalents |
| 78 | 86 | |
| 1,450 | 1,358 | ||
Assets held for sale |
| 525 | - | |
Total assets |
| 17,253 | 16,962 | |
Current liabilities |
| |||
Trade and other payables |
| (970) | (1,095) | |
Financial liabilities |
| (1,454) | (5,062) | |
Income tax payable |
| (102) | (144) | |
| ||||
| (2,526) | (6,301) | ||
Non-current liabilities |
| |||
Other payables | (292) | (327) | ||
Financial liabilities |
| (4,261) | (11) | |
Deferred tax liabilities |
| (220) | (261) | |
Defined benefit pension plan deficit |
| (1,662) | (1,246) | |
| (6,435) | (1,845) | ||
Total liabilities |
| (8,961) | (8,146) | |
Net assets |
| 8,292 | 8,816 | |
|
| |||
Capital and reserves |
| |||
Equity share capital |
| 264 | 264 | |
Capital redemption reserve |
| 673 | 673 | |
Treasury shares |
| (875) | (840) | |
Fair value adjustments reserve |
| 8 | 34 | |
Cash flow hedging reserve |
| (57) | - | |
Currency translation |
| 6 | 6 | |
Retained earnings |
| 8,273 | 8,679 | |
Total equity |
| 8,292 | 8,816 |
Group statement of cash flows
for the year ended 31 October 2012
Notes |
2012 £000 |
|
2011 £000 | |
Operating activities | ||||
Profit for the year | 631 | 843 | ||
Tax expense | 296 | 389 | ||
Net finance costs | 197 | 186 | ||
Profit on disposal of non current assets and assets held for sale | (101) | (10) | ||
Depreciation and impairment of property, plant and equipment | 537 | 295 | ||
Difference between pension contributions paid and amounts | ||||
recognised in the income statement | (507) | (507) | ||
(Increase)/decrease in trade and other receivables | (100) | 182 | ||
Increase in trade and other payables | 125 | 39 | ||
Cash generated from operations | 1,078 | 1,417 | ||
Income taxes paid | (246) | (349) | ||
Interest Paid | (168) | (138) | ||
Net cash flow from operating activities | 664 | 930 | ||
Investing activities | ||||
Interest received | 26 | 33 | ||
Proceeds from sale of property, plant and equipment and assets held for sale |
534 |
114 | ||
Payments to acquire property, plant and equipment | (1,386) | (1,199) | ||
Net cash outflow from investing activities | (826) | (1,052) | ||
Financing activities | ||||
Preference dividend paid | (1) | (1) | ||
Equity dividends paid | 3 | (354) | (360) | |
Consideration received by EBT on sale of shares | 54 | 43 | ||
Consideration paid by EBT on purchase of shares | (112) | (194) | ||
New long-term borrowings | 250 | - | ||
Net cash flow from financing activities | (163) | (512) | ||
Decrease in cash and cash equivalents | (325) | (634) | ||
Cash and cash equivalents at the beginning of the year | (976) | (342) | ||
Cash and cash equivalents at the year end | (1,301) | (976) |
Group statement of changes in equity
for the year ended 31 October 2012
Equity share capital £000 | Capital redemption reserve £000 |
Treasury shares £000 | Fair value adjustment reserve £000 |
Currency translation £000 |
Retained earnings £000 |
Total equity £000 | |
At 1 November 2010 | 264 | 673 | (826) | 30 | 6 | 8,236 | 8,383 |
Profit for the year | - | - | - | - | - | 843 | 843 |
Other comprehensive | |||||||
income for the year net of income tax | - | - | - | 4 | - | 97 | 101 |
Total comprehensive | |||||||
income for the year | - | - | - | 4 | - | 940 | 944 |
Consideration received | |||||||
by EBT on sale of shares |
- |
- |
43 |
- |
- |
- |
43 |
Consideration paid by
| |||||||
EBT on purchase of shares | - | - | (194) | - | - | - | (194) |
Loss by EBT on sale | |||||||
of shares | - | - | 137 | - | - | (137) | - |
Equity dividends paid | - | - | - | - | - | (360) | (360) |
At 31 October 2011 | 264 | 673 | (840) | 34 | 6 | 8,679 | 8,816 |
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 2011 | 264 | 673 | (840) | 34 | 6 | - | 8,679 | 8,816 |
Profit for the year | - | - | - | - | - | - | 631 | 631 |
Other comprehensive | ||||||||
income for the year net of income tax | - | - | - | (26) | - | (57) | (660) | (743) |
Total comprehensive | ||||||||
income for the year | - | - | - | (26) | - | (57) | (29) | (112) |
Consideration received | ||||||||
by EBT on sale of shares |
- |
- |
54 |
- |
- |
- |
- |
54 |
Consideration paid by | ||||||||
EBT on purchase of shares | - | - | (112) | - | - | - | - | (112) |
Loss by EBT on sale | ||||||||
of shares | - | - | 23 | - | - | - | (23) | - |
Equity dividends paid | - | - | - | - | - | - | (354) | (354) |
At 31 October 2012 | 264 | 673 | (875) | 8 | 6 | (57) | 8,273 | 8,292 |
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 represents 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 2012 the Group held 82,198 Ordinary Shares and 156,866 'A' Limited Voting Ordinary Shares (2011: 68,174 Ordinary Shares and 146,641 'A' Limited Voting Ordinary Shares) of its own shares at an average cost of £3.65 (2011: £3.90). The market value of these shares as at 31 October 2012 was £579,385 (2010: £478,187).
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.
Cash flow hedging reserve
The cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in fair value of the hedging instruments that are recognised and accumulated under the heading of cash flow hedging reserve will be re-classified to profit or loss only when the hedged transaction affects the profit or loss.
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 2012. The statutory financial statements have not yet been delivered to the Registrar of Companies.
The financial information is 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 2012, which are expected to be mailed to shareholders on 7 March 2013. 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:
2012 £000 | 2011 £000 | |
Profit for the year | 631 | 843 |
2012 No. (000) | 2011 No. (000) | |
Basic weighted average number of shares (excluding treasury shares) | 5,061 | 5,129 |
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
2012 £000 | 2011 £000 | |
Declared and paid during the year: | ||
Equity dividends on ordinary shares: | ||
Final dividend for 2011: 3.5p (2010: 3.5p) | 185 | 185 |
First dividend for 2012: 3.5p (2011: 3.5p) | 185 | 185 |
Less dividend on shares held within employee share schemes | (16) | (10) |
Dividends paid | 354 | 360 |
Proposed for approval at AGM | ||
(not recognised as a liability as at 31 October) | ||
Final dividend for 2012: 3.5p (2011: 3.5p) Cumulative preference dividends | 180 1 | 180 1
|
4. Segment information
Primary reporting format - business segments
During the year the Group operated in one business segment - leased estate.
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 2012 and 2011. 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 2012 | UK £000 | United States £000 | Total £000 |
Revenue | |||
Sales to external customers | 7,268 | - | 7,268 |
Other segment information | |||
Segment assets | 17,196 | 57 | 17,253
|
Total Assets | 17,196 | 57 | 17,253 |
Capital expenditure | |||
Property, plant and equipment | 1,103 | - | 1,103 |
Year ended 31 October 2011 | UK £000 | United States £000 | Total £000 |
Revenue | |||
Sales to external customers | 7,352 | - | 7,352 |
Other segment information | |||
Segment assets | |||
16,915 | 47 | 16,962
| |
Total Assets | 16,915 | 47 | 16,962 |
Capital expenditure | |||
Property, plant and equipment | 1,534 | 20 | 1,554 |
5. General information
The 2012 Annual Report and Financial Statements will be published and posted to shareholders on 7 March 2013. Further copies may be obtained by contacting the Company Secretary at The Heavitree Brewery PLC, Trood Lane, Matford, Exeter EX2 8YP. The 2012 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 12 April 2013 at 11.30am.
.
Ends.