Last checked at 14 Feb 2017 16:00
The Heavitree Brewery PLC
Trood Lane
Matford
Exeter EX2 8YP
Date: 14 February 2017
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, 14 February 2017, the Directors announce the preliminary statement of results for the year ended 31 October 2016.
ISIN: GB0004182720 for 'A' Limited Voting Ordinary Shares
ISIN: GB0004182506 for Ordinary Shares
Chairman's statement
Operating profit for the year under review has increased by 0.56% (£8,000) after a 1.03% (£73,000) increase in turnover on the previous year. There was an impairment cost of £163,000 relating to the Pen and Quill, and this was further to the £47,000 impairment for the same house which I reported last year.
Results
Group Turnover increased by £73,000 to £7,155,000. Group Operating Profit increased by £8,000 to £1,420,000.
Heavitree Inns remained dormant throughout the year.
Heavitree Inc. generated an operating loss of £16,000 (2015 - loss of £13,000).
Key Performance Indicators
Adjusted Operating Profit before Taxation of £1,420,000 was up 0.56% on last year.
Interest costs were covered 9.72 times.
Dividend
The Directors recommend a 2.04% increase in the final dividend to 3.75p per Ordinary and 'A' Limited Voting Ordinary Share (2015 - 3.675p) making a total for the year of 7.425p. The dividend will be paid on 21 April 2017, subject to shareholder approval at the Annual General Meeting on 13 April 2017, to those shareholders on the Register at 24 March 2017.
The Directors decision to recommend an increase in the dividend reflects another steady performance for the Company. Also, it is an opportunity to return some capital to shareholders following the disposals of non-core houses during the year.
Sale of Property
I reported last year that the Hole in the Wall and the Exeter Inn, both in Dawlish, were being marketed for sale. These properties were sold in the year under review realising a book profit of £28,000 and £171,000 respectively. We also sold the Carpenters Arms in Ilsington, realising a profit of £278,000, and one of the three newly built houses on the old Country House Inn site in Exeter, which realised a profit of £93,000. The Pen and Quill in Taunton and the Bell Inn in Cullompton are currently being marketed for sale.
Capital Investments
A redevelopment of the Dolphin in St. Marychurch and significant refurbishments of the Marshals in Barnstaple and the Atmospheric Railway in Starcross were undertaken during the year, although the latter was not completed until soon after the year under review closed. These were the major capital works carried out during the year and all three houses are trading well after reopening. Many further smaller investments were carried out across different houses in upgrades to kitchens, lavatories or cellars, new patio areas and the normal annual programme of external decorations and changes to signage. The redevelopment of the Dartmoor Halfway in Bickington is well under way and it is hoped that this exciting new pub will be opened in April of this year.
Website
At the time of writing, our new website is having the finishing touches added to it before it goes live. Designed by AB in Exeter, the new site and our improved web presence should help in attracting strong operators to our business.
Pension Scheme
The Company continues to meet its funding obligations to its closed final salary Pension Scheme. The next triennial valuation fell due on 1 January 2017 and is anticipated to be completed in early 2018.
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
Sadly, the year was tainted by the very sad loss of Geoff Evans who died in September 2016. Geoff retired from the Company in April 2001 having joined in April 1968. He was a knowledgeable, well-respected member of our team, much liked by his colleagues from this Office and in particular, the many successful tenants who were chosen by him to operate one of our houses. His cheerful demeanour was infectious, even when he was given the unenviable task of showing the present Chairman the ropes when he first joined the Company. His involvement in the trade and with Devon County Cricket meant that he touched the lives of many and he will be sorely missed.
Outlook
Our pubs and their operators and our staff at Head Office have again combined to produce a good result for the Company against a backdrop of all sorts of peculiarities in our ever-changing world. The standards of presentation and operation in our houses remains very high and, together with the income streams generated from the reopening of newly refurbished houses, this should stand us in good stead for the coming year.
N H P TUCKERChairman
14 February 2017
Group income statement
for the year ended 31 October 2016
|
Notes |
Total 2016 £000 |
Total 2015 £000 |
Revenue |
| 7,155 | 7,082 |
Change in stocks |
| - | - |
Other operating income |
| 241 | 229 |
Purchase of inventories |
| (2,955) | (2,986) |
Staff costs |
| (1,301) | (1,172) |
Depreciation of property, plant and equipment |
|
(208) |
(218) |
Other operating charges |
| (1,512) | (1,523) |
|
| (5,735) | (5,670) |
Group operating profit |
| 1,420 | 1,412 |
Profit on sale of property plant and equipment |
| 585 | 5
|
Movements in valuation of estate and related assets |
| (163) | (47) |
Group profit before finance costs and taxation |
|
1,842 |
1,370 |
Finance income |
| 6 | 8 |
Finance costs |
| (152) | (170) |
Other finance costs - pensions |
| (43) | (35) |
|
| (189) | (197) |
|
|
|
|
Profit before taxation |
| 1,653 | 1,173 |
Tax expense |
| (288) | (258) |
|
|
|
|
Profit for the year attributable to equity holders of the parent |
|
1,365 |
915 |
|
|
|
|
Basic earnings per share | 2 | 28.0p | 18.8p |
|
|
|
|
Diluted earnings per share | 2 | 28.0p | 18.8p |
All amounts in 2016 and 2015 relate to continuing operations.
Group statement of comprehensive income
for the year ended 31 October 2016
| 2016 £000 | 2015 £000 |
Profit for the year
| 1,365 | 915 |
Items that will not be reclassified to profit or loss |
|
|
Actuarial losses on defined benefit pension plans | (1,195) | (740) |
Tax relating to items that will not be reclassified | 203 | 147 |
| (992) | (593) |
Items that may be reclassified to profit or loss |
|
|
Cash flow hedges | - | 24 |
Fair value adjustments | 7 | (2) |
Exchange rate differences on translation of subsidiary undertaking | 10 | - |
Tax relating to items that may be reclassified | - | (4) |
| 17 | 18 |
|
|
|
Other comprehensive income for the year, net of tax | 390 | 340 |
Total comprehensive income attributable to: Equity holders of parent | 390 | 340 |
Group balance sheet
at 31 October 2016
|
|
2016 £000 |
|
2015 £000 |
Non-current assets |
|
|
|
|
Property, plant and equipment |
| 16,700 |
| 16,779 |
Investment property |
| 1,312 |
| 463 |
|
| 18,012 |
| 17,242 |
Financial assets |
| 40 |
| 34 |
Deferred tax asset |
| 359 |
| 282 |
|
| 18,411 |
| 17,558 |
Current assets |
|
|
|
|
Inventories |
| 10 |
| 10 |
Trade and other receivables |
| 1,585 |
| 1,359 |
Cash and cash equivalents |
| 57 |
| 51 |
|
| 1,652 |
| 1,420 |
Assets held for sale |
| 219 |
| 645 |
Total assets |
| 20,282 |
| 19,623 |
Current liabilities |
|
|
|
|
Trade and other payables |
| (980) |
| (759) |
Financial liabilities |
| (1,332) |
| (1,753) |
Income tax payable |
| (149) |
| (96) |
|
| (2,461) |
| (2,608) |
Non-current liabilities |
|
|
|
|
Other payables |
| (274) |
| (258) |
Financial liabilities |
| (6,057) |
| (6,011) |
Deferred tax liabilities |
| (335) |
| (305) |
Defined benefit pension plan deficit |
| (2,111) |
| (1,411) |
|
| (8,777) |
| (7,985) |
Total liabilities |
| (11,238) |
| (10,593) |
Net assets |
| 9,044 |
| 9,030 |
Capital and reserves |
|
|
|
|
Equity share capital |
| 264 |
| 264 |
Capital redemption reserve |
| 673 |
| 673 |
Treasury shares |
| (1,254) |
| (1,235) |
Fair value adjustments reserve |
| 21 |
| 14 |
Currency translation |
| 17 |
| 7 |
Retained earnings |
| 9,323 |
| 9,307 |
Total equity |
| 9,044 |
| 9,030 |
Group statement of cash flows
for the year ended 31 October 2016
|
|
2016 £000 |
|
2015 £000 |
Operating activities |
|
|
|
|
Profit for the year |
| 1,365 |
| 915 |
Tax expense |
| 288 |
| 258 |
Net finance costs |
| 189 |
| 197 |
Profit on disposal of non-current assets and assets held for sale |
| (585) |
| (5) |
Depreciation and impairment of property, plant and equipment |
| 371 |
| 265 |
Difference between pension contributions paid and amounts |
| 4 |
| - |
recognised in the income statement |
| (538) |
| (522) |
Increase in trade and other receivables |
| (226) |
| (114) |
Increase/(decrease) in trade and other payables |
| 238 |
| (171) |
|
|
|
|
|
Cash generated from operations |
| 1,106 |
| 823 |
Income taxes paid |
| (79) |
| (143) |
Interest paid |
| (152) |
| (170) |
|
|
|
|
|
Net cash flow from operating activities |
| 875 |
| 510 |
|
|
|
|
|
Investing activities |
|
|
|
|
Interest received |
| 6 |
| 8 |
Proceeds from sale of property, plant and equipment and assets held for sale |
|
1,205 |
|
20 |
Payments to acquire property, plant and equipment |
| (1,275) |
| (3,124) |
|
|
|
|
|
Net cash outflow from investing activities |
| (64) |
| (3,096) |
|
|
|
|
|
Financing activities |
|
|
|
|
Preference dividend paid |
| (1) |
| (1) |
Equity dividends paid |
| (358) |
| (358) |
Consideration received by EBT on sale of shares |
| 40 |
| 30 |
Consideration paid by EBT on purchase of shares Capital element of finance lease rental payments |
| (58) (2) |
| (65) - |
New long-term borrowings |
| - |
| 1,250
|
|
|
|
|
|
Net cash flow from financing activities |
| (379) |
| 856 |
|
|
|
|
|
Increase/(decrease) in cash and cash equivalents |
| 432 |
| (1,730) |
Cash and cash equivalents at the beginning of the year |
| (1,702) |
| 28 |
|
|
|
|
|
Cash and cash equivalents at the year end |
| (1,270) |
| (1,702) |
Group statement of changes in equity
for the year ended 31 October 2016
| 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 2014 | 264 | 673 | (1,202) | 16 | 7 | (20) | 9,345 | 9,083 |
|
|
|
|
|
|
|
|
|
Profit for the year | - | - | - | - | - | - | 915 | 915 |
Other comprehensive |
|
|
|
|
|
|
|
|
income for the year net of income tax | - | - | - | (2) | - | 20 | (593) | (575) |
Total comprehensive |
|
|
|
|
|
|
|
|
income for the year | - | - | - | (2) | - | 20 | 322 | 340 |
Consideration received |
|
|
|
|
|
|
|
|
by EBT on sale of shares |
- |
- |
30 |
- |
- |
- |
- |
30 |
Consideration paid by |
|
|
|
|
|
|
|
|
EBT on purchase of shares | - | - | (65) | - | - | - | - | (65) |
Loss by EBT on sale |
|
|
|
|
|
|
|
|
of shares | - | - | 2 | - | - | - | (2) | - |
Equity dividends paid | - | - | - | - | - | - | (358) | (358) |
At 31 October 2015 | 264 | 673 | (1,235) | 14 | 7 | - | 9,307 | 9,030 |
| 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 2015 | 264 | 673 | (1,235) | 14 | 7 | - | 9,307 | 9,030 |
|
|
|
|
|
|
|
|
|
Profit for the year | - | - | - | - | - | - | 1,365 | 1,365 |
Other comprehensive |
|
|
|
|
|
|
|
|
income for the year net of income tax | - | - | - | 7 | 10 | - | (992) | (975) |
Total comprehensive |
|
|
|
|
|
|
|
|
income for the year | - | - | - | 7 | 10 | - | 373 | 390 |
Consideration received |
|
|
|
|
|
|
|
|
by EBT on sale of shares |
- |
- |
40 |
- |
- |
- |
- |
40 |
Consideration paid by |
|
|
|
|
|
|
|
|
EBT on purchase of shares | - | - | (58) | - | - | - | - | (58) |
Gain by EBT on sale |
|
|
|
|
|
|
|
|
of shares | - | - | (1) | - | - | - | 1 | - |
Equity dividends paid | - | - | - | - | - | - | (358) | (358) |
At 31 October 2015 | 264 | 673 | (1,254) | 21 | 17 | - | 9,323 | 9,044 |
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 2016 the Group held 142,082 Ordinary Shares and 268,652 'A' Limited Voting Ordinary Shares (2015: 139,102 Ordinary Shares and 266,676 'A' Limited Voting Ordinary Shares) of its own shares at an average cost of £3.05 (2015: £2.71). The market value of these shares as at 31 October 2016 was £1,192,172 (2015: £1,247,421).
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 2016. 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 2016, which are expected to be mailed to shareholders on 10 March 2017. 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:
| 2016 £000 | 2015 £000 |
Profit for the year | 1,365 | 915 |
|
|
|
| 2016 No. (000) | 2015 No. (000) |
Basic weighted average number of shares (excluding treasury shares) | 4,879 | 4,874 |
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
| 2016 £000 | 2015 £000 |
Declared and paid during the year: |
|
|
Equity dividends on ordinary shares: |
|
|
Final dividend for 2015: 3.675p (2014: 3.675p) | 194 | 194 |
First dividend for 2016: 3.675p (2015: 3.675p) | 194 | 194 |
Less dividend on shares held within employee share schemes | (30) | (30) |
|
|
|
Dividends paid | 358 | 358 |
|
|
|
Proposed for approval at AGM |
|
|
(not recognised as a liability as at 31 October) |
|
|
|
|
|
Final dividend for 2016: 3.75p (2015: 3.675p) Cumulative preference dividends | 198 1 | 194 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 2016 and 2015. 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 2016 | UK £000 | United States £000 | Total £000 |
Revenue |
|
|
|
Sales to external customers | 7,155 | - | 7,155 |
|
|
|
|
|
|
|
|
Other segment information |
|
|
|
Segment assets | 20,249 | 33 | 20,282
|
Total Assets | 20,249 | 33 | 20,282 |
Capital expenditure |
|
|
|
Property, plant and equipment | 1,275 | - | 1,275 |
|
|
|
|
Year ended 31 October 2015 | UK £000 | United States £000 | Total £000 |
Revenue |
|
|
|
Sales to external customers | 7,082 | - | 7,082 |
|
|
|
|
Other segment information |
|
|
|
Segment assets |
|
|
|
| 19,598 | 25 | 19,623
|
Total Assets | 19,598 | 25 | 19,623 |
Capital expenditure |
|
|
|
Property, plant and equipment | 3,124 | - | 3,124 |
5. General information
The 2016 Annual Report and Financial Statements will be published and posted to shareholders on 10 March 2017. Further copies may be obtained by contacting the Company Secretary at The Heavitree Brewery PLC, Trood Lane, Matford, Exeter EX2 8YP. The 2016 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 13 April 2017 at 11.30am.
Ends.