Last checked at 14 Feb 2018 15:00
The Heavitree Brewery PLC
Trood Lane
Matford
Exeter EX2 8YP
Date: 14 February 2018
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 2018, the Directors announce the preliminary statement of results for the year ended 31 October 2017.
ISIN: GB0004182720 for 'A' Limited Voting Ordinary Shares
ISIN: GB0004182506 for Ordinary Shares
Chairman's statement
I am pleased to report that operating profit for the year under review has increased by 25.21% (£358,000) after a 2.01% increase in turnover on the previous year. About half of the development land in Houston in which Heavitree Inc. holds a 5.26% interest was sold returning a profit of £104,000. Compensation and a pay back of legal fees following a land dispute at one of our houses added £36,000 to the operating profit line; as did a £107,000 reduction in the expense for bad debts. Our team, of course, always works hard year on year on cash management, but this is a particularly impressive result and it is a most welcome addition to an already strong contribution performance.
Results
Group Turnover increased by £144,000 to £7,299,000. Group Operating Profit has increased by £358,000 to £1,778,000.
Heavitree Inns has remained dormant throughout the year.
Heavitree Inc. generated an operating profit of £104,000 (2016 - loss of £16,000).
Key Performance Indicators
Adjusted operating profit before Taxation of £1,778,000 was up 25.21% on last year.
Interest costs were covered 10.16 times.
Dividend
The Directors recommend a 6.67 % increase in the final dividend to 4.00p per Ordinary and 'A' Limited Voting Ordinary Share (2016 - 3.75p) making a total for the year of 7.675p. The dividend will be paid on 20 April 2018, subject to shareholder approval at the Annual General Meeting on 11 April 2018, to those shareholders on the Register at 23 March 2018.
Sale of Property
The Pen and Quill in Taunton was sold generating a small loss in the year of £5,000. Impairments on this site had been absorbed in the accounts of previous years. Since this year's accounts were finalised The King of Prussia in Bovey Tracey has been sold. This house was closed in 2009 with a small rental income retained from the letting of the flat. The pub will be converted into a community facility.
At the time of writing a small residential property on Topsham Road in Exeter, The Crown and Sceptre in Newton St.Cyres (which closed in June 2017) and The Kings Arms in Strete (which closed in September 2016) are on the market with sales agreed, subject to contract on the two pub sites. Also, four flats and a house which are part of the residential development at the old St.Loye's Hotel site in Exeter which was completed in 2012 have been marketed for sale. Here too a sale has been agreed, subject to contract, for all of these units. I shall report further on these at the Half-Year.
Capital Investments
I reported the successful completion of the development of the Dartmoor Halfway in Bickington at the Half-Year. Further improvements to the camping facilities and caravan pitches have been carried out to make the house ready for the season in 2018. No further major developments are planned for the present year.
Pension Scheme
At the time of writing, draft figures for the triennial valuation which fell due on 1 January 2017 have been received. The accounts that accompany this report include the previously signed off numbers and, as stated before, the Company remains committed to the funding of its obligations to its closed final salary scheme.
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
I am extremely grateful to our team at Head Office and to all the personnel in each of our houses for the hard work and innovation that has helped produce the numbers which are reported in these accounts. I can report that the new year has started satisfactorily as well.
I look forward to reporting on the sales of the properties mentioned above. With uncertainty in the market place caused by Brexit and interest rates beginning to rise, reduction of debt would seem the sensible way forward.
N H P TUCKERChairman
14 February 2018
Group income statement
for the year ended 31 October 2017
|
Notes |
Total 2017 £000 |
Total 2016 £000 |
Revenue |
| 7,299 | 7,155 |
Change in stocks |
| - | - |
Other operating income |
| 384 | 241 |
Purchase of inventories |
| (2,968) | (2,955) |
Staff costs |
| (1,353) | (1,301) |
Depreciation of property, plant and equipment |
|
(248) |
(208) |
Other operating charges |
| (1,336) | (1,512) |
|
| (5,521) | (5,735) |
Group operating profit |
| 1,778 | 1,420 |
Profit on sale of property plant and equipment |
| 6 | 585
|
Movements in valuation of estate and related assets |
| - | (163) |
Group profit before finance costs and taxation |
|
1,784 |
1,842 |
Finance income |
| 7 | 6 |
Finance costs |
| (182) | (152) |
Other finance costs - pensions |
| (55) | (43) |
|
| (230) | (189) |
|
|
|
|
Profit before taxation |
| 1,554 | 1,653 |
Tax expense |
| (226) | (288) |
|
|
|
|
Profit for the year attributable to equity holders of the parent |
|
1,328 |
1,365 |
|
|
|
|
Basic earnings per share | 2 | 27.0p | 28.0p |
|
|
|
|
Diluted earnings per share | 2 | 27.0p | 28.0p |
All amounts in 2017 and 2016 relate to continuing operations.
Group statement of comprehensive income
for the year ended 31 October 2017
| 2017 £000 | 2016 £000 |
Profit for the year
| 1,328 | 1,365 |
Items that will not be reclassified to profit or loss |
|
|
Actuarial gains/(losses) on defined benefit pension plans | 428 | (1,195) |
Tax relating to items that will not be reclassified | (74) | 203 |
| 354 | (992) |
Items that may be reclassified to profit or loss |
|
|
Cash flow hedges | - | - |
Fair value adjustments | 6 | 7 |
Exchange rate differences on translation of subsidiary undertaking | - | 10 |
Tax relating to items that may be reclassified | - | - |
| 6 | 17 |
|
|
|
Other comprehensive income for the year, net of tax | 1,688 | 390 |
Total comprehensive income attributable to: Equity holders of parent | 1,688 | 390 |
Group balance sheet
at 31 October 2017
|
|
2017 £000 |
|
2016 £000 |
Non-current assets |
|
|
|
|
Property, plant and equipment |
| 17,022 |
| 16,700 |
Investment property |
| 1,094 |
| 1,312 |
|
| 18,116 |
| 18,012 |
Financial assets |
| 46 |
| 40 |
Deferred tax asset |
| 221 |
| 359 |
|
| 18,383 |
| 18,411 |
Current assets |
|
|
|
|
Inventories |
| 10 |
| 10 |
Trade and other receivables |
| 1,696 |
| 1,585 |
Cash and cash equivalents |
| 56 |
| 57 |
|
| 1,762 |
| 1,652 |
Assets held for sale |
| 890 |
| 219 |
Total assets |
| 21,035 |
| 20,282 |
Current liabilities |
|
|
|
|
Trade and other payables |
| (871) |
| (980) |
Financial liabilities |
| (1,624) |
| (1,332) |
Income tax payable |
| (190) |
| (149) |
|
| (2,685) |
| (2,461) |
Non-current liabilities |
|
|
|
|
Other payables |
| (256) |
| (274) |
Financial liabilities |
| (6,045) |
| (6,057) |
Deferred tax liabilities |
| (345) |
| (335) |
Defined benefit pension plan deficit |
| (1,300) |
| (2,111) |
|
| (7,946) |
| (8,777) |
Total liabilities |
| (10,631) |
| (11,238) |
Net assets |
| 10,404 |
| 9,044 |
Capital and reserves |
|
|
|
|
Equity share capital |
| 264 |
| 264 |
Capital redemption reserve |
| 673 |
| 673 |
Treasury shares |
| (1,223) |
| (1,254) |
Fair value adjustments reserve |
| 27 |
| 21 |
Currency translation |
| 17 |
| 17 |
Retained earnings |
| 10,646 |
| 9,323 |
Total equity |
| 10,404 |
| 9,044 |
Group statement of cash flows
for the year ended 31 October 2017
|
|
2017 £000 |
|
2016 £000 |
Operating activities |
|
|
|
|
Profit for the year |
| 1,328 |
| 1,365 |
Tax expense |
| 151 |
| 288 |
Net finance costs |
| 231 |
| 189 |
Profit on disposal of non-current assets and assets held for sale |
| (6) |
| (585) |
Depreciation and impairment of property, plant and equipment |
| 248 |
| 371 |
Difference between pension contributions paid and amounts |
| (3) |
| 4 |
recognised in the income statement |
| (438) |
| (538) |
Increase in trade and other receivables |
| (76) |
| (226) |
(Decrease)/increase in trade and other payables |
| (170) |
| 238 |
|
|
|
|
|
Cash generated from operations |
| 1,265 |
| 1,106 |
Income taxes paid |
| (110) |
| (79) |
Interest paid |
| (182) |
| (152) |
|
|
|
|
|
Net cash flow from operating activities |
| 973 |
| 875 |
|
|
|
|
|
Investing activities |
|
|
|
|
Interest received |
| 6 |
| 6 |
Proceeds from sale of property, plant and equipment and assets held for sale |
|
193 |
|
1,205 |
Payments to acquire property, plant and equipment |
| (1,117) |
| (1,275) |
|
|
|
|
|
Net cash outflow from investing activities |
| (918) |
| (64) |
|
|
|
|
|
Financing activities |
|
|
|
|
Preference dividend paid |
| (1) |
| (1) |
Equity dividends paid |
| (333) |
| (358) |
Consideration received by EBT on sale of shares |
| 49 |
| 40 |
Consideration paid by EBT on purchase of shares Capital element of finance lease rental payments |
| (15) (21) |
| (58) (2) |
New long-term borrowings |
| - |
| -
|
|
|
|
|
|
Net cash flow from financing activities |
| (321) |
| (379) |
|
|
|
|
|
(Decrease)/increase in cash and cash equivalents |
| (266) |
| 432 |
Cash and cash equivalents at the beginning of the year |
| (1,270) |
| (1,702) |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the year end |
| (1,536) |
| (1,270) |
Group statement of changes in equity
for the year ended 31 October 2017
| 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) |
Loss by EBT on sale |
|
|
|
|
|
|
|
|
of shares | - | - | (1) | - | - | - | 1 | - |
Equity dividends paid | - | - | - | - | - | - | (358) | (358) |
At 31 October 2016 | 264 | 673 | (1,254) | 21 | 17 | - | 9,323 | 9,044 |
| 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) |
Gain 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
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 2017 the Group held 142,082 Ordinary Shares and 252,097 'A' Limited Voting Ordinary Shares (2016: 142,082 Ordinary Shares and 268,652 'A' Limited Voting Ordinary Shares) of its own shares. During the year there were purchases of 6,846 and sales of 23,401 '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 2017. 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 2017, which are expected to be mailed to shareholders on 8 March 2018. 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:
| 2017 £000 | 2016 £000 |
Profit for the year | 1,328 | 1,365 |
|
|
|
| 2017 No. (000) | 2016 No. (000) |
Basic weighted average number of shares (excluding treasury shares) | 4,877 | 4,879 |
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
| 2017 £000 | 2016 £000 |
Declared and paid during the year: |
|
|
Equity dividends on ordinary shares: |
|
|
Final dividend for 2016: 3.75p (2015: 3.675p) | 198 | 194 |
First dividend for 2017: 3.675p (2016: 3.675p) | 194 | 194 |
Less dividend on shares held within employee share schemes | (30) | (30) |
|
|
|
Dividends paid | 362 | 358 |
|
|
|
Proposed for approval at AGM |
|
|
(not recognised as a liability as at 31 October) |
|
|
|
|
|
Final dividend for 2017 4.00p (2016: 3.75p) Cumulative preference dividends | 211 1 | 198 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 2017 and 2016. 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 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 |
|
|
|
|
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 |
5. General information
The 2017 Annual Report and Financial Statements will be published and posted to shareholders on 8th March 2018. Further copies may be obtained by contacting the Company Secretary at The Heavitree Brewery PLC, Trood Lane, Matford, Exeter EX2 8YP. The 2017 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 11 April 2018 at 11.30am.
Ends.