Last checked at 13 Feb 2015 16:00
The Heavitree Brewery PLC
Trood Lane
Matford
Exeter EX2 8YP
Date: 13 February 2015
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, 13 February 2015, the Directors announce the preliminary statement of results for the year ended 31 October 2014.
ISIN: GB0004182720 for 'A' Limited Voting Ordinary Shares
ISIN: GB0004182506 for Ordinary Shares
Chairman's statement
Profitability (operating profit) for the year under review has increased by 4.39% despite a small drop in turnover.
Results
Turnover for the Group decreased by £33,000 (0.46%) to £7,198,000. Group Operating Profit increased by 4.39% (£59,000) on the previous year.
Heavitree Inns remained dormant throughout the year.
Heavitree Inc. generated an operating profit of £6,000 (2013 - loss of £13,000).
Key Performance indicators
Adjusted Operating Profit before Taxation £1,404,000 was up 4.39% on last year.
Interest costs were covered 7.54 times.
Dividend
The Directors recommend a final dividend of 3.675p per Ordinary and 'A' Limited Voting Ordinary Share (2013 - 3.5p) making a total for the year of 7.35p, which is up 5% on last year. The dividend will be paid on 17 April 2015, subject to shareholder approval at the Annual General Meeting on 15 April 2015, to shareholders on the Register at 20 March 2015.
Sale of Property
The Artichoke Inn in Christow and The Vestry in Newton Abbot were sold in the year under review. This resulted in a net profit of £322,000. Also, four flats at the Old St. Loyes site were sold, resulting in a net profit of £129,000.
Capital Investments
I reported last year that planning permission had been granted for the conversion of the Red Lion in Ashburton and the Country House Inn in Exeter. Work is still ongoing at these two sites.
Upgrade work has started at The Heavitree in Exmouth and The George and Dragon in Dartmouth and I shall report further at the half-year about the exciting developments at these two houses.
The Dartmoor Halfway in Bickington is currently closed but we are close to approving a scheme to develop and improve this great site. Again, I shall report further at the half-year.
The Pen Inn has been leased to Mitchells and Butler who have closed the pub for a six-month redevelopment under their Toby Carvery brand.
Pension Scheme
The Company continues to meet its funding obligations to its closed final salary Pension Scheme. The next triennial valuation of the scheme fell due on 1 January 2014. There has been a delay in the issue of the valuation due to the Scheme's actuary being away from work because of a long illness. He is now back and the valuation is due to be completed by 31 March 2015.
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
Judy Grundy retired from the Accounts department in August of this year. She joined the Company in June 1975. I am sure that all of our shareholders will join the Board in thanking her for her years of dedication to the Company, and also wishing her a long and healthy retirement.
It is with great sadness that I have to report the loss in the year of two friends of the Company with whom we have enjoyed a long and happy association.
Ray Price died on 27 September 2014. Ray retired from the Company in 1985. He had joined as Company Secretary in 1957 and was invited to the Board in 1966. His long service was a huge support to my Father, and in particular, he helped guide the Company through the transitional period after we ceased brewing in 1970.
It was also a very sad day for everyone at Head Office when we heard of the passing of Wally Protheroe. Wally was our tenant at the Teignmouth Inn in Dawlish in January 1979 before he and his wife June took the tenancy of the Mount Pleasant Inn at Dawlish Warren in February 1985. As a result of their vision and hard work, Wally and his family enjoyed consistent success and made the Mount Pleasant one of the Company's flagship operations.
Outlook
In November MPs voted in favour of the Small Business, Enterprise and Employment Bill. Subject to approval in the House of Lords the Bill should become law later in 2015. Clause 2 of the Bill requires all tenanted and leased pub operators with over 500 houses to offer 'Market Rent Only' agreements with no tie on beer or cider products. Due to the size of our estate we will not be legislatively bound to offer MRO agreements; and we will continue to operate with a tie albeit with a large choice of permanently listed products and an even larger list of seasonal ales and ciders for our tenants to choose from. So in practical terms we are not directly affected. However, this potential change will, at the very least, cast a shadow of uncertainty across the industry; and we will have to adapt to the commercial realities that accompany it.
N H P TUCKERChairman
13 February 2015
Group income statement
for the year ended 31 October 2014
|
Notes |
Total 2014 £000 |
Total 2013 £000 |
Revenue |
| 7,198 | 7,231 |
Change in stocks |
| - | - |
Other operating income |
| 230 | 166 |
Purchase of inventories |
| (3,127) | (3,079) |
Staff costs |
| (1,144) | (1,102) |
Depreciation of property, plant and equipment |
|
(227) |
(240) |
Other operating charges |
| (1,526) | (1,631) |
|
| (5,794) | (5,886) |
Group operating profit |
| 1,404 | 1,345 |
Profit/(loss) on sale of property plant and equipment |
| 466 | (85) |
|
|
|
|
Group profit before finance costs and taxation |
|
1,870 |
1,260 |
Finance income |
| 17 | 22 |
Finance costs |
| (203) | (207) |
Other finance costs - pensions |
| (42) | (61) |
|
| (228) | (246) |
|
|
|
|
Profit before taxation |
| 1,642 | 1,014 |
Tax expense |
| (261) | (270) |
|
|
|
|
Profit for the year attributable to equity holders of the parent |
|
1,381 |
744 |
|
|
|
|
Basic earnings per share | 2 | 28.0p | 14.8p |
|
|
|
|
Diluted earnings per share | 2 | 28.0p | 14.8p |
All amounts in 2014 and 2013 relate to continuing operations.
Group statement of comprehensive income
for the year ended 31 October 2014
2014 £000 | 2013 £000 | |
Profit for the year
| 1,381 | 744 |
Items that will not be reclassified to profit or loss | ||
Actuarial (losses)/gains on defined benefit pension plans | (415) | 8 |
Tax relating to items that will not be reclassified | 84 | (2) |
(331) | 6 | |
Items that may be reclassified to profit or loss | ||
Cash flow hedges | 28 | 22 |
Fair value adjustments | 8 | - |
Exchange rate differences on translation of subsidiary undertaking | 1 | - |
Tax relating to items that may be recalssified | (6) | (7) |
31 | 15 | |
Other comprehensive income for the year, net of tax | 1,081 | 765 |
Total comprehensive income attributable to: Equity holders of parent | 1,081 | 765 |
Group balance sheet
at 31 October 2014
|
|
2014 £000 |
|
2013 £000 |
Non-current assets |
| |||
Property, plant and equipment |
| 15,043 | 14,717 | |
Financial assets |
| 35 | 27 | |
Deferred tax asset |
| 237 | 265 | |
|
| 15,315 | 15,009 | |
Current assets |
| |||
Inventories |
| 10 | 10 | |
Trade and other receivables |
| 1,245 | 1,739 | |
Cash and cash equivalents |
| 112 | 65 | |
| 1,367 | 1,814 | ||
Assets held for sale |
| - | 444 | |
Total assets |
| 16,682 | 17,267 | |
Current liabilities |
| |||
Trade and other payables |
| (954) | (835) | |
Financial liabilities |
| (4,858) | (1,144) | |
Income tax payable |
| (184) | (52) | |
| ||||
| (5,996) | (2,031) | ||
Non-current liabilities |
| |||
Other payables | (234) | (241) | ||
Financial liabilities |
| (11) | (5,011) | |
Deferred tax liabilities |
| (200) | (212) | |
Defined benefit pension plan deficit |
| (1,158) | (1,208) | |
| (1,603) | (6,672) | ||
Total liabilities |
| (7,599) | (8,703) | |
Net assets |
| 9,083 | 8,564 | |
|
| |||
Capital and reserves |
| |||
Equity share capital |
| 264 | 264 | |
Capital redemption reserve |
| 673 | 673 | |
Treasury shares |
| (1,202) | (1,002) | |
Fair value adjustments reserve |
| 16 | 8 | |
Cash flow hedging reserve |
| (20) | (42) | |
Currency translation |
| 7 | 6 | |
Retained earnings |
| 9,345 | 8,657 | |
Total equity |
| 9,083 | 8,564 |
Group statement of cash flows
for the year ended 31 October 2014
|
2014 £000 |
|
2013 £000 | |
Operating activities | ||||
Profit for the year | 1,381 | 744 | ||
Tax expense | 261 | 270 | ||
Net finance costs | 228 | 246 | ||
(Profit)/loss on disposal of non current assets and assets held for sale | (466) | 85 | ||
Depreciation and impairment of property, plant and equipment | 227 | 240 | ||
Difference between pension contributions paid and amounts | ||||
recognised in the income statement | (507) | (507) | ||
Decrease/(increase) in trade and other receivables | 120 | (2) | ||
Increase/(decrease) in trade and other payables | 113 | (112) | ||
Cash generated from operations | 1,357 | 964 | ||
Income taxes paid | (36) | (185) | ||
Interest paid | (203) | (207) | ||
Net cash flow from operating activities | 1,118 | 572 | ||
Investing activities | ||||
Interest received | 17 | 22 | ||
Proceeds from sale of property, plant and equipment and assets held for sale |
1,381 |
309 | ||
Payments to acquire property, plant and equipment | (649) | (884) | ||
Net cash inflow/(outflow) from investing activities | 749 | (553) | ||
Financing activities | ||||
Preference dividend paid | (1) | (1) | ||
Equity dividends paid | (354) | (352) | ||
Consideration received by EBT on sale of shares | 37 | 41 | ||
Consideration paid by EBT on purchase of shares | (245) | (182) | ||
New long-term borrowings | (250) | 750 | ||
Net cash flow from financing activities | (813) | 256 | ||
Decrease in cash and cash equivalents | 1,054 | 275 | ||
Cash and cash equivalents at the beginning of the year | (1,026) | (1,301) | ||
Cash and cash equivalents at the year end | 28 | (1,026) |
Group statement of changes in equity
for the year ended 31 October 2014
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 2012 | 264 | 673 | (875) | 8 | 6 | (57) | 8,273 | 8,292 |
Profit for the year | - | - | - | - | - | - | 744 | 744 |
Other comprehensive | ||||||||
income for the year net of income tax | - | - | - | - | - | 15 | 6 | 21 |
Total comprehensive | ||||||||
income for the year | - | - | - | - | - | 15 | 750 | 765 |
Consideration received | ||||||||
by EBT on sale of shares |
- |
- |
41 |
- |
- |
- |
- |
41 |
Consideration paid by
| ||||||||
EBT on purchase of shares | - | - | (182) | - | - | - | - | (182) |
Loss by EBT on sale | ||||||||
of shares | - | - | 14 | - | - | - | (14) | - |
Equity dividends paid | - | - | - | - | - | - | (352) | (352) |
At 31 October 2013 | 264 | 673 | (1,002) | 8 | 6 | (42) | 8,657 | 8,564 |
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 2013 | 264 | 673 | (1,002) | 8 | 6 | (42) | 8,657 | 8,564 |
Profit for the year | - | - | - | - | - | - | 1,381 | 1,381 |
Other comprehensive | ||||||||
income for the year net of income tax | - | - | - | 8 | 1 | 22 | (331) | (300) |
Total comprehensive | ||||||||
income for the year | - | - | - | 8 | 1 | 22 | 1,050 | 1,081 |
Consideration received | ||||||||
by EBT on sale of shares |
- |
- |
37 |
- |
- |
- |
- |
37 |
Consideration paid by | ||||||||
EBT on purchase of shares | - | - | (245) | - | - | - | - | (245) |
Loss by EBT on sale | ||||||||
of shares | - | - | 8 | - | - | - | (8) | - |
Equity dividends paid | - | - | - | - | - | - | (354) | (354) |
At 31 October 2014 | 264 | 673 | (1,202) | 16 | 7 | (20) | 9,345 | 9,083 |
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 2014 the Group held 128,672 Ordinary Shares and 273,479 'A' Limited Voting Ordinary Shares (2013: 110,712 Ordinary Shares and 183,263 'A' Limited Voting Ordinary Shares) of its own shares at an average cost of £2.98 (2013: £3.40). The market value of these shares as at 31 October 2014 was £916,880 (2013: £694,269).
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 2014. 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 2014, which are expected to be mailed to shareholders on 12 March 2015. 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:
2014 £000 | 2013 £000 | |
Profit for the year | 1,381 | 744 |
2014 No. (000) | 2013 No. (000) | |
Basic weighted average number of shares (excluding treasury shares) | 4,939 | 5,023 |
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
2014 £000 | 2013 £000 | |
Declared and paid during the year: | ||
Equity dividends on ordinary shares: | ||
Final dividend for 2013: 3.5p (2012: 3.5p) | 185 | 185 |
First dividend for 2014: 3.675p (2013: 3.5p) | 194 | 185 |
Less dividend on shares held within employee share schemes | (25) | (18) |
Dividends paid | 354 | 352 |
Proposed for approval at AGM | ||
(not recognised as a liability as at 31 October) | ||
Final dividend for 2014: 3.675p (2013: 3.5p) Cumulative preference dividends | 194 1 | 180 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 2014 and 2013. 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 2014 | UK £000 | United States £000 | Total £000 |
Revenue | |||
Sales to external customers | 7,198 | - | 7,198 |
Other segment information | |||
Segment assets | 16,624 | 58 | 16,682
|
Total Assets | 16,624 | 58 | 16,682 |
Capital expenditure | |||
Property, plant and equipment | 649 | - | 649 |
Year ended 31 October 2013 | UK £000 | United States £000 | Total £000 |
Revenue | |||
Sales to external customers | 7,231 | - | 7,231 |
Other segment information | |||
Segment assets | |||
17,222 | 45 | 17,267
| |
Total Assets | 17,222 | 45 | 17,267 |
Capital expenditure | |||
Property, plant and equipment | 812 | - | 812 |
5. General information
The 2014 Annual Report and Financial Statements will be published and posted to shareholders on 12 March 2015. Further copies may be obtained by contacting the Company Secretary at The Heavitree Brewery PLC, Trood Lane, Matford, Exeter EX2 8YP. The 2013 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 15 April 2015 at 11.30am.
Ends.