Last checked at 12 Feb 2016 15:00
The Heavitree Brewery PLC
Trood Lane
Matford
Exeter EX2 8YP
Date: 12 February 2016
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 2016, the Directors announce the preliminary statement of results for the year ended 31 October 2015.
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 0.56% despite a small drop in turnover. There was an impairment cost of £47,000 (2014 - £Nil) relating to the Pen and Quill which has been transferred to assets held for sale. There was also a small profit from the sale of non-current assets of £5,000 compared to £466,000 in the previous year.
Results
Turnover for the Group decreased by £116,000 (1.6%) to £7,082,000. Group Operating Profit increased by 0.56% (£8,000) on the previous year.
Heavitree Inns remained dormant throughout the year.
Heavitree Inc. generated an operating loss of £13,000 (2014 - profit of £6,000).
Key Performance indicators
Adjusted Operating Profit before Taxation of £1,412,000 was up 0.56% on last year.
Interest costs were covered 8.71 times.
Dividend
The Directors recommend a final dividend of 3.675p per Ordinary and 'A' Limited Voting Ordinary Share (2014 - 3.675p) making an unchanged total for the year of 7.35p. The dividend will be paid on 22 April 2016, subject to shareholder approval at the Annual General Meeting on 14 April 2016, to shareholders on the Register at 29 March 2016.
Sale of Property
The Hole in the Wall in Dawlish, the Exeter Inn in Dawlish, the Pen and Quill in Taunton, the Maltsters Arms in Harbertonford and the Bell Inn in Cullompton are each being marketed for sale. We have achieved planning permission for the Hole in the Wall, the Exeter Inn and the Pen and Quill for various schemes of change of use following a number of years of closure. The Maltsters Arms is currently closed but the Bell Inn is open and trading.
Purchase of Property
In October we purchased a closed pub in Teignmouth called the Queensbury Arms for £330,000.
Capital Investments
The conversion of the Red Lion Inn in Ashburton into four flats and a retail unit and the development of the Country House Inn site in Exeter into three detached houses are close to completion. I shall report further on these at the half-year.
The substantial capital investments at the Oddfellows in Exmouth and the George and Dragon in Dartmouth have been completed. The Oddfellows opened in August and The George and Dragon opened in November. Both are trading well and we look forward to significant contributions from these two houses. Our tenants at both these pubs brought great vision and operational skill and detail to the styles that have been achieved and we wish both Yvan and Faye Williams at the Oddfellows and Adrian, Leigh and Sophie Ovens at the George and Dragon every success and a long and happy partnership with this Company.
The Dartmoor Halfway Inn in Bickington remains closed but a redevelopment plan which will deliver a bigger and better pub has been approved by Teignbridge District Council; at the time of writing costings are being sought. An informal agreement has been reached with a favoured operator and we look forward to work getting underway at this site. Again, I shall report further at the half-year.
Pension Scheme
The Company continues to meet its funding obligations to its closed final salary Pension Scheme. Following the triennial valuation of the Scheme which fell due on 1 January 2014 and which was completed earlier in the year under review, a revised schedule of deficit repayment contributions extending to 2022 has been agreed by the trustees with the Scheme's actuary. The next valuation falls due on 1 January 2017 with anticipated completion in early 2018; but required by 31 March 2018 at the latest.
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 once again find myself drawing attention to the uncertainties which overshadow the trade whilst the economic recovery in our trading area slowly moves forward. There has been much debate about possible interest rate increases and the effects on small businesses, such as pub operators, of the introduction of the national living wage. Most recently, the new, well publicised guidance on alcohol consumption from the UK Chief Medical Officer has added to the list of issues faced by today's Licensee. With all these pressures very much in mind, we continue to attract great operators by offering a combination of stability with our new agreements; both tenancy and leasehold, an expanding choice of products and strong support from the head office team to all our houses.
N H P TUCKERChairman
12 February 2016
Group income statement
for the year ended 31 October 2015
|
Notes |
Total 2015 £000 |
Total 2014 £000 |
Revenue |
| 7,082 | 7,198 |
Change in stocks |
| - | - |
Other operating income |
| 229 | 230 |
Purchase of inventories |
| (2,986) | (3,127) |
Staff costs |
| (1,172) | (1,144) |
Depreciation of property, plant and equipment |
|
(218) |
(227) |
Other operating charges |
| (1,523) | (1,526) |
|
| (5,670) | (5,794) |
Group operating profit |
| 1,412 | 1,404 |
Profit on sale of property plant and equipment |
| 5 | 466
|
Movements in valuation of estate and related assets |
| (47) | - |
Group profit before finance costs and taxation |
|
1,370 |
1,870 |
Finance income |
| 8 | 17 |
Finance costs |
| (170) | (203) |
Other finance costs - pensions |
| (35) | (42) |
|
| (197) | (228) |
|
|
|
|
Profit before taxation |
| 1,173 | 1,642 |
Tax expense |
| (258) | (261) |
|
|
|
|
Profit for the year attributable to equity holders of the parent |
|
915 |
1,381 |
|
|
|
|
Basic earnings per share | 2 | 18.8p | 28.0p |
|
|
|
|
Diluted earnings per share | 2 | 18.8p | 28.0p |
All amounts in 2015 and 2014 relate to continuing operations.
Group statement of comprehensive income
for the year ended 31 October 2015
| 2015 £000 | 2014 £000 |
Profit for the year
| 915 | 1,381 |
Items that will not be reclassified to profit or loss |
|
|
Actuarial losses on defined benefit pension plans | (740) | (415) |
Tax relating to items that will not be reclassified | 147 | 84 |
| (593) | (331) |
Items that may be reclassified to profit or loss |
|
|
Cash flow hedges | 24 | 28 |
Fair value adjustments | (2) | 8 |
Exchange rate differences on translation of subsidiary undertaking | - | 1 |
Tax relating to items that may be reclassified | (4) | (6) |
| 18 | 31 |
|
|
|
Other comprehensive income for the year, net of tax | 340 | 1,081 |
Total comprehensive income attributable to: Equity holders of parent | 340 | 1,081 |
Group balance sheet
at 31 October 2015
|
|
2015 £000 |
|
2014 £000 |
Non-current assets |
|
|
|
|
Property, plant and equipment |
| 16,779 |
| 14,580 |
Investment property |
| 463 |
| 463 |
|
| 17,242 |
| 15,043 |
Financial assets |
| 34 |
| 35 |
Deferred tax asset |
| 282 |
| 237 |
|
| 17,558 |
| 15,315 |
Current assets |
|
|
|
|
Inventories |
| 10 |
| 10 |
Trade and other receivables |
| 1,359 |
| 1,245 |
Cash and cash equivalents |
| 51 |
| 112 |
|
| 1,420 |
| 1,367 |
Assets held for sale |
| 645 |
| - |
Total assets |
| 19,623 |
| 16,682 |
Current liabilities |
|
|
|
|
Trade and other payables |
| (759) |
| (954) |
Financial liabilities |
| (1,753) |
| (4,858) |
Income tax payable |
| (96) |
| (184) |
|
| (2,608) |
| (5,996) |
Non-current liabilities |
|
|
|
|
Other payables |
| (258) |
| (234) |
Financial liabilities |
| (6,011) |
| (11) |
Deferred tax liabilities |
| (305) |
| (200) |
Defined benefit pension plan deficit |
| (1,411) |
| (1,158) |
|
| (7,985) |
| (1,603) |
Total liabilities |
| (10,593) |
| (7,599) |
Net assets |
| 9,030 |
| 9,083 |
Capital and reserves |
|
|
|
|
Equity share capital |
| 264 |
| 264 |
Capital redemption reserve |
| 673 |
| 673 |
Treasury shares |
| (1,235) |
| (1,202) |
Fair value adjustments reserve |
| 14 |
| 16 |
Cash flow hedging reserve |
| - |
| (20) |
Currency translation |
| 7 |
| 7 |
Retained earnings |
| 9,307 |
| 9,345 |
Total equity |
| 9,030 |
| 9,083 |
Group statement of cash flows
for the year ended 31 October 2015
|
|
2015 £000 |
|
2014 £000 |
Operating activities |
|
|
|
|
Profit for the year |
| 915 |
| 1,381 |
Tax expense |
| 258 |
| 261 |
Net finance costs |
| 197 |
| 228 |
Profit on disposal of non current assets and assets held for sale |
| (5) |
| (466) |
Depreciation and impairment of property, plant and equipment |
| 265 |
| 227 |
Difference between pension contributions paid and amounts |
|
|
|
|
recognised in the income statement |
| (522) |
| (507) |
(Increase)/decrease in trade and other receivables |
| (114) |
| 120 |
(Decrease)/increase in trade and other payables |
| (171) |
| 113 |
|
|
|
|
|
Cash generated from operations |
| 823 |
| 1,357 |
Income taxes paid |
| (143) |
| (36) |
Interest paid |
| (170) |
| (203) |
|
|
|
|
|
Net cash flow from operating activities |
| 510 |
| 1,118 |
|
|
|
|
|
Investing activities |
|
|
|
|
Interest received |
| 8 |
| 17 |
Proceeds from sale of property, plant and equipment and assets held for sale |
|
20 |
|
1,381 |
Payments to acquire property, plant and equipment |
| (3,124) |
| (649) |
|
|
|
|
|
Net cash (outflow)/inflow from investing activities |
| (3,096) |
| 749 |
|
|
|
|
|
Financing activities |
|
|
|
|
Preference dividend paid |
| (1) |
| (1) |
Equity dividends paid |
| (358) |
| (354) |
Consideration received by EBT on sale of shares |
| 30 |
| 37 |
Consideration paid by EBT on purchase of shares |
| (65) |
| (245) |
New long-term borrowings |
| 1,250 |
| (250) |
|
|
|
|
|
Net cash flow from financing activities |
| 856 |
| (813) |
|
|
|
|
|
(Decrease)/increase in cash and cash equivalents |
| (1,730) |
| 1,054 |
Cash and cash equivalents at the beginning of the year |
| 28 |
| (1,026) |
|
|
|
|
|
Cash and cash equivalents at the year end |
| (1,702) |
| 28 |
Group statement of changes in equity
for the year ended 31 October 2015
| 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 £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
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 2015 the Group held 139,102 Ordinary Shares and 266,676 'A' Limited Voting Ordinary Shares (2014: 128,672 Ordinary Shares and 273,479 'A' Limited Voting Ordinary Shares) of its own shares at an average cost of £2.71 (2014: £2.98). The market value of these shares as at 31 October 2015 was £1,247,421 (2014: £916,880).
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 2015. 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 2015, which are expected to be mailed to shareholders on 11 March 2016. 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:
| 2015 £000 | 2014 £000 |
Profit for the year | 915 | 1,381 |
|
|
|
| 2015 No. (000) | 2014 No. (000) |
Basic weighted average number of shares (excluding treasury shares) | 4,874 | 4,939 |
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
| 2015 £000 | 2014 £000 |
Declared and paid during the year: |
|
|
Equity dividends on ordinary shares: |
|
|
Final dividend for 2014: 3.675p (2013: 3.5p) | 194 | 185 |
First dividend for 2015: 3.675p (2014: 3.675p) | 194 | 194 |
Less dividend on shares held within employee share schemes | (30) | (25) |
|
|
|
Dividends paid | 358 | 354 |
|
|
|
Proposed for approval at AGM |
|
|
(not recognised as a liability as at 31 October) |
|
|
|
|
|
Final dividend for 2015: 3.675p (2014: 3.675p) Cumulative preference dividends | 194 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 2015 and 2014. 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 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 |
|
|
|
|
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 |
5. General information
The 2015 Annual Report and Financial Statements will be published and posted to shareholders on 11 March 2016. Further copies may be obtained by contacting the Company Secretary at The Heavitree Brewery PLC, Trood Lane, Matford, Exeter EX2 8YP. The 2015 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 14 April 2016 at 11.30am.
Ends.