TIDMHVT
RNS Number : 9574C
Heavitree Brewery PLC
13 February 2020
The Heavitree Brewery PLC
Trood Lane
Matford
Exeter EX2 8YP
Date: 13 February 2020
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, 13 February 2020, the
Directors announce the preliminary statement of results for the
year ended 31 October 2019.
ISIN: GB0004182720 for 'A' Limited Voting Ordinary Shares
ISIN: GB0004182506 for Ordinary Shares
Chairman's statement
Although Turnover for the Group has decreased by GBP86,000 to
GBP7,528,000, I am pleased to report that Group Operating Profit
has increased by GBP207,000 to GBP1,839,000. The drop in Turnover
has, in most part, been as a result of rents not being received at
two houses which are being operated by external management
companies while new tenants are being sought. These houses are The
Lysley Arms in Pewsham, near Chippenham and The Traveller's Rest in
Whitestone, near Exeter. A new Tenant has now been found for The
Traveller's Rest.
The increase in Group Operating Profit has been aided by a
reduction in the bad debt provision of GBP68,000 following another
year of efficient credit control. There has also been a reduction
in Superannuation costs against the previous year of GBP86,000.
Results
Group Turnover decreased by GBP86,000 to GBP7,528,000. Group
Operating Profit has increased by GBP207,000 to GBP1,839,000, an
increase of 12.68% on the previous year.
Heavitree Inns remained dormant throughout the year.
Heavitree Inc. generated an operating profit of GBP30,000
following the sale of a small parcel of development land during the
year under review (2018 - GBP12,000).
Dividend
The Directors recommend a final dividend of 4.25p per Ordinary
and 'A' Limited Voting Ordinary Share (2018 - 4.25p) making a total
for the year of 7.925p (2018 - 7.925p). The dividend will be paid
on 17 April 2020, subject to shareholder approval at the Annual
General Meeting on 15 April 2020, to those shareholders on the
Register at 20 March 2020.
Sale of Property
Since the end of the financial year The Maltsters Arms in
Harbertonford and the adjoining cottage, Bridge House, and also
Rose Cottage in Strete have been marketed for sale. The Maltsters
Arms has been closed since September 2018 and is subject to an
Asset of Community Value listing. I hope to report further on these
properties at the half-year.
Capital Investments
Listed Building consent and Planning Permission has been granted
at The Ley Arms in Kenn to demolish the function room area and
build a block of eight bedrooms to allow for an offer of bed and
breakfast. This is a wonderful house being traded exceptionally
well by our tenant Karen Bayliss. The addition of bedrooms will
obviously compliment the quality offer at this house and
contractors' quotes for the project are currently being sought.
Corporate Governance
The Board adopted the Corporate Governance Code of the Quoted
Companies Alliance in September 2018 when this became a requirement
under AIM Rules. I, and the other Members of our Board, are
collectively accountable to you, the shareholders for ensuring good
corporate governance. My specific role and responsibility as
Chairman is to make sure that all aspects of corporate governance
are covered and adhered to. Historically this Company has always
strived to conduct business responsibly to the benefit of all
stakeholders. The Code gives the Directors a structure to help them
to deliver good governance to all shareholders and, in turn, to all
our tenants and employees.
Personnel
It was announced to the London Stock Exchange on 29(th) August
2019 that Chris Bush had been appointed to the Board as an
Independent Non-Executive Director and it gave me great pleasure at
the time to extend my personal welcome. He commenced his role with
us on 1st September 2019. Chris is an Institute of Chartered
Accountants in England and Wales professional and he has many
years' experience in leadership roles within audit practice. He
also fills the Independent Non-Executive role required by our QCA
Corporate Governance Code with specific responsibility for
Corporate Governance and Audit oversight.
Pension Scheme
The Company continues to operate its Final Salary Pension Scheme
for retired Members and their dependents. As I reported last year
the final three deferred Members transferred out of the Scheme
during the previous financial year. Since then, and following the
High Court's ruling in October 2018 that all Guaranteed Minimum
Pension (GMP) benefits in UK pension plans must be equalised for
male and female members, the Scheme's actuary has been working on
establishing the GMP liability to the Scheme. This process is not
yet complete but as at 31 October 2019 the liability has been
estimated at GBP52,000 and this has been accrued in the financial
statements for the year under review.
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 pleased to report that since the year end our expiring
banking facilities with Barclays, with whom we have enjoyed an
excellent relationship and who have provided us with facilities for
nearly 40 years, have been revised and renewed for a further term
of five years.
After the prolonged period of political uncertainty endured by
business and the country as a whole. The hope has to be that the
result of the December General Election will deliver some much
needed stability. While we await this and monitor the effects of
the departure from the European Union, the Directors feel it
prudent to leave the final Dividend unchanged from the previous
year.
N H P TUCKER
Chairman
13 February 2020
Group income statement
for the year ended 31 October 2019
Notes Total Total
2019 2018
GBP000 GBP000
Revenue 7,528 7,614
--------- ---------
Other operating income 302 279
Purchase of inventories (3,100) (3,109)
Staff costs (1,385) (1,407)
Depreciation of property,
plant and equipment (222) (235)
Other operating charges (1,284) (1,510)
--------- ---------
(5,689) (5,982)
--------- ---------
Group operating profit 1,839 1,632
Profit on sale of property
plant and equipment 185 824
Group profit before
finance costs and taxation 2,042 2,456
Finance income 4 5
Finance costs (184) (175)
Other finance costs
- pensions - (35)
--------- ---------
(180) (205)
Profit before taxation 1,844 2,251
Tax expense (313) (324)
Profit for the year
attributable to equity
holders of the parent 1,531 1,927
--------- ---------
Basic earnings per
share 2 32.0p 39.6p
--------- ---------
Diluted earnings per
share 2 32.0p 39.6p
--------- ---------
Group statement of comprehensive income
for the year ended 31 October 2019
2019 2018
GBP000 GBP000
Profit for the year 1,531 1,927
-------- --------
Items that will not be reclassified
to profit or loss
Fair value adjustment on investment
in equity (6) (4)
Actuarial (losses) on defined benefit
scheme - (248)
Tax relating to items that will not
be reclassified - 42
-------- --------
(6) (210)
Items that may be reclassified to
profit or loss
Exchange rate differences on translation
of subsidiary undertaking 2 (2)
2 (2)
Other comprehensive income for the
year, net of tax 1,527 1,715
-------- --------
Total comprehensive income attributable
to:
Equity holders of the parent 1,527 1,715
Group balance sheet
at 31 October 2019
2019 2018
GBP000 GBP000
Non-current assets
Property, plant and equipment 17,692 17,812
Investment property 1,485 1,094
--------- ---------
19,177 18,906
Financial assets 41 47
Deferred tax asset 16 38
--------- ---------
19,234 18,991
--------- ---------
Current assets
Inventories 10 10
Trade and other receivables 1,344 1,292
Cash and cash equivalents 51 44
--------- ---------
1,405 1,346
--------- ---------
Assets held for sale - 62
--------- ---------
Total assets 20,639 20,399
--------- ---------
Current liabilities
Trade and other payables (953) (1,078)
Financial liabilities (6,087) (818)
Income tax payable (231) (131)
--------- ---------
(7,271) (2,027)
--------- ---------
Non-current liabilities
Other payables (284) (311)
Financial liabilities (37) (6,067)
Deferred tax liabilities (394) (300)
Defined benefit pension plan deficit (92) (39)
--------- ---------
(807) (6,717)
--------- ---------
Total liabilities (8,078) (8,744)
--------- ---------
Net assets 12,561 11,655
--------- ---------
Capital and reserves
Equity share capital 264 264
Capital redemption reserve 673 673
Treasury shares (1,562) (1,317)
Fair value adjustments reserve 17 23
Currency translation 17 15
Retained earnings 13,152 11,997
--------- ---------
Total equity 12,561 11,655
--------- ---------
Group statement of cash flows
for the year ended 31 October 2019
2019 2018
GBP000 GBP000
Operating activities
Profit for the year 1,531 1,927
Tax expense 313 324
Net finance costs 180 206
Profit on disposal of non-current assets
and assets held for sale (185) (824)
Depreciation and impairment of property,
plant and equipment 222 235
Exchange gain on cash, liquid resources
and loans - 5
Difference between pension contributions
paid and amounts
recognised in the income statement 52 (1,544)
(Increase)/decrease in trade and other
receivables (72) 284
(Decrease)/increase in trade and other
payables (145) 380
--------- --- ---------
Cash generated from operations 1,896 993
Income taxes paid (97) (188)
Interest paid (184) (176)
Net cash inflow from operating activities 1,615 629
--------- --- ---------
Investing activities
Interest received 4 6
Proceeds from sale of property, plant
and equipment and assets held for sale 278 1,454
Payments to acquire property, plant
and equipment (506) (777)
Net cash (outflow)/inflow from investing
activities (224) 683
--------- --- ---------
Financing activities
Preference dividend paid (1) (1)
Equity dividends paid (379) (373)
Consideration received by EBT on sale
of shares 56 54
Consideration paid by EBT on purchase
of shares (298) (145)
Capital element of finance lease rental
payments (15) (68)
Net cash outflow from financing activities (637) (533)
--------- --- ---------
Increase in cash and cash equivalents 754 779
Cash and cash equivalents at the beginning
of the year (757) (1,536)
--------- --- ---------
Cash and cash equivalents at the year
end (3) (757)
--------- --- ---------
Group statement of changes in equity
for the year ended 31 October 2019
Equity Capital Fair
share redemption Treasury value Currency Retained Total
capital reserve shares adjustment translation earnings equity
GBP000 GBP000 GBP000 reserve GBP000 GBP000 GBP000
GBP000
At 1 November
2017 264 673 (1,223) 27 17 10,646 10,404
Profit for the
year - - - - - 1,927 1,927
Other comprehensive
income for the
year
net of income
tax - - - (4) (2) (206) (212)
--------- ------------ ----------- ------------ -------------- ----------- ---------
Total comprehensive
income for the
year - - - (4) (2) 1,721 1,715
--------- ------------ ----------- ------------ -------------- ----------- ---------
Consideration
received
by EBT on sale
of
shares - - 54 - - - 54
Consideration
paid by
EBT on purchase
of shares - - (145) - - - (145)
Loss by EBT on
sale
of shares - - (3) - - 3 -
Equity dividends
paid - - - - - (373) (373)
--------- ------------ ----------- ------------ -------------- ----------- ---------
At 31 October
2018 264 673 (1,317) 23 15 11,997 11,655
--------- ------------ ----------- ------------ -------------- ----------- ---------
Equity Capital Fair
share redemption Treasury value Currency Retained Total
capital reserve shares adjustment translation earnings equity
GBP000 GBP000 GBP000 reserve GBP000 GBP000 GBP000
GBP000
At 1 November
2018 264 673 (1,317) 23 15 11,997 11,655
Profit for the
year - - - - - 1,531 1,531
Other comprehensive
income for the
year
net of income
tax - - - (6) 2 - (4)
--------- ------------ ----------- ------------ -------------- ----------- ---------
Total comprehensive
income for the
year - - - (6) 2 1,531 1,527
--------- ------------ ----------- ------------ -------------- ----------- ---------
Consideration
received
by EBT on sale
of
shares - - 56 - - - 56
Consideration
paid by
EBT on purchase
of shares - - (298) - - - (298)
Loss by EBT on
sale
of shares - - (3) - - 3 -
Equity dividends
paid - - - - - (379) (379)
--------- ------------ ----------- ------------ -------------- ----------- ---------
At 31 October
2019 264 673 (1,562) 17 17 13,152 12,561
--------- ------------ ----------- ------------ -------------- ----------- ---------
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 2019 the Group held 179,053 Ordinary Shares and
300,002 'A' Limited Voting Ordinary Shares (2018: 146,082 Ordinary
Shares and 262,885 'A' Limited Voting Ordinary Shares) of its own
shares. During the year there were purchases of 32,971 Ordinary
Shares and 62,737 'A 'Limited Voting ordinary Shares and sales of
25,620 'A; Limited Voting Ordinary Shares.
Fair value adjustments reserve
The fair value adjustments reserve is used to record differences
in the year on year fair value of the investment classified as fair
value through other comprehensive income.
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 2019. The statutory financial statements have not yet been
delivered to the Registrar of Companies.
The auditors, PKF Francis Clark, have reported on the accounts
for the years ended 31 October 2019 and 31 October 2018. Their
audit reports in both years were unqualified, did not include a
reference to any matters to which the auditors drew attention by
way of emphasis without qualifying their report and did not contain
a statement under Section 498 (2) or (3) of the Companies Act 2006
in respect of those accounts.
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 2019,
which are expected to be mailed to shareholders on 10 March 2020.
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:
2019 2018
GBP000 GBP000
Profit for the year 1,531 1,927
-------- --------
2019 2018
N(o) . N(o) .
(000) (000)
-------- --------
Basic weighted average number of shares
(excluding treasury shares) 4,786 4,866
-------- --------
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
2019 2018
GBP000 GBP000
Declared and paid during the year:
Equity dividends on ordinary shares:
Final dividend for 2018: 4.25p (2017: 4.00p) 224 211
First dividend for 2019: 3.675p (2018:
3.675p) 194 198
Less dividend on shares held within employee
share schemes (39) (36)
Dividends paid 379 373
-------- --------
Proposed for approval at AGM
(not recognised as a liability as at 31
October)
224 224
Final dividend for 2019 4.25p (2018: 4.25p)
Cumulative preference dividends 1 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 and free of tie
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 2019 and 2018. 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 2019 UK United Total
GBP000 States GBP000
GBP000
Revenue
Sales to external customers 7,528 - 7,528
Other segment information
Segment assets 20,596 43 20,639
-------- -------- --------
Total Assets 20,596 43 20,639
-------- -------- --------
Capital expenditure
Property, plant and equipment 505 - 505
-------- -------- --------
Year ended 31 October 2018 UK United Total
GBP000 States GBP000
GBP000
Revenue
Sales to external customers 7,614 - 7,614
Other segment information
Segment assets
20,356 43 20,399
-------- -------- --------
Total Assets 20,356 43 20,399
-------- -------- --------
Capital expenditure
Property, plant and equipment 839 - 839
-------- -------- --------
5. General information
The 2019 Annual Report and Financial Statements will be
published and posted to shareholders on 10th March 2020 Further
copies may be obtained by contacting the Company Secretary at The
Heavitree Brewery PLC, Trood Lane, Matford, Exeter EX2 8YP. The
2019 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 2020 at 11.30am.
Ends.
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END
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