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 £86,000 to £7,528,000, I am pleased to report that Group Operating Profit has increased by £207,000 to £1,839,000. 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 £68,000 following another year of efficient credit control. There has also been a reduction in Superannuation costs against the previous year of £86,000.
Results
Group Turnover decreased by £86,000 to £7,528,000. Group Operating Profit has increased by £207,000 to £1,839,000, an increase of 12.68% on the previous year.
Heavitree Inns remained dormant throughout the year.
Heavitree Inc. generated an operating profit of £30,000 following the sale of a small parcel of development land during the year under review (2018 - £12,000).
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 29th 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 £52,000 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 2019 £000 |
Total 2018 £000 |
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 £000 | 2018 £000 |
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 Actuarial (losses) on defined benefit scheme | (6) - | (4) (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 £000 |
|
2018 £000 |
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 £000 |
|
2018 £000 |
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 Exchange gain on cash, liquid resources and loans |
| 222 - |
| 235 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 Capital element of finance lease rental payments |
| (298) (15) |
| (145) (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 share capital £000 | Capital redemption reserve £000 |
Treasury shares £000 | Fair value adjustment reserve £000 |
Currency translation £000 |
Retained earnings £000 |
Total equity £000 |
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 share capital £000 | Capital redemption reserve £000 |
Treasury shares £000 | Fair value adjustment reserve £000 |
Currency translation £000 |
Retained earnings £000 |
Total equity £000 |
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 £000 | 2018 £000 |
Profit for the year | 1,531 | 1,927 |
|
|
|
| 2019 No. (000) | 2018 No. (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 £000 | 2018 £000 |
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) |
|
|
|
|
|
Final dividend for 2019 4.25p (2018: 4.25p)
Cumulative preference dividends
| 224
1 | 224
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 £000 | United States £000 | Total £000 |
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 £000 | United States £000 | Total £000 |
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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