RNS Number : 8883C
Heavitree Brewery PLC
24 June 2021
 

The Heavitree Brewery PLC

Trood Lane

Matford

Exeter EX2 8YP

 

Date:               24 June 2021

 

Contact:          Graham Crocker - Managing Director - 01392 217733

Nicola McLean - Company Secretary - 01392 217733

Patrick Castle /Anita Ghanekar - Shore Capital - 0207 408 4090

 

 

 

Following a meeting by a duly authorised committee of the Board of Directors held today, 24 June 2021, the Directors announce the interim results for the six months ended 30 April 2021.

 

 

Chairman's statement

 

In my statement accompanying the accounts for the previous financial year, I warned that the next half year results would be further impacted by the trading restrictions and lockdown of our sector as the Government battled this country's second wave of infection of Covid-19.  Despite a write back of rent in the period of £344,000 caused by the peculiarity of the IFRS 16 Lease Accounting calculations which I explained in my year-end statement as at 31 October 2020, turnover has reduced by 67.77% to £846,000 (2020: £2,623,000).  This turnover figure is predominantly comprised of a discounted rental income from our licensed properties for December 2020 only and some income from tied products from the trading under restrictions before Christmas.

 

Results

 

The Group has returned an Operating Loss of £647,000 (2020: £243,000 Profit).  There is a Loss Before Tax of £76,000 (2020: £184,000 Profit Before Tax).

 

Dividend

 

The Directors do not recommend the payment of a dividend at the half-year.  As disruption and uncertainty within our sector continues, the Board will not consider the payment of a dividend during the current financial year.  When trading does return to some sort of normality, the Board will be able to review future dividend payments.

 

 

 

 

Property

 

The sale of some non-core assets has been achieved during the period under review:

 A small parcel of land in Abbotskerswell was sold for £20,000.

A flat on the site of the old St.Loye's Hotel site was sold for £185,000.

The closed Maltster's Arms and adjoining cottage in Harbertonford was sold for £225,000.

The Castle Inn in Holcombe was sold for £425,000.

 

Prospects

 

The reopening of the garden areas and, in turn the reopening of indoor trading areas under restrictions is an early step on the road to a recovery. We have tenants in all our pubs and the feedback from our houses and the support from our customers shows great promise for the summer months and for future trading.  The Company's cashflow forecasts continue to show that we are able to trade within our banking facility and as I reported at the year-end, Barclays Bank has waived the testing of our banking covenants until April 2022.  The Board is most grateful for the patience, support and determination shown by all stakeholders in the Company's business.

 

 

N H P TUCKER

Chairman

 

Group income statement (unaudited)

For the six months ended 30 April 2021

 

 

 

6 months

to

30 April
2021

 

6 months

to

30 April

2020

Audited

12 months

to

31 October

2020

 

Note

£' 000

£' 000

£' 000

Revenue

 

          846

  2,623

  5,019

Change in stocks

 

-

-

-

Other operating income

 

183

136

317

Purchase of inventories

 

(253)

(995)

(2,065)

Staff costs

 

(655)

(713)

(1,310)

Depreciation of property, plant and equipment

 

(77)

(87)

(177)

Other operating charges

 

          (691)

          (721)

       (1,245)

 

 

       (1,493)

       (2,380)

       (4,480)

Group operating Loss/ profit

 

(647)

243

539

Profit on sale of property, plant and equipment

 

647  

             15

          293 

Movements in valuation of estate and related assets

 

             -

           -  

          (279)

Group Loss/profit before finance costs and taxation

 

-

258

553

Finance income

 

-

2

2

Finance costs

 

(76)

(76)

(141)

Other finance costs-pensions

 

            -

            -

            -

 

 

          (76)

          (74)

          (139)

Loss/profit before taxation

 

(76)

184

414

Tax expense

 

          (10)

          (42)

          (300)

Loss/profit for the period

 

         (86)

          142

          114

Earnings per share

- basic
- diluted

2

 

(1.8)p
(1.8)p

 

3.0p
3.0p

 

2.4p
2.4p

 

 

 

 

Group statement of comprehensive income (unaudited)

For the six months ended 30 April 2021

 

 

 

6 months

to

30 April
2021

 

6 months

to

30 April

2020

    Audited

   12months

    to

 31 October

      2020

 

 

£' 000

  £' 000

       £' 000

Loss/profit for the period

 

 (86)

 142

 114

Items that will not be reclassified to profit or loss

Fair value adjustment on investment in equity

Actuarial (losses)/gains on defined benefit pension plans

Tax relating to items that will not be reclassified

 

 

 

4

 

(9)

-

 

(12)

-

 

 

4

(9)

(12)

Items that may be reclassified to profit or loss

Exchange rate differences on translation of subsidiary undertaking

Tax relating to items that may be reclassified

 

 

 

 

-

 

-

     

-

 

(2)

 

-

 

(2)

 

(4)

 

-

 

(4)

 

 

 

 

 

Other comprehensive income for the year, net of tax

 

 (82)

 131

 98

Total comprehensive income attributable to:

Equity holders of the parent

 

 

 (82)

 

 131

 

 98

 

 

 

 

 

 

 

 

 

 

 

Group balance sheet (unaudited)

at 30 April 2021

 

 

30 April

2021

£' 000

 

30 April

2020

£' 000

Audited

31 October 2020

£'000

Non-current assets

 

 

 

 

Property, plant and equipment

 

 

18,743

 

19,364

18,745

Financial assets

 

33

32

30

 

Deferred tax asset

 

       16   

       16

       16

 

 

18,792

19,412

18,791

Current assets

 

 

 

 

Trade and other receivables

 

1,852

915

1,277

Inventories

 

10

10

10

Cash and short-term deposits

 

  66

     45

     49

 

 

1,928

970

1,336

Assets held for sale

 

211

-

 

219

Total assets

 

20,931

 20,382

 20,346

Current liabilities

 

 

 

 

Trade and other payables

 

(619)

(452)

(666)

Financial liabilities

 

(2,162)

(1,681)

(1,520)

Income tax payable

 

   (98)

   (267)

   (237)

 

 

(2,879)

(2,400)

(2,423)

Non-current liabilities

 

 

 

 

Other payables

 

(279)

(296)

(274)

Financial liabilities

 

(4,508)

(4,531)

(4,322)

Deferred tax liabilities

 

(536)

(394)

(536)

Defined benefit pension plan

 

 (92)

(92)

 (92)

 

 

(5,415)

(5,313)

(5,224)

Total liabilities

 

(8,294)

(7,713)

(7,647)

Net assets

 

12,637

12,669

12,699

Capital and reserves

 

 

 

 

Equity share capital

 

264

264

264

Capital redemption reserve

 

673

673

673

Treasury shares

 

(1,502)

(1,585)

(1,522)

Fair value adjustments reserve

 

9

8

5

Currency translation

 

13

15

13

Retained earnings

 

13,180

13,294

13,266

Total equity

 

12,637

12,669

12,699

 

Dividends

 

The Directors do not recommend a dividend to be paid at the half-year. 

 

 

 

 

 

 

Group statement of cash flows (unaudited)

for the six months ended 30 April 2021                                                           

 

 

 

6 months

to

30 April
2021

 

6 months

to

30 April

2020

Audited

12months

 to

31 October

2020

Operating activities

 

£' 000

£' 000

£' 000

(Loss)/profit for the period

 

(86)

142

114

Tax expense

 

10

42

301

Net finance costs

 

76

74

139

(Profit) on disposal of non-current assets and assets held for sale

 

 

(647)

 

(15)

 

(293)

Depreciation and impairment of property, plant and equipment

 

97

87

177

Exchange gain on cash, liquid resources and loan

 

-

-

-

Difference between pension contributions paid and recognised in the income statement

 

 

-

 

-

 

-

(Increase)/decrease in trade and other receivables

 

(338)

416

   220

(Decrease)/increase in trade and other payables

Impairment of assets

 

(58)

-

           (528)

-

(274)

279

Cash generated from operations

 

(946)

218

663

Income taxes paid

 

(150) 

              -   

         (151)  

Interest paid

 

(76) 

 (76)  

(141)

Net cash(outflow)/ inflow from operating activities

 

 (1,172) 

  142  

 371

Investing activities

 

 

 

 

Interest received

 

-

2

2

Proceeds from sale of property, plant and equipment and assets held for sale

 

584

15

186

Payments to acquire property, plant and equipment

 

(209)

(262)

(315)

Net cash(outflow)/ inflow from investing activities

 

375

(245)

  (127)  

Financing activities

 

 

 

 

Preference dividend paid

 

(1)

(1)

(1)

Equity dividends paid

 

-

-

-

Consideration received by EBT on sale of shares

 

41

-

62

Consideration paid by EBT on purchase of shares

 

(54)

(23)

(25)

Capital element of finance lease rental payments

 

(7)

(6)

(9)

Repayment of bank borrowings

 

(27)

(6,000)

(1,500)

Draw down of bank borrowings

 

-

4,500

-

Net cash outflow from financing activities

 

   (48)

 (1,530)

 (1,473)

(Decrease)/increase in cash and cash equivalents

 

(845)

(1,633)

(1,229)

Cash and cash equivalents at the beginning of the period

 

 (1,232)

 (3)  

(3) 

Cash and cash equivalents at the period end

 

 (2,077)

 (1,636)

 (1,232) 

 

Group statement of cash flows (unaudited) (continued)

 

for the six months ended 30 April 2021                               

 

 

 

 

Represented by:

 

 

 

 

Cash and short term deposits

 

66

45

49

Overdraft

 

(2,143)

(1,681)

(1,281)

 

 

(2,077)

(1,636)

(1,232)

 

 

Group reconciliation of movements in equity (unaudited)

 

 

 

6 months to

Equity

Capital

 

Fair

 

 

 

30 April 2021

share

redemption

Treasury

value

Currency

Retained

Total

 

capital

reserve

shares

adjustment

translation

earnings

equity

 

£' 000

£' 000

 £' 000

£' 000

£' 000

£' 000

£' 000

 

 

 

 

 

 

 

 

At 1November 2020

264

673

(1,522)

5

13

13,266

12,699

(Loss) for the period

-

-

-

-

-

(86)

(86)

Other comprehensive income for the period, net of income tax

-

-

-

4

-

-

4

Total     comprehensive income for the period

-

-

-

4

-

(86)

(82)

Consideration

received by EBT on sale of shares                                 

 

 

 

-

 

 

 

-

 

 

 

41

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

41

Consideration paid by EBT on purchase of shares

-

-

(54)

-

-

-

(54)

 

 

 

 

 

 

 

 

Loss by EBT on sale of shares

-

-

33

-

-

-

33

Equity dividend paid

-

-

-

-

-

-

-

 

 

 

 

 

 

 

 

At 30 April 2021

264

673

(1,502)

9

13

13,180

12,637

 

 

 

 

 

Group reconciliation of movements in equity (unaudited) - continued

 

6 months to

Equity

Capital

 

Fair

 

 

 

30 April 2020

share

redemption

Treasury

value

Currency

Retained

Total

 

capital

reserve

shares

adjustment

Translation

earnings

equity

 

£' 000

£' 000

 £' 000

£' 000

£' 000

£' 000

£' 000

 

 

 

 

 

 

 

 

At 1November 2019

264

673

(1,562)

17

      17

13,152

12,561

Profit for the period

-

-

          -

         -

        -

      142

      142

Other comprehensive income for the period, net of income tax

-

-

          -

  (9)

     (2)

      -

     (11)

Total     comprehensive income for the period

-

-

-

(9)

(2)

142

131

Consideration

received by EBT on sale of shares    

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

Consideration paid by EBT on purchase of shares

-

-

(23)

-

-

-

(23)

Gain by EBT on sale of shares

-

-

-

-

-

-

-

 

 

 

 

 

 

 

 

Equity dividend paid

-

-

-

-

-

-

-

 

 

 

 

 

 

 

 

At 30 April 2020

264

673

(1,585)

8

15

13,294

12,669

 

 

Group reconciliation of movements in equity (unaudited) - continued

 

 

 

 

12 months to 31 October 2020

Audited

 

 

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 2019

264

673

(1,562)

17

17

13,152

12,561

 

 

 

 

 

 

 

 

Profit for the year

-

-

-

-

-

114

114

Other comprehensive income for the year

net of income tax

-

-

-

(12)

(4)

-

(16)

Total comprehensive

 

 

 

 

 

 

 

income for the year

-

-

-

(12)

(4)

114

98

Consideration received by EBT on sale of shares

 

-

 

-

 

62

 

-

 

-

 

-

 

62

Consideration paid by

 

 

 

 

 

 

 

EBT on purchase of shares       

-

-

-

-

-

-

-

Loss by EBT on sale of shares

-

-

(24)

-

-

-

(24)

Equity dividends paid

-

-

2

-

-

-

2

At 31 October 2020

264

673

(1,522)

5

13

13,266

12,699

                                                               

 

 

 

Equity share capital

The balance classified as share capital includes the total net proceeds (both nominal value and share premium) on issue of the Company's equity share capital, comprising 5p Ordinary and 'A' Limited Voting 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 Benefit Trust ('EBT'). Shares held at half-year 415,975.

 

 

 

Notes to the interim results

 

1.  Basis of preparation

 

These unaudited interim condensed and consolidated financial statements have been prepared in accordance with IAS34 "interim financial reporting" and do not constitute statutory accounts as defined in section 434 of the Companies Act 2006.  They have been prepared on the basis of the accounting policies that were complied with in the annual financial statements for the year ended 31 October 2020. The accounting policies are drawn up in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as adopted by the European Union.

 

These unaudited financial statements were approved and authorised for issue by a duly appointed and authorised committee of the Board of Directors on 24 June 2021.

 

2. Going concern

 

With the continued uncertainty of the Covid-19 pandemic the Directors have continued to review the Group's financial resources including a continued review of the medium-term financial plan, along with a range of cash flow forecasts, the Group has positive cash generation from its operations and the gearing remains low. These forecasts include the rent concessions which have been given to the end of May 2021 for Tenants including and factoring in any further lockdowns. As reported in the year end Chairman's Statement the Board has taken the decision to accelerate its programme of non-core asset sales and in the first half of the financial year four of these assets have been sold. The Board continues to monitor and control costs and where possible and have claimed on the Governments Furlough Scheme and will continue to review cashflows as guidance from Government changes.

As reported in the Chairman's Statement a waiver of covenants has been agreed by Barclays Bank until April 2022, the Bank continues to be satisfied with the Group's forecasts and projections, which take account any future changes which may come about as a direct result of the Covid-19 pandemic and shows that the Group will be able to operate within its facilities. The current trading performance of the Group also shows that it will be able to operate within the level of its facilities for the foreseeable future. With the value in the Estate being realised over time and with the support from the bank there are no material uncertainties. For this reason, the Group continues to adopt the going concern basis in preparing its financial statements.

 

 

 

 

Notes to the interim results - continued

 

3. Key Estimates

 

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are discussed below:

 

Impairment of assets

 

The Directors assess impairment of assets at each reporting date on a property by property basis.  The Directors take into consideration trade performance during the year and open market value as to whether there is an indication that an asset may be permanently impaired.  When necessary external valuations are carried out.  The impact of the ongoing Covid-19 pandemic on the pub trade and the wider UK economy could have ramifications for the valuation of the Group's estate.  Given the current significant and unprecedented levels of uncertainty, the Directors' view is that it is not possible to quantify any potential impact at this time, and as such the values in these interim financial statements have not been adjusted to take into account the impact of the pandemic.

 

4.  Basic and diluted earnings per share

The calculation of basic earnings per ordinary share is based on earnings of £(86,000) (2020: £142,000), being (loss)/profit after taxation for the period, and on 4,819,991 (2020: 4,777,939) shares being the weighted average number of Ordinary and 'A' Limited Voting Ordinary Shares in issue during the period after excluding the shares owned by The Heavitree Brewery PLC Employee Benefits Trust and those shares under option pursuant to the Employee Share Option Scheme. Employee share options could potentially dilute basic earnings per share in the future but are not included in the interim calculation of dilutive earnings per share because they are antidilutive for the period presented. The Ordinary Shares and the 'A' Limited Voting Ordinary Shares have equal dividend rights and therefore no separate calculation of earnings per share for the different classes has been given.

 

5.  Segment information

 

Primary reporting format - Business segments

The primary segmental reporting format is determined to be business segments as the Group's risks and rates of return are affected predominantly by differences in the products and services provided.

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.

 

 

6.  Interim report

 

Copies of this announcement are available from the Company at Trood Lane, Matford, Exeter EX2 8YP. The Company's interim report for the six months ended 30 April 2021 has been posted to shareholders today and will be available on our website at www.heavitreebrewery.co.uk.

 

Ends.

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