Heavitree Brewery PLC 14 February 2005 The Heavitree Brewery PLC Trood Lane Matford Exeter EX2 8YP Telephone: 01392 217733 Contact: Mr G.J.Crocker - Finance Director and Company Secretary Mr R.J.Glanville - Director Date: 14 February 2005 Preliminary Notice of Results Following a Board Meeting held today, 14 February 2005, the Directors announce the preliminary results for the year ended 31 October 2004. Group profit and loss account for the year ended 31 October 2004 As restated 2004 2003 Notes £000 £000 Turnover 12,487 12,309 Operating profit 1,850 1,360 Profit on sale of fixed assets 16 140 Income from other fixed asset investments 13 12 Profit on ordinary activities before interest and taxation 1,879 1,512 Other interest receivable 9 27 Interest payable (298) (274) Profit on ordinary activities before taxation 1,590 1,265 Taxation on profit on ordinary activities (432) (218) Profit attributable to shareholders 1,158 1,047 Dividends - equity and non-equity 3 (510) (507) Profit retained for the financial year 648 540 Basic and diluted earnings per share 4 21.4p 18.9p All revenues and costs relate to continuing operations. Dividends The Directors propose a 4.3% increase in the final dividend to 6p per share (2003 - 5.75p) on the Ordinary and 'A' Limited Voting Ordinary Shares making a total of 9.5p per share (2003 - 9.25p) for the year. If approved at the Annual General Meeting due to be held on 13 April 2005, this dividend will be paid on 14 April 2005 to shareholders on the register at 4 March 2005. Chairman's Statement Results As indicated by the half-year report this has been another year of solid improvement. The figures are distorted as costs of some £200,000 authorised but not actually spent in 2004 have been reallocated to 2005. This money is part of the £400,000 which I mentioned in June 2004 as being a minimum necessary spend to comply with the new regulations regarding Disability Discrimination, Control of Asbestos and Licensing. The profit for this year has benefited from this, but next year's will suffer the consequences. A profit before tax of £1,590,000 was achieved (2003 restated - £1,265,000) which is an increase of 25.7% or £325,000 but bear in mind the £200,000 explained above. Other headline figures are: Core Company - operating profit of £1,900,000 (2003 restated - £1,680,000); an increase of 13.1%. The Managed Houses (Heavitree Inns) - operating loss of £45,000 (2003 - loss £312,000); an improvement of £267,000 or 85.6%. The American Subsidiary (Heavitree Inc) - operating loss of £5,000 (2003 - loss £7,000). Sales of Fixed Assets - a profit of £16,000 (2003 - £140,000). Sales of Beer - up by 1.9% on volume. Dividends The Directors recommend a final dividend of 6p per Ordinary and 'A' Limited Voting Ordinary Share (2003 - 5.75p); an increase of 4.3% making a total of 9.5p for the year (2003 - 9.25p). Shares During the year we bought in and cancelled 100,000 'A' Limited Voting Ordinary Shares at a cost of £350,000. Heavitree Inns I said last year that further progress could be expected and this has been achieved in full measure. Everyone in this subsidiary has made a magnificent effort. Losses at their worst were £482,000 in 2002. That was the year we took these pubs back under our own control. Heavitree Inc There is nothing significant to report. Property We did not dispose of any properties in the year, although we acquired two cottages for the expansion of our pub operations at a cost of £356,000. Minor improvements were carried out at The Bishop John De Grandisson, Bishopsteignton, Teignmouth; The Jolly Sailor Inn, East Ogwell, Newton Abbot; The Royal Oak Inn, Ideford, Newton Abbot; and also The Ship Inn, Kingswear, which was subject to a major spend following a landslip, resulting in a combined cost of £335,000. Personnel Everyone has done very well to achieve these results. Their efforts are much appreciated. Prospects There are grounds for optimism but the barrage of legislation continues to create uncertainty about the future. Indeed, the £400,000 mentioned in my half-year statement and referred to under the 'Results' heading above appears certain to be exceeded. W P Tucker Chairman 14 February 2005 Group balance sheet At 31 October 2004 As restated 2004 2003 £000 £000 Fixed assets Tangible assets 14,839 13,871 Investments 195 204 15,034 14,075 Current assets Stocks 143 142 Debtors 1,665 1,144 Cash at bank and in hand 700 401 2,508 1,687 Creditors: amounts falling due within one year (9,199) (7,843) Net current liabilities (6,691) (6,156) Total assets less current liabilities 8,343 7,919 Creditors: amounts falling due after more than one year (270) (259) Provisions for liabilities and charges Deferred taxation (218) (205) 7,855 7,455 Capital and reserves Called up share capital 291 296 Capital redemption reserve 658 653 Other reserves 72 75 Own shares reserve (595) (606) Profit and loss account 7,429 7,037 7,855 7,455 Attributable to non-equity interests 11 11 Attributable to equity interests 7,844 7,444 Total shareholders' funds 7,855 7,455 Group statement of cash flows for the year ended 31 October 2004 2004 2003 Note £000 £000 Net cash inflow from operating activities 5 1,785 1,942 Returns on investments and servicing of finance Interest paid (246) (313) Interest received 9 27 Dividends received 13 12 Preference dividend paid (1) (1) Net cash outflow from returns on investments and servicing of finance (225) (275) Taxation Corporation tax paid (330) 24 Return of overpayment of corporation tax 26 - (304) 24 Capital expenditure and financial investment Payments to acquire tangible fixed assets (1,609) (2,126) Receipts from sales of tangible fixed assets 154 872 Receipts from repayment of fixed asset investments 9 2 (1,446) (1,252) Equity dividends paid (502) (487) Financing Consideration received by EBT on sale of shares 203 66 Consideration received by EBT on exercise of share options 147 - Consideration paid by EBT on purchase of shares (595) (434) Repayment of directors' loans (23) - Loans from directors 22 - (246) (368) Decrease in cash (938) (416) Notes to the preliminary announcement 1 These figures do not constitute full accounts within the meaning of S.240 of the Companies Act 1985. They have been extracted from the statutory accounts for the year ended 31 October 2004, on which the auditors have issued an unqualified audit report. The statutory accounts have not yet been delivered to the Registrar of Companies. 2 The 2003 results have been restated following the implementation of Urgent Issues Task Force (UITF) Abstract 38 'Accounting for ESOP Trusts'. 3 Dividends 2004 2003 £000 £000 Non-equity interests: £1 11.5% Preference - paid 1 1 Equity interests: Interim 3.5p per Ordinary and 'A' Limited Voting Ordinary share (2003 - 3.5p) - paid 199 201 Proposed final 6p per Ordinary and 'A' Limited Voting Ordinary share (2003 - 5.75p) 335 327 Less dividends on shares held within employee share schemes (25) (22) 509 506 510 507 4 Basic and diluted earnings per share The calculation of basic earnings per ordinary share is based on earnings of £1,157,000 (2003 restated: £1,046,000), being profit after taxation for the year of £1,158,000 (2003 restated - £1,047,000) less preference dividends of £1,000 (2003 - £1,000), and on 5,414,935 (2003 - 5,548,910) shares being the weighted average number of Ordinary and 'A' Limited Voting Ordinary Shares in issue during the year 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. The diluted earnings per share is equal to the basic earnings per share because the share options within the Employee Share Option Scheme are considered to be non-dilutive potential ordinary shares. 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 Group statement of cash flows Reconciliation of operating profit to net cash inflow from operating activities: 2004 2003 £000 £000 Operating profit 1,850 1,360 Depreciation 503 505 (Increase)/decrease in stocks (1) 35 Increase in operating debtors (521) (46) (Decrease)/increase in operating creditors (46) 88 Net cash inflow from continuing operating activities 1,785 1,942 6 Copies of the 2004 Annual Report and Accounts will be posted to shareholders on 11 March 2005. Further copies may be obtained by contacting the Company Secretary at The Heavitree Brewery PLC, Trood Lane, Matford, Exeter EX2 8YP. The Annual General Meeting is to be held at the Registered Office on 13 April 2005. Ends. This information is provided by RNS The company news service from the London Stock Exchange