Heavitree Brewery PLC 29 June 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: 29 June 2005 Following a Board Meeting held today, 29 June 2005, the Directors announce the half-year results for the six months ended 30 April 2005. Group profit and loss account for the six months ended 30 April 2005 As restated 2005 2004 Notes £000 £000 Turnover 5,830 5,742 Operating profit 542 432 Profit on sale of fixed assets 241 11 Income from other fixed asset investments - - Profit on ordinary activities before interest and taxation 783 443 Other interest receivable 3 3 Interest payable (176) (134) Profit on ordinary activities before taxation 610 312 Taxation on profit on ordinary activities (185) (92) Profit attributable to shareholders 425 220 Dividends - equity and non-equity (201) (191) Profit retained for the financial period 224 29 Basic and diluted earnings per share 3 7.89p 4.03p All revenues and costs relate to continuing operations. Dividends The Directors propose an interim dividend of 3.5p per share (2004 - 3.5p) on the Ordinary and 'A' Limited Voting Ordinary Shares. This dividend will be paid on 29 July 2005 to shareholders on the register at 8 July 2005. Chairman's Statement Results The half-year has been satisfactory. Turnover, beer and cider sales are all up giving an Operating Profit up by 25.5% and Profit Before Tax of £610,000. Nearly double last year's figure of £312,000. The Managed Houses have nearly maintained last year's big improvement (of £240,000) with a loss of £134,000 which is £30,000 worse than last year. Properties The Lamb Inn at Sandford, near Crediton has been sold giving rise to a profit of £241,000. Prospects for the year I can do no better than to repeat, word for word, what I wrote this time last year. "Our performance so far deserves a year of all round improvement. However, I am sorry to report that the cost, this year, of implementing the legislation of which I warned in my 2003 statement looks like being about £400,000. This involves the Disability Discrimination Act, new Asbestos Regulations and the new Licensing Act. Some of this has already been incurred. More will follow. Bad news for us but good news for the fast growing army of bureaucrats whose jobs depend on the invention of costly schemes." The warning was confirmed in my year-end statement. The majority of the £400,000 will in fact be paid in the second half of this year. It is therefore unlikely that there will be any growth in the year's profit. Nor any increase in dividend. The warning was correct but the timing was a bit adrift. Rather like a weather forecast. Dividend An interim dividend of 3.5p (unchanged) on the Ordinary and 'A' Limited Voting Ordinary Shares has been declared and will be paid on 29 July 2005 to shareholders on the Register at 8 July 2005. Compliance with all the regulations is also costing an enormous amount of management time, which is a heavy burden on our already hard-working team. In the language of politics this is all known as 'cutting red tape'. W P Tucker Chairman 29 June 2005 Group balance sheet At 30 April 2005 As restated 2005 2004 £000 £000 Fixed assets Tangible assets 15,407 14,050 Investments 195 195 15,602 14,245 Current assets Stocks 146 155 Debtors 2,887 2,505 Cash at bank and in hand 538 347 3,571 3,007 Creditors: amounts falling due within one year (10,671) (9,325) Net current liabilities (7,100) (6,318) Total assets less current liabilities 8,502 7,927 Creditors: amounts falling due after more than one year (284) (248) Provisions for liabilities and charges Deferred taxation (218) (281) 8,000 7,398 Capital and reserves Called up share capital 291 296 Capital redemption reserve 658 653 Other reserves 72 75 Own shares reserve (674) (664) Profit and loss account 7,653 7,038 8,000 7,398 Attributable to non-equity interests 11 11 Attributable to equity interests 7,989 7,387 Total shareholders' funds 8,000 7,398 Group statement of cash flows for the six months ended 30 April 2005 2005 2004 Note £000 £000 Net cash inflow from operating activities 4 1,047 900 Returns on investments and servicing of finance Interest paid (228) (134) Interest received 3 3 Preference dividend paid (1) (1) Net cash outflow from returns on investments and servicing of finance (226) (132) Taxation Corporation tax paid (426) (372) Capital expenditure and financial investment Payments to acquire tangible fixed assets (880) (417) Receipts from sales of tangible fixed assets 315 11 Receipts from repayment of fixed assets investments - 9 (565) (397) Equity dividends paid (325) (326) Financing Consideration received by EBT on sale of shares 39 - Consideration paid by EBT on purchase of shares (118) (10) Repayment of directors' loans (10) (7) Loans from directors - - (89) (17) Decrease in cash (584) (344) Notes to the interim results 1 These figures for the six months ended 30 April 2005 are unaudited. 2 The 2004 results have been restated following the implementation of Urgent Issues Task Force (UITF) Abstract 38 'Accounting for ESOP Trusts'. 3 Basic and diluted earnings per share The calculation of basic earnings per ordinary share is based on earnings of £424,000 (2004 restated: £219,000), being profit after taxation for the year of £425,000 (2004 restated - £220,000) less preference dividends of £1,000 (2004 - £1,000), and on 5,374,483 (2004 - 5,433,950) 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. 4 Group statement of cash flows Reconciliation of operating profit to net cash inflow from operating activities: 2005 2004 £000 £000 Operating profit 542 432 Depreciation 238 238 (Increase) in stocks (3) (13) (Increase) in operation debtors (1,222) (1,361) Increase in operating creditors 1,492 1,604 Net cash inflow from continuing operating activities 1047 900 This information is provided by RNS The company news service from the London Stock Exchange