TIDMHVT
RNS Number : 2343E
Heavitree Brewery PLC
28 June 2023
The Heavitree Brewery PLC
Trood Lane
Matford
Exeter EX2 8YP
Date: 28 June 2023
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, 28 June 2023, the Directors announce the
interim results for the six months ended 30 April 2023.
Chairman's statement
I reported at the 2022 year-end that the Company had returned to
a performance level on a par with 2019 before the impact of the
pandemic was felt. Despite this, I warned that we had much to be
cautious about in the new trading year and I had concerns about how
the cost of doing business exacerbated by hikes in energy, food and
labour costs might affect our operators and how the cost-of-living
increases might affect how our customers would support our pubs.
Fortunately, these worries have not materialised as feared and I am
pleased to report that we are hearing from our tenants that top
line trading has held up well during the first half of this
financial year and continues to do so; in turn, I can report that
the Company has returned satisfactory numbers at the half-year.
Results
Turnover for the Group at the half-year was GBP3,326,000 (2022:
GBP3,290,000). The turnover figure was reduced by GBP61,000 due to
the IFRS 16 Lease Accounting unwind. I have explained the mechanics
of this accounting standard in previous statements.
The Group has returned an operating profit of GBP523,000 (2022:
an operating profit of GBP522,000) at the half-year. Profit before
tax is GBP947,000 after a book profit of GBP503,000 was realised
from the sale of property in accordance with our disposal programme
of non-core assets. This corresponds to a profit before tax at the
2022 half-year of GBP1,063,000 which included a book profit of
GBP601,000 from the sale of property in that period.
Dividend
As reported, the Directors were delighted to reinstate the
payment of a dividend at the 2022 year-end. The Directors recommend
the reinstatement of an interim dividend at a rate of 2p per
Ordinary and 'A' Ordinary share to those shareholders on the
register on 14th July 2023 payable on 4th August 2023. The payment
of future dividends in these times of uncertainty remains under
continual review.
Property
The Jolly Abbot in Newton Abbot has been sold during this period
under review. Also, a cottage in Honiton Clyst and a second one in
Barnstaple have been sold, together with a small parcel of land in
Christow.
A set of plans to rebuild on the site of the Jolly Sailor in
East Ogwell which we lost to a devastating fire more than two years
ago have been submitted as a pre-application to Teignbridge
District Council and I hope to report further on this matter at the
year-end.
The development of the new accommodation block at the Ley Arms
in Kenn continues at pace and we remain on target to complete this
project in September 2023. There is much interest in the addition
of seven bedrooms to this flourishing pub.
Prospects
The period of consolidation has continued and although the Board
remains cautious about the head winds facing our sector, the
half-year results show the Company is back to generating cash
through a sustainable operating profit which gives the Directors
the confidence to reinstate an interim dividend.
N H P TUCKER
Chairman
Group income statement (unaudited)
For the six months ended 30 April 2023
6 months 6 months Audited
to to 12 months
30 April 30 April to
2023 2022 31 October
2022
Note GBP' 000 GBP' 000 GBP' 000
Revenue 3,326 3,290 7,280
Change in stocks - - -
Other operating income 103 110 211
Purchase of inventories (1,271) (1,312) (2,980)
Staff costs (669) (714) (1,477)
Depreciation of property, plant and equipment (98) (98) (228)
Other operating charges (868) (754) (1,384)
(2,803) (2,768) (5,858)
Group operating profit 523 522 1,422
Profit on sale of property, plant and equipment 503 601 968
Group Profit before finance costs and taxation 1,026 1,123 2,390
Finance income - - -
Finance costs (79) (60) (117)
(79) (60) (117)
Profit/(loss) before taxation 947 1,063 2,273
Tax expense (213) (208) (306)
Profit for the period 734 855 1,967
Earnings per share
- basic 4 15.3p 15.4p 40.7p
- diluted 15.3p 15.4p 40.7p
Group statement of comprehensive income (unaudited)
For the six months ended 30 April 2023
6 months 6 months Audited
to to 12months
30 April 30 April to
2023 2022 31 October
2022
GBP' 000 GBP' 000 GBP' 000
Profit for the period 734 855 1,967
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
- - -
9 1
-
- -
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 - - -
Other comprehensive income/ (loss) for the year, net of tax 734 864 1,968
Total comprehensive income/ (loss) attributable to:
Equity holders of the parent 734 864 1,968
Group balance sheet (unaudited)
at 30 April 2023 30 April 30 April Audited
2023 2022 31 October
GBP' 000 GBP' 000 2022
GBP'000
Non-current assets
Property, plant and equipment 18,291 17,798 17,864
Financial assets 34 34 34
Deferred tax asset 16 16 16
18,341 17,848 17,914
Current assets
Trade and other receivables 2,146 1,996 1,631
Inventories 10 10 10
Cash and short-term deposits 566 35 788
2,722 2,041 2,429
Assets held for sale 125 371 180
Total assets 21,188 20,260 20,523
Current liabilities
Trade and other payables (1,296) (1,274) (1,133)
Financial liabilities (35) (1,051) (229)
Income tax payable (552) (318) (339)
(1,883) (2,643) (1,701)
Non-current liabilities
Other payables (299) (325) (326)
Financial liabilities (2,126) (2,187) (2,195)
Deferred tax liabilities (784) (734) (784)
Defined benefit pension plan (92) (92) (92)
(3,301) (3,338) (3,397)
Total liabilities (5,184) (5,981) (5,098)
Net assets 16,004 14,279 15,425
Capital and reserves
Equity share capital 251 264 264
Capital redemption reserve 686 673 673
Own share reserve (946) (1,579) (1,537)
Fair value adjustments reserve 10 10 10
Currency translation 14 22 14
Retained earnings 15,989 14,889 16,001
Total equity 16,004 14,279 15,425
Dividends
The Directors recommend a dividend of 2.00p to be paid at the
half-year.
Group statement of cash flows (unaudited)
for the six months ended 30 April 2023
6 months 6 months Audited
to to 12months
30 April 30 April to
2023 2022 31 October
2022
Operating activities GBP' 000 GBP' 000 GBP' 000
Profit/(loss) for the period 734 855 1,967
Tax expense 213 208 306
Net finance costs 78 60 117
(Profit) on disposal of non-current
assets and assets held for sale (503) (601) (968)
Depreciation and impairment of property,
plant and equipment 98 98 228
Exchange gain on cash, liquid resources
and loan - - -
(Increase)/decrease in trade and
other receivables (452) (80) 264
(Decrease)/Increase in trade and
other payables (38) 274 157
Impairment of assets - - -
Cash generated from operations (130) 814 2,071
Income taxes paid - - (24)
Interest paid (78) (60) (117)
Net cash (outflow)/inflow from operating
activities (52) 754 1,930
Investing activities
Interest received - - -
Proceeds from sale of property, plant
and equipment and assets held for
sale 564 1,402 2,038
Payments to acquire property, plant
and equipment (577) (153) (425)
Net cash (outflow)/inflow from investing
activities (13) 1,249 1,613
Financing activities
Preference dividend paid (1) (1) (1)
Equity dividends paid (171) - -
Consideration received by EBT on
sale of shares 636 - 42
Consideration paid by EBT on purchase
of shares (45) (50) (50)
Own Share buyback (575) - -
Capital element of finance lease
rental payments (27) (4) (34)
Repayment of bank borrowings (100) (1,892) (1,998)
Mortgage Receipts 22 21 41
Net cash outflow from financing activities (261) (1,926) (2,000)
(Decrease)/increase in cash and cash
equivalents (222) 77 1,543
Cash and cash equivalents at the
beginning of the period 788 (755) (755)
Cash and cash equivalents at the
period end 566 (678) 788
Group statement of cash flows (unaudited)
(continued)
for the six months ended 30 April
2023
Represented by:
Cash and short term deposits 566 35 736
Overdraft - (713) 807
566 (678) 1,543
Group reconciliation of movements in equity (unaudited)
6 months Equity Capital Own Fair
to
30 April share redemption share value Currency Retained Total
2023
capital reserve reserve adjustment translation earnings equity
GBP' GBP' 000 GBP' GBP' GBP' GBP' GBP'
000 000 000 000 000 000
At 1November
2022 264 673 (1,537) 10 14 16,001 15,425
Profit for
the period - - - - - 734 734
Other comprehensive
income for
the period,
net of income
tax - - - - - - -
-------- ----------- -------- ----------- ------------ --------- -------
Total comprehensive
income for
the period - - - - - 734 734
-------- ----------- -------- ----------- ------------ --------- -------
Consideration
received
by EBT on
sale of shares - - 61 - - - 61
Consideration
paid by EBT
on purchase
of shares - - (45) - - - (45)
Buy back
and cancellation
of own shares (13) 13 575 - - (575) -
Loss by EBT
on sale of
shares - - - - - - -
Equity dividend
paid - - - - - (171) (171)
At 30 April
2023 251 686 (946) 10 14 15,989 16,004
-------- ----------- -------- ----------- ------------ --------- -------
Group reconciliation of movements in equity (unaudited) -
continued
6 months Equity Capital Own Fair
to
30 April share redemption share value Currency Retained Total
2022
capital reserve reserve adjustment Translation earnings equity
GBP' GBP' 000 GBP' GBP' GBP' 000 GBP' GBP'
000 000 000 000 000
At 1November
2021 264 673 (1,529) 10 13 14,034 13,465
Profit for
the period - - - - - 855 855
Other comprehensive
income for
the period,
net of income
tax - - - - 9 - 9
-------- ----------- ----------- ----------- ------------ --------- ---------
Total comprehensive
income for
the period - - - - 9 855 864
-------- ----------- ----------- ----------- ------------ --------- ---------
Consideration
received
by EBT on
sale of shares - - - - - - -
Consideration
paid by EBT
on purchase
of shares - - (50) - - - (50)
Loss by EBT
on sale of
shares - - - - - - -
Equity dividend
paid - - - - - - -
-------- ----------- ----------- ----------- ------------ --------- ---------
At 30 April
2022 264 673 (1,579) 10 22 14,889 14,279
-------- ----------- ----------- ----------- ------------ --------- ---------
Group reconciliation of movements in equity (unaudited) -
continued
Equity Capital Own Fair
share redemption share value Currency Retained Total
12 months to capital reserve reserves adjustment Translation earnings equity
31 October 2022 GBP000 GBP000 GBP000 reserve GBP000 GBP000 GBP000
Audited GBP000
At 1 November
2021 264 673 (1,529) 10 13 14,034 13,465
Profit for the
year - - - - - 1,967 1,967
Other comprehensive
income for the
year
net of income
tax - - - - 1 - 1
--------- ------------ ---------- ------------ -------------- ----------- ---------
Total comprehensive
income for the
year - - - - 1 1,967 1,968
--------- ------------ ---------- ------------ -------------- ----------- ---------
Consideration
received by EBT
on sale of shares - - 42 - - - 42
Consideration
paid by
EBT on purchase
of shares - - (50) - - - (50)
Loss by EBT on
sale of shares - - - - - - -
Equity dividends
paid - - - - - - -
--------- ------------ ---------- ------------ -------------- ----------- ---------
At 31 October
2022 264 673 (1,537) 10 14 16,001 15,425
--------- ------------ ---------- ------------ -------------- ----------- ---------
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.
On the 7th of December 2022 a stock exchange announcement was
made by the Group regarding the following share transactions.
Purchase of own shares from the Company's Employee Benefit
Trust
- 150,000 Ordinary Shares of 5p each at GBP2.90 (mid-market
price on 6/12/22) per share representing 7.51% of the total number
of Ordinary Shares in issue.
- 100,000 'A' Limited Voting Shares of 5p each at GBP1.40
(mid-market price on 6/12/22) per share representing 3.04% of the
total number of 'A' Limited Voting Shares in issue.
The shares purchased by the Company pursuant to the Share
Purchase have been cancelled.
Own share reserve
Own shares reserve represents 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 123,276.
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 2022. The accounting policies are drawn up in accordance
with International Accounting Standards (IAS) and International
Financial Reporting Standards (IFRS) as adopted by the United
Kingdom.
These unaudited financial statements were approved and
authorised for issue by a duly appointed and authorised committee
of the Board of Directors on 28 June 2023.
2 . Going concern
The impact of rising energy, interest rates and food costs
continues to hit the industry , all of these factors were taken
into consideration when forecasting for the current financial year,
while we have exceeded expectations the Board has continued to take
these factors into consideration when reviewing forecasts in order
to minimise any impact these may have on the second half of the
trading year. The Group remains well within its forecasts to April
2023 with the full GBP3M overdraft available the term loan has been
decreased in the year by GBP100k. The Board continues to focus
attention on the long-term trading position of the Group. The
acceleration of the Group's programme of non-core asset sales is
continuing and in line with targets set, achieving GBP458k of sales
within the first six months of the financial year. 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.
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. Within this trading period the Directors conclude that
there were no impairments.
4. Basic and diluted earnings per share
The calculation of basic earnings per ordinary share is based on
earnings of GBP734,000 (2022: GBP855,000), being profit after
taxation for the period, and on 4,794,270 (2022: 4,818,652) 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 2023 has been posted to
shareholders today and will be available on our website at
www.heavitreebrewery.co.uk.
Ends.
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END
IR SEASAAEDSELM
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