Preliminary Announcement

RNS Number : 6067X

Heavitree Brewery PLC

12 February 2013

 



The Heavitree Brewery PLC

Trood Lane

 Matford

 Exeter EX2 8YP

Date:                12 February 2013

Contact:           Graham Crocker - Managing Director - 01392 217733

Nicola McLean - Company Secretary - 01392 217733

Pascal Keane - Shore Capital - 0207 408 4090

Following a Board Meeting held today, 12 February 2013, the Directors announce the preliminary statement of results for the year ended 31 October 2012.

ISIN: GB0004182720 for 'A' Limited Voting Ordinary Shares

ISIN: GB0004182506 for Ordinary Shares

Chairman's statement

A similar performance to last year has been achieved.   Last year I reported that it had been a satisfactory performance bearing in mind the economic environment in which we were trading.  That environment has changed very little and, together with the adverse weather conditions during the summer season and the floods experienced towards the year end, public houses have had a lot to contend with once again.  Despite these factors we have again returned a steady set of results. 

Results

Turnover for the Group decreased from last year by £84,000 (1.14%) to £7,268,000 and generated a Group operating profit of £1,245,000 (2011 - £1,408,000) after consolidation adjustments.  Gross margins and rental income held up extremely well; but heavy repair costs in the year, combined with additional costs directly attributable to dealing with a small number of problematic houses, account for the reduced profitability. Group profit before taxation has been further impacted by an exceptional impairment cost of £244,000 arising on the transfer of non-current assets to assets held for sale.

Heavitree Inns remained dormant throughout the year.

Heavitree Inc. generated an operating profit of £10,000 (2011 - £9,000).

Key Performance Indicators

Adjusted operating profit before taxation of £1,245,000 was down 11.57% on last year.  Interest costs were covered 8.76 times.

Details of the key performance indicators used by the Board to measure the performance of the Group's business can be found in the Directors' report on page 7.

Dividend

The Directors recommend a final dividend of 3.5p per Ordinary and 'A' Limited Voting Ordinary Share (2011 - 3.5p) making a total for the year of 7p, which is unchanged from last year.  The dividend will be paid on 19 April 2013, subject to shareholder approval at the Annual General Meeting on 12 April 2013, to shareholders on the Register at 22 March 2013.

Capital Investments

At the time of writing the conversion into six flats of the old St.Loyes pub in Exeter is nearing completion.  These flats will be marketed for sale in the coming months.

Phase one work has started at The Maltsters Arms site in Clyst St.Mary converting the old skittle alley into a detached house.

The upgrade of The Heart of Oak in Pinhoe was completed in December 2012.

The extension of the trading area at The Half Moon in Clyst St.Mary was also completed in December 2012.

Pension Scheme

The Company continues to meet its funding obligations to its closed final salary Pension Scheme.

Following completion, in April 2012, of the triennial valuation of the Scheme as at 1 January 2011, a continuing annualised deficit correction payment was agreed, with the last payment now being due in February 2020.

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.

Personnel

Rod Glanville retired as Company Secretary and from the Board on 19 June 2012, having joined the Company in 1981.  At last year's Annual General Meeting, on behalf of the Board of Directors and the shareholders, I thanked Rod for his years of invaluable service to the Company and wished him a long and happy retirement.

Nicky McLean, I am delighted to report, has become Company Secretary having been Assistant to Rod before his retirement.

Outlook

The Government has announced that it is now minded to introduce a statutory Code of Practice for Public House companies and has decided to commence a consultation period to be completed by spring this year.  There is no suggestion that the Beer Tie itself will be abolished, in fact quite the reverse, but the Government's proposals will seek to enshrine the principle that 'a tied licensee should be no worse off than a free of tie licensee'. Although it is currently considered this statutory Code will only apply to companies with more than five hundred tied tenanted and/or leased houses, it is inevitable that the effects will be felt by all companies in the sector.  We have worked to our own voluntary code since December 2010, and have always taken great pride in the positive relationship that has always existed between the Company and our Tenants.

The Government has also chosen not to act to remove the beer duty escalator about which I spoke at last year's Annual General Meeting.  As a result we can only anticipate further above-inflation duty increases.

Despite the expectation that trading conditions will remain difficult, perhaps for years to come, the key to our future success will continue to be the result of the strong relationships between Head Office and our Landlords and Landladies.

N H P TUCKER
Chairman

Group income statement

for the year ended 31 October 2012

	Notes	Total 2012 £000	Total 2011 £000
Revenue		7,268	7,352
Change in stocks		-	-
Other operating income		144	113
Purchase of inventories		(3,097)	(3,134)
Staff costs		(1,211)	(1,194)
Depreciation of property, plant and equipment		(293)	(295)
Other operating charges		(1,566)	(1,434)
		(6,023)	(5,944)
Group operating profit		1,245	1,408
Exceptional items		(121)	10
Group profit before finance costs and taxation		1,124	1,418
Finance income		26	33
Finance costs		(168)	(138)
Other finance costs - pensions		(55)	(81)
		(197)	(186)
Profit before taxation		927	1,232
Tax expense		(296)	(389)
Profit  for the year attributable to equity holders of the parent		631	843
Basic earnings per share	2	12.5p	16.4p
Diluted earnings per share	2	12.5p	16.4p

All amounts in 2012 and 2011 relate to continuing operations.

Group statement of comprehensive income

for the year ended 31 October 2012

	2012 £000	2011 £000
Profit for the year	631	843
Other comprehensive income
Actuarial (losses)/gains on defined benefit pension plans	(868)	130
Cash flow hedges	(75)	-
Tax credit on items taken directly to or transferred from equity	226	(33)
Fair value adjustment	(26)	4
	(743)	101
Total comprehensive income for the year  Total comprehensive income attributable  to: Equity holders of the parent	(112) (112)	944 944

Group balance sheet

at 31 October 2012

		2012 £000		2011 £000
Non-current assets
Property, plant and equipment		14,833		15,225
Financial assets		28		54
Deferred tax asset		417		325
		15,278		15,604
Current assets
Inventories		10		10
Trade and other receivables		1,362		1,262
Cash and cash equivalents		78		86
		1,450		1,358
Assets held for sale		525		-
Total assets		17,253		16,962
Current liabilities
Trade and other payables		(970)		(1,095)
Financial liabilities		(1,454)		(5,062)
Income tax payable		(102)		(144)
		(2,526)		(6,301)
Non-current liabilities
Other payables		(292)		(327)
Financial liabilities		(4,261)		(11)
Deferred tax liabilities		(220)		(261)
Defined benefit pension plan deficit		(1,662)		(1,246)
		(6,435)		(1,845)
Total liabilities		(8,961)		(8,146)
Net assets		8,292		8,816
Capital and reserves
Equity share capital		264		264
Capital redemption reserve		673		673
Treasury shares		(875)		(840)
Fair value adjustments reserve		8		34
Cash flow hedging reserve		(57)		-
Currency translation		6		6
Retained earnings		8,273		8,679
Total equity		8,292		8,816

Group statement of cash flows

for the year ended 31 October 2012

	Notes	2012 £000		2011 £000
Operating activities
Profit for the year		631		843
Tax expense		296		389
Net finance costs		197		186
Profit on disposal of non current assets and assets held for sale		(101)		(10)
Depreciation and impairment of property, plant and equipment		537		295
Difference between pension contributions paid and amounts
recognised in the income statement		(507)		(507)
(Increase)/decrease in trade and other receivables		(100)		182
Increase in trade and other payables		125		39
Cash generated from operations		1,078		1,417
Income taxes paid		(246)		(349)
Interest Paid		(168)		(138)
Net cash flow from operating activities		664		930
Investing activities
Interest received		26		33
Proceeds from sale of property, plant and equipment and assets held for sale		534		114
Payments to acquire property, plant and equipment		(1,386)		(1,199)
Net cash outflow from investing activities		(826)		(1,052)
Financing activities
Preference dividend paid		(1)		(1)
Equity dividends paid	3	(354)		(360)
Consideration received by EBT on sale of shares		54		43
Consideration paid by EBT on purchase of shares		(112)		(194)
New long-term borrowings		250		-
Net cash flow from financing activities		(163)		(512)
Decrease in cash and cash equivalents		(325)		(634)
Cash and cash equivalents at the beginning of the year		(976)		(342)
Cash and cash equivalents at the year end		(1,301)		(976)

Group statement of changes in equity

for the year ended 31 October 2012

	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 2010	264	673	(826)	30	6	8,236	8,383
Profit for the year	-	-	-	-	-	843	843
Other comprehensive
income for the year net of income tax	-	-	-	4	-	97	101
Total comprehensive
income for the year	-	-	-	4	-	940	944
Consideration received
by EBT on sale of shares	-	-	43	-	-	-	43
Consideration paid by
EBT on purchase of shares	-	-	(194)	-	-	-	(194)
Loss by EBT on sale
of shares	-	-	137	-	-	(137)	-
Equity dividends paid	-	-	-	-	-	(360)	(360)
At 31 October 2011	264	673	(840)	34	6	8,679	8,816

	Equity share capital £000	Capital redemption reserve £000	Treasury shares £000	Fair value adjustment reserve £000	Currency translation £000	Cash flow hedge reserve £000	Retained earnings £000	Total equity £000
At 1 November 2011	264	673	(840)	34	6	-	8,679	8,816
Profit for the year	-	-	-	-	-	-	631	631
Other comprehensive
income for the year net of income tax	-	-	-	(26)	-	(57)	(660)	(743)
Total comprehensive
income for the year	-	-	-	(26)	-	(57)	(29)	(112)
Consideration received
by EBT on sale of shares	-	-	54	-	-	-	-	54
Consideration paid by
EBT on purchase of shares	-	-	(112)	-	-	-	-	(112)
Loss by EBT on sale
of shares	-	-	23	-	-	-	(23)	-
Equity dividends paid	-	-	-	-	-	-	(354)	(354)
At 31 October 2012	264	673	(875)	8	6	(57)	8,273	8,292

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 represents 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 2012 the Group held 82,198 Ordinary Shares and 156,866 'A' Limited Voting Ordinary Shares (2011: 68,174 Ordinary Shares and 146,641 'A' Limited Voting Ordinary Shares) of its own shares at an average cost of £3.65 (2011: £3.90). The market value of these shares as at 31 October 2012 was £579,385 (2010: £478,187).

Fair value adjustments reserve

The fair value adjustments reserve is used to record differences in the market value of the available-for-sale investment year on year.

Cash flow hedging reserve

The cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in fair value of the hedging instruments that are recognised and accumulated under the heading of cash flow hedging reserve will be re-classified to profit or loss only when the hedged transaction affects the profit or loss.

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 2012. The statutory financial statements have not yet been delivered to the Registrar of Companies. 

The financial information is 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 2012, which are expected to be mailed to shareholders on 7 March 2013.  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:

	2012 £000	2011 £000
Profit for the year	631	843
	2012 No. (000)	2011 No.  (000)
Basic weighted average number of shares (excluding treasury shares)	5,061	5,129

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

	2012 £000	2011 £000
Declared and paid during the year:
Equity dividends on ordinary shares:
Final dividend for 2011: 3.5p (2010: 3.5p)	185	185
First dividend for 2012: 3.5p (2011: 3.5p)	185	185
Less dividend on shares held within employee share schemes	(16)	(10)
Dividends paid	354	360
Proposed for approval at AGM
(not recognised as a liability as at 31 October)
Final dividend for 2012: 3.5p (2011: 3.5p)    Cumulative preference dividends	180 1	180 1

4.  Segment information

 Primary reporting format - business segments

During the year the Group operated in one business segment - leased estate. 

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 2012 and 2011. 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 2012	UK £000	United States £000	Total £000
Revenue
Sales to external customers	7,268	-	7,268
Other segment information
Segment assets	17,196	57	17,253
Total Assets	17,196	57	17,253
Capital expenditure
Property, plant and equipment	1,103	-	1,103
Year ended 31 October 2011	UK £000	United States £000	Total £000
Revenue
Sales to external customers	7,352	-	7,352
Other segment information
Segment assets
	16,915	47	16,962
Total Assets	16,915	47	16,962
Capital expenditure
Property, plant and equipment	1,534	20	1,554

5. General information

The 2012 Annual Report and Financial Statements will be published and posted to shareholders on 7 March 2013. Further copies may be obtained by contacting the Company Secretary at The Heavitree Brewery PLC, Trood Lane, Matford, Exeter EX2 8YP. The 2012 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 12 April 2013 at 11.30am.

.

Ends. 

 

END

 

 

FR UAAOROVAUAAR