Source - LSE Regulatory
RNS Number : 6656Q
Heavitree Brewery PLC
29 June 2022
 

The Heavitree Brewery PLC

Trood Lane

Matford

Exeter EX2 8YP

 

Date:               29 June 2022

 

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, 29 June 2022, the Directors announce the interim results for the six months ended 30 April 2022.

 

 

Chairman's statement

 

I am satisfied to report that the Company has begun to move on from the intensely difficult and much reported upon trading environments of the previous two years. Although there remains much to be cautious about in the months ahead, at this half-year under review, we have returned to a performance level on a par with 2019 before the various measures implemented to combat the Covid 19 pandemic impacted the whole of our sector. Having reported a small operating loss at the previous year-end, this half-year has generated a turnover of £3,290,000 and returned an operating profit of £522,000.  The turnover figure has been reduced by £109,000 due to the IFRS 16 Lease Accounting unwind corresponding to the positive write back effect in previous years. I have explained the mechanics of this accounting standard in previous statements. 

 

 

Results

 

The Group has returned an operating profit of £522,000 (2021: an operating loss of £647,000) at the half-year.  Profit before tax is £1,063,000 (2021: a loss before tax of £76,000) after a book profit of £601,000 (2021: a book profit £647,000) was achieved on Property sales.

 

Dividend

 

The Directors do not recommend the payment of a dividend at the half-year.  The Board considers the payment of dividends to be an intrinsic part of our business and we are determined to resume the payment of dividends at the earliest possible time but only when the Directors are confident about generating cash through a sustainable operating profit.  The payment of a future dividend remains under continual review.

 

 

 

Property

 

The Company has continued to pursue the policy of the sale of non-core assets. The following properties have been sold during the period under review:

Two cottages on the site adjoining the Exeter Inn in Honiton Clyst.

The Marshalls Hotel in Barnstaple.

The Victoria Inn and an adjoining cottage in Ashburton.

The Maltsters Arms, the converted skittle alley and the adjoining development site in Clyst St Mary.

In line with the Board's strategy of reducing debt and following these sales, three prepayments against the term loan held with Barclays have been made during the period under review, totalling £1,750,000.

 

Personnel

 

I am very sad to report the passing of Andy Paver, our tenant at The Dewdrop Inn in Kingsteignton.  He died shortly after his deteriorating health had forced him to retire from the tenancy in April after nearly thirty years as the licensee.  He ran the pub with impeccable standards and a natural charm that made the pub a very special place under his stewardship.  He was also held in the highest esteem by all at head office and he will be greatly missed. 

 

Prospects

 

Whilst pleased with the rebound in trade across our houses in the preliminary months of the year and the boost in sales enjoyed by many pubs during the long Jubilee weekend, I am acutely aware of the two-fold strain to the trade caused by the cost of living hikes to our customers and the cost of doing business hikes faced by our operators.  The Directors are, of course, concerned as to how these pressures might manifest themselves across the estate, particularly come this Autumn and Winter.  We shall continue to monitor the situation as it develops.

 

 

 

N H P TUCKER

Chairman



Group income statement (unaudited)

For the six months ended 30 April 2022



 

6 months

to

30 April
2022

 

6 months

to

30 April

2021

Audited

12 months

to

31 October

2021


Note

£' 000

£' 000

£' 000

Revenue


          3,290

          846

 

          4,618

Change in stocks


-

-

-

Other operating income


110

183

310

Purchase of inventories


(1,312)

(253)

(1,909)

Staff costs


(714)

(655)

(1,349)

Depreciation of property, plant and equipment


(98)

(77)

(177)

Other operating charges


          (754)

          (691)

       (1,552)

 

 


       (2,768)

       (1,493)

 

       (4,677)

Group operating profit/(loss)


522

(647)

(59)

Profit on sale of property, plant and equipment


601              

             647

 

          1,318






Group Profit before finance costs and taxation


1,123

-

1,259

Finance income


-

-

-

Finance costs


(60)

(76)

(145)



          (60)

          (76)

          (145)

Profit/(loss) before taxation


1,063

(76)

1,114

Tax expense


         (208)

          (10)

          (313)

Profit/(loss) for the period


         855

          (86)

          801

Earnings per share

- basic
- diluted

4

 

15.4p
15.4p 

 

(1.8)p 
(1.8)p 

 

16.6p
16.6p

 



 

 

Group statement of comprehensive income (unaudited)

For the six months ended 30 April 2022



 

6 months

to

30 April
2022

 

6 months

to

30 April

2021

    Audited

   12months

    to

 31 October

      2021

 


£' 000

  £' 000

       £' 000

Profit/loss for the period


 855

 (86)

 801

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

-

 

5

-

 


-

4

5

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

 

 


 

9


     -


-

 

-

 

-


-

 

-

 

-


-

 





Other comprehensive income/ (loss) for the year, net of tax


 864

 (82)

 806

Total comprehensive income/ (loss) attributable to:

Equity holders of the parent


 

 864

 

 (82)

 

806

 





 

 

 

 



 

Group balance sheet (unaudited)

at 30 April 2022


 

30 April

2022

£' 000

 

30 April

2021

£' 000

Audited

31 October 2021

£'000

Non-current assets





Property, plant and equipment

 


17,798

 

18,743

17,997

Financial assets


34

33

34

 

Deferred tax asset


       16  

       16

       16

 


17,848

18,792

18,047

Current assets





Trade and other receivables


1,996

1,852

1,936

Inventories


10

10

10

Cash and short-term deposits


  35

     66

     52



2,041

1,928

1,998

Assets held for sale


371

211

 

883

Total assets


20,260

 20,931

 20,928

Current liabilities





Trade and other payables


(1,274)

(619)

(984)

Financial liabilities


(1,051)

(2,162)

(1,158)

Income tax payable


   (318)

   (98)

   (108)



(2,643)

(2,879)

(2,250)

Non-current liabilities





Other payables


(325)

(279)

(318)

Financial liabilities


(2,187)

(4,508)

(4,069)

Deferred tax liabilities


(734)

(536)

(734)

Defined benefit pension plan


 (92)

(92)

 (92)



(3,338)

(5,415)

(5,213)

Total liabilities


(5,981)

(8,294)

(7,463)

Net assets


14,279

12,637

13,465

Capital and reserves





Equity share capital


264

264

264

Capital redemption reserve


673

673

673

Treasury shares


(1,579)

(1,502)

(1,529)

Fair value adjustments reserve


10

9

10

Currency translation


22

13

13

Retained earnings


14,889

13,180

14,034

Total equity


14,279

12,637

13,465

 

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 2022                                                           



 

6 months

to

30 April
2022

 

6 months

to

30 April

2021

Audited

12months

 to

31 October

2021

Operating activities


£' 000

£' 000

£' 000

Profit/(loss) for the period


855

(86)

801

Tax expense


208

10

313

Net finance costs


60

76

145

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


 

(601)

 

(647)

 

(1,200)

Depreciation and impairment of property, plant and equipment

 

98

97

177

Exchange gain on cash, liquid resources and loan

 

-

-

-






(Increase)/decrease in trade and other receivables


(80)

(338)

   (442)

Increase/(decrease) in trade and other payables

Impairment of assets


274

-

           (58)

-

353

-

Cash generated from operations


814

(946)

147

Income taxes paid


-  

                        


                         

(150)  

              (245)

Interest paid


(60)

 (76)  

(145)

Net cash inflow / (outflow) from operating activities


 754

 (1,172) 

 (243)

Investing activities





Interest received


-

-

-

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


1,402

584

1,411

Payments to acquire property, plant and equipment


(153)

(209)

(473)

Net cash Inflow/outflow from investing activities


1,249

375

 938

Financing activities





Preference dividend paid


(1)

(1)

(1)

Equity dividends paid


-

-

-

Consideration received by EBT on sale of shares


-

41

41

Consideration paid by EBT on purchase of shares


(50)

(54)

(81)

Capital element of finance lease rental payments


(4)

(7)

(25)

Repayment of bank borrowings


(1,892)

(27)

(187)

Mortgage Receipts


21

-

35

Net cash outflow from financing activities


   (1,926)

 (48)

 (218)

Increase/(decrease) in cash and cash equivalents


77

(845)

477

Cash and cash equivalents at the beginning of the period


 (755)

 (1,232)

(1,232)

Cash and cash equivalents at the period end


 (678)

 (2,077)

 (755)

 

 

 

Group statement of cash flows (unaudited) (continued)

 

for the six months ended 30 April 2022                               





Represented by:





Cash and short term deposits


35

66

52

Overdraft


(713)

(2,143)

(807)

 


(678)

(2,077)

(755)



 

Group reconciliation of movements in equity (unaudited)

 

 

 

6 months to

Equity

Capital


Fair




30 April 2022

share

redemption

Treasury

value

Currency

Retained

Total


capital

reserve

shares

adjustment

translation

earnings

equity


£' 000

£' 000

 £' 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

 

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

 

 

 

 

12 months to 31 October 2021

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 2020

264

673

(1,522)

5

13

13,266

12,699









Profit for the year

-

-

-

-

-

801

801

Other comprehensive income for the year

net of income tax

-

-

-

5

-

-

5

Total comprehensive








income for the year

-

-

-

5

-

801

806

Consideration received by EBT on sale of shares

 

-

 

-

 

41

 

-

 

-

 

-

 

41

Consideration paid by








EBT on purchase of shares       

-

-

(81)

-

-

-

(81)

Loss by EBT on sale of shares

-

-

33

-

-

(33)

-

Equity dividends paid

-

-

-

-

-

-

-

At 31 October 2021

264

673

(1,529)

10

13

14,034

13,465

                                                               

 

 

 

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 444,155.

 



 

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 2021. 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 29 June 2022.

 

2. Going concern

 

While Covid restrictions are no longer in place, there are concerns around the general increase in costs including the hike in energy prices, which we have not yet seen the impact of in our half year results. The Board has continued to review and adjust forecasts to take into account any possible impact this may have on trading in the second half of the year. The Group remains well within its forecasts to April 2023 with minimum headroom of £2.1m on the £3m overdraft, and three prepayments to the term loan have been made totalling £1,750,000. 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 £1.4m 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 £855,000 (2021: £(86,000)), being profit/(loss) after taxation for the period, and on 4,818,652 (2021: 4,819,991) 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.

 

Within our Financial statements year ended 31 October 2021 a presentation error occurred in the segment information section. This was a cross casting error due to a late balance sheet adjustment. The balance sheet at the year end and the split in the assets held in the United States were correct.

 

 

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 2022 has been posted to shareholders today and will be available on our website at www.heavitreebrewery.co.uk.

 

Ends.

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