Final Results
Heavitree Brewery PLC
12 February 2007
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: 12 February 2007
Following a Board Meeting held today, 12 February 2007, the Directors announce
the preliminary results for the year ended 31 October 2006.
Chairman's statement
Introduction:
The rules governing the preparation and presentation of the accounts have
changed again. As a result, most of the information which I cover is now also
carried in the 'expanded' Directors' Report which will appear in the Report &
Accounts, when published. It goes without saying that the new arrangements will
be more expensive and time-consuming than the old. This applies equally to our
Auditors and any extra costs incurred by them will have to be passed on to us.
I find it difficult to see any benefit coming from all of this.
Results:
Group profit on ordinary activities before tax was £2,201,000 (2005: £1,298,000
as restated). A significant improvement but this year's figure does include
£842,000 profit from the sale of our holding in George Gale and Company Limited.
Turnover increased by £521,000 to £13,412,000.
Dividends:
The Directors recommend a final dividend of 7p per Ordinary and 'A' Limited
Voting Ordinary Share, an increase of 1p on top of the increase of 1/2p which
was paid on the interim dividend, making a total of 11p per share (2005: 9.5p)
for the year. This reflects the satisfactory trading position of the Company.
The dividend will be paid, subject to shareholder approval, on 10 April 2007 to
shareholders on the Register at 23 February 2007.
Borrowing:
The change in our borrowing capacity which was proposed at last year's Annual
General Meeting was duly approved.
Heavitree Inns:
This has been the first year under the new, no rent, regime; as reported in my
Statement last year. A pre-tax profit of £522,000 (2005: loss £11,000) was
achieved. This will be the benchmark for future years.
The notional improvement of £533,000 is, in fact, a real improvement of £130,000
if a like-for-like comparison is drawn. A truly excellent performance on which
Terry Wheatley and his team are to be congratulated.
Heavitree Incorporated (USA):
There has been no significant change. The usual costs and fees produced a
pre-tax loss of £6,000 (2005: loss £6,000).
At the time of writing, negotiations are in an advanced state for the sale of a
small piece of our remaining land near Houston.
Properties:
The cost of maintaining our properties has fallen by £235,000. This is due to
the strict financial controls devised by Rodney Glanville and to improved
quality control and use of time by our newly-appointed buildings supervisor
Michael Jordan.
Personnel:
Once again I draw attention to the excellent service which the Company has
enjoyed from its employees in both administration and retail. My thanks go to
all of them and also to our tenants and their families.
W P Tucker
Chairman
12 February 2007
Group profit and loss account
for the year ended 31 October 2006
As restated
2006 2005
Notes £000 £000
Turnover 13,412 12,891
Operating profit 1,852 1,489
(Loss)/Profit on sale of tangible fixed assets (74) 252
Profit on sale of fixed asset investments 842 -
Income from other fixed asset investments 1 13
Profit on ordinary activities before interest
and taxation 2,621 1,754
Other interest receivable 10 9
Interest payable (371) (380)
Other finance charges - FRS 17 (59) (85)
Profit on ordinary activities before taxation 2,201 1,298
Taxation on profit on ordinary activities (384) (308)
Profit attributable to shareholders 1,817 990
Dividends - equity dividends paid 3 (533) (510)
Basic earnings per share 4 34.1p 18.4p
Diluted earnings per share 4 34.0p 18.4p
All revenues and costs relate to continuing operations.
Group statement of total recognised gains and losses
for the year ended 31 October 2006
As restated
2006 2005
£000 £000
Profit attributable to shareholders 1,817 990
Exchange difference on retranslation of net assets of subsidiary (3) -
Actuarial gain/(loss) recognised on pension scheme 174 (127)
Deferred tax relating to actuarial gain/(loss) on pension scheme (52) 38
Total recognised gains and losses relating to year and since 1,936 901
last annual report
Reconciliation of shareholders' funds
for the year ended 31 October 2006
Note As restated
2006 2005
£000 £000
At 1 November as previously reported 6,581 6,316
Prior year adjustment - FRS 21 2 322 320
Prior year adjustment - FRS 25 2 (12) (12)
At 1 November as restated 6,891 6,624
Total recognised gains and losses relating to the year 1,936 901
Dividends (533) (510)
Consideration received by EBT on sale of shares 309 39
Buy back of own shares (246) -
Consideration paid by EBT on purchase of shares (759) (163)
At 31 October 7,598 6,891
Group balance sheet
at 31 October 2006
As restated
2006 2005
£000 £000
Fixed assets
Tangible assets 16,650 15,836
Investments 20 195
16,670 16,031
Current assets
Stocks 142 149
Debtors 1,493 1,299
Cash at bank and in hand 435 520
2,070 1,968
Creditors: amount falling due within one year (9,067) (8,866)
Net current liabilities (6,997) (6,898)
Total assets less current liabilities 9,673 9,133
Creditors: amount falling due after more than one year (296) (284)
Provisions for liabilities and charges
Deferred taxation (262) (282)
Net assets excluding pension liability 9,115 8,567
Pension liability (1,517) (1,676)
7,598 6,891
Capital and reserves
Called up share capital 278 279
Capital redemption reserve 659 658
Other reserves 69 72
Own shares reserve (1,335) (730)
Profit and loss account 7,927 6,612
Total shareholders' funds 7,598 6,891
Group statement of cash flows
for the year ended 31 October 2006
2006 2005
Note £000 £000
Net cash inflow from operating activities 5 2,543 2,616
Returns on investments and servicing of finance
Interest paid (371) (431)
Interest received 10 9
Dividends received 1 13
Preference dividend paid (1) (1)
Net cash outflow from returns on investments
and servicing of finance (361) (410)
Taxation
Corporation tax paid (316) (632)
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (1,764) (1,786)
Receipts from sales of tangible fixed assets 222 470
Receipts from sales of fixed assets investments 1,017 -
(525) (1,316)
Equity dividends paid (533) (510)
Financing
Consideration received by EBT on sale of shares 63 39
Consideration paid by EBT on purchase of shares (760) (163)
Repayment of Directors' loans (7) (21)
Loans from Directors - 17
(704) (128)
Increase/(decrease) in cash 104 (380)
Reconciliation of net cash flow to movement in net debt
for the year ended 31 October 2006
2006 2005
£000 £000
Increase/(decrease) in cash in the year 104 (380)
Cash outflow resulting from decrease in debt 7 4
Net debt at 1 November (6,617) (6,241)
Net debt at 31 October (6,506) (6,617)
Notes to the preliminary announcement
1 Financial information
These figures do not constitute full accounts within the meaning of Section 240
of the Companies Act 1985. They have been extracted from the statutory financial
statements for the year ended 31 October 2006, on which the auditors have issued
an unqualified audit report. The statutory financial statements have not yet
been delivered to the Registrar of Companies.
Comparative figures for the year ended 31 October 2005, set out within this
announcement, have been extracted from the Group's statutory consolidated
financial statements for that period, as filed with the Registrar of Companies
and on which the auditors gave an unqualified audit report.
2 Prior year adjustment
The accounting policies are consistent with the previous year except for the
adoption of FRS 21 'Events after the balance sheet date', FRS 22 'Earnings Per
Share' and FRS 25 'Financial Instruments Disclosure and Presentation'. FRS 21
and FRS 25 have required a change to the accounting treatment for dividends and
preference shares, respectively. Prior year results have been restated
accordingly. The implementation of FRS 22 has had no impact on the reported
results.
(a) Group profit and loss account
Profit for the
year attributable
to shareholders
£000
As previously reported 991
Implementation of FRS 25 (1)
As restated for the year ended 31 October 2005 990
The implementation of FRS 25 has resulted in preference share dividends being
reclassified from dividends to interest payable.
(b) Group balance sheet
Creditors due Creditors due in Share capital Profit & Loss
within one year more than one year reserve
£000 £000 £000 £000
As previously reported (9,188) (272) 291 6,290
Implementation of FRS 21 322 - - 322
Implementation of FRS 25 - (12) (12) -
At 31 October 2005 As restated (8,866) (284) 279 6,612
The implementation of FRS 21 has resulted in proposed dividends being recognised
on paid rather than accrued basis.
The implementation of FRS25 has resulted in the Preference Shares being
reclassified from equity to debt.
3 Dividends
As restated
2006 2005
£000 £000
Declared and paid during the year
Equity dividends on Ordinary and 'A' Limited Voting Ordinary Shares
Final dividend for 2005 - 6p (2004 - 6p) 321 333
First dividend for 2006 - 4p (2005 - 3.5p) 237 195
Less: dividends on shares held within employee share schemes (25) (18)
533 510
Proposed for approval at AGM
(not recognised as a liability at 31 October)
Equity dividends on Ordinary and 'A' Limited Voting Ordinary Shares
Final dividend for 2006 - 7p (2005 - 6p) 370 321
4 Basic and diluted earnings per share
The calculation of basic earnings per ordinary share is based on earnings of
£1,817,000 (2005 restated - £990,000), being profit after taxation for the year,
on 5,323,113 (2005 - 5,369,929) 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 calculation of diluted earnings per ordinary share is based on earnings of
£1,817,000 (2005 restated - £990,000), being profit after taxation for the year,
on 5,349,453 (2005 - 5,379,424) shares, being the weighted average number of
Ordinary and 'A' Limited Voting Ordinary Shares in issue during the year, as
diluted for the share options in issue.
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:
2006 2005
£000 £000
Operating profit 1,852 1,489
Depreciation 654 572
Decrease/(increase) in stocks 7 (10)
(Increase)/decrease in operating debtors (195) 312
Increase in operating creditors 337 241
Net pension change (112) 12
Net cash inflow from continuing operating activities 2,543 2,616
6 General information
The 2006 Annual Report and Financial Statements will be published and posted to
shareholders on 9 March 2007. 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 will be held at the Registered Office on 4 April 2007
at 11.30am.
Ends.
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