Final Results

RNS Number : 1734B

Heavitree Brewery PLC

15 February 2011

 



The Heavitree Brewery PLC

Trood Lane

Matford

Exeter EX2 8YP

Date:                15 February 2011

Contact:           Graham Crocker - Managing Director - 01392 217733

Rod Glanville - Director and Company Secretary - 01392 217733

Pascal Keane - Shore Capital - 0207 408 4090

Following a Board Meeting held today, 15 February 2011, the Directors announce the preliminary statement of results for the year ended 31 October 2010.

ISIN: GB0004182720 for 'A' Limited Voting Ordinary Shares

ISIN: GB0004182506 for Ordinary Shares

Chairman's statement

Turnover has dropped considerably against the previous year but this is as a direct result of the cessation in turnover from retail sales in 2009 from the last of the Managed Houses before they were returned to tenancy. In 2010 turnover arose solely from the operation of a tenanted and leased estate. It is very pleasing to be able to report a substantial increase in operating profit for the Group.

Results

Turnover for the Group decreased against last year by 19.78% to £7,388,000 (2009: £9,210,000) but generated an increased Group Operating Profit of £1,427,000 (2009: £1,046,000) after consolidation adjustments.

Heavitree Inc. generated an Operating Loss of £15,000 (2009: Loss of £13,000).

Heavitree Inns ceased trading in the previous year so has been dormant throughout the period under review (2009: Loss of £279,000).

Group Profit before Taxation decreased by £28,000 (2.23%) to £1,225,000.  However, it should be remembered that last year's figure included both a profit of £781,000 on the disposal of assets (2010: £32,000) as well as costs of £370,000 arising from the restructure and refinancing of the Group (2010: £nil)

Key Performance Indicators

·    Adjusted Operating Profit before Taxation of £1,427,000 was £102,000 (7.7%) ahead of last year.

·    Interest Costs were covered 13.46 times.

Dividend

The Directors recommend a final dividend of 3.5p per Ordinary and 'A' Limited Voting Ordinary Share (2009: 3.5p) making an overall total for the year of 7p, which is unchanged from last year.  The dividend will be paid on 20 April 2011, subject to shareholder approval at the Annual General Meeting on 15 April 2011 to those shareholders on the Register at 18 March 2011.

Capital Investments

An extension at The Cricket Inn at Beesands to create a larger dining area and four further letting bedrooms was completed in May 2010.

Pension Scheme

The Company continues to meet its funding obligations to its closed final salary Pension Scheme.  Following completion, in September 2009, of the triennial actuarial valuation of the Scheme as at 1 January 2008, an annualised deficit correction payment was agreed, with the last payment being due in February 2018.

The next Scheme triennial valuation is as at 1 January 2011. This should be completed by the end of the year.

Repurchase of Shares

The Company did not purchase any of its own shares during the year under review, but the Directors intend to seek shareholder approval at the forthcoming AGM for the continuing authority to do so.

Outlook

We have continued to support our tenants and leaseholders during the present difficult trading environment.  This we shall continue to do in the year ahead.  The increase in the rate of VAT in January, the promise of another Excise Duty increase, wholesale price increases and the treacherous weather conditions at the start of the new financial year have applied further pressure on all pubs. I am most grateful for the performance of both our operators and our head office staff whose skills and hard work have combined to produce this year's pleasing set of results.  In the present climate it will be vital to continue with a similar focus.

N H P TUCKER

Chairman

Group income statement

for the year ended 31 October 2010

	Notes	Total 2010 £000	Discontinued Operations 2009 £000	Continuing Operations 2009 £000	Total 2009 £000
Revenue		7,388	2,152	7,058	9,210
Change in stocks		(9)	(144)	-	(144)
Other operating income		91	-	83	83
Purchase of inventories		(3,141)	(743)	(2,899)	(3,642)
Staff costs		(1,197)	(766)	(1,234)	(2,000)
Depreciation of property, plant and equipment		(272)	(100)	(352)	(452)
Other operating charges		(1,433)	(678)	(1,331)	(2,009)
		(5,961)	(2,431)	(5,733)	(8,164)
Group operating profit/(loss)		1,427	(279)	1,325	1,046
Profit/(loss) on disposal of non-current assets and assets held for sale		32	(96)	877	781
Restructuring and finance costs		-	(103)	(267)	(370)
Group profit/(loss) before finance costs and taxation		1,459	(478)	1,935	1,457
Finance income		35	-	26	26
Finance costs		(141)	-	(153)	(153)
Other finance costs - pensions		(128)	-	(77)	(77)
		(234)	-	(204)	(204)
Profit/(loss) before taxation		1,225	(478)	1,731	1,253
Tax (expense)/credit		(368)	33	(175)	(142)
Profit/(loss) for the year attributable to equity holders of the parent		857	(445)	1,556	1,111
Basic earnings per share	2	16.7p			21.7p
Diluted earnings per share	2	16.7p			21.7p

All amounts in 2010 relate to continuing operations.

Group statement of comprehensive income

for the year ended 31 October 2010

	2010 £000	2009 £000
Income and expense recognised directly in equity
Actuarial losses on defined benefit pension plans	(93)	(1,456)
Tax credit on items taken directly to or transferred from equity	26	410
Exchange difference on retranslation of subsidiary	3	-
Fair value adjustment	-	(8)
Net expense recognised directly in equity	(64)	(1,054)
Profit for the year	857	1,111
Total recognised income and expense for the year Attributable  to: Equity holders of the parent	793 793	57 57

Group balance sheet

at 31 October 2010

		2010 £000		2009 £000
Non-current assets
Property, plant and equipment		14,070		13,683
Financial assets		50		50
Deferred tax asset		505		598
		14,625		14,331
Current assets
Inventories		10		19
Trade and other receivables		1,444		1,668
Cash and cash equivalents		216		521
		1,670		2,208
Total assets		16,295		16,539
Current liabilities
Trade and other payables		(709)		(915)
Financial liabilities		(558)		-
Income tax payable		(248)		(77)
		(1,515)		(992)
Non-current liabilities
Other payables		(319)		(272)
Financial liabilities		(4,011)		(5,011)
Deferred tax liabilities		(265)		(261)
Defined benefit pension plan deficit		(1,802)		(2,088)
		(6,397)		(7,632)
Total liabilities		(7,912)		(8,624)
Net assets		8,383		7,915
Capital and reserves
Equity share capital		264		264
Capital redemption reserve		673		673
Treasury shares		(826)		(994)
Fair value adjustments reserve		30		30
Currency translation		6		3
Retained earnings		8,236		7,939
Total equity		8,383		7,915

Group statement of cash flows

for the year ended 31 October 2010

	Notes	2010 £000		2009 £000
Operating activities
Profit for the year		857		1,111
Tax		368		142
Net finance costs		234		204
Profit on disposal of non current assets and assets held for sale		(32)		(781)
Depreciation and impairment of property, plant and equipment		272		452
Share-based payments		11		13
Difference between pension contributions paid and amounts
recognised in the income statement		(507)		(450)
Decrease in inventories		9		144
Decrease in trade and other receivables		224		129
Decrease in trade and other payables		(158)		(626)
Cash generated from operations		1,278		338
Income tax paid		(78)		(169)
Net cash flow from operating activities		1,200		169
Investing activities
Interest received		35		26
Proceeds from sale of property, plant and equipment and assets held for sale		91		2,184
Payments to acquire property, plant and equipment		(718)		(61)
Net cash(outflow)/inflow from investing activities		(592)		2,149
Financing activities
Interest paid		(141)		(153)
Preference dividend paid		(1)		(1)
Dividends paid	3	(359)		(537)
Repayment of  loans from Directors		8		-
Consideration received by EBT on sale of shares		44		49
Consideration paid by EBT on purchase of shares		(22)		-
Net movement in long term borrowings		(1,000)		5,000
Net cash flow from financing activities		(1,471)		4,358
(Decrease)/increase in cash and cash equivalents		(863)		6,676
Cash and cash equivalents at the beginning of the year		521		(6,155)
Cash and cash equivalents at the year end		(342)		521

Group reconciliation of movements in equity

	Equity share capital £000	Capital redemption reserve £000	Treasury shares £000	Fair value adjustments reserve £000	Currency translation £000	Retained earnings £000	Total equity £000
At 1 November 2008	264	673	(1,248)	38	3	8,603	8,333
Total recognised income
and expense for the year	-	-	-	(8)	-	65	57
Consideration received
by EBT on sale of
shares	-	-	49	-	-	-	49
Loss by EBT on sale
of shares	-	-	205	-	-	(205)	-
Share based payment	-	-	-	-	-	13	13
Equity dividends paid	-	-	-	-	-	(537)	(537)
At 31 October 2009	264	673	(994)	30	3	7,939	7,915

	Equity share capital £000	Capital redemption reserve £000	Treasury shares £000	Fair value adjustments reserve £000	Currency translation £000	Retained earnings £000	Total equity £000
At 1 November 2009	264	673	(994)	30	3	7,939	7,915
Total recognised income					3	790	793
and expense for the year
Consideration     received/(paid)
by EBT on sale of      shares	- -	- -	44 (22)	- -	- -	- -	44 (22)
Loss by EBT on sale
of shares	-	-	146	-	-	(146)	-
Share based payment	-	-	-	-	-	12	12
Equity dividends paid	-	-	-	-	-	(359)	(359)
At 31 October 2010	264	673	(826)	30	6	8,236	8,383

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 2010 the Group held 58,779 Ordinary Shares and 74,592 'A' Limited Voting Ordinary Shares (2009: 58,779 Ordinary Shares and 87,332 'A' Limited Voting Ordinary Shares) of its own shares at an average cost of £6.18 (2009: £5.82). The market value of these shares as at 31 October 2010 was £333,000 (2009: £359,000).

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.

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 2010. 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 2010, which are expected to be mailed to shareholders on 09 March 2011.  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.  Basic and diluted 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.

Diluted earnings per share amounts are calculated by dividing the profit 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 as diluted for the share options in issue.

The following reflects the income and shares data used in the basic and diluted earnings per share computations:

	2010 £000	2009 £000
Profit for the year	857	1,111
	2010 No. (000)	2009 No. (000)
Basic weighted average number of shares (excluding treasury shares)	5,139	5,117
Dilutive potential ordinary shares:
Employee share options	-	-
Diluted weighted average number of shares	5,139	5,117

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.

Employee share options could potentially dilute basic earnings per share in the future but are not included in the 2010 calculation of dilutive earnings per share because they are antidilutive for the period presented.

3. Dividends paid and proposed

	2010 £000	2009 £000
Declared and paid during the year:
Equity dividends on ordinary shares:
Final dividend for 2009: 3.5p (2008: 7p)	185	369
First dividend for 2010: 3.5p (2009: 3.5pl)	185	185
Less dividend on shares held within employee share schemes	(11)	(17)
Dividends paid	359	537
Proposed for approval at AGM
(not recognised as a liability as at 31 October)
Final dividend for 2010: 3.5p (2009: 3.5p)    Cumulative preference dividends	180 1	180 1

4.  Segment information Primary reporting format - business segments

IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief executive to allocate resources to the segments and to assess their performance.

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

In the prior year the Group operated in two business segments - leased estate and managed estate. The managed estate was discontinued in the previous year.

Leased estate represents properties which are leased to tenants to operate independently from the Group.

Managed estate represents properties which were owned, operated and maintained by the Group and represents the discontinued operations.

Segment information
Year ended 31 October 2010	Leased £000	Managed £000	Eliminations £000	Total £000
Revenue
Sales to external customers	7,388	-	-	7,388
Segment revenue	7,388	-	-	7,388
Results
Segment results	1,225	-	-	1,225
Profit before taxation	1,225	-	-	1,225
Tax expense	(368)			(368)
Profit for the year	857			857
Assets and liabilities
Segment assets	16,295	-	-	16,295
Total assets	16,295	-	-	16,295
Segment liabilities	(7,912)	-	-	(7,912)
Total liabilities	(7,912)	-	-	(7,912)
Other segment information
Capital expenditure:
Property, plant and equipment	718		-	718
Depreciation	272	-	-	272
Year ended 31 October 2009	Leased £000	Managed £000	Eliminations £000	Total £000
Revenue
Sales to external customers	7,058	2,152	-	9,210
Inter-segment sales	357	-	(357)	-
Segment revenue	7,415	2,152	(357)	9,210
Results
Segment results	1,858	(478)	-	1,308
Unallocated expenses				(127)
Profit before taxation				1,253
Tax expense				(142)
Profit for the year				1,111
Assets and liabilities	Leased £000	Managed £000	Eliminations £000	Total £000
Segment assets	15,941	-	-	15,941
Unallocated assets				598
Total assets				16,539
Segment liabilities	(8,259)	-	-	(8,259)
Unallocated liabilities				(365)
Total liabilities				(8,624)
Other segment information
Capital expenditure:
Property, plant and equipment	57	4	-	61
Depreciation	352	100	-	452

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 2010 and 2009. Revenue is based on the geographical location of customers and assets are based on the geographical location of the asset.

Year ended 31 October 2010	UK £000	United States £000	Total £000
Revenue
Sales to external customers	7,388	-	7,388
Other segment information
Segment assets	16,285	10	16,295
Total assets	16,285	10	16,295
Capital expenditure
Property, plant and equipment	718	-	718
Year ended 31 October 2009	UK £000	United States £000	Total £000
Revenue
Sales to external customers	9,210	-	9,210
Other segment information
Segment assets	15,890	51	15,941
Unallocated assets			598
Total assets			16,539
Capital expenditure
Property, plant and equipment	61	-	61

5. General information

The 2010 Annual Report and Financial Statements will be published and posted to shareholders on 9 March 2011. Further copies may be obtained by contacting the Company Secretary at The Heavitree Brewery PLC, Trood Lane, Matford, Exeter EX2 8YP. The 2010 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 15 April 2011 at 11.30am.

.

Ends. 

 

END

 

 

FR TIMMTMBJBBJB