Half Yearly Report

RNS Number : 8189V

Heavitree Brewery PLC

20 July 2009

 



The Heavitree Brewery PLC
Trood Lane

Matford

Exeter EX2 8YP

Date:        20 July 2009

Contact:    Graham Crocker - Managing Director - 01392 217733

     Rod Glanville - Director and Company Secretary - 01392 217733

     Pascal Keane - Shore Capital - 0207 468 7995

Following a meeting by a duly authorised committee of the Board of Directors held today, 20 July 2009, the Directors announce the interim results for the six months ended 30 April 2009. 

Chairman's statement

I reported at this year's Annual General Meeting that following our decision to restructure the business and to close our Managed House operation (Heavitree Inns), the challenge was then to return the pubs operated by Heavitree Inns to tenancy or leasehold as efficiently as possible. I am pleased to report that at the time of writing only one of these houses remains under the Heavitree Inns umbrella and a lease contract has now been agreed. Completion is expected to be imminent. This in the present climate is an excellent achievement by the Managing Director and the operational team and we look forward to a long and mutually beneficial relationship with the new operators of these houses.

RESULTS.

Turnover for the Group decreased against last year by 18% to £4,944,000. This was expected because as the number of Managed Houses has reduced so the associated retail sales have been lost to turnover. Group Operating Profit is £269,000 (2008: £130,000 loss). Profit before taxation for the six month period was £387,000 after restructuring costs of £256,000 to date, finance costs and the sale of three properties and a small piece of land (2008 : £185,000).

DIVIDEND.

The Directors recommend an interim dividend of 3.5p per Ordinary and 'A' Limited Voting Ordinary Share (2008 - Nil).

PROPERTIES.

The King's Arms in South Zeal, The Old Rydon in Kingsteignton, and The Heavitree Arms in Bideford were sold. Also a small piece of land at Sandford was sold. These transactions realised a book profit before tax totalling £503,000.

Since 30 April 2009 the Company has accepted an offer on, and completed the sale of The Hub in Exeter.

PENSION SCHEME.

The triennial actuarial funding review has been completed and the deficit for the closed final salary Pension Scheme stands at £4.5 m at the 1 May 2009. This is not a fixed figure as every 3 years further valuations will be required. However, it is a lesser figure than previously feared and I can confirm that the Directors have informed the Trustees that the Company will meet its funding obligations through annualised deficit correction payments.

AUDITORS

It was resolved at the Annual General Meeting to re-elect Messrs Ernst and Young LLP to serve as the Company's auditors. Following a restructure of their business Messrs Ernst and Young LLP have resigned and Messrs Francis Clark Chartered Accountants have been appointed as the Company's auditors in their place.

BOARD CHANGES.

Matthew Pease-Watkin resigned from the Board of Directors on 8 May 2009 owing to external commitments. Matthew joined the Board in June 1999 and his dedication and contribution to the Company will be missed. The Board would like to extend its gratitude for his 10 years of service.

Katherine Pease-Watkin has been appointed as a non-executive director as of 1 July 2009 and will stand for election at the next Annual General Meeting.

PROSPECTS.

The decisions that the Company made after last year's strategic review have resulted in a steady performance for the half-year. The interim dividend reflects this whilst recognising that caution is still needed at a time when the winds of uncertainty continue to buffet our industry as a whole. 

N H P TUCKER

Chairman

Consolidated income statement (unaudited)

for the six months ended 30 April 2009

		2009		2008
	Note	£ '000		£ '000
Revenue		4,944		6,054
Change in stocks		(74)		(14)
Other operating income		40		25
Purchase of inventories		(1,866)		(2,210)
Staff Costs		(1,305)		(1,893)
Depreciation of property, plant and equipment		(225)		(278)
Other operating charges		(1,245)		(1,814)
		(4,675)		(6,184)
Group operating profit/ (loss)		269		(130)
Profit on disposal of non-current assets		503		566
Group profit before finance costs, taxation and restructuring costs		772		436
Restructuring Costs		(256)		-
Group profit before finance costs and taxation		516		436
Finance income		10		4
Finance costs		(81)		(209)
Other finance costs-pensions		(58)		(46)
		(129)		(251)
Profit before taxation		387		185
Tax (expense)		(55)		(31)
Profit for the period		332		154
Earnings per share - basic - diluted	2	6.5p 6.5p		2.94p 2.94p

  Group statement of total recognised income and expense (unaudited)

for the six months ended 30 April 2009

		2009 £ '000		2008 £ '000
Income and expense recognised directly in equity
Exchange differences on translation of foreign operations		-		1
Actuarial (losses) on defined benefit pension plans		(400)		(147)
		(400)		(146)
Tax on items taken directly to or transferred from equity		112		41
Net (expense) recognised directly in equity		(288)		(105)
Profit for the period		332		154
Total recognised income and expense for the period		44		49

Dividends

The Directors declare an interim dividend of 3.5p per share (2008 - Nil) on the Ordinary and 'A' Limited Voting Ordinary Shares. This dividend will be paid on 21 August 2009 to shareholders on the register at 31 July 2009.

Consolidated balance sheet (unaudited)

at 30 April 2009

		2009 £ '000		2008  £ '000
Non-current assets
Property, plant and equipment		14,521		15,912
Financial assets		46		77
Deferred tax asset		389		429
		14,956		16,418
Current assets
Trade and other receivables		1,901		2,259
Inventories		89		196
Cash and short-term deposits		574		441
Assets held for sale		285		594
Total assets		17,805		19,908
Current liabilities
Trade and other payables		(1,430)		(2,370)
Financial liabilities		(6,181)		(8,313)
Income tax payable		(142)		(210)
Provisions		-		-
		(7753)		(10,893)
Non-current liabilities
Other payables		(265)		(251)
Financial liabilities		(11)		(11)
Deferred tax liabilities		(368)		(263)
Defined benefit pension plan		(1,343)		(1,510)
		(1,987)		(2,035)
Total liabilities		(9,740)		(12,928)
Net assets		8,065		6,980
Capital and reserves
Equity share capital		264		264
Capital redemption reserve		673		673
Treasury shares		(994)		(1,227)
Fair value adjustments reserve		26		57
Currency translation		3		-
Retained earnings		8,093		7,211
Total equity		8,065		6,980

Group statement of cash flows (unaudited)

for the six months ended 30 April 2009

		2009		2008
		£ '000		£ '000
Operating activities
Profit/(loss) for the period		269		(130)
Adjustments to reconcile operating profit/loss for the period to net cash inflow/ outflow from operating activities
Depreciation and impairment of property, plant and equipment		225		278
Restructuring Costs		256		-
Share based payments		7		-
Decrease in inventories		74		14
(Increase) in trade and other receivables		(105)		(762)
(Decrease)/Increase in trade and other payables		(118)		694
Net pension charge		(120)		(158)
Cash generated from operations		488		(64)
Income taxes paid		-		(311)
Net cash inflow/(outflow) from operating activities		488		(375)
Investing activities
Interest received		10		4
Proceeds from sale of property, plant and equipment		712		801
Payments to acquire property, plant and equipment		(273)		(986)
Net cash inflow/ (outflow) from investing activities		449		(181)
Financing activities
Interest paid		(81)		(208)
Preference dividend paid		(1)		(1)
Equity dividends paid		(356)		(370)
Consideration received by EBT on sale of shares		49		145
Consideration paid by EBT on purchase of shares		-		(345)
Repurchase of shares		-		(1,899)
Net cash (outflow) from financing activities		(389)		(2,678)
Increase/(decrease) in cash and cash equivalents		548		(3,234)
Cash and cash equivalents at the beginning of the period		(6,155)		(4,638)
Cash and cash equivalents at the period end.		(5,607)		(7,872)

    Group reconciliation of movements in equity (unaudited)

	Equity	Capital		Fair
	share	redemption	Treasury	value	Currency	Retained	Total
	capital	reserve	shares	adjustment	translation	earnings	equity
	£ ’000	£ ‘000	‘£000	£ ‘000	£ ‘000	£ ‘000	£ ‘000
At 31 October 2008	264	673	(1248)	38	3	8,603	8,333
Total     recognised income and
expense for the period	-	-	-	-	-	44	44
Consideration received
by EBT on sale of
shares	-	-	49	-	-	-	49
Gain by EBT on sale
of shares	-	-	205	-	-	(205)	-
Equity dividend paid	-	-	-	-	-	(356)	(356)
Fair value adjustment	-	-	-	(12)	-	-	(12)
Share based payment						7	7
At 30 April 2009	264	673	(994)	26	3	8,093	8,065

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 represents the cost of The Heavitree Brewery PLC shares purchased in the market and held by The Heavitree Brewery PLC Employee Benefit Trust ('EBT').

Notes to the interim results

1.  Basis of preparation

These interim condensed and consolidated financial statements do not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006.  They have been prepared on the basis of the accounting policies that will be complied with in the annual financial statements. The accounting policies are drawn up in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.  These unaudited financial statements were approved and authorised for issue by a duly appointed and authorised committee of the Board of Directors on 20 July 2009.

       2.  Basic and diluted earnings per share

The calculation of basic earnings per ordinary share is based on earnings of £332,000 (2008 :£154,000), being profit after taxation for the period, and on 5,102,365 (2008 : 5,232,443) 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. 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.

      3. 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.

The Group operates in two business segments; leased estate and managed estate.  Leased estate represents properties which are leased to tenants to operate independently from the Group. Managed estate represents properties which are owned, operated and maintained by the Group.

	30 April 2009		30 April 2008
	Revenue £ ‘000	Profit/(loss) £ ‘000	Revenue £ ‘000	Profit/(loss) £ ‘000
Leased	3,448	163	3,585	(31)
Managed	1,806	(150)	3,062	(99)
Intra group sales	(310)	-	(593)	-
Common Costs	-	(129)	-	(251)
Sale of non-current assets	-	503	-	566
	4,944	387	6,054	185

      4.  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 2009 has been posted to shareholders today and will be available on our website at www.heavitreebrewery.co.uk.

Ends. 

 

END

 

 

IR ZQLFFKDBZBBX