TIDMHVT
RNS Number : 7519B
Heavitree Brewery PLC
15 February 2022
The Heavitree Brewery PLC
Trood Lane
Matford
Exeter EX2 8YP
Date: 15 February 2022
Contact: Graham Crocker - Managing Director - 01392 217733
Nicola McLean - Company Secretary - 01392 217733
Patrick Castle /Anita Ghanekar - Shore Capital - 0207 408
4052
Following a Board Meeting held today, 15 February 2022, the
Directors announce the preliminary statement of results for the
year ended 31 October 2021.
ISIN: GB0004182720 for 'A' Limited Voting Ordinary Shares
ISIN: GB0004182506 for Ordinary Shares
Chairman's statement
The results reported at the half-year showed that this Company,
like most in the hospitality sector, inevitably would be reporting
at the year-end numbers that had been detrimentally affected by the
ongoing Covid-19 pandemic. At the beginning of the year under
review, during November 2020, our pubs were under lockdown. This
was followed by trading under restrictions in December until Boxing
Day when the Government implemented another lockdown which
continued until 12th April. Following this our pubs were permitted
to trade with restrictions until 19th July when social distancing
measures were eased. As in the previous year, the Board has
remained determined to support and protect our Tenants and
Leaseholders as best we can during the periods of lockdown and the
periods of restricted trading by waiving and discounting rents as
appropriate. Consequently, only three months of the year had rents
collected at the full rate. This has had an increased impact on
turnover against the previous year and revenue for the year under
review has decreased by 7.98% to GBP4,618,000 (2020: GBP5,019,000).
The Group returned a small operating loss of GBP59,000. Profit
before taxation was GBP1,114,000 (2020: GBP414,000).
The IFRS 16 Lease Accounting calculation which apportions rental
income to each year of the full term of the lease and which I
referred to in last year's statement, has once again skewed the
position by causing the inclusion of significant rental income that
was not actually collected, nor charged, in the year.
Also, in April 2021, The Jolly Sailor in East Ogwell was
destroyed by a devastating fire. Thankfully, and most importantly,
our Tenants John Turner and Amanda Bearne and their customers were
not harmed, nor any members of the local emergency services who
bravely attended the scene and prevented any spread to other
properties in the village. At the time of writing, the site has
been made secure while we await the decision, following the
recommendation of the conservation officer, of a demolition
application of the damaged, unstable gable end. Included in the
operating loss for the year is the impairment loss GBP119,000 for
The Jolly Sailor, in order to write off the book 'historical cost'
carrying value.
The Company has continued the programme of selling some non-core
assets and this has realised a book profit of GBP1,318,000 (2020:
GBP293,000) in this respect. This policy is in line with the
Board's decision to reduce the Company's level of borrowing.
Dividend
At the half-year, I reported that the Directors would not
consider the payment of a dividend for the financial year
2020/2021. When trading does return to some sort of normality, the
Board will be able to review future dividend payments.
Sale of Property
The properties that were sold during the year are listed as
follows:
The Maltsters Arms in Harbertonford, which had been closed since
September 2018. The adjacent cottage Bridge house. The garage
opposite the pub.
The Castle Inn in Holcombe.
The Toby Jug Inn in Bickington which had been closed since May
2003.
Rose Cottage in Strete.
Two flats at the Old St.Loye's Hotel site.
Land at the rear of the Globe Inn in Chudleigh.
Two garden plots in Abbotskerswell.
Within the financial year, the Company made a reduction in
borrowings of GBP661,000. Early in the new year following the
completion of further sales of The Victoria Inn in Ashburton with a
small adjoining cottage and the Maltster's Arms site in Clyst St
Mary, a prepayment on the term loan of GBP750,000 was made.
Heavitree Inc.
The final piece of land held by our American subsidiary in
Houston has been sold for $45,000 (GBP33,000). This is a post
balance sheet event which will end our involvement in Houston. This
started in 1982 with our investment in a company operating an
English style pub and restaurant in the city called The Bear and
Ragged Staff. The collapse of the oil price and, in turn, the
collapse of the Houston economy led to the demise of the operating
company and this Company taking direct control of the site in 1983.
In 1986 the original site was swapped for a parcel of undeveloped
land. Over the years, a series of land sales has distributed cash
to the parent Company.
Pension Scheme
In January 2022 the trustees of the Final Salary Pension Scheme
and the Company formally gave notice to trigger the wind-up of the
Scheme. The Scheme was closed to new members in July 2002, with no
future accrual since April 2006 and the last deferred members
transferred out in June 2018. Wind-up must be completed within a
two-year period. As part of the wind-up, retired members who had
annuities purchased on their behalf in the Scheme's name will, in
due course, have those annuities transferred into their own
names.
Personnel
I am very sad to report that Joan Ballman who was the landlady
of our Locomotive Inn in Exeter since 1988 and who held the tenancy
of The Mitre in Exeter before that, passed away in December 2021.
Joan commanded the utmost respect and affection from all of us at
head office during her long time at The Locomotive and the huge
number of attendees at her funeral showed how she was held in the
highest esteem by the many who visited her pub. We will all miss
Joan.
A similarly huge figure from the Exeter licencing trade was
Derek Elson who we also sadly lost early in 2022. Derek (with his
wife Adrienne) was probably ahead of his time in terms of being a
multi pub operator and started as our very first Manager when
taking on The Gardeners' Arms in Exeter in 1965. He was then
appointed as our Manager at The Upton Vale in Torquay in 1968 and
after that held tenancies or leases with us at The St. Loye's Hotel
in Exeter, The George in Babbacombe and most famously at The Kings
Arms in Exeter, which he took on in 1976. Our Managing Director
even managed to persuade him to come out of retirement to help us
by taking The Royal Oak in Exeter, for a short period, while a new
tenant was being sought. We will always be grateful to Derek for a
long, happy and highly respected association with this Company and
again, he will be greatly missed by many.
Prospects
The trading environment remains testing; although there was no
actual lockdown, Christmas trading was hindered as customers became
unsettled by the recent infection rate peak caused by the Omicron
variant. Staff shortages and increasing costs are also a continual
concern.
However, the success of the vaccination programme has clearly
helped in encouraging customers to support pubs and enjoy
everything they have to offer and some comfort for the future was
drawn from the strong trade during late Summer and Autumn. Also,
the houses I visited during the variant affected build up to
Christmas and in the early new year showed not only how
professional and robust our operators are but also how determined
our customers are to enjoy the offer provided by our great
pubs.
N H P TUCKER
Chairman
15 February 2022
Group income statement
for the year ended 31 October 2021
Notes Total Total
2021 2020
GBP000 GBP000
Revenue 4,618 5,019
--------- ---------
Other operating income 310 317
Purchase of inventories (1,909) (2,065)
Staff costs (1,349) (1,310)
Depreciation of property,
plant and equipment (177) (177)
Other operating charges (1,552) (1,245)
--------- ---------
(4,677) (4,480)
--------- ---------
Group operating (loss)/profit (59) 539
Profit on sale of property
plant and equipment 1,318 293
Impairment of fixed
assets - (279)
Group profit before
finance costs and taxation 1,259 553
Finance income - 2
Finance costs (145) (141)
Other finance costs - -
- pensions
--------- ---------
(145) (139
Profit before taxation 1,114 414
Tax expense (313) (300)
Profit for the year
attributable to equity
holders of the parent 801 114
--------- ---------
Basic earnings per
share 2 16.6p 2.4p
--------- ---------
Diluted earnings per
share 2 16.6p 2.4p
--------- ---------
Group statement of comprehensive income
for the year ended 31 October 2021
2021 2020
GBP000 GBP000
Profit for the year 801 114
-------- --------
Items that will not be reclassified
to profit or loss
Fair value adjustment on investment
in equity 5 (12)
5 (12)
Items that may be reclassified to
profit or loss
Exchange rate differences on translation
of subsidiary undertaking - (4)
- (4)
Other comprehensive income for the
year, net of tax 806 98
-------- --------
Total comprehensive income attributable
to:
Equity holders of the parent 806 98
Group balance sheet
at 31 October 2021
2021 2020
GBP000 GBP000
Non-current assets
Property, plant and equipment 16,436 16,615
Investment property 1,490 2,130
Right of use asset 71 -
17,997 18,745
Financial assets 34 30
Deferred tax asset 16 16
--------- ---------
18,047 18,791
--------- ---------
Current assets
Inventories 10 10
Trade and other receivables 1,936 1,277
Cash and cash equivalents 52 49
--------- ---------
1,998 1,336
--------- ---------
Assets held for sale 883 219
--------- ---------
Total assets 20,928 20,346
--------- ---------
Current liabilities
Trade and other payables (984) (666)
Financial liabilities (1,158) (1,520)
Income tax payable (108) (237)
--------- ---------
(2,250) (2,423)
--------- ---------
Non-current liabilities
Other payables (318) (274)
Financial liabilities (4,069) (4,322)
Deferred tax liabilities (734) (536)
Defined benefit pension plan deficit (92) (92)
--------- ---------
(5,213) (5,224)
--------- ---------
Total liabilities (7,463) (7,647)
--------- ---------
Net assets 13,465 12,699
--------- ---------
Capital and reserves
Equity share capital 264 264
Capital redemption reserve 673 673
Treasury shares (1,529) (1,522)
Fair value adjustments reserve 10 5
Currency translation 13 13
Retained earnings 14,034 13,266
--------- ---------
Total equity 13,465 12,699
--------- ---------
Group statement of cash flows
for the year ended 31 October 2021
2021 2020
GBP000 GBP000
Operating activities
Profit for the year 801 114
Tax expense 313 301
Net finance costs 145 139
Profit on disposal of non-current assets
and assets held for sale (1,200) (293)
Depreciation and impairment of property,
plant and equipment 177 177
(Increase)/decrease in trade and other
receivables (442) 220
Increase/(decrease) in trade and other
payables 353 (274)
Impairment of fixed assets - 279
---------- --- ---------
Cash generated from operations 147 663
Income taxes paid (245) (151)
Interest paid (145) (141)
Net cash(outflow)/ inflow from operating
activities (243) 371
---------- --- ---------
Investing activities
Interest received - 2
Proceeds from sale of property, plant
and equipment and assets held for sale 1,411 186
Payments to acquire property, plant
and equipment (473) (315)
Net cash inflow/(outflow) from investing
activities 938 (127)
---------- --- ---------
Financing activities
Preference dividend paid (1) (1)
Equity dividends paid - -
Consideration received by EBT on sale
of shares 41 62
Consideration paid by EBT on purchase
of shares (81) (25)
Capital element of finance lease rental
payments (25) (9)
Loan repayment (187) (1,500)
Mortgage receipts received 35 -
Net cash outflow from financing activities (218) (1,473)
---------- --- ---------
Increase/(decrease) in cash and cash
equivalents 477 (1,229)
Cash and cash equivalents at the beginning
of the year (1,232) (3)
---------- --- ---------
Cash and cash equivalents at the year
end (755) (1,232)
---------- --- ---------
Group statement of changes in equity
for the year ended 31 October 2021
Equity Capital Fair
share redemption Treasury value Currency Retained Total
capital reserve shares adjustment translation earnings equity
GBP000 GBP000 GBP000 reserve GBP000 GBP000 GBP000
GBP000
At 1 November
2019 264 673 (1,562) 17 17 13,152 12,561
Profit for the
year - - - - - 114 114
Other comprehensive
income for the
year
net of income
tax - - - (12) (4) - (16)
--------- ------------ ----------- ------------ -------------- ----------- ---------
Total comprehensive
income for the
year - - - (12) (4) 114 98
--------- ------------ ----------- ------------ -------------- ----------- ---------
Consideration
received
by EBT on sale
of
shares - - 62 - - - 62
Consideration
paid by
EBT on purchase
of shares - - (24) - - - (24)
Loss by EBT on
sale
of shares - - 2 - - - 2
Equity dividends - - - - - - -
paid
--------- ------------ ----------- ------------ -------------- ----------- ---------
At 31 October
2020 264 673 (1,522) 5 13 13,266 12,699
--------- ------------ ----------- ------------ -------------- ----------- ---------
Equity Capital Fair
share redemption Treasury value Currency Retained Total
capital reserve shares adjustment translation earnings equity
GBP000 GBP000 GBP000 reserve GBP000 GBP000 GBP000
GBP000
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 (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 represent 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 2021 the Group held 193,053 Ordinary Shares and
238,310 'A' Limited Voting Ordinary Shares (2020: 183,719 Ordinary
Shares and 254,153 'A' Limited Voting Ordinary Shares) of its own
shares. During the year there were purchases of 9,334 Ordinary
Shares and 17,204 'A 'Limited Voting ordinary Shares and sales of
33,147 'A; Limited Voting Ordinary Shares.
Fair value adjustments reserve
The fair value adjustments reserve is used to record differences
in the year on year fair value of the investment classified as fair
value through other comprehensive income.
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 2021. The statutory financial statements have not yet been
delivered to the Registrar of Companies.
The auditors, PKF Francis Clark, have reported on the accounts
for the years ended 31 October 2021 and 31 October 2020. Their
audit reports in both years were unqualified, did not include a
reference to any matters to which the auditors drew attention by
way of emphasis without qualifying their report and did not contain
a statement under Section 498 (2) or (3) of the Companies Act 2006
in respect of those accounts.
The financial information in this statement has been prepared in
accordance with International Financial Reporting Standards (IFRS)
as adopted for use in the United Kingdom. The accounting policies
have been consistently applied and are described in full in the
statutory financial statements for the year ended 31 October 2021,
which are expected to be mailed to shareholders on 11 March 2022.
The financial statements will also be available on the Group's
website www.heavitreebrewery.co.uk .
Going concern
With the continued uncertain nature of the pandemic and further
lockdowns and restrictions being in place during this financial
year, the Directors have considered the Group's financial
resources. This had included a further review of the medium-term
financial plan, along with a range of cash flow forecasts for 12
months from the date of approval of these financial statements. The
Group has positive cash generation from its operations before tax
and interest and the gearing remains low. These forecasts include a
reduction in trade in the financial year to October 2022 due to an
anticipated decrease in footfall and assume that there will be no
further lockdown or significant trading restrictions. The
mitigation measures which are in place in order to protect the cash
position of the business have been incorporated into the forecasts
for future cash positions. The forecast for capital receipts in
2022 includes non-core asset sales of GBP2m of which GBP880,000 has
been received. These forecasts leave the Group with headroom of
over GBP1.4m on an overdraft facility of GBP3m. The Board will
continue to review cashflows as guidance from Government
changes.
The Board took the decision last year to accelerate the paying
down of its GBP4.5m term loan by the selling of non-core assets to
secure its current position and the long term trading position of
the Group. The Board identified up to 15 non-core assets with a
value of between GBP5m and GBP7m to be realised over a period of 2
to 3 years. These include unlicensed properties and developments
with permissions which are already within the Estate. This year the
Group has sold 9 of the non-core assets resulting in profits of
GBP1,318,000 being realised from these sales, with a further
property completing early in the new financial year this has
enabled the Group post year end to make a further prepayment on the
term loan of GBP750,000, meaning that by the 31 December 2021 the
Group has paid down GBP992,000 on the loan.
The Board has continued to engage with the bank regarding its
facilities and forward trading, it has in place a waiver of
covenant testing until April 2022 along with the agreement on
paying down of loan facilities, projections show that there is a
good level of headroom in the debt service cover covenant both to
April 2022 and October 2022. However one covenant will fail the
April 2022 testing but will have headroom in October 2022. A
further waiver has been received from the bank in respect of the
April 2022 covenant test. The Directors are satisfied that the
Group's forecasts and projections, which take account the
anticipated changes which will come about as a direct result of the
Covid-19 pandemic and shows that the Group will be able to operate
within its facilities. The current trading performance of the Group
also shows that it will be able to operate within the level of its
facilities for the 12 months from date of approval. With value in
the Estate being realised over time and with the support from the
bank there are no material uncertainties in relation to going
concern. For this reason, the Group continues to adopt the going
concern basis in preparing its 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:
2021 2020
GBP000 GBP000
Profit for the year 801 114
-------- --------
2021 2020
N(o) . N(o) .
(000) (000)
-------- --------
Basic weighted average number of shares
(excluding treasury shares) 4,824 4,801
-------- --------
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
2021 2020
GBP000 GBP000
Declared and paid during the year:
Equity dividends on ordinary shares:
Final dividend for 2020: nil (2019: nil) - -
First dividend for 2021: nil (2020: nil) - -
Less dividend on shares held within employee - -
share schemes
Dividends paid - -
-------- --------
Proposed for approval at AGM
(not recognised as a liability as at 31
October)
- -
Final dividend for 2021 nil (2020: nil)
Cumulative preference dividends 1 1
-------- --------
4. Segment information
Primary reporting format - business segments
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, under tied and free of tie
tenancies.
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 2021 and 2020. 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 2020 UK United Total
GBP000 States GBP000
GBP000
Revenue
Sales to external customers 5,019 - 5,019
Other segment information
Segment assets 20,304 42 20,346
-------- -------- --------
Total Assets 20,304 42 20,346
-------- -------- --------
Capital expenditure
Property, plant and equipment 355 - 355
-------- -------- --------
Year ended 31 October 2021 UK United Total
GBP000 States GBP000
GBP000
Revenue
Sales to external customers 4,618 - 4,618
Other segment information
Segment assets
21,382 42 21,424
-------- -------- --------
Total Assets 21,382 42 21,424
-------- -------- --------
Capital expenditure
Property, plant and equipment 473 - 473
Right of use asset 71 71
5. General information
The 2021 Annual Report and Financial Statements will be
published and posted to shareholders on 11th March 2022 Further
copies may be obtained by contacting the Company Secretary at The
Heavitree Brewery PLC, Trood Lane, Matford, Exeter EX2 8YP. The
2021 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 13 April 2022 at 11.30am.
Ends.
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