TIDMHVT
RNS Number : 8883C
Heavitree Brewery PLC
24 June 2021
The Heavitree Brewery PLC
Trood Lane
Matford
Exeter EX2 8YP
Date: 24 June 2021
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, 24 June 2021, the Directors announce the
interim results for the six months ended 30 April 2021.
Chairman's statement
In my statement accompanying the accounts for the previous
financial year, I warned that the next half year results would be
further impacted by the trading restrictions and lockdown of our
sector as the Government battled this country's second wave of
infection of Covid-19. Despite a write back of rent in the period
of GBP344,000 caused by the peculiarity of the IFRS 16 Lease
Accounting calculations which I explained in my year-end statement
as at 31 October 2020, turnover has reduced by 67.77% to GBP846,000
(2020: GBP2,623,000). This turnover figure is predominantly
comprised of a discounted rental income from our licensed
properties for December 2020 only and some income from tied
products from the trading under restrictions before Christmas.
Results
The Group has returned an Operating Loss of GBP647,000 (2020:
GBP243,000 Profit). There is a Loss Before Tax of GBP76,000 (2020:
GBP184,000 Profit Before Tax).
Dividend
The Directors do not recommend the payment of a dividend at the
half-year. As disruption and uncertainty within our sector
continues, the Board will not consider the payment of a dividend
during the current financial year. When trading does return to some
sort of normality, the Board will be able to review future dividend
payments.
Property
The sale of some non-core assets has been achieved during the
period under review:
A small parcel of land in Abbotskerswell was sold for
GBP20,000.
A flat on the site of the old St.Loye's Hotel site was sold for
GBP185,000.
The closed Maltster's Arms and adjoining cottage in
Harbertonford was sold for GBP225,000.
The Castle Inn in Holcombe was sold for GBP425,000.
Prospects
The reopening of the garden areas and, in turn the reopening of
indoor trading areas under restrictions is an early step on the
road to a recovery. We have tenants in all our pubs and the
feedback from our houses and the support from our customers shows
great promise for the summer months and for future trading. The
Company's cashflow forecasts continue to show that we are able to
trade within our banking facility and as I reported at the
year-end, Barclays Bank has waived the testing of our banking
covenants until April 2022. The Board is most grateful for the
patience, support and determination shown by all stakeholders in
the Company's business.
N H P TUCKER
Chairman
Group income statement (unaudited)
For the six months ended 30 April 2021
6 months 6 months Audited
to to 12 months
30 April 30 April to
2021 2020 31 October
2020
Note GBP' 000 GBP' 000 GBP' 000
Revenue 846 2,623 5,019
Change in stocks - - -
Other operating income 183 136 317
Purchase of inventories (253) (995) (2,065)
Staff costs (655) (713) (1,310)
Depreciation of property, plant and
equipment (77) (87) (177)
Other operating charges (691) (721) (1,245)
(1,493) (2,380) (4,480)
Group operating Loss/ profit (647) 243 539
Profit on sale of property, plant
and equipment 647 15 293
Movements in valuation of estate and
related assets - - (279)
Group Loss/profit before finance costs
and taxation - 258 553
Finance income - 2 2
Finance costs (76) (76) (141)
Other finance costs-pensions - - -
(76) (74) (139)
Loss/profit before taxation (76) 184 414
Tax expense (10) (42) (300)
Loss/profit for the period (86) 142 114
Earnings per share 2
- basic (1.8)p 3.0p 2.4p
- diluted (1.8)p 3.0p 2.4p
Group statement of comprehensive income (unaudited)
For the six months ended 30 April 2021
6 months 6 months Audited
to to 12months
30 April 30 April to
2021 2020 31 October
2020
GBP' 000 GBP' 000 GBP' 000
Loss/profit for the period (86) 142 114
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 4 (9) (12)
be reclassified - - -
4 (9) (12)
Items that may be reclassified to
profit or loss -
Exchange rate differences on translation (2) (4)
of subsidiary undertaking -
Tax relating to items that may be - -
reclassified - (2) (4)
Other comprehensive income for the
year, net of tax (82) 131 98
Total comprehensive income attributable
to:
Equity holders of the parent (82) 131 98
Group balance sheet (unaudited)
at 30 April 2021 30 April 30 April Audited
2021 2020 31 October
GBP' 000 GBP' 000 2020
GBP'000
Non-current assets
Property, plant and equipment 18,743 19,364 18,745
Financial assets 33 32 30
Deferred tax asset 16 16 16
18,792 19,412 18,791
Current assets
Trade and other receivables 1,852 915 1,277
Inventories 10 10 10
Cash and short-term deposits 66 45 49
1,928 970 1,336
Assets held for sale 211 - 219
Total assets 20,931 20,382 20,346
Current liabilities
Trade and other payables (619) (452) (666)
Financial liabilities (2,162) (1,681) (1,520)
Income tax payable (98) (267) (237)
(2,879) (2,400) (2,423)
Non-current liabilities
Other payables (279) (296) (274)
Financial liabilities (4,508) (4,531) (4,322)
Deferred tax liabilities (536) (394) (536)
Defined benefit pension plan (92) (92) (92)
(5,415) (5,313) (5,224)
Total liabilities (8,294) (7,713) (7,647)
Net assets 12,637 12,669 12,699
Capital and reserves
Equity share capital 264 264 264
Capital redemption reserve 673 673 673
Treasury shares (1,502) (1,585) (1,522)
Fair value adjustments reserve 9 8 5
Currency translation 13 15 13
Retained earnings 13,180 13,294 13,266
Total equity 12,637 12,669 12,699
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 2021
6 months 6 months Audited
to to 12months
30 April 30 April to
2021 2020 31 October
2020
Operating activities GBP' 000 GBP' 000 GBP' 000
(Loss)/profit for the period (86) 142 114
Tax expense 10 42 301
Net finance costs 76 74 139
(Profit) on disposal of non-current
assets and assets held for sale (647) (15) (293)
Depreciation and impairment of property,
plant and equipment 97 87 177
Exchange gain on cash, liquid resources
and loan - - -
Difference between pension contributions
paid and recognised in the income
statement - - -
(Increase)/decrease in trade and
other receivables (338) 416 220
(Decrease)/increase in trade and
other payables (58) (528) (274)
Impairment of assets - - 279
Cash generated from operations (946) 218 663
Income taxes paid (150) - (151)
Interest paid (76) (76) (141)
Net cash(outflow)/ inflow from operating
activities (1,172) 142 371
Investing activities
Interest received - 2 2
Proceeds from sale of property, plant
and equipment and assets held for
sale 584 15 186
Payments to acquire property, plant
and equipment (209) (262) (315)
Net cash(outflow)/ inflow from investing
activities 375 (245) (127)
Financing activities
Preference dividend paid (1) (1) (1)
Equity dividends paid - - -
Consideration received by EBT on
sale of shares 41 - 62
Consideration paid by EBT on purchase
of shares (54) (23) (25)
Capital element of finance lease
rental payments (7) (6) (9)
Repayment of bank borrowings (27) (6,000) (1,500)
Draw down of bank borrowings - 4,500 -
Net cash outflow from financing activities (48) (1,530) (1,473)
(Decrease)/increase in cash and cash
equivalents (845) (1,633) (1,229)
Cash and cash equivalents at the
beginning of the period (1,232) (3) (3)
Cash and cash equivalents at the
period end (2,077) (1,636) (1,232)
Group statement of cash flows (unaudited)
(continued)
for the six months ended 30 April
2021
Represented by:
Cash and short term deposits 66 45 49
Overdraft (2,143) (1,681) (1,281)
(2,077) (1,636) (1,232)
Group reconciliation of movements in equity (unaudited)
6 months Equity Capital Fair
to
30 April share redemption Treasury value Currency Retained Total
2021
capital reserve shares adjustment translation earnings equity
GBP' GBP' 000 GBP' GBP' GBP' GBP' GBP'
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
6 months Equity Capital Fair
to
30 April share redemption Treasury value Currency Retained Total
2020
capital reserve shares adjustment Translation earnings equity
GBP' GBP' 000 GBP' GBP' GBP' 000 GBP' GBP'
000 000 000 000 000
At 1November
2019 264 673 (1,562) 17 17 13,152 12,561
Profit for
the period - - - - - 142 142
Other comprehensive
income for
the period,
net of income
tax - - - (9) (2) - (11)
-------- ----------- ----------- ----------- ------------ --------- ---------
Total comprehensive
income for
the period - - - (9) (2) 142 131
-------- ----------- ----------- ----------- ------------ --------- ---------
Consideration
received
by EBT on
sale of shares - - - - - - -
Consideration
paid by EBT
on purchase
of shares - - (23) - - - (23)
Gain by EBT
on sale of
shares - - - - - - -
Equity dividend
paid - - - - - - -
-------- ----------- ----------- ----------- ------------ --------- ---------
At 30 April
2020 264 673 (1,585) 8 15 13,294 12,669
-------- ----------- ----------- ----------- ------------ --------- ---------
Group reconciliation of movements in equity (unaudited) -
continued
Equity Capital Fair
share redemption Treasury value Currency Retained Total
12 months to 31 capital reserve shares adjustment Translation earnings equity
October 2020 GBP000 GBP000 GBP000 reserve GBP000 GBP000 GBP000
Audited 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 - - - - - - -
Loss by EBT on
sale of shares - - (24) - - - (24)
Equity dividends
paid - - 2 - - - 2
--------- ------------ ----------- ------------ -------------- ----------- ---------
At 31 October
2020 264 673 (1,522) 5 13 13,266 12,699
--------- ------------ ----------- ------------ -------------- ----------- ---------
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
415,975.
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 2020. The accounting policies are drawn up in accordance
with International Accounting Standards (IAS) and International
Financial Reporting Standards (IFRS) as adopted by the European
Union.
These unaudited financial statements were approved and
authorised for issue by a duly appointed and authorised committee
of the Board of Directors on 24 June 2021.
2 . Going concern
With the continued uncertainty of the Covid-19 pandemic the
Directors have continued to review the Group's financial resources
including a continued review of the medium-term financial plan,
along with a range of cash flow forecasts, the Group has positive
cash generation from its operations and the gearing remains low.
These forecasts include the rent concessions which have been given
to the end of May 2021 for Tenants including and factoring in any
further lockdowns. As reported in the year end Chairman's Statement
the Board has taken the decision to accelerate its programme of
non-core asset sales and in the first half of the financial year
four of these assets have been sold. The Board continues to monitor
and control costs and where possible and have claimed on the
Governments Furlough Scheme and will continue to review cashflows
as guidance from Government changes.
As reported in the Chairman's Statement a waiver of covenants
has been agreed by Barclays Bank until April 2022, the Bank
continues to be satisfied with the Group's forecasts and
projections, which take account any future changes which may 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
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.
Notes to the interim results - continued
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. The impact of the ongoing Covid-19 pandemic on the pub
trade and the wider UK economy could have ramifications for the
valuation of the Group's estate. Given the current significant and
unprecedented levels of uncertainty, the Directors' view is that it
is not possible to quantify any potential impact at this time, and
as such the values in these interim financial statements have not
been adjusted to take into account the impact of the pandemic.
4. Basic and diluted earnings per share
The calculation of basic earnings per ordinary share is based on
earnings of GBP(86,000) (2020: GBP142,000), being (loss)/profit
after taxation for the period, and on 4,819,991 (2020: 4,777,939)
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.
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 2021 has been posted to
shareholders today and will be available on our website at
www.heavitreebrewery.co.uk.
Ends.
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IR XXLFLFQLEBBV
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