The Heavitree Brewery PLC

Trood Lane

Matford

Exeter EX2 8YP

Date:               27 June 2024

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, 27 June 2024, the Directors announce the interim results for the six months ended 30 April 2024.

Chairman's statement

Results

The Company performed well in the first half of this year against the same period last year despite the combination of weeks of cold and wet weather conditions and a very early Easter weekend which one would expect to have an adverse effect on number comparisons.  Turnover has in fact increased by 2.1% to £3,396,000 (2023: £3,326,000).  As reported in recent years, the turnover figure for this period was again reduced by the IFRS 16 Lease Accounting unwind.  This equated to a reduction of £39,500.

The Group has returned an operating profit of £540,000 (2023: operating profit of £523,000), a 3% improvement on the previous year.  In turn, profit before tax is £761,000 (2023: £947,000) which includes the book profit of £300,000 realised on the sale of non-core assets (2023 non-core assets : £503,000). The reduction in profit before tax reflects greater non-core asset sales for the corresponding period of 2023.

Dividend

The Directors recommend the payment of an increased interim dividend at a rate of 2.25p (2023: 2.0p) per Ordinary and 'A' Ordinary share to those shareholders on the register on 12 July 2024.  The dividend will be payable on 02 August 2024.

Property

In accordance with the disposal programme of non-core assets, The Exeter Inn in Honiton Clyst was sold.

The new accommodation block at The Ley Arms in Kenn is finished offering quality bedrooms at this very popular pub. 

Heavitree Inc.

I reported at this year's Annual General Meeting that we were awaiting the issue of a 'certificate of good standing' from the Texas Secretary of State before being able to further move towards terminating our American subsidiary.  The certificate was duly received and a 'certificate of termination' subsequently issued and filed with the Secretary of State and Texas Comptroller of Tax.  The wind-up was officially concluded on 04 June 2024, ending our involvement in the United States which began in 1982.

Final Salary Pension Scheme.

I had hoped to be updating conclusively concerning the wind up of the final salary pension scheme.  I reported at the Annual General Meeting that the process has been protracted as we remain beholden to the pace of work of the relevant insurance companies which will be supplying annuity reassignments so that future payments can be made directly to individual members.  Matters appear to be moving forward with all but one company at the time of writing which means that I am reasonably confident the wind up can be achieved during the second part of the year.

Prospects

A retirement planned for the end of this year of one of our longstanding tenants has meant that we have just one pub under notice with no further vacancies within the estate.  This should position us well for the second half of the year and we hope for a boost in sales from the Euros football competition and the summer Olympics, both of which will be broadcast at times favourable to licensed hours.  The Board's confidence for the second half of the year is reflected in the increase to the interim dividend.

N H P TUCKER

Chairman

Group income statement (unaudited)

For the six months ended 30 April 2024

Group statement of comprehensive income (unaudited)

For the six months ended 30 April 2024

Group balance sheet (unaudited)

Dividends

The Directors  recommend a dividend of 2.25p to be paid at the half-year. 

Group statement of cash flows (unaudited)

for the six months ended 30 April 2024                                                           

Group reconciliation of movements in equity (unaudited)

Group reconciliation of movements in equity (unaudited)

Group reconciliation of movements in equity (unaudited) - continued

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.

Own share reserve

Own shares reserve represents 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 146,957.

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 2023 The accounting policies are drawn up in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as adopted by the United Kingdom.

These unaudited financial statements were approved and authorised for issue by a duly appointed and authorised committee of the Board of Directors on 27 June 2024.

2. Going concern

The cost of living crisis was taken into account when forecasting for this financial year, as this continues to affect all areas of the hospitality sector. We have seen a steady start to the first half of the financial year and have exceeded budget expectations, while this is a positive start the factors affecting the industry continue and with this in mind the Board continues with its cautious approach in the second half of the financial year. The Group remains well within its forecasts to April 2025 with £2.8M overdraft available as at April 2024 and the term loan has been decreased in the year by £99k. The Board continues to focus attention on the long-term trading position of the Group. The acceleration of the Group's programme of non-core asset sales is continuing and in line with targets set, achieving £300k of sales within the first six months of the financial year. 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.

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. Within this trading period the Directors conclude that there were no impairments. 

4.  Basic and diluted earnings per share

The calculation of basic earnings per ordinary share is based on earnings of £569,000 (April 2023:£734,000), being profit after taxation for the period, and on 4,822,277 (April 2023: 4,794,270) 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 2024 has been posted to shareholders today and will be available on our website at www.heavitreebrewery.co.uk.

Ends.