Heavitree Plc
Chairman's statement
Although Turnover for the Group has decreased by GBP86,000 to GBP7,528,000, I am pleased to report that Group Operating Profit has increased by GBP207,000 to GBP1,839,000. The drop in Turnover has, in most part, been as a result of rents not being received at two houses which are being operated by external management companies while new tenants are being sought. These houses are The Lysley Arms in Pewsham, near Chippenham and The Traveller's Rest in Whitestone, near Exeter. A new Tenant has now been found for The Traveller's Rest.
The increase in Group Operating Profit has been aided by a reduction in the bad debt provision of GBP68,000 following another year of efficient credit control. There has also been a reduction in Superannuation costs against the previous year of GBP86,000.
Results
Group Turnover decreased by GBP86,000 to GBP7,528,000. Group Operating Profit has increased by GBP207,000 to GBP1,839,000, an increase of 12.68% on the previous year.
Heavitree Inns remained dormant throughout the year.
Heavitree Inc. generated an operating profit of GBP30,000 following the sale of a small parcel of development land during the year under review (2018 – GBP12,000).
Dividend
The Directors recommend a final dividend of 4.25p per Ordinary and 'A' Limited Voting Ordinary Share (2018 – 4.25p) making a total for the year of 7.925p (2018 – 7.925p). The dividend will be paid on 17 April 2020, subject to shareholder approval at the Annual General Meeting on 15 April 2020, to those shareholders on the Register at 20 March 2020.
Sale of Property
Since the end of the financial year The Maltsters Arms in Harbertonford and the adjoining cottage, Bridge House, and also Rose Cottage in Strete have been marketed for sale. The Maltsters Arms has been closed since September 2018 and is subject to an Asset of Community Value listing. I hope to report further on these properties at the half-year.
Capital Investments
Listed Building consent and Planning Permission has been granted at The Ley Arms in Kenn to demolish the function room area and build a block of eight bedrooms to allow for an offer of bed and breakfast. This is a wonderful house being traded exceptionally well by our tenant Karen Bayliss. The addition of bedrooms will obviously compliment the quality offer at this house and contractors' quotes for the project are currently being sought.
Corporate Governance
The Board adopted the Corporate Governance Code of the Quoted Companies Alliance in September 2018 when this became a requirement under AIM Rules. I, and the other Members of our Board, are collectively accountable to you, the shareholders for ensuring good corporate governance. My specific role and responsibility as Chairman is to make sure that all aspects of corporate governance are covered and adhered to. Historically this Company has always strived to conduct business responsibly to the benefit of all stakeholders. The Code gives the Directors a structure to help them to deliver good governance to all shareholders and, in turn, to all our tenants and employees.
Personnel
It was announced to the London Stock Exchange on 29(th) August 2019 that Chris Bush had been appointed to the Board as an Independent Non-Executive Director and it gave me great pleasure at the time to extend my personal welcome. He commenced his role with us on 1st September 2019. Chris is an Institute of Chartered Accountants in England and Wales professional and he has many years' experience in leadership roles within audit practice. He also fills the Independent Non-Executive role required by our QCA Corporate Governance Code with specific responsibility for Corporate Governance and Audit oversight.
Pension Scheme
The Company continues to operate its Final Salary Pension Scheme for retired Members and their dependents. As I reported last year the final three deferred Members transferred out of the Scheme during the previous financial year. Since then, and following the High Court's ruling in October 2018 that all Guaranteed Minimum Pension (GMP) benefits in UK pension plans must be equalised for male and female members, the Scheme's actuary has been working on establishing the GMP liability to the Scheme. This process is not yet complete but as at 31 October 2019 the liability has been estimated at GBP52,000 and this has been accrued in the financial statements for the year under review.
Repurchase of shares
The Company did not repurchase any of its own shares during the year under review, but the Directors intend to seek shareholder approval at the forthcoming Annual General Meeting for the continuing authority to do so.
Outlook
I am pleased to report that since the year end our expiring banking facilities with Barclays, with whom we have enjoyed an excellent relationship and who have provided us with facilities for nearly 40 years, have been revised and renewed for a further term of five years.
After the prolonged period of political uncertainty endured by business and the country as a whole. The hope has to be that the result of the December General Election will deliver some much needed stability. While we await this and monitor the effects of the departure from the European Union, the Directors feel it prudent to leave the final Dividend unchanged from the previous year.