Heavitree Brewery Plc
Interim Results
Following a meeting by a duly authorised committee of the Board of Directors
held today, 26 June 2020, the Directors announce the interim results for the
six months ended 30 April 2020.
Chairman's statement
The request by the Prime Minister asking the public to avoid visiting pubs,
and the subsequent forced closure of pubs, clubs and restaurants across the UK
on March 20 ^th 2020 has had an inevitably devastating effect on the trade as
a whole and, of course, our business is not immune to the impact that has been
felt by all pub companies. After the closure announcement, in a move to
conserve cash within the business at this incredibly challenging time, all
capital works were immediately postponed, the Board withdrew its
recommendation to pay a final dividend for the year ending October 2019, the
Directors volunteered and took a salary reduction and in turn, some members of
our Head Office staff were placed on the Government's Coronavirus Job
Retention Scheme. Whilst we all understand the reasoning for the closure, it
is hard to convey the shockwave felt by all within our organisation and how
saddening it has been to see our pubs standing empty during a traditionally
strong trading time of the year. One of our tenants commented that in the 45
years of his family operating one of our houses, this was the first time he
had ever had to close. Similar sentiments have been felt throughout our
estate.
Results
Turnover for the period under review has decreased by £804,000 (23.46%) to
£2,623,000. The Group has returned an Operating Profit of £243,000 (2019:
£624,000), a reduction of 61.00%. Profit Before Tax is £184,000 (2019:
£705,000) a reduction of 73.90% on the previous year. It is worth noting that
the Profit Before Tax in the previous year did include a book profit of
£173,000 on, predominantly, the sale of an unlicensed property.
Dividend
The Directors do not recommend the payment of a dividend at the half-year.
Once our pubs reopen and when we see trading back on a more even keel, the
Board will be able to review future dividends.
Property
A small parcel of land has been sold in Christow, near Exeter for £15,000.
Prospects
Much has been written about getting the pubs open to “save our summer”. It is
important to remember that, rather ominously for the second half of our
financial year, we already have two months without any trading to absorb.
Immediately following the closure, we gave some comfort to our tenants by
deferring the rents that were to be collectable. Since then we have taken the
decision to cancel rents completely for all our licensed houses up to the end
of July 2020. Rents will be reviewed as we go forward. Obviously, there has
been no revenue coming in from tied product sales during the period of
closure.
I am most grateful to each of our staff members for the calm and considered
response to the closure and to the changes and stresses to office and day to
day life that the pandemic has caused. This approach has aided us in updating
and advising all our tenants regularly to help them to navigate through an
ever-changing landscape.
Barclays Bank has extended its support to our business by offering an
increased overdraft facility if required, a 12 months' capital repayment
holiday on our existing facility and a relaxation of the covenants attached to
the original facility. We have enjoyed a long relationship with Barclays and
are appreciative of the Bank's reaction to the difficulties that have arisen
from the pandemic.
At the time of writing we are reacting to the publication of the Government's
“Safer Workplace Guidance for Pubs and Restaurants” following the confirmation
by the Prime Minister that pubs can reopen on or after July 4 ^th . There
will be restrictions and new practices to adhere to, each of which bring their
own issues which will have to be managed. Our team will continue to support
our tenants through this next chapter, and we all look forward to the sector
returning to happier times.
N H P TUCKER
Chairman