Shepherd Neame Ltd - Announcement of Full Year Results London Stock Exchange
RNS Number : 4358S
Shepherd Neame Limited
24 September 2014
 

 

 

 

 

24 September 2014

SHEPHERD NEAME LIMITED

ANNOUNCEMENT OF FULL YEAR RESULTS

 

Shepherd Neame, the Kent-based brewer and pub operator, today announces results for the 52 weeks ended 28 June 2014.

 

Financial performance:

 

-      Turnover up 2.8% to £138.7m (2013: £134.9m)

-      Operating profit before exceptionals up 5.5% at £13.4m (2013: £12.7m) and EBITDA1 up 4.3% to a record level of £20.5m (2013: £19.6m)

-      Statutory profit before tax is up 8.7% to £7.7m (2013: £7.1m)

-      Basic earnings per 50p ordinary share2 is up 12.9% to 41.9p (2013: 37.1p) and basic earnings per 50p ordinary share before exceptional items2 is up 16.9% to 48.5p (2013: 41.5p)

-      Proposed final dividend per share up 3.0% to 20.75p (2013: 20.15p per £1 share) making total dividends for the year of 25.90p (2013: 25.15p per £1 share)

 

Operational highlights:

 

-      Very strong performance across our pub estate

- Like-for-like managed pub and hotel sales up 8.9%, with liquor up 8.0%, food up 10.4% andaccommodation up 9.7%

- Average EBITDAR3 per managed pub up 13.9%

- Like-for-like tenanted EBITDAR up 4.4%

- Average EBITDAR per tenanted pub up 5.9% 

-      Core own and licensed beer brand volumes (excluding contract brewing) up 6.1%: with strong growth from Bishops Finger, Whitstable Bay and Samuel Adams Boston Lager

-      Business and board and share capital reorganisation successfully implemented during the year, including a phased exit from contract brewing and transfer of warehousing and distribution operations

 

Current trading:

 

-      In the 10 weeks to 6 September like-for-like sales in Managed pubs are up by 4.1% and like-for-like EBITDAR from Tenanted pubs (to 30 August) is up by 2.6%, against a very strong comparable period in 2013.

 

Jonathan Neame, Chief Executive, commented:

 "I am pleased to report strong trading across all parts of the business, which has resulted in record EBITDA for the year.  We have the right strategic framework and skills within the business, as well as a good pipeline of product innovation and pub developments, to continue this year's progress and exploit the opportunities of this ever changing market."

 

 

[1] Earnings before exceptional items, interest, tax, depreciation, amortisation, loss on sale of fixed assets (excluding property) and free trade loan discounts

2 Comparatives have been restated for the share capital reorganisation

3 Earnings before interest, tax, depreciation, amortisation and rent payable

 

For further information, please contact:

 

 


Shepherd Neame Limited



Jonathan Neame, Chief Executive

Mark Rider, Finance and IT Director

Tel: 01795 532206

 


 

Kreab Gavin Anderson


Marc Cohen / Christina Clark

Tel: 020 7074 1800


 

Regional and Trade Media Contact:



John Humphreys

Tel: 01795 542051

 

Note: The Directors of Shepherd Neame Limited accept responsibility for this announcement.



NOTES FOR EDITORS

 

Shepherd Neame is a regional brewer and pub owner based in Faversham, Kent.  Established in 1698, it is Britain's oldest brewer and employs around 1,200 people.

 

The Company retails its own beers, on draught and in bottles, under a range of highly successful brand names, including:

 

-      Spitfire: One of the leading premium bottled ales in the UK with national distribution on draught (4.2% abv) and in bottle (4.5% abv) - supported by an Armstrong and Miller 'Bottle of Britain' advertising campaign.

 

-      Bishops Finger: Connoisseur premium ale (5.4% abv), nationally distributed in all major supermarkets - one of the country's leading specialist ales.  

 

-      Whitstable Bay: Sold under the Faversham Steam Brewery brand, this is a collection of stylish, modern beers which appeal to pubs, restaurants and bars. The range includes a Pale Ale, an Organic Ale, Blonde Lager and Black Oyster Stout.

 

-      Master Brew: Widely distributed well-hopped cask ale (3.7% abv) - a 'local hero' brand mainly sold in Kent.   

 

The Company also brews lagers under licence:

 

-      Asahi Super Dry: Japan's number one beer (5% abv), which is produced under an exclusive UK licence for brewing, sales and marketing.

 

-      Samuel Adams Boston Lager: Full-flavoured (and number one) US craft lager (4.8% abv) brewed under licence from the Boston Beer Company.

 

-      Oranjeboom Pilsener: Lager brewed under licence from United Dutch Breweries (3.9% abv), with wide distribution via the Company's own pubs.

 

Shepherd Neame sold 281,000 brewers' barrels of beer (81.1 million pints) including 245,000 brewers' barrels of own brewed beer (70.5 million pints) in the last year.  The majority of these sales were made in the UK although the Company also exports to more than 35 countries including Sweden, Italy, Ireland, the United States and Canada.

 

At the year end, the Company operated 347 pubs in the South East, of which 299 were tenanted or leased and 48 managed.  The pub estate ranges from mainstream city centre pubs to food destination houses, from hotels to historic coaching inns and traditional community 'locals'. 

 

Shepherd Neame's shares are traded on ISDX.  See http://www.isdx.com/ for further information and the current share price. 

 

For further information on the Company, see www.shepherdneame.co.uk.



CHAIRMAN'S STATEMENT

 

Overview

I am delighted that at this our 100th Annual General Meeting since the company's incorporation in 1914, I will be reporting a strong financial performance and further continued momentum into the new financial year.

 

Shepherd Neame is Britain's Oldest Brewer and a family business with a proud heritage and clear strategy for the future. This year, in particular has been a momentous one for the business with a successful implementation of material changes to the Company structure.

 

During the year we have carried out a business and board reorganisation and share capital reorganisation. Both of these significant undertakings provide a strong platform for the business to grow and develop.

 

The year has seen the economy improve and more favourable weather conditions in comparison to the prior year. Our performance also shows the benefit of investing consistently in our pubs and brands over many years, especially during the recession and we are now beginning to see higher returns as a result.

 

Turnover increased by +2.8% to £138.7m (2013: £134.9m). Operating profit before exceptionals grew by +5.5% to £13.4m (2013: £12.7m) and operating margin before exceptionals was up +0.3% to 9.7%.

 

The Company has incurred an exceptional charge of £1.3m (2013: £1.2m) for the costs associated with the transfer of warehousing and distribution activities to Kuehne and Nagel Drinkflow Logistics (KNDL) in October 2013 and the costs of the Share Capital Reorganisation in June 2014.

 

Profit before tax and exceptionals is £8.8m (2013: £8.0m), up +9.3%. Statutory profit before tax, after recognising exceptional items and lower property profits is £7.7m (2013: £7.1m), up +8.7%. Basic earnings per Ordinary Share of 50p was 41.9p (2013: 37.1p restated for the share capital reorganisation), up 12.9%. Basic earnings per Ordinary Share of 50p before exceptional items was 48.5p (2013: 41.5p restated for the share capital reorganisation), up 16.9%.

 

Business and board reorganisation

As communicated last year, the Company completed the transfer of warehousing and distribution activities in October 2013 to KNDL who took over responsibility for local and national drinks distribution, including to Shepherd Neame's pubs and hotels. The Company retains ownership of the warehouse site and continues to manage customer services.

 

Graeme Craig was appointed Brewing and Brands Director from 1 January 2014 following the resignation of Tom Falcon as Production and Distribution Director and we are beginning to see the benefits of integrating these two parts of the business. Nigel Bunting became Retail and Tenanted Operations Director with effect from 1 July 2014. George Barnes became Property and Services Director from the same date.

 

Share capital reorganisation

Further to the announcement in last year's Annual Report, in which the Board stated that it would be undertaking a review to assess the impact of the Company's share capital structure on share liquidity, the Shareholders approved a simplification of the share capital structure of the Company at a General Meeting on 5 June 2014.

 

This results in the Company having a single class of Ordinary Shares in issue under which 11,457,500 issued 'A' Shares of £1 nominal value and 68,000,000 issued 'B' Shares of 2p nominal value were converted into 14,857,500 issued Ordinary Shares of 50p nominal value. Each 'A' Shareholder received 1 Ordinary Share of 50 pence nominal value for each 'A' Share of £1 nominal value. Each 'B' Shareholder received 1 Ordinary Share of 50p nominal value for 20 'B' Shares of 2p nominal value; equivalent to a 2.5 times premium.

 

Economic and voting rights of all Shareholders are now aligned. We pride ourselves in having good investor relations, and I am particularly pleased to note the establishment during the year of a Family Council, which allows for regular engagement and clearer communication with family Shareholders.

Shepherd Neame remains a private limited company with the new Ordinary Shares admitted to trading on the ISDX Growth Market from 9 June 2014. These shares continue to benefit from the low dealing costs and tax advantages of this Exchange. The Company's shares were admitted to the CREST trading platform in September 2013.

 

Dividend

As part of the Share Capital Reorganisation, the Board announced that it intends to grow the dividend rate payable to all Shareholders with a view to a target dividend cover in the region of two times basic earnings per share pre-exceptional items in the medium term.

 

The Board is proposing a final dividend of 20.75p (2013: 20.15p) making the total dividends for the year of 25.90p (2013: 25.15p), an increase of 3.0%. This represents a dividend cover pre-exceptional items of 1.9 times.

 

Government and regulation

In his 2014 Budget the Chancellor delighted the industry by announcing a 1p cut in beer duty for an historic second year in a row. This comes after many years of above inflation increases which has caused considerable challenge to the sector. This has given a much needed boost to jobs and investment in the sector and the benefit was passed on to our customers in full. The industry, however, remains materially over-taxed and we will continue to push for further reductions in the overall tax burden.

 

In the Queen's Speech the Government announced that it plans to implement a Statutory Code of Practice for Pub Companies and intends to pass legislation within this Parliament. The Government made previous assurances that small companies with fewer than 500 pubs would not be included and so we are disappointed that under the current proposals they now may be. We will continue to petition for amendments to the Bill to reduce unnecessary red tape and additional cost for our business.

 

Summary

The last few years have seen the Company take important steps to enhance its business with the acquisition of some excellent pubs and hotels, transformational development of many of our key sites, and the strengthening of our brand portfolio. We have seen some of the benefits of the business reorganisation in the current year, and we believe these actions and our investment strategy will drive higher returns for the Company in the future.

 

The beer and pub sector is now arguably as dynamic and innovative as it has ever been with a plethora of new brands and new concepts. The customer will pay for a good experience and high-quality beers. We believe that we have the skills and the platform to exploit these beneficial trends in the marketplace.

 

M H Templeman

Chairman

 



 

CHIEF EXECUTIVE'S REVIEW

 

I am pleased to report a successful and progressive year for the 52 weeks to 28th June 2014. We have achieved strong trading across all parts of the business which has resulted in record turnover and EBITDA, strong cash flow and the anticipated reduced gearing. At the same time we have also made good progress against our strategy and successfully implemented the changes to our business announced last year.

 

Our marketplace has improved in the last 12 months, with greater consumer confidence, improved weather conditions, and lower taxation on beer. As a consequence, after many years of decline, the beer market has grown, with total UK beer volume increasing by +3.8% (2013: -5.0%) for the 12 months to the end of June 2014.

 

Within this market the consumer is increasingly motivated by a wider flavour profile, new styles of beer and renewed interest in craft and local production. The market for pubs has also improved as drinkers and diners are returning to pubs that offer a great atmosphere, interesting product range, great fresh food and so provide a memorable experience. This year, after many years of continuous investment, we have enjoyed a particularly good performance from our pub business, with trading figures comparing favourably with the strongest competition in the market. We have achieved a step-up in profit contribution from our retail pubs and hotels and a very strong return to growth from the tenanted trade, our largest business division. Within the beer business, growth in core own brewed and licensed brands, excluding contract volumes of Kingfisher, is well ahead of the market. Once again we have increased the investment in property repairs, marketing and brand support.

 

[1] Source: The British Beer & Pub Association

 

Tenanted and Retail Pub Operations

Overview

At the year end we operated 347 (2013: 350) pubs and hotels of which 302 are freehold. Of these, 48 (2013: 46) are managed and 299 (2013: 304) are tenanted or leased.

 

We aim to drive footfall to our pubs and attract and retain the best licensees through improving the quality of our pub estate, growing the mix of our retail business, maintaining strong liquor businesses, and increasing our investment in food and accommodation. We are reducing our exposure to small wet-led outlets. We intend to retain our focus on Kent, London and the South East, and maintain a predominantly freehold asset base.

 

We continue to pursue economic single site acquisition opportunities as they arise. We have a strong pipeline of development opportunities in our existing tenanted and retail estates and believe that investing here offers the best route to deliver growth in returns for the business at this time.

 

Since 2007 we have made considerable progress against this strategy through active property management and have acquired 32 pubs and hotels and disposed of 62. In the last year, in particular, competition for new sites and hence prices have firmed which vindicates our decision to make several substantial single site acquisitions, at attractive prices, during the economic downturn, even if this meant operating at higher leverage levels during this time.

 

We acquired one new outlet during the year by taking the lease of The George, Wardour Street, London. We have raised gross proceeds of £2.2m (2013: £2.7m) from the disposal of four pubs (2013: six pubs), three unlicensed properties (2013: one unlicensed property), one piece of land and other assets. This realised a profit of £0.2m (2013: £0.3m). We have also transferred 1 tenanted pub to our retail estate.

 

Total investment in our estate was £7.4m (2013: £9.9m) of which £0.3m was invested in acquisitions (2013: £3.6m), £5.1m (2013: £4.6m) on development and maintenance capex and a further £2.0m (2013: £1.7m) expended as repairs and decorations.

 

Driving footfall to our pubs

We aim to offer our customers a great and memorable experience every time they visit one of our pubs and hotels. To achieve this we have increased investment on the internal and external appearance of our pubs and made transformational changes to the look and feel of several outlets. Notable projects in our retail estate include the complete redevelopment and repositioning of The Botany Bay Hotel (formerly known as The Fayreness) and the smaller but high impact development of The Bell Hotel, Sandwich.

 

In the tenanted estate we have carried out major redevelopments, of note in the second half, The Kings Arms, Dorking, Kings Head, Shadoxhurst and The Three Lions, Farncombe as well as many smaller developments.

 

We have enhanced the product range available in our pubs to ensure there is a great portfolio of interesting beers available. The Whitstable Bay range has been very well received by our customers, our seasonal range has been re-positioned and we offer more guest ales and a wider national lager range. We have increased our investment in glassware and added Trade Quality Advisors to provide field training for our licensees so that the customer receives a great beer in our pubs every time they visit.

 

We have improved our complementary product offer with a stronger wine list focussed on wines from small family owned producers, such that around 75% of wine sales in our pubs are exclusive brands to us. We have improved the coffee offer available to our tenants with improved machines, ingredients and regular quality audits under the Coffee and Ale House brand.

 

We have continued to focus on our food offer. The food development team has supported our managers and tenants in improving procurement, driving better retail pricing, skills training, menu development and design. In the tenanted estate we have positively influenced the offer in more than 100 sites. In the retail estate, footfall from diners has increased by +8.3% and spend per head by +2.2% to £11.48 (2013: £11.23).

 

Our accommodation offer and marketing continues to improve with further investment in technology to optimise online bookings. This is supported by the digital marketing team who have made great strides in consolidating customer reviews and engaging with customers online. Occupancy during the year in the 271 bedrooms in our retail estate was strong at 76% (2013: 73%) and RevPAR up +8.3% to £52 (2013: £48).

 

[1] Revenue Per Available Room

 

Attracting and retaining the best people

We continue to focus on improving our recruitment and induction process for new licensees with better information on our website and improved skills training. We also use our retail skills to offer a strong business support package for our tenanted licensees to draw on.

 

As a consequence the number of applicants for our tenanted pubs has increased this year and the number of tenancy changes reduced. At the year end our tenanted estate was fully let. Satisfaction levels amongst our licensees from annual independent surveys are high and increasing. We score particularly well on the support from our Business Development Managers and Food Specialists.

 

More and more of our training is bespoke to the needs of the licensee and their outlet which enables higher success rates. During the year, we also trained our Business Development Managers to British Institute of Innkeeping Level 4 of Multi Retail Management.

 

We have reviewed our tenanted offer to ensure we provide a viable commercial proposition for both parties with flexible and appealing agreements, affordable rent and beer discount as appropriate. We have also had great success with matched investments with licensees.

 

We like to reward achievement, and I am delighted with the standards achieved by all of our award winners but notably Kathryn Gracey at The Marine Hotel, Shepherd Neame Pub of the Year, Mike Stokes at the Hoop and Grapes, Tenanted Pub of the Year and Brian and Anne Hogg at the Dog and Bear, Lenham, Managed Business of the Year.

 

Trading Performance

As a consequence of these initiatives, investments and the improved market conditions, trading in our pubs has been strong.

 

Tenanted estate revenues grew by +2.2% (2013: -1.1%) for the 52 weeks to 28 June 2014. Like for like EBITDAR per tenanted pub grew by +4.4% (2013: -1.0%) with modest like for like beer volume growth achieved for the first time in many years. Average EBITDAR per tenanted pub grew by +5.9% (2013: +3.0%) as we evolve the quality of our estate and the performance of individual outlets.

 

Retail estate revenues grew by +10.8% (2013: +5.0%) for the 52 weeks to 28 June 2014. Same outlet like for like sales were up +8.9% (2013: +3.3%), with liquor +8.0% (2013: +2.0%), food +10.4% (2013: +5.0%) and accommodation +9.7% (2013: +7.9%). Average EBITDAR per managed pub is up +13.9% (2013: +4.0%).

 

Brewing and Brands

Overview

This has been a year of considerable change in our Brewing and Brands business and we have made good progress as we restructure this part of our business.

 

Our strategic objectives are to attract and retain customers to a great portfolio of premium brands, instil a passion for quality, and drive continuous innovation and great marketing.

 

Total own brewed beer sold was marginally down by -0.3% (2013: -1.3%) at 245,000 BBs (2013: 246,000 BBs). As previously announced, the Company is making a phased exit from the production of Kingfisher lager. Bottled production ceased in October 2013 and keg production will cease in December 2014. The brand represented 13.5% of own produced beer volume (2013: 18.6%). The core own and licensed beer volume, adjusted to exclude contract volume, grew by +6.1% (2013: +0.9%).

 

Portfolio Development

Our brand portfolio has strengthened materially in the last year. We relaunched our Heritage Range with new packaging for Bishops Finger and 1698 bottle conditioned ale and revived several old recipes as our Classic Collection. Within our Discovery segment, we re-launched Whitstable Bay as a broader beer range in new livery, under the Faversham Steam Brewery banner, with a Pale Ale and Blonde Lager to complement the original Organic Ale.

 

These initiatives have performed above expectation with the Whitstable Bay range growing by two and a half times and Bishops Finger by +7.7% (2013: +1.0%). Samuel Adams Boston Lager more than doubled in volume with a particularly strong performance in the on trade. Our core brands had a solid year with Spitfire growing by +1.1% (2013: +2.7%) and Asahi Super Dry by +0.1% (2013: +9.4%).

 

In addition to the improvements in our portfolio above, we have launched new designs for our seasonal beers such as Early Bird and Goldings and created a new brand for occasional and event beers from our micro brewery, called the No.18 Yard Brewhouse. Since the year end we have further developed our portfolio with the launch of Whitstable Bay Black Oyster Stout and are redesigning Master Brew branding.

 

We have increased our marketing spend by £0.3m as announced last year following our agreement to engage comedy duo, Armstrong and Miller in character as 'Spitfire pilots'. We launched a multi-media advertising campaign with TV coverage and strong trade support in July 2013. This campaign was supported by digital activity and the Movember partnership and will continue in autumn 2014.

 

Business Reorganisation

In October 2013 we transferred our warehousing and distribution operations to KNDL. The transition to this agreement is delivering the anticipated financial and cashflow benefits in this financial year. This agreement allows the Company to pursue trading and development opportunities beyond its Kent heartland.

 

In support of this initiative, the Company has widened its national sales representation, built up a high-quality salesforce and achieved good volume growth in national on and national off trade. Export volume is also up +24% (2013: +30%). We have also combined the sales and marketing and production and distribution teams into one business division, which has reduced cost and improved focus on common objectives. We have outsourced non-core functions such as the management of point of sale and events equipment. To support the new business structure we have re-aligned the roles and responsibilities of our central functions and strengthened our financial reporting teams.

 

Operations

The water recovery plant became operational in March 2014. This plant will minimise the consumption of extracted well water by enabling us to recycle 40% of our water for re-use in boilers and cleaning. This investment is necessary as we near the end of a long term agreement with our local water company. The transition from the old arrangement to the new plant is a major project for the business with costly environmental compliance.

 

We now anticipate that ongoing annual charges will be £1.0m higher than the previous arrangement but this investment will help us to offset the materially higher costs that would have been incurred if we did not pre-treat our water prior to discharge. Since the year end the Company has received a permit to discharge cleansed water from the plant direct to the neighbouring creek.

 

Current Trading

We have made a good start to the new year and maintained recent momentum, in particular in the pub estate, against a very strong comparable period in 2013.

 

For the 10 weeks to 6 September 2014 like-for-like managed sales are up by +4.1% (2013: +10.2%). Like for like EBITDAR in the tenanted estate to 30 August 2014 is up +2.6% (2013: +1.7%). Total beer volume is down -13.5% but this was against a very buoyant period in the prior year (2013: +9.3%) and in part reflects the phasing out of the Kingfisher contract. We expect this volume trend to flatten out as the year progresses.

 

Summary

This has been a significant year for the Company with good strategic progress and the implementation of a challenging reorganisation. For the second year in a row we have taken decisive steps to strengthen the pub and beer portfolio and the quality and efficiency of our operations.

 

The trading performance has been strong and the cost savings arising from the business reorganisation partly reinvested into improving the pub experience for our customers and brand marketing activity, as well as offsetting the cost inflation from the water recovery plant. This has resulted in higher returns, strong cash flow and reduced leverage.

 

We believe we have the right strategic framework, the suitable skills within the business to exploit new opportunities and a good pipeline of product innovation and pub developments to continue this year's good progress and to exploit the opportunities of this ever-changing market.

 

J B Neame

Chief Executive

 

 



Profit and loss account

52 weeks ended 28 June 2014

                                                                                                                



52 weeks to 28 June 2014

52 weeks to 29 June 2013

 

 

Before

exceptional items

Exceptional items

Total

Before exceptional items

Exceptional items

Total

 

note

£'000

£'000

£'000

£'000

£'000

£'000

Turnover

1

138,679

-

138,679

134,906

-

134,906

Operating charges


(125,278)

(1,279)

(126,557)

(122,198)

(1,243)

(123,441)

Operating profit


13,401

(1,279)

12,122

12,708

(1,243)

11,465

Profit on sale of property


-

224

224

-

317

317

Profit on ordinary activities before interest


13,401

(1,055)

12,346

12,708

(926)

11,782

Interest receivable and similar income


25

-

25

10

-

10

Interest payable and similar charges


(4,647)

-

(4,647)

(4,685)

-

(4,685)

Profit on ordinary activities before taxation


8,779

(1,055)

7,724

8,033

(926)

7,107

Taxation

2

(1,622)

76

(1,546)

(1,913)

276

(1,637)

Profit after taxation


7,157

(979)

6,178

6,120

(650)

5,470

Earnings per 50p ordinary share*


 

 

 

 

 

 

Basic

4

 

 

41.9p

 

 

37.1p

Basic before exceptional items

4

 

 

48.5p

 

 

41.5p

Diluted

4

 

 

41.6p

 

 

36.9p

 

 

Statement of total recognised gains and losses

There are no recognised gains or losses other than the profit attributable to the shareholders of the Company of £6,178,000 for the 52 weeks ended 28 June 2014 (52 weeks ended 29 June 2013: £5,470,000).

 

 

Note of historical cost profits and losses


52 weeks ended


29 June 2013


£'000

Profit on ordinary activities before taxation

7,724

7,107

Realisation of property valuation

103

(77)

Difference between an historic cost depreciation charge and the actual depreciation charge for the year

29

29

Historical cost profit on ordinary activities before taxation

7,856

7,059

Historical cost profit for the year retained after taxation

6,310

5,422

 

 

 

 

 

 

 

 

 

*Comparatives have been restated for the change in share capital



Balance sheet

As at 28 June 2014

 

 

28 June 2014

29 June 2013

£'000

£'000

Fixed assets






Tangible fixed assets

201,591

201,312

Investments and loans

1,073

1,193





202,664

202,505

Current assets

Stock




6,417

5,790

Debtors




18,202

18,768

Cash




5,981

85





30,600

24,643

Creditors: amounts falling due within one year



Bank loans and overdrafts

(1,987)

(1,196)

Creditors

(23,477)

(18,704)





(25,464)

(19,900)

Net current assets

5,136

4,743

Total assets less current liabilities

207,800

207,248

Creditors: amounts falling due after more than one year



Bank loans

(75,463)

(77,302)

Provision for liabilities

(3,586)

(4,144)

Net assets

128,751

125,802







Capital and reserves



Called up share capital

7,429

12,818

Share premium account

1,099

1,439

Revaluation reserve

13,125

13,228

Reserve for own shares held

(908)

(798)

Profit and loss account

108,006

99,115

Equity shareholders' funds

128,751

125,802

These accounts were approved by the Board of Directors on 17 September 2014 and were signed on its behalf by:

 

M H Templeman

J B Neame

Directors



Cash flow statement

52 weeks ended 28 June 2014

 

 

 

 

52 weeks ended

 

52 weeks ended

 

 

 

28 June 2014

 

29 June 2013

 

 

£'000

£'000

£'000

£'000

Net cash inflow from operating activities (see note a)


22,437


19,023

Returns on investment and servicing of finance





Interest paid

(3,584)


(4,538)


Interest received

25


10




(3,559)


(4,528)

Taxation paid


(1,458)


(2,333)

Capital expenditure and financial investment





Purchase of tangible fixed assets

(8,819)


(13,771)


Proceeds of sales of tangible fixed assets

2,217


2,742


Additional loans to customers

(210)


(275)


Customer loan redemptions

152


270




(6,660)


(11,034)

Equity dividends paid


(3,236)


(3,140)

Net cash inflow/(outflow) before financing


7,524


(2,012)

Financing





Purchase of own shares


(432)


-

Reclassification to reflect maturity


(1,987)


-

New long-term loans


-


6,000

Issue costs of long-term loans


-


(475)

Repayment of long-term loan


-


(5,000)

Movement in cash during the period


5,105


(1,487)



Notes to the cash flow statement

52 weeks ended 28 June 2014

 

a  Reconciliation of operating profit to net cash inflow from operating activities

 


52 weeks ended 28 June 2014

52 weeks ended 29 June 2013


Before Exceptional items

Exceptional items

Total

Before Exceptional items

Exceptional items

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

Operating profit

13,401

(1,279)

12,122

12,708

(1,243)

11,465








Depreciation and amortisation

6,708

-

6,708

6,561

-

6,561

Impairment provision

-

45

45

-

537

537

Charge for share-based payments credited to reserves

413

26

439

288

14

302

Increase in stocks

(627)

-

(627)

(119)

-

(119)

Decrease/(increase) in debtors and prepayments

582

-

582

(807)

-

(807)

Increase in creditors and accruals

2,406

412

2,818

554

185

739

Free trade loan discounts

162

-

162

210

-

210

Loss on sale of assets (excluding property)

188

-

188

135

-

135


9,832

483

10,315

6,822

736

7,558

Net cash inflow from operating activities

23,233

(796)

22,437

19,530

(507)

19,023

 

b  Reconciliation of cash flows to movement in net debt

 

 

 

 

52 weeks ended 28 June 2014

52 weeks ended 29 June 2013

 

 

 

 

£'000

£'000

Opening cash and overdraft

(1,111)

376

Closing cash and overdraft

3,994

(1,111)

Increase/(decrease) in cash during the period

5,105

(1,487)

Reclassification to reflect maturity

1,987

-

New long-term loans

-

(6,000)

Repayment of long-term loan

-

5,000

Amortisation of loan issue costs

(148)

(144)

Movement in net debt during the period

6,944

(2,631)

Net debt at beginning of the period

(78,413)

(75,782)

Net debt at end of the period

(71,469)

(78,413)

 

c  Analysis of changes in net debt

 

 

2013

Cash flow

Reclassification to reflect maturity

Amortisation of issue costs

2014

 

 

£'000

£'000

£'000

£'000

£'000

Cash

85

5,896

-

-

5,981

Debt due within one year

(1,196)

1,196

(1,987)

-

(1,987)


(1,111)

7,092

(1,987)

-

3,994

Debt due after more than one year

(77,302)

-

1,987

(148)

(75,463)

Total

(78,413)

7,092

-

(148)

(71,469)

 



Notes to the accounts

28 June 2014

 

1  Turnover          

Turnover comprises sales net of discounts, rents receivable and services rendered from continuing trading activities, excluding value added tax. The Directors consider that the business carried on by the Company is that of a fully integrated regional brewer operating in the UK and that this constitutes one class of business. The export sales during the year were £3,485,000 (2013: £2,730,000).

 

 

2  Taxation

a  Tax on profit on ordinary activities


52 weeks ended

29 June 2013


£'000

£'000

Current tax:



UK Corporation tax at 22.50% (2013: 23.75%)

2,196

1,489

Prior year over provision

(50)

(57)

Total current tax

2,146

1,432

Deferred tax:



Origination and reversal of timing differences

(65)

378

Effect of reduction in the rate of corporation tax

(535)

(176)

Prior year under provision

-

3

Total deferred tax

(600)

205

Total tax charge

1,546

1,637

 

 

b   Factors affecting the current tax charge

The tax assessed on the profit on ordinary activities before taxation for the year is higher (2013: lower) than the standard average statutory rate of corporation tax in the UK of 22.50% (2013: 23.75%). The differences are reconciled below.

it on ordinary activities


52 weeks ended

29 June 2013


£'000

£'000

Profit on ordinary activities before tax

7,724

7,107




UK Corporation tax at average statutory rate 22.50% (2013: 23.75%)

1,738

1,688

Expenses not deductible for tax purposes and non-taxable income

416

239

Capital allowances less/(greater) than depreciation

81

(298)

Short-term timing differences

49

6

Utilisation of tax losses

(65)

(86)

Profit on sale of property less chargeable gains

(23)

(38)

Rolled over gains on asset disposals

-

(22)

Prior year over provision

(50)

(57)


2,146

1,432

The exceptional profit on the disposal of properties of £224,000 (2013: £317,000) gives rise to a tax charge of £28,000 (2013: £15,000). The exceptional operating charge of £1,279,000 (2013: £1,243,000) gives rise to a tax credit of £104,000 (2013: £291,000) of which £nil (2013: £128,000) is a deferred tax release. This gives a net tax credit on exceptional items of £76,000 (2013: £276,000).

 

 

c   Factors that may affect future tax charges

No provision is made for the taxation liability which would arise on the disposal of properties at their revalued amounts or on gains rolled over into replacement assets. Such tax would become payable only if the property were sold without it being possible to claim rollover relief. The total amount unprovided is estimated at £3.6m (2013: £4.1m), based on a corporation tax rate of 20% (2013: 23%). At present it is not envisaged that any such tax will become payable in the foreseeable future.

 



3  Dividends


52 weeks ended

29 June 2013


£'000

£'000

Declared and paid during the year



£1 'A' shares:



Final dividend for 2013: 20.15p (2012: 19.60p)

2,302

2,234

Interim dividend for 2014: 5.15p (2013: 5.00p)

590

571


2,892

2,805

2p 'B' shares:



Final dividend for 2013: 0.403p (2012: 0.392p)

274

267

Interim dividend for 2014: 0.103p (2013: 0.100p)

70

68


344

335




Dividends paid

2,146

1,432




Proposed for approval at the 2014 AGM:                                                                                                                                                                                                                                 

Final dividend for 2014 on 50p ordinary shares: 20.75p

3,074

-

Final dividend for 2013 on £1 'A' shares: 20.15p

-

2,302

Final dividend for 2013 on 2p 'B' shares: 0.403p

-

274


3,074

2,576

Shares held by the Company (and not allocated to employees under the Share Incentive Plan) are treated as cancelled when calculating dividends and earnings per share.

 

 

4  Earnings per share




Restated


52 weeks ended

29 June 2013


£'000

£'000

Profit attributable to equity shareholders

6,178

5,470




Weighted average number of shares in issue

14,746

14,751

Dilutive outstanding options

121

75

Adjusted weighted average share capital

14,867

14,826

Basic

41.9p

37.1p

Basic before exceptional items

48.5p

41.5p

Diluted

                41.6p

36.9p

The earnings per share before exceptional items are calculated on profit after tax and before exceptional items of £7,157,000 (2013: £6,120,000). Comparatives have been restated for the change in issued share capital from 11,457,500 'A' shares of £1 each and 68,000,000 'B' shares of 2p each to 14,857,500 ordinary shares of 50p each.

 

 

5  Accounts

The financial information set out above does not constitute the Company's statutory accounts for the 52 weeks ended 28 June 2014 or 52 weeks ended 29 June 2013 but is derived from those accounts. Statutory accounts for 2013 have been delivered to the Registrar of Companies and those for 2014 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under s498(2) or (3) of the Companies Act 2006.

 

The preliminary announcement is prepared on the same basis as set out in the previous year's annual accounts.


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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