Heavitree Brewery FY2025: Profit Jumps on Property Sales and Insurance Cash
Heavitree Brewery has posted a markedly stronger bottom line for the year to 31 October 2025, but the engine behind that jump was not beer or rent. It was property gains and an insurance settlement. Revenue inched up 1.7% to £7.63 million, yet operating profit nudged down 3.3% to £1.38 million as costs rose. The big swing came further down the income statement: a £1.06 million profit on asset sales and a £877,000 insurance receipt turned a steady trading year into a punchy set of headline numbers.
The Board is keeping the final dividend unchanged at 3.85p per share, payable on 24 April 2026 to holders on 13 March 2026, subject to AGM approval on 15 April 2026. Thanks to a higher interim, the total dividend for the year is up 8.1%.
Key numbers at a glance
| Metric | FY2025 | FY2024 |
|---|---|---|
| Revenue | £7.63 million | £7.50 million |
| Operating profit | £1.38 million | £1.42 million |
| Profit on property sales | £1.06 million | £308,000 |
| Insurance receipt (Jolly Sailor) | £877,000 | – |
| Impairment of fixed assets | £200,000 | – |
| Profit before tax | £3.02 million | £1.56 million |
| Basic EPS | 54.2p | 27.2p |
| Cash and cash equivalents | £2.31 million | £754,000 |
| Total financial liabilities | £1.64 million | £2.38 million |
| Net assets | £19.75 million | £17.54 million |
What actually drove the profit surge?
The big movers were non-trading items. Heavitree booked a £1.06 million profit on fixed asset disposals, mainly from selling the Locomotive Inn in Exeter, and received £877,000 of insurance proceeds for the Jolly Sailor in East Ogwell, destroyed by fire in 2020. Against that, management recognised a £200,000 impairment on the old Heavitree Arms in Exmouth, trimming its carrying value.
Finance costs fell to £92,000 from £172,000, helping the pre-tax line. All in, profit before tax rose to £3.02 million (2024: £1.56 million), with earnings per share up to 54.2p (2024: 27.2p). In plain English: this was a one-off heavy year – great for cash and equity, not a signal that pub trading has suddenly doubled in strength.
Underlying trading: steady top line, slight margin squeeze
Revenue grew 1.7% to £7.63 million, while operating profit dipped 3.3% to £1.38 million. Management flags higher payroll costs during the leadership transition as a key factor. Repairs spend was reduced to £801,000 (2024: £890,000), which helped cushion the impact.
Other operating income edged down to £285,000 (2024: £294,000). The story here is of resilient tenants keeping pubs busy, but with profit margins under pressure from multiple directions.
Cash, debt and banking: balance sheet in better shape
Cash ended the year at £2.31 million, up from £754,000, thanks to property sales and the insurance receipt. Total financial liabilities fell to £1.64 million, and the term loan stood at £1.52 million at 31 October 2025. Operating cash flow was a solid £1.33 million.
- New 5-year banking facility in place, including a £3 million overdraft.
- Slight reduction in the term loan interest margin, and a simpler covenant – now based on EBITDA (earnings before interest, tax, depreciation and amortisation).
- Forecasts show minimum headroom of over £2.5 million on the overdraft.
Notably, the defined benefit pension deficit is now nil (2024: £92,000), with the scheme wind-up progressing, albeit slowly. That removes a lingering uncertainty and future funding risk.
Dividend: unchanged final, higher total year-on-year
The proposed final dividend is maintained at 3.85p per Ordinary and ‘A’ Limited Voting share. It is scheduled for payment on 24 April 2026 to shareholders on the register on 13 March 2026, subject to AGM approval on 15 April 2026. When combined with the higher interim, the total dividend for FY2025 represents an 8.1% increase year-on-year.
Cash discipline supports this stance: despite paying down debt and investing in the estate, Heavitree ended the year with more cash and fewer borrowings.
Estate update: insurance cash banked, trading continuity after fire
- Jolly Sailor, East Ogwell – cash insurance settlement received and banked (£877,000). Planning permission is in place; the Board will decide between rebuilding or selling the land with consent.
- The Cleave, Lustleigh – fire damage to stores and cellar in October. A temporary cellar kept trading uninterrupted; rebuild discussions are ongoing with insurers and the National Park Conservation Officer.
- Locomotive Inn, Exeter – sale completed, contributing to the £1.06 million profit on asset disposals.
- Old Heavitree Arms, Exmouth – a £200,000 impairment recognised.
- Tenancies – five changes and one lease assignment completed; only two tenancies currently available, with interest from prospective tenants.
Outlook: prudent assumptions amid industry headwinds
The Chairman is blunt about the pressures on pubs: an RPI-linked alcohol duty increase, higher energy and food costs, increased employer National Insurance, new worker rights legislation and a higher minimum wage. Business rates were a particular flashpoint after the November Budget and subsequent rethink. The uncertainty alone has been unhelpful for planning.
Heavitree’s budgets are conservative: a 3.5% decrease assumed for wet (drink) revenue and 3% for rental revenue. There are no forecast capital sales in the coming year, though the disposal programme will be reviewed again over the next 12 months. The upshot – management is not banking on more one-offs to make the numbers.
My take: solid stewardship, but don’t annualise the one-offs
There is a lot to like in these results from a financial health perspective. Cash is up, borrowings are down, bank terms improved, and the pension deficit has gone. The estate is trading through adversities – even fires – with minimal disruption, and tenant demand looks decent given only two vacancies. The dividend policy is measured and, in aggregate, more generous year-on-year.
The other side of the coin is that underlying profitability remains tight. Operating profit slipped, and the headline EPS surge is driven by property profits and insurance cash. Those are valuable and real, but not repeatable by definition. Add the sector’s cost and tax headwinds, and FY2026 is set to be a grind rather than a glide.
In short: Heavitree’s prudent financial management is doing the heavy lifting while the pubs navigate a tough macro backdrop. For investors, this looks like a steady, asset-backed pubco with an eye on cash and risk – just be careful not to extrapolate this year’s one-off boosted earnings into the future. The key catalysts to watch are the Jolly Sailor site decision, any resumed disposal activity, and confirmation that trading stays resilient against the new cost regime.
