Heartstone Inns, the Enterprise Investment Scheme (EIS)-backed freehold pub operator, turned around a pre-tax loss of £685,328 to report a pre-tax profit of £116,918 in what it called a “year of significant progress” for the group in 2013.
Turnover grew 10% to £6.4m. Gross profit improved by £254,538 to £2m, up 14% on last year and representing 31% of turnover against 30% last year.
The group, which is led by James Birch, acquired one pub in the year, the Blathwayt Arms near Bath, and sold the Boatman in Guildford to Young’s, realising a profit of £356,177.
Operating profit before depreciation, amortisation and exceptionals grew by £158,076 to £442,669.
The company said: “Net debt at 31 December was £2,652,608 (2012: £4,360,814) representing a loan to value ratio of 20% based upon a third party professional valuation of the group’s property portfolio of £13,500,000.
“2013 was a year of significant progress for the group and has created a sound platform to enable the group to raise additional capital to continue the development of the current estate and make further acquisitions.
“The directors believe that the quality, trading style and location of the group’s public houses puts the group in a strong position to meet the challenges of the current market, the local competition, the on-going impact of legislative changes and the continued pressure on direct costs and overheads.”
During the year, Heartstone issued 1.4m ordinary shares at £1 under EIS at prices ranging from £1.075 to £1.10. Since the year end, it has issued a further 759,256 at between £1 and £1.15, raising a further £873,144.
