At long last, Summer has arrived! We recently held our Annual Members' Meeting. 23 Members attended the Annual Member Meeting on 30th May. For those unable to attend, the presentation is available here.
Repairs and Improvements
A third of the lower beer garden deck area has been replaced as it was showing signs of significant rot and starting to fail in places. There are two other sections of decking that are in reasonable order but will need similar replacement in time. The condition of these areas will be kept under review. Also, works have been completed to the perimeter of the car park.
When the adjacent houses were finished, we were left with a mud strip around the car park which was proving difficult to maintain so this has been overlaid with limestone chippings to improve the appearance and lower maintenance.
During the year we had a new Energy Performance Assessment due every 10 years. We achieved a grade B which is a significant result for an old building and a testament to the improvement and energy efficiency works that have been completed as part of the renovations. There are some recommendations, but we can't achieve a grade A. One of the recommendations is to replace the kitchen windows and this will be taken forward in our future capital works proposals.
We hope to be looking at updating the restaurant in 2025.
Shares
When we purchased the pub and cottage, we raised £250,000 in share capital. Over the past couple of years, a small number of shares have been offered back to the Society where there has been a change in circumstances of the shareholder.
Our Share Prospectus for reselling those shares has been updated to reflect this. We have changed a couple of the rules so that the maximum shareholding by any one person is limited to £10,000 and new shareholders can not withdraw for a minimum of 3 years. This does not affect the founding shareholders but are changes felt necessary to help manage our future liabilities.
In 2023, 19 shares were repurchased and all were resold. So far in 2024, we have had a small number of withdrawals. Some of the shares have been resold and the Share Repurchase Fund has been used to accommodate all the balance of the requests so far. This has been manageable but the Management Committee has recently been given notice of two significant requests to withdraw which are beyond our resources to accommodate immediately.
Share repurchases can only be funded from trading profits, reserves, and from reselling shares. Also, the Management Committee has discretion on withdrawal requests and must decline where this would endanger the business.
Therefore, to manage this and future requests, the Management Committee has taken steps to ensure that the business remains sound by placing a moratorium on any further requests for up to 3 years.
This will enable us to deal with the request in hand in phases and we should be in a position to complete this over the next two years, or sooner if we can, and there is nothing unexpected we have to accommodate in our trading projections.
We intend to lift the moratorium as soon as we can. When it is lifted we will have to put in place an annual financial limit on withdrawal requests which is in balance with our finances and progress with reselling shares that become available. We will also need to reprofile our medium-term budget outlook on how the trading profits are allocated between our two main reserves that deal with Repairs and Renewals and Share Repurchases.
We do not see the trajectory changing for share interest payments to reach 5% by 2027 because of this.
We hope you understand the action we have taken and we will keep you posted on progress.
All shares repurchased remain available for sale and you may have noticed in the pub posters and new glass coasters that advertise this. If any existing shareholder wishes to increase their holding or you know anyone who might be interested in becoming a shareholder, please get in touch.
Details are also available at here.
Accounts and Finances
Our accountants report that the annual accounts comply with requirements.
Our overall capital position remains similar to the previous year, holding a balance of £13,789. The Management Committee has determined that we should maintain a minimum prudential balance of £12,000 to enable us to cope with the unforeseen, should we ever be in those circumstances at any point in the future. In line with plans to build up funds to cope with future repairs and renewals and a pot to cope with the cash flow requirements from share repurchases and sales, contributions were made to both from the year trading profit. Altogether we have around £19,000 available for new capital projects.
Our medium-term budget outlook is looking sound. Our original loan of £50,000 was paid off in January 2004. We are now supporting our new loan of £45,000 which paid for the flat roof renewal.
Contributions will continue to be made to the two funds and share interest is predicted to rise by 0.5% each year until 2027 when it will reach 5%. Interest payments for 2023 are set at 3.5% and this will be paid before the end of June.
Management Committee
Finally, as mentioned in a previous newsletter, the term of some of the founding Directors has come to an end. Peter, George, Alasdair and John were re-elected along with Ali Bearpark who was co-opted last December, and our new committee member, Jim Haigh. Along with Cathy, Lucinda and Linda we now have a full committee, and we all thank you for your continued support.
Don't forget the next Beer Festival from 23rd to 25th August.