Shareholder Information
The story so far
The New Inn at Halse is an 18th century coaching inn, formerly known as The Kings Arms, The Butchers Arms and The Red Lion. It became the New Inn in 1789. The New Inn has been very successful in the past and following an extensive renovation in 2005 was a thriving pub, restaurant and B&B business. Business declined over the last 10 years and the New Inn found itself in danger of closing. It was purchased by the local community in September 2020 and has been refurbished by funds raised in our first share issue and grants. A month after opening in October 2020 the New Inn closed, for all but takeaways, in response to COVID restrictions.
Throughout the COVID restriction refurbishing work was carried out. A business framework was established with the aim that the New Inn would continue to operate and continue to be an asset to the local community.
Funding of £382,000 from the first share issue which included a £100,000 injection from the Plunkett Foundation put the New Inn on the right trajectory for survival. The appointment a competent Management Committee and Management Team saw the New Inn doubling the projected monthly income before the second Covid lockdown which was imposed in November 2020. During this second lockdown refurbishment continued, new facilities and services on offer were improved and B&B rooms opened in mid 2021.
Management continually looks to raise additional funding to be able to improve and add to the services being offered. 2022 proved to be a difficult period for the hospitality industry in the UK and the New Inn was no exception, electricity and gas prices increased significantly as did all other material costs associated with the hospitality industry. Unfortunately, 2023 did not seen the hoped for easing of the headwinds facing the industry and 2024 was just as bad.. Our vision was and remains, to give our customers the best experience possible We have made every effort to effectively manage our operating costs to remain not only competitive but to present an affordable product for our customers.
The New Inn
For most villages a pub is an important service; it is a meeting place, communication centre and the lynchpin of village life. Much of the appeal of our village rests on its sense of community. An active village pub is a factor which people consider positively when making the decision to relocate to or remain in Halse. The existence of our community pub with the café and B&B rooms has enhanced the community spirit and given Halse and District a stronger sense of place.
The primary objective was to refurbish and operate the New Inn as a community asset which meets the needs of the community, to achieve this the New Inn has to operate as a profitable business. The restaurant provides food and facilities that suit the whole family, young and old, we attract customers / visitors from outside the district as well as engaging the close community.
The café continues to provide a much needed social opportunity for the community and is growing in popularity as a stop off spot for cyclists, ramblers and tourist visiting the area.
We provide five en-suite rooms for B&B and a sixth studio apartment; all are competitively priced and have so far have produced a regular income.
Current Services
Management continues to consider other services which were highlighted in the initial Community Q&A, to date we have hosted many new activities.
Halse Players Productions; Movie Nights; Food Theme Evenings; Live Music; Monthly Quiz Night.
Fitzhead Lunch Club meet on a monthly basis as do the Wiveliscombe Rotary Club.
The Café has art exhibits and a book exchange and takes part in the 10 parishes exhibition.
A number of awards have already been made to the New Inn including runner up in the Somerset pub of the year, Plunkett award for the best community offering, CAMRA best local pub, Best cycle stop.
Business Plan
The original Business Plan created in 2020 is now out of date and many things have changed since then, particularly:
Thanks to the hard work of the original Management Committee and many volunteers, the required refurbishment work was satisfactorily completed within the budget parameters initially set out.
Our sales volumes for both food and drink have massively exceeded our original projections – very nearly double.
The New Inn has gained an excellent local reputation, including being top ranked locally on Trip Advisor.
Because of the higher volumes seen in all departments, our costs have increased well beyond originally budgeted levels. In addition, industry conditions have worked against us, with hospitality wages running at record levels and material costs at a high level as well. Added to that, inflation is a threat to discretionary spending.
We are therefore in the process of updating our Business Plan with specific emphasis on both profitability and cashflow.
Since the initial share offer there have been four sets of Accountant prepared unaudited financial statements produced, one for the initial trading period 24/8/2020 to 30/9/2021 and the others for the ensuing 12 month periods up to 30/9/2024. The 2025 accounts will be prepared once the preriod finishes (end Sept) and will be released the following Mar . A brief summary of these follows and our accounts can be examined in full on the New Inn website:
30/9/2021
These show a pre tax loss for the period totalling £120,311. This figure is after charging refurbishment costs of £199,039 during the period which have to be accounted for as a charge against profits in that year. Only ‘additions’ can be added to capital. It should be noted, however, that this expenditure has been necessary for the benefit of the building and will have added to the capital value of the same. On the other hand, during the year there was a non-recurring benefit of £112,771 from Grant Income, some of which will have related to the improvement project and some in the form of Government Covid Support*
On a simple calculation, therefore, the contribution from trading in a year badly affected by Covid was a loss/deficit of some £34,043 before tax.
30/9/2022
This again was a trading period partly affected by Covid and the pre tax loss for the period was £56,003 which includes refurbishment costs of £24,155, implying a loss/deficit from trading of £31,848, a small improvement on the previous year.
30/9/2023
We saw a further improvement in trading performance in the full year with turnover reaching £596,236 and our operating deficit reducing from £50k in 2022 to 6k in 2023.
30/9/2024
Hospitality was hit hard this period and finances were tight for most people, as a result our footfall and turnover were less than the previous year by £56k. We were able to reduce the anticipated operating deficit through efficiency measures although the timelag saw our deficit at £30k
The Structure
The Halse and District Community Benefit Society Ltd (‘H&D CBS’) registration no 8456 was formed using the model rules developed by the Plunkett Foundation and registered with the Financial Conduct Authority (FCA). In its rules is embedded the principle that if the society has a surplus, this will be made available for distribution to other community or charitable projects.
The primary objective of the society is to run the New Inn for the benefit of the community, and in the longer term, whenever there is any surplus, to use this surplus for the benefit of the wider community of Halse and its surrounding district.
The responsibility of H&D CBS is to oversee the business operations of the New Inn. This is achieved by the Management Committee, equivalent to a Non Executive Board of Directors, who oversee the Management Team who manage the operations of the New Inn.
The First Management Committee was appointed by the Steering Group to serve until the first AGM which was held _in January 2022.
At all subsequent AGM’s 1/3rd of members of the Management Committee stand down and elections take place to appoint a new Management Committee members.
The committee has 12 positions including:
- Chairman
- Vice Chair
- Treasurer
- Secretary
- Media:
- Policies & Welfare
- Fund-raising
- Volunteers
- Corporate Partners
- Legal
- Property Improvement and Maintenance:
Each share is worth £1 and there is a minimum holding of £100 and a maximum of £50,000. Anyone who invests the minimum of £100 becomes a Member of the Society and has a vote and therefore a voice in the affairs of the business at General Meetings. The structure operates strictly on a one Member, one vote basis, regardless of how many shares you hold.
In forming the H&D CBS care was taken to ensure there is an Asset Lock on the assets the H&D CBS held, which is essentially the premises.
Shares can be redeemed by a Member subject to certain terms and conditions, however the premises cannot be sold unless it is for the benefit of the community.
The Share Offer
This community share offer invites you to invest in the Halse and District Community Benefit Society Ltd (‘H&D CBS’) so that the New Inn can support its future operations. The New Inn day to day operations are managed by the Management Team. The H&D CBS Management Committee oversee the operations and finances of the New Inn in conjunction with the Management Team.
Shares issued under this 7th Share Issue stand pari passu (equal footing) with all other shares issued under earlier Share Issues.
Each share is worth £1 and there is a minimum holding of £100 and a maximum of £50,000. Anyone who invests the minimum of £100 becomes a Member of the Society and has a vote and therefore a voice in the affairs of the business at General Meetings. The business operates strictly on a one Member, one vote basis, regardless of how many shares you hold. Members must be 18 years old and over, although shares can be held in trust until a person becomes 18 years old.
Any Investment should be regarded as a long-term social investment with possible total loss of your investment.
It is recommended that you consider independent financial advice before making an investment.
Returns on Investment
The Rules state no annual interest payments would be made before 30th September 2023 and any such interest payments thereafter will be dependent on performance of and financial resources of the New Inn at a rate set by the Management Committee and approved at the AGM by the Members.
It is each Member’s responsibility to declare such earnings to HMRC.
The value of the shares will not increase, shares can be redeemed only at their initial investment value.
Redemption of Shares
The Rules provide that shares may only be redeemed by Members, who have held them for a minimum of 3 years or such other period as the Management Committee may decide in its sole discretion. The Rules provide for specific exemptions in the case of death or bankruptcy.
The Rules further provide all redemptions must be funded from trading profits, reserves or New Share Capital provided by new or existing Members, and at the absolute discretion of the Management Committee having regard to the long-term interests of the Society.
In the event that the building and other assets of the New Inn are sold, for whatever reason, after the repayment of all third-party liabilities and debts, if surplus funds are available, Members will be redeemed at the initial investment value. If sufficient funds are not available to redeem all Members at their initial investment value Members will receive a prorated redemption amount based of the value of their initial investment.
After payment of all third party liabilities and debts and full redemption of Members, any surplus will be paid to a Halse and District charitable or community body as determined by the Management Committee.
Risks and Warnings
This is deemed to be a long-term social investment with modest if any financial returns and could result in total loss of your investment
Restrictions on the redemption of your investment
The Rules permit redemptions after three years or such other period as the Management Committee may decide at their absolute discretion. Redemption of shares by Members will be considered by the Management Committee in the order in which they were received.
Loss of capital.
As with any business, the future financial success of the New Inn is not guaranteed. The hospitality industry is under continued stress and is vulnerable to change and unanticipated risk from rising material costs, inflation lowering discretionary spending, to government intervention and global recession. This list is not exhaustive, before making any investment, we urge to consider that events mentioned above could result in the total loss of your investment.
Member’s liability to the New Inn is limited to the value of their initial investment in shares, should the project fail, no further liability can fall on the shareholders.
No investment guarantees.
This Share Offer is exempt from the Financial Services and Markets Act 2000 or subsidiary regulations; this means you have no right of complaint to an ombudsman. A community benefit society is registered with, but not authorised by, the Financial Conduct Authority and therefore the money you pay for your shares is not safeguarded by any depositor protection scheme or dispute resolution scheme. As the whole of your investment could carry a risk, please consider it carefully in the context of the complete share offer document and, if needed, seek independent advice.
Data Protection
The H&D CBS will use its best endeavours to safely store, use and process personal data only for the purposes for which it is gathered and not keep it longer than necessary. Personal data will be used solely for the purpose of maintaining a register of members and potential members as required by the rules of the society and for communicating with members. We will not share any members’ personal information with third parties.
FAQ's
Yes. However you should note that only the first named investor on the application form will be a member of the H&D CBS with voting rights. If a couple would both like to be members, then each person should make a separate application.
Yes, as long as they are over 16 years of age, you can buy shares on their behalf. You can buy gifts of shares for children by nominating them as your beneficiary and providing their contact details. On the day they become eligible for membership (18 years old) the H&DCBS will write to the giver and receiver asking for consent to give and receive shares/and become a member of the Society.
The Rules state a Member may in accordance with the law nominate any person or persons to whom any of their property in the Society at the time of their death shall be transferred, but such nomination shall only be valid to the extent for the time being provided by the law. On receiving satisfactory proof of the death of a Member who has made a nomination the Society shall, in accordance with the law, either transfer the full amount of such property to the person so nominated, or pay the full amount of such property to the nominated person in accordance redemption terms stated in the Rules.
The minimum that you can invest is £100 (i.e. 100 shares at £1 each). The maximum has been set by the Management Group at £50,000.
We shall continue accept applications to reduce our borrowing. The scheme will remain open for new investors.
The Rules state no annual interest payments will be made before 30th September 2023 and any such interest payments thereafter any interest payments will be dependent on performance of and financial resources of the New Inn and at a rate set by the Management Committee and approved at the AGM by the Members.
No. The legislation for community benefit societies is very clear that shares cannot be traded or transferred. The statutory asset lock is designed to ensure that any increase in share value is only used for community benefit.
The Rules permit redemptions after three years or such other period as the Management Committee may decide but this at their absolute discretion. Redemption of shares by Members will be considered by the Management Committee in the order in which they were received
Personal data will be used solely for the purpose of maintaining a register of members and potential members as required by the rules of the CBS, and for communicating with members. We will not share any members personal information (names, addresses, phone numbers etc) with third parties.
What you need to do now
If you have already decided to support the Community Benefit Society by buying shares, please complete the form attached which is a formal application for a shares. The form should be printed off and signed as indicated.
Making payment
The Community Benefit Society account details are:
Account Name: Halse and District Community Benefit Society Ltd
Bank Name: Metro Bank
Sort code: 23-05-80
A/c: 39504601
We would prefer you to transfer monies by BACS if possible. Otherwise, please make cheques payable to:- Halse and District Community Benefit Society Ltd and send to our bookeeper:
Heather Davis
Church Barn
Halse
TA4 3AB
Share certificates will be issued once your funding is received along with your details on the form “Become a Shareholder” button below. We anticipate that you will receive your certificate within 3 weeks of this.
We appreciate that many of you will want your pledges to be kept confidential and so only one member of the steering group will open the envelopes and will provide the rest of the group with the totals only.
If you have any questions about the formation of the Halse and District Community Benefit Society or the proposed share structure then please feel free to speak to:
David Sargison (Chairman), Orchard Barn, Halse, TA4 3AB 01823 430726
Mike Davis (Vice Chairman), Church Barn, Halse 07846956036