ANNOUNCEMENT OF FULL YEAR RESULTS - JUNE 2022

Posted: 28th September 2022

Shepherd Neame
Full Year Results to 25 June 2022

Shepherd Neame, Britain's Oldest Brewer and owner and operator of over 300 high quality pubs in Kent and the Southeast, today announces results for the 52 weeks ended 25 June 2022.
The period under review has been dominated by the impact of COVID-19 in the first half and by the effects of the war in Ukraine in the second half. In this context, we are pleased to have achieved the strong rebound in sales and profits. 

ANNOUNCEMENT OF FULL YEAR RESULTS

Significant growth in revenue, a return to profits and final dividend recommended

  • Statutory profit before tax was £7.4m (2021: loss of £(16.4)m)
  • Basic earnings per share was 42.5p (2021: loss per share of (120.5)p)
  • Underlying basic earnings per share1 was 39.4p (2021: loss per share of (55.5)p)
  • EBITDA2 rose significantly to £23.4m (2021: £7.7m)
  • Final dividend of 15.00p recommended which together with the interim dividend of 3.50p, makes a total of 18.50p for 2022 (2021: nil; 2019: 30.08p)
  • Net assets per share3 increased from £11.40 as at 26 June 2021 to £11.94 as at 25 June 2022
  • Tight cash management has resulted in net debt, excluding lease liabilities4, being reduced to pre-pandemic levels, allowing for the resumption of investment in the existing estate and new pubs. Net debt, excluding lease liabilities4, as at 25 June 2022 was £75.3m (2021: £90.8m) 

Strong operational performance

  • Retail Pubs and Hotels (63 pubs): 

Total retail like-for-like sales5 were -8% vs 20196 and +130% vs 2021 for the 52 weeks to 25 June 2022 with footfall outside London near normal and strong in our coastal estate

Retail like-for-like sales5 inside the M25 (25 pubs and hotels) were -30% vs 20196 and +263% vs 2021. Outside of the M25 (38 pubs and hotels), retail like-for-like sales5 were +1% vs 20196 and +104% vs 2021 
​​​​​​
Total like-for-like drink sales were -16% vs 20196 and +168% vs 2021 and like-for-like food sales were -1% vs 20196 and +94% vs 2021

Total like-for-like accommodation sales were +25% vs 20196 and +111% vs 2021

Four high quality pubs acquired post year-end for £6.7m

  • Tenanted Pubs (231 pubs):

​​​​Following our strong support during the pandemic, like-for-like tenanted pub income7 was +1% vs 20196 and +119% vs 2021

  • Brewing and Brands: 

         Good sales momentum with total beer volumes8 +7% vs 20196 and +27% vs 2021 
         Own beer volumes9 were -8% vs 20196 and +16% vs 2021

  • The business is largely protected from the worst of the energy inflation through fixed price contracts at below market rate: the brewery through to 2024 and retail pubs through to March 2023


Encouraging trading over the summer

  • For the 13 weeks to 24 September 2022, retail like-for-like sales5 were level with 202010 and +9.4% vs the 202211 financial year
  • For the 13 weeks to 24 September 2022, retail like-for-like sales5 inside the M25 (25 pubs and hotels) were -11.0% vs 202010 and +50.6% vs 202211. Outside of the M25 (38 pubs and hotels), retail like-for-like sales5 were +4.7% vs 202010 and -0.4% vs 202211
  • For the 9 weeks to 27 August 2022, like-for-like tenanted pub income7 was +2.9% vs 202010 and +12.8% vs 202211
  • For the 13 weeks to 24 September 2022, total beer volumes8 were +5.6% vs 202010 and +1.2% vs 202211. Own beer volumes9 were +4.4% vs 202010 and +14.4% vs 202211


Outlook

  • Fundamentals of the business remain strong. Demand is encouraging and the business is in good shape. Short term may be challenging with many political and economic uncertainties ahead 
  • Government assistance on energy costs for consumers and for business is warmly welcomed but further material inflation still anticipated in the coming year
  • Business is well placed for the long term as our geographic heartland is undergoing significant infrastructure development and we continue to seek good opportunities to enhance our portfolio of high-quality pubs
     

Jonathan Neame, CEO of Shepherd Neame, said:

"Shepherd Neame has rebounded well from the challenges of the last two years – a testament to the strength of the business model and depth of talent across the business. 

The Company has strengthened its balance sheet through tight cash management and net debt reduction and continues to evolve operationally to meet changes in the market.

Our business is in good shape and has traded well through the summer. Whilst we are cautious about the winter ahead and the inflationary environment, we retain an optimistic view for the business and continue to seek investment and acquisition opportunities for the long term.”
 

1Underlying profit/(loss) less attributable taxation divided by the weighted average number of ordinary shares in issue during the period. The numbers of shares in issue excludes those held by the Company and not allocated to employees under the Share Incentive Plan which are treated as cancelled
2Underlying profit/(loss) before tax pre net finance costs, depreciation, amortisation, profit or loss on sale of fixed assets excluding property and free trade loan discounts
3Net assets at the reporting date divided by the number of shares in issue being 14,857,500 50p shares
4Net debt excluding lease liabilities comprises cash, bank overdrafts, bank and other loans less unamortised loan fees
5Retail like-for-like sales includes revenue from the sale of drink, food and accommodation but excludes machine income. Like-for-like sales performance is calculated against a comparable 52 week period in the prior year for pubs that were in the estate in the same period within both years
62019 is the 52 weeks to the 29 June 2019
7Tenanted income calculated to exclude from both years those pubs which have not been in the estate throughout the two years. The principal exclusions are pubs purchased or sold, pubs which have closed, and pubs transferred to or from our retail business. Income is calculated against a comparable 52 week period in the prior year for pubs that were trading in both 52-week periods
8Shepherd Neame branded, licensed, foreign, customer own-label and contract beer and cider sales volumes
9Shepherd Neame branded, licensed, customer own-label and contract beer and cider sales volumes
10The periods referred to for financial year 2020 are the comparative month(s) of July, August & September 2019 which were during the financial year 52 weeks to 27 June 2020
11The periods referred to for financial year 2022 are the comparative month(s) of July, August & September 2021 which were during the financial year 52 weeks to 25 June 2022
 

Enquiries:
Shepherd Neame Limited
Jonathan Neame, Chief Executive               Tel: 01795 532206
Mark Rider, Chief Financial Officer
Instinctif Partners
Matthew Smallwood                                     Tel: 020 7457 2020
 

For full details:

Download the full press release