Announcement of Interim Results 2019

Posted: 11th March 2020

A strong performance in the tenanted estate  
Turnover growth in all divisions

Shepherd Neame, Britain's Oldest Brewer and owner and operator of 320 high quality pubs in Kent and the South East, today announces results for the 26 weeks ended 28 December 2019.  

Financial performance: 

  • Turnover in the period increased to £79.0m (2018: £76.5m), an increase of +3.3%  
  • Underlying operating profit (1) was up +1.1% at £8.0m (2018: £7.9m) and underlying profit before tax (2) was up +4.8% to £6.2m (2018: £5.9m) benefitting from lower interest charges  
  • Underlying basic earnings per share (3) are up +4.7% to 33.1p (2018: 31.6p) 
  • Statutory profit before tax was £5.4m (2018: loss of £4.1m) 
  • The Board is declaring an interim dividend of 6.00p (2018: 5.87p), an increase of +2.2%  

Operational Highlights:  

  • Managed pubs (69) achieved a solid performance  
    - Total managed sales grew by +4.3% to £37.0m (2018: £35.5m)    
    - Like-for-like sales were up by +0.9% against strong comparatives in the prior year (2018: +4.1%)
    - Average income(4) per managed pub grew by +1.4% (2018: +8.5%)
  • Tenanted pubs (239) continued to trade strongly despite fewer pubs
    - Average income per tenanted pub grew by +5.0% (2018: +4.0%)
    - Divisional underlying operating profit was up +1.7% to £6.7m (2018: £6.6m). Like-for-like tenanted pub income grew by +2.9% (2018: +2.2%)
    - Winner of the Publican Award for Best Tenanted/Leased Company (up to 500 sites)
  • Own brand volume returned to growth  
    - Own brand beer and cider volume grew ahead of the market at +3.3% (2018: -1.0%) during the period (versus market growth of +2.6% (5)
    - Divisional turnover grew by +3.5%, underlying operating profit was £0.4m (2018: £0.5m)
    - We have made a promising start to the new partnership for distributing Singha beer  

                                                        
(1) Profit before net finance costs, any profit or loss on the disposal of properties, investment property fair value movements and operating charges which are either material or infrequent in nature and do not relate to the underlying performance.
(2) Underlying operating profit less underlying net finance costs.
(3) Underlying profit less attributable taxation divided by the weighted average number of shares in issue during the period. The number of shares in issue excludes those held by the company and not allocated to the employees under the Share Incentive Plan, which are treated as cancelled.
(4) Calculated by dividing pub profit before depreciation, amortisation, rent and property costs and other allocations by the average number of divisional pubs trading in the financial period.
(5) The British Beer and Pub Association.  

Current Trading:  

  • For the 35 weeks to 29 February 2020:
    - Managed pub like-for-like sales up +0.6%
    - Like-for-like tenanted pub income up +2.6%  
    - Own brand beer and cider volumes up +4.4%


Jonathan Neame, Chief Executive, commented:  

"Shepherd Neame continues to benefit from a well-balanced business. These results demonstrate the strength of our tenanted pubs in a period where managed margin was held back by the challenging cost environment. We are pleased to see that own brand beer and cider volume is outperforming the market. As a result of this strategy we again have delivered a solid performance in the first half. 
 
For the rest of the year, we remain concerned about the potential impact of the Covid-19 virus. We have seen no discernible change in customer behaviour to date. Looking forward it is impossible at this stage to gauge the likely impact, but should there be significant restrictions on travel and the movement of people in the coming months, that would have an inevitable bearing on our business and our supply chain.  
 
Over the longer term, the quality and profile of the Company’s brands and pubs will stand us in good stead and form an excellent platform from which to grow. We are confident we are building an even stronger business for the future."


March 2020 
Shepherd Neame  
Tel: 01795 532206 
Jonathan Neame, Chief Executive  
Mark Rider, Finance and IT Director  
  
Instinctif Partners
Tel: 020 7457 2020 
Matthew Smallwood  
Seb Holland

For full details, click the PDF below:

Shepherd Neame Interim Results
Shepherd Neame Interim Report (Colour)
Shepherd Neame Interim Report (Black & White)