ANNOUNCEMENT OF PRELIMINARY RESULTS - JUNE 2023

Strong demand, record revenue, improved underlying profit

• Revenue for the year grew by +9.7% to a record £166.3m (2022: £151.5m).
• Underlying profit before tax¹ grew by +3.8% to £7.6m (2022: £7.3m).
• Statutory profit before tax was £4.9m (2022: £7.4m).
• Year of increased investment at £17.2m (2022: £5.4m).
• Underlying basic earnings per share² was 41.1p (2022: 39.4p). Basic earnings per share was 23.5p (2022: 42.5p).
• Net asset value per share³ has increased to £12.05 (2022: £11.94).
• Long term financing in place, with 65% of debt fixed at favourable rates.
• Full year dividend of 20.00p (2022: 18.50p), an increase of +8.1%.

Strong retail sales, particularly in drinks (72 pubs)

During the period we have transferred six tenanted pubs to retail. We have acquired four pubs and sold eight properties.

• Within the M25, retail LFL sales4 are +30.6% vs 2022, driven largely by increased momentum in the return to offices. Outside the M25, retail LFL sales4 are +6.6% vs 2022. 
• Total occupancy was 74% (2022: 76%) and RevPAR £81 (2022: £80).

Tenanted pubs (217 pubs) remained robust during the period

Brewing and Brands: Volumes resilient but margins impacted by exceptional inflationary pressures

• Increase in own beer volume⁷ driven by the brewing of Singha beer, but has been offset by the declines in cask ale and premium bottled ales across the market.
• Material cost inflation with cost of goods for bottled beers up in excess of £2m year on year.​​​​​​

Current trade encouraging and continuing positive pub trends over summer

Jonathan Neame, CEO of Shepherd Neame, said:

“Demand has been strong all year with recent trade in our pubs encouraging.

We have faced considerable inflationary challenges in the last year but these are now easing.

We have an excellent pub estate which has been performing in line with the best in the sector. We have a loyal customer base, a high profile within the communities we serve, and we have an ambitious investment programme ahead.

The turmoil of the last few years is now settling and the outlook is positive. We have much to look forward to. The balance sheet remains strong and the business has momentum in our pipeline of investment. We are confident we have the team and skills to deliver good returns for our shareholders over the long term.”
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1 Profit before any profit or loss on disposal of properties, investment property fair value movements and charges which are either material or infrequent in nature and do not relate to the underlying performance.

2 Underlying profit 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.

3 Net assets at the reporting date divided by the number of shares in issue being 14,857,500 50p shares.

4 Retail 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.

5 Tenanted 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.

6 Pub profit before depreciation, amortisation, rent and property costs and other cost allocations.

7 Shepherd Neame branded, licensed, third party, customer own-label and contract beer and cider sales volumes.

8 Shepherd Neame branded, licensed, customer own-label and contract beer and cider sales volumes.

9 The periods referred to for financial year 2023 are the comparative month(s) of July, August & September 2022 which were during the financial year 52 weeks to 24 June 2023.

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