Posted: 30th March 2022
ANNOUNCEMENT OF INTERIM RESULTS 2021
Shepherd Neame, Britain's Oldest Brewer and owner and operator of 302 high quality pubs in Kent and the South East, today announces results for the 26 weeks ended 25 December 2021.
A strong rebound in sales, a return to profits and the payment of an interim dividend
• Revenue has recovered to the same level as the first half of financial year 2020¹ with £78.7m of sales up 54.5% (H1 2021 restated: £50.9m)
• Underlying EBITDA³ rose substantially to £11.3m (H1 2021 restated²: £3.4m)
• Statutory profit before tax was £5.4m (H1 2021 restated²: loss of (£7.2m))
• Underlying basic earnings per share⁴ was 15.9p (H1 2021 restated²: loss per share of (28.6p))
• Interim dividend of 3.50p declared, - the first dividend since October 2019
• Net assets per share⁵ increased from £11.40 at 26 June 2021 to £11.76 (H1 2021 restated²: £12.12). This position excludes the revaluation of our licensed premises, carried out as at 26 June 2021, which indicated a surplus over book value of £35.9m, or +13%
Objectives achieved
• Successfully remobilised the business after the disruption of the pandemic and recovered demand
• Generated significant cash to normalise our debt and leverage. Net debt excluding lease liabilities⁶ as at 25 December 2021 was £82.4m (£92.5m at 26 December 2020). We paid all the remaining VAT liabilities to HMRC by the end of January 2022 and all deferred rent payments
• Net debt excluding lease liabilities6 as at 26 March 2022 was £78.5m. CLBILS⁷ loan of £25m taken out at the start of the Coronavirus outbreak has now been retired and the Company is performing within pre-pandemic financial covenants
• Appointment of Managing Director, Pubs. Jonathon Swaine joins us in the summer
Operational Performance
| Performance H1 2022 vs H1 20212 |
Performance H1 2022 vs H1 20201 |
|
| Retail like-for-like sales8 | +80.7% | -11.2% |
| Like-for-like tenanted income9 | +70.5% | -5.6% |
| Total beer volume 10 | +23.6% | +5.7% |
| Own beer volume 11 | +10.5% | -4.0% |
• Retail Pubs and Hotels (64 pubs): Like-for-like retail sales⁸ were 89% of 2020¹ in the 26 weeks, but over 100% in restriction free periods. Most central London pubs near normal as back to work footfall increases
• Tenanted Pubs (232 pubs): Like-for-like tenanted income⁹ was 94% of 2020¹ in the 26 weeks, but again traded at or above 2020¹ levels when restriction free. High levels of support during the pandemic has led to low levels of licensee turnover
• Brewing and Brands: Good sales momentum with total beer volumes¹⁰ +5.7% vs 2020¹. Own beer volumes¹¹ were -4.0% vs 2020¹. In January 2022 we concluded a new agreement to transfer all Singha production to Faversham in phases over the next few months
• Operational challenges around skills shortages, driver shortages, supply chain disruption, substantial inflation and impact of Omicron during the peak festive season
Current trading
• For the 13 weeks to 26 March 2022, retail like-for-like sales⁸ were 110% of equivalent periods in 2020¹
• For the 9 weeks to 26 February 2022, like-for-like tenanted income⁹ was 97% of equivalent periods in 2020¹
• For the 13 weeks to 26 March 2022, total beer volumes¹⁰ were -0.6% vs equivalent period in 2020¹. Own beer volumes11 were -1.3% vs equivalent period in 2020¹
Outlook
• Demand is encouraging and current performance is in line with expectation
• Fundamentals of the business remain strong and business in good shape, notwithstanding ongoing operational and inflationary challenges
• Strong portfolio of pubs across the South East (85% freehold) with increasing economic activity anticipated in our heartland in the coming years
Jonathan Neame, CEO of Shepherd Neame, said:
"I am pleased to report a strong rebound in the first half of the year despite ongoing restrictions and operational challenges during the period. We are now back to pre-pandemic trading levels, have strong cash flow and have returned to profitability.
Our business is in good shape and has traded well following the lifting of all restrictions. However, the current economic uncertainties are putting inflationary pressure on the sector which will impact margins.
We have a robust and resilient business and a strong platform from which to build. We move forward with confidence and are pleased that we can now resume investment across our business at pre-pandemic levels. To support this we have strengthened our management team with a highly experienced and proven operator to help take the pub business forward.
We are looking to the future with cautious optimism and are excited about delivering an uninterrupted Easter and summer for the first time in 3 years.”
30 March 2022
Enquiries
Shepherd Neame Tel: 01795 532206
Jonathan Neame, Chief Executive
Mark Rider, Chief Financial Officer
Instinctif Partners Tel: 020 7457 2020
Matthew Smallwood