Shepherd Neame unveils LFLs up 4.8%

Shepherd Neame, the Kent brewer and pub operator, has unveiled like-for-like sales growth of 4.8% in its managed pub business for the six months to 30 December 2006.

The company, which currently operates 50 managed houses, said that it had experienced particularly good sales in its accommodation sites.

Profits from its tenanted estate, which now comprises 325 properties, rose 6.1%.

The group said that its tied trade has continued its recent strong performance with particularly good sales in July, through the autumn, and a strong Christmas.

The company said it has commenced its programme of investing £3m in outside areas in advance of the smoking ban, and expects to have completed projects in half of its pubs by 1 July.

Since 1 July 2006, the company has acquired nine freehold pubs for £13.5m, which includes disposals from Spirit Group and Mitchells & Butler.

Since 30 December it has bought two more at a cost of £1.9m. Of these, six will be managed and five will be tenanted.

The group also reported that the charge to profit to date of upgrading its IT systems is £1.2m, with further charges expected in the second half.

In February, it completed the sale of its former warehouse site in Belvedere Road for £2.4m, which will realise a profit on disposal of £1.9m in the second half of the year.

Total beer volumes were up 3.4%, with good performances Spitfire, Bishops Finger, and Asahi Super Dry, the company said.

It said that since 1 January 2007, it had extended its brewing licence for Asahi Super Dry to cover sales, marketing and distribution for the UK and Ireland.

However, the group also said it has experienced inflationary cost pressures in a variety of areas across production and distribution, and is paying substantially more for malting barley and utilities than the previous year.

It has begun the construction of a new cask racking and washing facility, which is due for completion before the end of its financial year.

Pre-tax profits rose 9.6% to £5.1m on sales up 3.5% to £50.6m. Operating profit increased by 7.2% to £6.8m.

The company said it is confident that trading will continue to show similar progress in the second half.