Sheps reports first half profits up 16 per cent

Recently acquired pubs and a booming food trade helped Shepherd Neame push its first half turnover up more than eight per cent and its operating profits up by more than 16 per cent.

The Faversham-based outfit, which bought 15 "high turnover" pubs this time last year, said across its managed pub estate its like-for-like liquor sales had risen 1.4 per cent in the six months to December 26, 2009, but like-for-like food sales, up 5.3 per cent, had been the main driver of growth.

The strong food performance was the result of a review of its offer, the brewer said.

Accommodation however proved to be the weakest sales area, but had levelled off to a 0.5 per cent decline in the period.

Like-for-like earnings per pub fell four per cent, driven by a decline across the brewer's smaller tenanted sites, 35 of which have already been identified for sale.

Six pubs were sold in the period, with another six expected to be sold in the near future.

Sheps said that excluding the pubs pegged for sale the core earnings pub figure was down nearly three per cent.

Beer volumes were up 7.9 per cent, and its own bottled beer sales were up 11.4 per cent across all channels, boosted by the brewer's new bottling line.

The group's chairman, Miles Templeman, said the business had performed well during the recession but he remained cautious about the impact of potential tax hikes on consumer spending, as well as "potential regulation on the sector".

Sheps gave no indication of current trading, other than to say the severe weather in january and early February had hit trade, especially in its rural pubs.

Results at a glance*

Turnover: £60.8m - up 8.2 per cent

Operating profit: £6.4m - up 16.4 per cent

Pre-tax profits: £4.1m - up 25.7 per cent

Earnings per share: 28.7p - up 38.6 per cent

Dividend per share: 4.75p - up 4.4 per cent

* pre-expectionals