Shepherd Neame reports slight drop in pre-tax profits

Pre-tax profit dropped from £4.8m to £4.5m, while operating profit stayed level at £6.7m.

The group said it had seen a strong performance across its pub and hotel estate in a challenging market. Managed house like-for-like sales increased by 2.9%, with liquor up 2.4%, food up 3.5% and accommodation up 5.8%.

Tenanted like-for-like EBITDAR climbed by 0.4% with average EBITDAR per pub up 3.9%.
The company said: “Recent market conditions have been particularly challenging with industry on-trade beer sales down 4.7% for the 12 months to the end of December 2012 and off-trade sales down 7.5% in the final quarter.

"Factors that have contributed to this are unremittingly wet and dull weather, disappointing trade during August, as the much anticipated boost to tourism from the London 2012 Olympics did not materialise, and increasing caution from the consumer as the economy continues to falter.”

At the half year the company operated 353 (2011: 355) pubs of which 307 (2011: 310) are tenanted or leased and 46 (2011: 45) managed. It acquired two managed houses and disposed of three tenanted and one unlicensed property during the period.

It said that its managed houses achieved record sales over Christmas and that the newly acquired Royal Wells Hotel was its second highest trading outlet over this period.

After a positive start to the new year, the group said that sales were adversely impacted by the snow in January. However, managed house like-for-like sales for the 34 weeks to 23 February 2013 remained consistent at +2.8%.
It said that a key driver for growth continues to be increased occupancy rates and revenue per available room in its inns and hotels.

The company said that the performance of its tenanted trade has continued to improve as it invests to improve the facilities and offer. Average EBITDAR per pub was up by +3.9% (2011: +2.4%) as it continues to change the profile of its estate through selective acquisition and disposal of less sustainable outlets.
Jonathan Neame, chief executive, said: "I am pleased to report a solid performance for the 26 weeks to 29 December 2012 with robust Christmas trading following the exceptional comparable period in 2011. Our performance reflects the underlying strength and resilience of our business as we have invested consistently in our brands and pubs over the long term."