city news
Shepherd Neame sales up 2.7% in tenanted and 6.5% in managed estates
During the period, turnover increased by 0.3% to £73.7m with total own beer volumes excluding contract up 0.1%.Underlying operating profit was up 2.9% to £7.2m.
The managed like-for-likes, which compare to a 6.8% increase for the same period last year, were made up of wet like-for-likes up 5.2%, food up 7.4% and accommodation up 11.2%
Tenanted like-for-likes were against a 3.4% increase last year, with average EBITDAR per pub up 7.2% (2014: 4%).
Statutory profit before tax was up to £8.7m (20141: £4.9m) with the increase driven by one-off disposal of land.
The group said its brewing and brands business had “again had a challenging period” with revenue down 8.9% and operating profit down 54.9%. It said the performance was driven by a decline in overall own beer volume which was down 11.3%, and higher water treatment costs than in 2014. Own beer excluding contract was up marginally at +0.1%.
Chairman Miles Templeman said: “The UK beer market has seen significant changes in recent years as the growing demand for local products with wider taste and flavour profiles has led to a rapid expansion in the number of micro and craft brewers entering the market, even though overall beer consumption is flat. Shepherd Neame has responded well to this challenge and built an enviable portfolio of great beers such as Spitfire, Bishops Finger, the Whitstable Bay range and our Classic Collection. I am particularly pleased that our Whitstable Bay design and brand development has won a 2016 Brand Effectiveness Award. During this period we have also added Spitfire Gold which has performed well since launch.
“Shepherd Neame has been brewing and selling Asahi Super Dry under licence in the UK for more than 10 years with an existing contract in place to 2017. We note the proposed purchase of the Peroni, Grolsch and Meantime Brewing businesses by Asahi Group Holdings which remain subject to regulatory approvals and are in discussions with them over the future of our ongoing partnership.”
Chief executive Jonathan Neame, said: “I am pleased to report that our half year results have been characterised by a sustained and strong trading in our pub business, positive operating cash flows and significant proceeds from property disposals. Our consistent investment in our brand and pub assets to align them to today’s consumer demand has resulted in the sustained quality and performance of the business in a highly competitive marketplace. We remain cautious about the outlook for consumer spending, however I am confident we have the right strategy to succeed and the skills to deliver it.”
The company, which refinanced during year, also announced the departure of non-executive directors Oliver Barnes and James Leigh-Pemberton after ten year. Both will step down during the next six months.
Hilary Riva, OBE, 58, will join the Board in April 2016. Riva has had various senior roles in the Arcadia group followed by her jointly leading the buyout of Principles, Hawkshead, Warehouse and Racing Green as Managing Director of Rubicon Retail. Following the sale of Rubicon, Hilary was CEO of the British Fashion Council from 2005 to 2009. She is a non-executive director at Shaftesbury plc, the FTSE 250 property company, and at ASOS plc.
Richard Oldfield, DL, 60, will join the board in June 2016. Oldfield is executive chairman of Oldfield Partners LLP, an investment management firm managing listed equities funds. He is also a director of Witan Investment Trust plc and a trustee of the Royal Marsden Cancer Charity and the Clore Duffield Foundation.
At the half year end, Shepherd Neame operated 335 pubs, of which 275 were tenanted or leased, 6 were held as investment properties under commercial free of tie leases, and 54 managed.
