Debt refinancing dents strong trading at Shepherd Neame

Britain’s oldest brewer and the operator of 322 pubs across Kent and the south-east reported that profit and turnover during the 52-week period to 29 June 2019 were hit by a one-off charge of £10.8m incurred by refinancing debt facilities.

According to Shepherd Neame’s interim results, group turnover reduced by 6.9% to £145.8m from £156.6m over the 12-month period, while underlying profit before tax fell by 0.3% to £11.4m.

However, despite this, the Kent-based brewer and operator revealed strong performance across its estate of managed and tenanted pub estate.

The company’s 70 managed pubs accounted for almost half of group turnover during the year to 23 June, with like-for-like sales increasing by 3.2% year on year with average income per managed pub growing by 6.6%.

What’s more, Shepherd Neame’s 239 tenanted pubs saw like-for-like sales increase by 2.3% while average income per site grew by 3.3% versus the previous year.

Despite strong trading performance across its pub estate, however, Shepherd Neame’s brewing operation remains in transition following the loss of Asahi and Lidl contracts with own beer volume falling by 23.3% versus the previous year.

However, as reported by The Morning Advertiser​, Shepherd Neame entered into a partnership with the Boon Rawd Brewery Company to import and distribute Singha Beer​ in August.

Encouraging new year trading

Despite a drop in profits and turnover, Shepherd Neame has traded well in the 11 weeks to 14 September, with total managed pub revenue increasing by 4.7%, managed wet sales up by 1.6% and like-for-like tenanted income rising by 2.7%.

“Shepherd Neame remains well positioned in the sector, with great pub assets, an exciting and evolving beer portfolio, an excellent brand reputation and a heartland presence in Kent that will benefit from considerable economic development in the next 10 years,” Shepherd Neame chief executive Jonathan Neame commented.

“Our strong balance sheet and long-term financing gives us a great platform to take advantage of any opportunities that arise.

“Our managed pubs have achieved substantial growth in turnover and profit. The tenanted pub estate has maintained its impressive like-for-like performance.

“Brewing and brands performance has, as expected, been more challenging this year but we are excited by the potential of our emerging portfolio.

“We are a modern, well-invested, financially strong and balanced business with a strategy designed to deliver long-term value for shareholders.

“We have transformed our business in recent years to increase our exposure to the growth areas of the market.

“We are encouraged by how the new year has started and remain cautiously optimistic about the company’s prospects despite the uncertainties ahead.”

As reported by The Morning Advertiser​, the Kent-based brewer and pub operator announced a boardroom reshuffle that will see Miles Templeman step down as chairman​ and Kevin Georgel join the company as non-executive director next year.