More than £10m swing sees Shepherd Neame record half-year loss

21-Apr-2021 - Last updated on 21-Apr-2021 at 08:57 GMT

Most encouraging: 'There are still many challenges to face and a long road to full recovery, but the balance sheet remains strong and we have ample liquidity,' Shepherd Neame's Jonathan Neame said

Kent-based family brewer and pub operator, Shepherd Neame, has revealed an underlying operating loss of £3.6m during the six months to 26 December 2020.

This compares to an £8m profit recorded during the first six months of 2020 by Britain’s oldest brewer and the operator of 316 pubs across Kent and the south east, an £11.6m swing.

The finalist in the Best Tenanted and Leased Pub Company category at the 2021 Publican Awards also reported a drop in turnover to £55.3m over the same six-month period from £79m registered in the first half of 2020.

What’s more, statutory loss before tax stood at £7.2m, compared to a profit of £5.4m made during the first half of 2020.

These figures come despite the operator revealing that “nearly all” of its pubs traded successfully and benefitted from the Eat Out To Help Out Scheme in the 13 weeks to 26 September 2020 – achieving 73% of 2019’s tenanted income

However, the operator later revealed that it had been forced to cut one-in-10 staff members in preparation for England’s month-long lockdown from 5 November.

Shepherd Neame also reported bottled beer volume growth of 25.7% during the second half of 2020 paired with tight cost control have restricted its underlying monthly cash burn to roughly £1.5m while its pub estate was closed.

'Significant pent-up demand'

Shepherd Neame’s interim results statement for the 26 weeks to 26 December also revealed that the company’s net debt stood at £96.5m as of 27 March 2021 compared to £84.4m on 27 June 2020, providing headroom of £36m.

What’s more, the business agreed new waivers with lenders on 20 April 2021, with normal covenant tests relaxed through to September 2022, giving it ample liquidity for the foreseeable future.

Off the back of a targeted investment programme to optimise gardens and outside space, Shepherd Neame also revealed that more than 200 of its pub gardens reopened on 12 April and that all pubs will be open on 17 May in keeping with the Government’s roadmap.

“We are delighted and excited to have opened over 200 pub gardens on 12 April and look forward to reopening the rest of our pubs in May with increasing confidence,” Jonathan Neame, CEO of Shepherd Neame, said.

“There is significant pent-up demand in the economy and the desire to go out for a drink or a meal is as strong as ever. Initial trade has been most encouraging.

“There are still many challenges to face and a long road to full recovery, but the balance sheet remains strong and we have ample liquidity.

“The relationship with our licensees is excellent and our reputation for beer and pubs is strong. We look forward with confidence to returning Shepherd Neame back to growth.”