Shepherd Neame reports record revenues, beer volumes down

The Kent-based brewer and operator of 291 pubs said progress has been made in “all three divisions” – managed, tenanted and beer brewed – has announced its results for the 53 weeks ended 29 June 2024

It added the “bounce-back” in London has been quicker than expected and hopes the increased business spills into its Kent and south-east heartlands.

Shepherd Neame CEO Jonathan Neame said: "We have seen further good progress in all three divisions.

“We have great beers and pubs, a strong balance sheet and a well-balanced and cash-generative business.

Pipeline of pub developments​

“We have a strong pipeline of pub developments and new opportunities in our heartland on-trade.

“We are optimistic about the consumer outlook and are well positioned for the future, notwithstanding the ongoing cost headwinds we face.”

Shepherd Neame highlighted revenue for the year grew by 3.6% to a record £172.3m (2023: £166.3m), statutory profit before tax grew by 38.1% to £6.8m (2023: £4.9m) and underlying profit before tax grew by 4.4% to £7.9m (2023: £7.6m).

In its managed division, the business had seen increased like-for-like (lfl) sales of 4.9% versus 2023, tenanted pubs lfl income rose by 4.6% versus 2023 and although profits in brewed beer were up, total volumes had dropped by 11.8% against last year and own-brewed beer volume was down 17.2%.

Chairman of the Faversham company Richard Oldfield said: “The business is well placed to take advantage of improving conditions in the economy and the sector.

Strong bounce-back​

“In the short term, we are concerned by proposed labour market regulation and anticipated higher costs of employment and logistics. In the long term, the ongoing investment in our heartland and rising population will drive future opportunities.

“We have seen a strong bounce-back in London, which has happened faster than many expected. In time, we hope that this level of activity will spill out into our region.

“There is good reason to believe that, with net disposable income growing and interest rates starting to fall, consumer confidence will improve over the next couple of years. Historically these favourable conditions have resulted in more footfall to our pubs. Add a little sunshine and most of our businesses should do well.

“Our pubs are well invested. We have potential for more transformational developments to follow recent successes; our brands are well regarded, and we have some exciting new beer brand designs under development.

“On-trade sales and service levels are good, and we have a strong pipeline of new business. These positive factors, even if balanced by short-term concerns about labour and logistics costs, make for a promising medium-term background.”