Shepherd Neame
Preliminary results for the 52 weeks to 24 June 2023
Shepherd Neame, Britain’s Oldest Brewer and owner and operator of 296 high quality pubs in Kent and the Southeast, today announces results for the 52 weeks ended 24 June 2023.
Despite challenging economic conditions, we achieved record revenues and an increase in underlying profits to the end of June 2023. Consumer demand was strong throughout the year but significant inflationary pressure has increased costs across the business.
Strong demand, record revenue, improved underlying profit
· Revenue for the year grew by +9.7% to a record £166.3m (2022: £151.5m).
· Underlying profit before tax[1] grew by +3.8% to £7.6m (2022: £7.3m).
· Statutory profit before tax was £4.9m (2022: £7.4m).
· Year of increased investment at £17.2m (2022: £5.4m).
· Underlying basic earnings per share[2] was 41.1p (2022: 39.4p). Basic earnings per share was 23.5p (2022: 42.5p).
· Net asset value per share[3] has increased to £12.05 (2022: £11.94).
· Long term financing in place, with 65% of debt fixed at favourable rates.
· Full year dividend of 20.00p (2022: 18.50p), an increase of +8.1%.
Strong retail sales, particularly in drinks (72 pubs)
During the period we have transferred six tenanted pubs to retail. We have acquired four pubs and sold eight properties.
| Performance2023 v 2022 | |
| Total retail LFL sales[4] | +12.9% |
| VAT adjusted LFL retail sales | +17.0% |
| LFL drink sales | +22.4% |
| LFL food sales | +3.1% |
| LFL accommodation sales (248 rooms) | -4.2% |
· Within the M25, retail LFL sales4 are +30.6% vs 2022, driven largely by increased momentum in the return to offices. Outside the M25, retail LFL sales4 are +6.6% vs 2022.
· Total occupancy was 74% (2022: 76%) and RevPAR £81 (2022: £80).
Tenanted pubs (217 pubs) remained robust during the period
| Performance2023 v 2022 | |
| Tenanted LFL pub income[5] | +3.9% |
| Average pub income[6] | +3.4% |
Brewing and Brands: Volumes resilient but margins impacted by exceptional inflationary pressures
| Performance2023 v 2022 | |
| Total beer volume[7] | -2.7% |
| Own brewed volume[8] | +5.2% |
· Increase in own beer volume7 driven by the brewing of Singha beer, but has been offset by the declines in cask ale and premium bottled ales across the market.
· Material cost inflation with cost of goods for bottled beers up in excess of £2m year on year.
Current trade encouraging and continuing positive pub trends over the summer
| Performance versus 2023[9] | |
| 9 weeks to 26 Aug tenanted LFL pub income5 | +3.0% |
| 13 weeks to 23 Sept LFL retail sales4 | +5.6% |
| 13 weeks to 23 Sept total beer volumes7 | -10.3% |
| 13 weeks to 23 Sept own beer volumes8 | -15.9% |
Jonathan Neame, CEO of Shepherd Neame, said:
“Demand has been strong all year with recent trade in our pubs encouraging.
We have faced considerable inflationary challenges in the last year but these are now easing.
We have an excellent pub estate which has been performing in line with the best in the sector. We have a loyal customer base, a high profile within the communities we serve, and we have an ambitious investment programme ahead.
The turmoil of the last few years is now settling and the outlook is positive. We have much to look forward to. The balance sheet remains strong and the business has momentum in our pipeline of investment. We are confident we have the team and skills to deliver good returns for our shareholders over the long term.”
27 September 2023