Shepherd Neame
Interim results for the 26 weeks to 28 December 2024
Shepherd Neame, Britain’s oldest brewer and owner and operator of high quality pubs in Kent and the Southeast, today announces results for the 26 weeks ended 28 December 2024.
This has been a strong period for the Company with good profit growth over the prior year and we have been building steady momentum in the last 12 months.
As a result of the Budget, we now face new, and unwelcome, cost increases in national living wage and national insurance, and will adapt accordingly. We plan to mitigate the majority of these costs over the next 18 months through a mix of price increases and cost efficiencies.
We have a great asset base, strength in depth in our team and remain optimistic for the future.
- Revenue for the period was £85.0m (H1 2024[1]: £89.0m) reflecting an increase in pub sales and a decrease in sales from premium bottled ales
- Statutory profit before tax grew to £4.3m (H1 2024: £1.1m)
- Underlying profit before tax[2] grew by +9.9% to £4.2m (H1 2024: £3.8m)
- Positive cash flow generation. Underlying EBITDA[3] grew by +8.6% to £13.0m (H1 2024: £12.0m)
- Continued investment in the business. £8.8m of capital expenditure (H1 2024: £7.4m), including £3.9m on a freehold acquisition
- Underlying basic earnings per share[4] was 20.1p (H1 2024: 18.3p), an increase of +9.8%
- Net assets per share[5] have increased to £12.21 (H1 2024: £11.92)
- Interim dividend of 4.35p (H1 2024: 4.20p), an increase of +3.6%
- In February 2025, a £0.5m share buyback was completed which will enhance earnings per share and net assets per share
Operational Performance
| Performance H1 2025 vs H1 2024 | |
| Retail like-for-like sales[6] | +4.4% |
| Like-for-like tenanted pub income[7] | +0.3% |
| Total beer volume[8] | -12.6% |
| Own beer volume[9] | -13.9% |
Operational Highlights
Retail: Encouraging LFL growth, with a particularly strong performance within the M25
- Retail like-for-like sales inside the M25 were +9.0% (H1 2024: +17.5%) and outside the M25 +2.3% (H1 2024: +1.8%).
- For the adjusted Christmas period, for the five weeks to 6 January, like-for-like retail sales were +7.4%, driven by a strong performance in London at +13.3%.
- Retail like-for-like drink sales up +5.5% vs H1 2024.
- Retail like-for-like food sales up +2.4% vs H1 2024.
- Total occupancy was up at 74.6% (H1 2024: 73.4%) and revenue per available room was up at £94 (H1 2024: £86).
- Divisional revenue in our Retail pubs was up +2.0% at £42.3m (H1 2024: £41.4m) and divisional underlying operating profit was up +3.6% at £5.5m (H1 2024: £5.3m).
Tenanted: Has continued its steady performance with solid like-for-like growth
- Divisional revenue in Tenanted pubs was up +2.7% to £18.2m (H1 2024: £17.7m) and divisional underlying operating profit was flat at £6.6m (H1 2024: £6.6m).
Brewing and Brands: Profits up but volumes down as we shift the focus of the business away from low priced off-trade volume towards local on-trade
- Divisional revenue in Brewing and Brands was down -18.4% on lower volumes to £23.8m (H1 2024: £29.2m), but divisional underlying operating profit improved to £0.6m (H1 2024: £0.2m)
Current Trading and Outlook
| Performance versus 2024[10] | |
| 35 weeks to 1st March LFL tenanted pub income7 | +0.5% |
| 37 weeks to 15th March retail LFL sales6 | +3.2% |
| 37 weeks to 15th March total beer volumes8 | -11.0% |
| 37 weeks to 15th March own beer volumes9 | -12.8% |
Jonathan Neame, CEO of Shepherd Neame, said:
“We have delivered a strong H1 in a challenging market.
The additional costs imposed on our sector are most unwelcome but the business model is flexible and we can adapt to the new circumstances.
We have an excellent pub estate and our beer business is evolving to meet current consumer tastes and trends.”
Notes
[1] H1 2024 is the first half of the financial period of the 53 weeks to the 29 June 2024. This period equated to the 26 weeks ended 23 December 2023.
[2] Profit before any profit or loss on the disposal of properties, investment property fair value movements and operating charges which are either material or infrequent in nature and do not relate to the underlying performance.
[3] Underlying profit before interest, tax, depreciation, amortisation, and profit or loss on the sale of property, plant and equipment (excluding property).
[4] Underlying profit less attributable taxation divided by the weighted average number of ordinary shares in issue during the period. The numbers of shares in issue excludes those held by the Company and not allocated to employees under the Share Incentive Plan which are treated as cancelled.
[5] Net assets at the reporting date divided by the number of shares in issue being 14,857,500 50p shares.
[6] Retail like-for-like sales includes revenue from the sale of drink, food and accommodation but excludes machine income. Like-for-like sales performance is calculated against a comparable 26-week period in the prior year for pubs that were in the estate in the same period within both years.
[7] Tenanted income calculated to exclude from both periods those pubs which have not been in the estate throughout the two periods. The principal exclusions are pubs purchased or sold, pubs which have closed, and pubs transferred to or from our retail business. Income is calculated against a comparable 26-week period in the prior year for pubs that were trading in both 26-week periods.
[8] Shepherd Neame branded, licensed, third-party, customer own-label and contract beer and cider sales volumes.
[9] Shepherd Neame branded, licensed, customer own-label and contract beer and cider sales volumes.
[10] The periods referred to for financial year 2024 are the comparative months during the financial year 53 weeks to 29 June 2024.