Kent brewer Shepherd Neame reports return to profit in preliminary annual reports

Britain's oldest brewer, Faversham-based Shepherd Neame, has reported a return to profit in its preliminary financial reports for the 52 weeks ended 25 June 2022.

The brewer, which operates more than 300 pubs across Kent and the South East, has reported a statutory profit before tax of £7.4 million, compared to the loss of £16.4 million it reported in 2021.

This has carried over into a basic earnings per share of 42.5p, a considerable bounce back from last year’s loss per share of 120.5p.

While total retail like-for-like sales in its Retail Pubs and Hotels were eight per cent below 2019 levels, they increased by 130 per cent against 2021 numbers.

The firm’s tenanted pubs are healthier still, as strong support during the pandemic has seen like-for-like tenanted pubs income increase by 1 per cent on 2019 and 119 per cent vs 2021.

In terms of its brewing and brands, the form has reported “good” sales momentum with total beer volume up seven per cent on 2019 and 27 per cent on 2021. Its own beer volumes dropped by 8 per cent compared to 2019, but rose 16 per cent against 2021.

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Shepherd Neame also reports that it is mostly protected from the worst of energy inflation, due to fixed price contracts at below market rate at the brewery until 2024, and retail pubs until March 2023.

The summer has been particularly encouraging for Shepherd Neame as, for the 13 weeks to 24 September, it reported a 9.4 per cent like-for-like retails sales increase against the 2022 financial year.

In the same period, total beer volumes were up 1.2 per cent against 2022, while own beer volumes were up 14.4 per cent.

For tenanted pubs for the nine weeks to 27 August, the like-for-like tenanted pub income was 12.8 per cent against 2022.

Jonathan Neame, CEO of Shepherd Neame, said: "Shepherd Neame has rebounded well from the challenges of the last two years - a testament to the strength of the business model and depth of talent across the business.

“The Company has strengthened its balance sheet through tight cash management and net debt reduction and continues to evolve operationally to meet changes in the market.

“Our business is in good shape and has traded well through the summer. Whilst we are cautious about the winter ahead and the inflationary environment, we retain an optimistic view for the business and continue to seek investment and acquisition opportunities for the long term."

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