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Announcement of Full Year Results - June 2018

Posted: 26th September 2018

Strong performance in line with expectations
Good trade over the summer

Shepherd Neame, Britain's Oldest Brewer and owner and operator of 321 high quality pubs in Kent and the South East (68 managed, 242 tenanted and 11 commercial free of tie leases), today announces results for the 53 weeks ended 30 June 2018.

Announcement of Full Year Results
Financial performance:
  • Turnover increased by +0.2% to £156.6m (2017: £156.2m)
  • Underlying EBITDA increased by +5.5% to £24.6m (2017: £23.4m)
  • Underlying operating profit up +5.3% to £16.1m (2017: £15.3m)
  • Underlying profit before tax up +5.4% to £11.8m (2017: £11.2m)
  • Statutory profit before tax up +2.9% to £12.1m (2017: £11.8m)
  • Underlying basic earnings per share4 up +6.6% to 63.0p (2017: 59.1p) and basic earnings per ordinary share down at 68.1p (2017: 69.1p) due to a higher tax charge
  • The Board is proposing a final dividend of 23.45p (2017: 22.73p) making the total dividend for the year up +3.0% to 29.20p (2017: 28.35p). This represents underlying dividend cover of 2.2 times (2017: 2.1 times)
Operational highlights:
  • Another year of building a strong, high quality pub estate through:
    - Three transformational investments in the managed estate, with a total investment of £10.2m (2017: £8.3m) in capital expenditure to improve the look and feel of our tenanted and managed pubs and £2.8m (2017: £2.4m) in repairs and decorations
    - Acquisition of two pubs in central London, the Samuel Pepys and the Savoy Tap
    - Since the year end we have acquired the Wheatsheaf, Farnham, a third pub in central London, the Cheshire Cheese, and entered a contract to build a new pub hotel in the centre of the Ebbsfleet Garden City development
    - Over the last five years 22 pubs have been acquired and 51 sold, transforming our pub profile.
  • Managed pubs (68 pubs) turnover grew by +7.7% to £65.3m (2017: £60.7m) with like-for-like (“LFL”) sales growth of +1.3%, which is ahead of the market and set against a tough comparative of +8.1% in the previous year. Managed pubs underlying operating profit was impacted by cost pressures and was down slightly at £8.7m (2017: £9.0m).
  • Tenanted pubs (242 pubs) had another strong year with LFL EBITDAR up +2.1% (2016: +1.6%) and average EBITDAR per pub up +5.8% (2017: +5.6%).
  • Higher profits in Brewing and Brands during period of transition to focus strategy on our own beer and cider brands. Whilst turnover reduced by -8.9% to £54.4m (2017: £59.8m) due to the end of the Asahi contract, divisional underlying operating profit grew by +46.9% to £2.3m (2017: £1.6m).
Current trading: 
  • Strong start to the new financial year benefiting from the sustained period of warm weather in July and August
  • For the 11 weeks to 15 September 2018, LFL managed sales were up +5.1% (2017: +1.4%). In the 9 weeks to 1 September 2018 LFL tenanted EBITDAR was up +6.2% (2017: +0.6%) and own brand beer and cider volume was up +6.4% (2017: -6.5%)

Jonathan Neame, Chief Executive of Shepherd Neame commented:

"Shepherd Neame is a strong business with an enviable track record of delivering consistent growth and this year is no exception. We have made further good progress against our strategic objectives and some great individual investments in our pubs. We have also successfully re-positioned our beer business away from contracts to focus on our own beer and cider brands.
A key strength of the company is the balance between the different financial and market characteristics of each division which gives resilience even in more challenging market conditions.
We have made some great acquisitions, during the year and since the year end, which further strengthens our managed estate and positions us well for the anticipated economic growth in our heartland over the next 15 years.
We have started the new year well as we have benefited from the warm summer weather, in particular in our coastal sites The coming year has more political and economic uncertainty than most of us can remember. But, whatever the short-term impact, we believe that we are well positioned to take advantage of opportunities that arise in our local region and in the wider industry."

For further information, please contact:
Shepherd Neame Limited
Jonathan Neame, Chief Executive               Tel: 01795 532206
Miles Templeman, Chairman
Instinctif Partners
Matthew Smallwood                                     Tel: 02074572020
Andy Low

Note: The Directors of Shepherd Neame Limited accept responsibility for this announcement.

For full details:

If you would like hard copies of our latest Annual Report, please contact the company secretary.

Annual Report 2018

The Annual Report is available in two versions: