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Financial Results

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 tax1 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 share2 was 41.1p (2022: 39.4p). Basic earnings per share was 23.5p (2022: 42.5p).
  • Net asset value per share3 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.

2023 v 2022
Total retail LFL sales4 +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

2023 v 2022
Tenanted LFL pub income5 +3.9%
Average pub income6 +3.4%

Brewing and Brands: Volumes resilient but margins impacted by exceptional inflationary pressures

2023 v 2022
Total beer volume7 -2.7%
Own brewed volume8 +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 summer

Performance versus 20239
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.”

1 Profit before any profit or loss on disposal of properties, investment property fair value movements and charges which are either material or infrequent in nature and do not relate to the underlying performance.

2 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.

3 Net assets at the reporting date divided by the number of shares in issue being 14,857,500 50p shares.

4 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 52 week period in the prior year for pubs that were in the estate in the same period within both years.

5 Tenanted income calculated to exclude from both years those pubs which have not been in the estate throughout the two years. 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 52 week period in the prior year for pubs that were trading in both 52-week periods.

6 Pub profit before depreciation, amortisation, rent and property costs and other cost allocations.

7 Shepherd Neame branded, licensed, third party, customer own-label and contract beer and cider sales volumes.

8 Shepherd Neame branded, licensed, customer own-label and contract beer and cider sales volumes.

9 The periods referred to for financial year 2023 are the comparative month(s) of July, August & September 2022 which were during the financial year 52 weeks to 24 June 2023.

Shepherd Neame Limited
Jonathan Neame, Chief Executive               Tel: 01795 532206
Mark Rider, Chief Financial Officer
Instinctif Partners
Matthew Smallwood                                     Tel: 020 7457 2020

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