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Interim Results

Shepherd Neame, Britain's Oldest Brewer and owner and operator of 302 high quality pubs in Kent and the South East, today announces results for the 26 weeks ended 25 December 2021.

A strong rebound in sales, a return to profits and the payment of an interim dividend
•    Revenue has recovered to the same level as the first half of financial year 2020¹ with £78.7m of sales up 54.5% (H1 2021 restated: £50.9m)
•    Underlying EBITDA³ rose substantially to £11.3m (H1 2021 restated²: £3.4m)
•    Statutory profit before tax was £5.4m (H1 2021 restated²: loss of (£7.2m))
•    Underlying basic earnings per share⁴ was 15.9p (H1 2021 restated²: loss per share of (28.6p))
•    Interim dividend of 3.50p declared, - the first dividend since October 2019
•    Net assets per share⁵ increased from £11.40 at 26 June 2021 to £11.76 (H1 2021 restated²: £12.12). This position excludes the revaluation of our licensed premises, carried out as at 26 June 2021, which indicated a surplus over book value of £35.9m, or +13%

Objectives achieved
•    Successfully remobilised the business after the disruption of the pandemic and recovered demand
•    Generated significant cash to normalise our debt and leverage. Net debt excluding lease liabilities⁶ as at 25 December 2021 was £82.4m (£92.5m at 26 December 2020). We paid all the remaining VAT liabilities to HMRC by the end of January 2022 and all deferred rent payments
•    Net debt excluding lease liabilities⁶ as at 26 March 2022 was £78.5m. CLBILS⁷ loan of £25m taken out at the start of the Coronavirus outbreak has now been retired and the Company is performing within pre-pandemic financial covenants
•    Appointment of Managing Director, Pubs. Jonathon Swaine joins us in the summer  

Operational Performance

H1 2022 vs H1 2021²
H1 2022 vs H1 2020¹
Retail like-for-like sales⁸ +80.7% -11.2%
Like-for-like tenanted income⁹ +70.5% -5.6%
Total beer volume¹⁰ +23.6% +5.7%
Own beer volume¹¹ +10.5% -4.0%

•    Retail Pubs and Hotels (64 pubs): Like-for-like retail sales⁸ were 89% of 2020¹ in the 26 weeks, but over 100% in restriction free periods. Most central London pubs near normal as back to work footfall increases
•    Tenanted Pubs (232 pubs): Like-for-like tenanted income⁹ was 94% of 2020¹ in the 26 weeks, but again traded at or above 2020¹ levels when restriction free. High levels of support during the pandemic has led to low levels of licensee turnover
•    Brewing and Brands: Good sales momentum with total beer volumes¹⁰ +5.7% vs 2020¹. Own beer volumes¹¹ were -4.0% vs 2020¹. In January 2022 we concluded a new agreement to transfer all Singha production to Faversham in phases over the next few months
•    Operational challenges around skills shortages, driver shortages, supply chain disruption, substantial inflation and impact of Omicron during the peak festive season 

Current trading
•    For the 13 weeks to 26 March 2022, retail like-for-like sales⁸ were 110% of equivalent periods in 2020¹
•    For the 9 weeks to 26 February 2022, like-for-like tenanted income⁹ was 97% of equivalent periods in 2020¹
•    For the 13 weeks to 26 March 2022, total beer volumes¹⁰ were -0.6% vs equivalent period in 2020¹. Own beer volumes¹¹ were -1.3% vs equivalent period in 2020¹

•    Demand is encouraging and current performance is in line with expectation
•    Fundamentals of the business remain strong and business in good shape, notwithstanding ongoing operational and inflationary challenges
•    Strong portfolio of pubs across the South East (85% freehold) with increasing economic activity anticipated in our heartland in the coming years

Jonathan Neame, CEO of Shepherd Neame, said:

"I am pleased to report a strong rebound in the first half of the year despite ongoing restrictions and operational challenges during the period. We are now back to pre-pandemic trading levels, have strong cash flow and have returned to profitability. 

Our business is in good shape and has traded well following the lifting of all restrictions. However, the current economic uncertainties are putting inflationary pressure on the sector which will impact margins. 

We have a robust and resilient business and a strong platform from which to build. We move forward with confidence and are pleased that we can now resume investment across our business at pre-pandemic levels. To support this we have strengthened our management team with a highly experienced and proven operator to help take the pub business forward. 

We are looking to the future with cautious optimism and are excited about delivering an uninterrupted Easter and summer for the first time in 3 years.” 
30 March 2022

¹ The periods referred to for financial year 2020 are the comparative month(s) during the financial year 52 weeks to 27 June 2020
² H1 2021 is the first half of the financial period of the 52 weeks to the 26 June 2021. This first half equated to the 26 weeks ended 26 December 2020. All comparatives have been restated on an IFRS basis. A description of the nature of change for all relevant accounting policies can be found in the Annual Report for the 52 weeks ended 26 June 2021
³ Profit before tax pre net finance costs, depreciation, amortisation, profit or loss on sale of fixed assets excluding property and free trade loan discounts
⁴ Underlying profit/(loss) less attributable taxation divided by the weighted average number of ordinary shares in issue during the period (see note 7). 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 Net debt excluding lease liabilities comprises cash, bank overdrafts, bank and other loans less unamortised loan fees
⁷ Coronavirus Large Business Interruption Loan Scheme
⁸ 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 trading in both 26-week periods
⁹ Tenanted income calculated to exclude from both years those pubs which have not been trading 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 26 week period in the prior year for pubs that were trading in both 26-week periods
¹⁰ Shepherd Neame branded, licensed, customer own-label and contract beer and cider sales volumes
¹¹ Shepherd Neame branded beer and cider sales volumes excluding licensed, customer own-label and contract volumes


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

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