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Shepherd Neame Ltd - Final Results 2019


Strong performance in managed pubs division

Encouraging start to new year

Shepherd Neame, Britain's Oldest Brewer and owner and operator of 322 high quality pubs in Kent and the South East, today announces results for the 52 weeks ended 29 June 2019.  

Financial performance:

As the previous financial year was a 53 week year to the 30 June 2018 a number of alternative measures are disclosed in addition to the statutory measures. All figures quoted are on a 53 week basis unless otherwise stated.

  • A year of good strategic progress and a solid financial performance
  • Managed and tenanted pubs performance has been excellent and we continue to outperform the market. Brewing and brands, as previously outlined, is in transition with lower turnover and profit.
  • Consequently, Group turnover reduced by -6.9% to £145.8m (2018: £156.6m)
  • Underlying profit before tax1 on a 52 v 52 week basis was down by -0.3% to £11.4m (2018: £11.4m) in line with expectations
  • Underlying basic earnings per share2 on a 52 v 52 week basis are level at 60.9p (2018: 60.9p)
  • In order to fund the business for the long term and to take advantage of any opportunities that may arise over the next few years, the business refinanced its debt facilities. As a result a one-off exceptional charge of £10.8m was incurred.  Statutory profit before tax therefore was £3.5m (2018: £12.1m)
  • Net assets per share3 increased by +3.5% to £14.01 (2018: £13.53)
  • The Board is proposing a final dividend of 24.21p (2018: 23.45p) making the total dividend for the year up +3.0% to 30.08p (2018: 29.20p)

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

Underlying profit less attributable taxation divided by the weighted average number of shares in issue during the period. The number of shares in issue during the period excludes those held by the Company and not allocated to the employees under the Share Incentive Plan, which are treated as cancelled.

Net assets at the balance sheet date divided by the number of shares in issue being 14,857,500 50p shares


Operational highlights:

All figures quoted are on a 52 v 52 week basis.

  • Managed pubs strong performance:

-     Managed pubs (70 pubs) account for nearly half of Group turnover and have been the focus of significant investment in recent years

-     Like-for-like (LFL) sales grew by +3.2% (2018: +1.3%)

-     Average income4 per managed pub grew by +6.6% (2018: -1.8%)

-     Despite ongoing cost inflation, underlying managed pub margin increased by 20 basis points to 13.4%


  • Tenanted pubs (239 pubs) continued to trade well:

-     LFL tenanted pub income5 grew by +2.3% (2018: +2.1%)

-     Average income per tenanted pub6 grew by +3.3% (2018: +5.8%)


  • Brewing and brands is in transition following the loss of the Asahi and Lidl contracts:

-     Own beer volume down -23.3% (2018: -10.6%)

-     Shepherd Neame own brand beer and cider volume grew by +0.5% (2018: -0.9%)

-     Modernised and expanded our portfolio

-     A new partnership was entered into in August 2019 with the Boon Rawd Brewery Company to import and distribute Singha Beer, Thailand's original premium beer

Calculated by dividing total managed pub profit before depreciation, amortisation, rent and property costs and other cost allocations by the average number of managed pubs trading in a financial period.

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 managed 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 Calculated by dividing total tenanted pub profit before depreciation, amortisation, rent and property costs and other cost allocations by the average number of tenanted pubs trading in a financial period.


Current Trading:

  • In the 11 weeks to 14 September, total revenue in our managed pubs was up +4.7% (2018: +7.8%) and same outlet like-for-like managed sales were up +1.6% (2018: +5.1%)
  • In the 11 weeks to 14 September, Shepherd Neame own brand beer and cider volume and grew by +5.8% (2018: +4.0%)
  • In the 9 weeks to 31 August like-for-like tenanted pub income was up +2.7% (2018: +6.2%)


Jonathan Neame, Chief Executive, commented:

"Shepherd Neame remains well positioned in the sector, with great pub assets, an exciting and evolving beer portfolio, an excellent brand reputation and a heartland presence in Kent that will benefit from considerable economic development in the next 10 years. Our strong balance sheet and long term financing gives us a great platform to take advantage of any opportunities that arise. 

Our managed pubs have achieved substantial growth in turnover and profit. The tenanted pub estate has maintained its impressive like-for-like performance. Brewing and brands performance has, as expected, been more challenging this year, but we are excited by the potential of our emerging portfolio.

We are a modern, well invested, financially strong and balanced business with a strategy designed to deliver long-term value for shareholders. We have transformed our business in recent years to increase our exposure to the growth areas of the market.

We are encouraged by how the new year has started and remain cautiously optimistic about the Company's prospects despite the uncertainties ahead."