Shepherd Neame Ltd – Interim Results

Financial performance:

·      Turnover increased by +6.3% to £84.1m (2016: £79.2m)

·      Underlying EBITDA¹ increased by +4.6% to £12.1m (2016: £11.6m)

·      Underlying operating profit² up +3.8% to £7.9m (2016: £7.6m)

·      Underlying profit before tax³ up +2.6% to £5.8m (2016: £5.7m)

·      Statutory profit before tax was £5.5m – down on the preceding year primarily due to an exceptional charge of £1.5m following reorganisation of the brewing and brands business

·      Underlying basic earnings per ordinary share⁴ up +4.0% to 31.2p (2016: 30.0p)

·      Net assets per share increased by +3.3% since December 2016 to £13.11 and proposed interim dividend per share up +2.3% to 5.75p (2016: 5.62p)

Operational highlights:

·      Our pubs have continued to deliver a strong performance against the market 

–     Managed pubs (66 pubs) LFL sales grew by +2.1% with strong performance from accommodation sales 

–     Tenanted pub LFL EBITDAR⁵ grew by +2.1% (2016: +1.7%) and average EBITDAR per pub grew by +5.7%

·      Own beer volumes excluding contract increased by +4.2%

–    Focus on existing own brands (Spitfire, Bishops Finger and Whitstable Bay) and recent additions to the range such as Cinque, Five Grain Premium Lager, Orchard View Cider and Bear Island East Coast Pale Ale 

–    Management structure in the brewery has been streamlined and operating costs reduced, following the conclusion of the Asahi Super Dry licence.

Jonathan Neame, Chief Executive, commented:

“Despite more challenging trading conditions, the company has had a solid and satisfactory performance in the first half of the financial year. 

“The strength of the business lies in our balanced strategic approach across each of our trading divisions. Thus, where the rate of growth of food sales in our managed estate has slowed, drinks sales have performed well, the tenanted like-for-like performance has been good and the brewing and brands business has enjoyed strong growth.

“We are a well invested business and are well positioned to navigate any future economic and political headwinds. In the second half, we have some exciting plans to develop our pub estate further and the brewery will undergo on-going modernisation. We remain focused on our core objectives of making investments for the long term benefit of shareholders.”

                                                                                                                                                 6 March, 2018