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Shepherd Neame pre-tax profits slip to £4.1m from £4.5m as a result of business reorganisation

05 March 2014
by Chris Price

Pre-tax profits at Shepherd Neame slipped to £4.1m, down from £4.5m, as a result of its continuing business reorganisation.

In an otherwise postive trading performance, the Faversham-based brewer saw turnover rise by 4.7% to £72.5m and operating profit before exceptionals was up 2.1% to £6.8m.

Shareholders will enjoy a hike in their dividend to 5.15p a share in June, up from 5p in 2012.

Shepherd Neame has invested heavily in marketing its Spitfire beer

Shepherd Neame has invested heavily in marketing its Spitfire beer

The interim results for the 26 weeks to December 28 last year show the company sold 151,000 barrels of beer (43.5m pints) including 132,000 barrels of own-brewed and packaged beer (38m pints).

The majority of these sales were made in the UK, although the business also exports to more than 20 countries including Sweden, Italy and Ireland.

The firm also showed a strong performance in its pub and hotel estate.

Managed house like-for-like sales were up 7.5%, with liquor up 6.8%, food up 8.4% and accommodation up 8.8%.

The Shepherd Neame brewery in Faversham

The Shepherd Neame brewery in Faversham

Meanwhile, tenanted pubs saw their like-for-like EBITDAR – earnings before interest, tax, depreciation, amortisation and rent payable – rise 1.5%.

Average EBITDAR per pub rose by 4.4%.

Chief executive Jonathan Neame said: “I am pleased to report a strong trading performance in all areas of the business, which shows the benefit of investing consistently in our pubs and brands over many years.

“Our tenanted, managed pubs and hotels and core brands have all accelerated their rate of growth during this period.

Shepherd Neame chief executive Jonathan Neame

“We believe our business is in a strong position to continue to benefit from any further improvement in the economy.”

At the half year end, Shepherd Neame operated 348 pubs in the South East, of which 301 were tenanted or leased and 47 managed.

In July, the firm announced it was separating into two sections: Brewing and Brands and Retail and Tenanted.

This transition gave rise to an exceptional charge, estimated in the region of £1.7m, to be paid until June 28, 2014.

Its distribution operations were taken over by Kuehne + Nagel Drinkflow Logistics.

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