Shepherd Neame profits flat as Olympic factor fails to fizz
Shepherd Neame chief
executive Jonathan Neame
by business editor Trevor Sturgess
Flat half-year profits at Shepherd Neame, the brewer and pub
owner, have been blamed on "unremittingly" bad weather and an
Olympic factor that failed to fizz.
In what the 300-year old Faversham company called "a challenging
market", operating profit came in at £6.7 million, the same as last
year, and pre-tax profits fell slightly from £4.8 million to £4.5
million.
But strong Christmas sales helped push up revenue by 2.6% to
£69.2 million in the six months to the end of December.
Pubs and hotels did well, with managed house like-for-like sales
up 2.9%, with drinks up 2.4%, food up 3.5% and accommodation up
5.8%.
Tenanted like-for-like earnings before interest, tax,
depreciation, amortisation and rent payable (EBITDAR) edged up
0.4%, with average EBITDAR per pub up 3.9%.
There was good news for shareholders who will receive a 5p
interim dividend, up from 4.9p in the same period a year ago.
Jonathan Neame, chief executive, said: "I am pleased to report a
solid performance for the 26 weeks to 29 December with robust
Christmas trading following the exceptional comparable period in
2011. Our performance reflects the underlying strength and
resilience of our business as we have invested consistently in our
brands and pubs over the long term."
Chairman Miles Templeman added recent market conditions had
been particularly challenging with on trade beer sales down 4.7%
for the 12 months to the end of December 2012 and off trade sales
down 7.5% in the final quarter.
He blamed "unremittingly wet and dull weather" and
lower-than-expected trade during the Olympics. He said the
anticipated boost to tourism from London 2012 did not materialise
and there was increasing caution from the consumer as the economy
continued to falter.
Operating profit was also hit by a tenfold spike in the cost of
glass recycling and the collapse of a major customer.
Sheps owns 353 pubs, with 307 tenanted or leased, and 46
managed. The company bought the Royal Wells Hotel and Beau Nash pub
in Tunbridge Wells for £3.6m but earned £1.9m from asset sales.
Meanwhile, Sheps announced it would stop brewing Kingfisher Beer
under licence within the next three financial years to concentrate
on core brand and brewing strategy, and "reduce our exposure to
large-scale contract volume".
Bill Brett, executive chairman of the Brett Group, the
Canterbury-based construction and building materials business, is
joining the board as a non-executive director, replacing Randall
Nicol who retires in September.
08/03/13
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