Shepherd Neame back in profit as financial figures for 2021-2022 reveal strong rebound - but CEO Jonathan Neame warns of clouds on horizon

The boss of Shepherd Neame says the business has emerged from the ravages caused by Covid "pretty well" by warned of "some very significant headwinds" it now faces.

The Faversham firm revealed impressive yearly financial results this morning, for the year ending June 25 - a year which was hit by the pandemic, soaring energy costs, challenges with supply chain and logistics and struggles with staffing.

The Shepherd Neame brewery in Faversham
The Shepherd Neame brewery in Faversham

Yet its statutory profit before tax stood at £7.4million - compared to a loss of £16.4m the year before.

Earnings before interest, tax, depreciation and amortization (EBITDA) increased to £23.4m - up significantly from £7.7m in 2021.

Shepherd Neame operates 300 pubs across the South East as well brewing its own beers and has deals in place to brew for a number of major brands such as Singha.

Chief executive Jonathan Neame said: "For all of the enormous challenges of the last two years, to have got our debt down to 2018 levels, to be growing the business again, returning to profit, investing again and paying a dividend again, is all a very satisfactory outcome.

"We absolutely recognise we are not, in profit terms, where we were in 2019, but in revenue terms we are higher.

"And we recognise this is not a full recovery as such, but it's a very substantial recovery and very substantial rebound none-the-less.

"If you look at the year as a whole, there have been so many interruptions - whether it was Omicron at Christmas and the delay in restrictions lifting last summer, whether it's to do with logistics and supply chain difficulties, I can't help thinking the demand has been there and we could have done even better if we'd had the chance to trade at Christmas and peak periods.

"But, nonetheless, I think this is a peg in the ground. It's a moment to say 'that chapter is over' we bounced back strongly, we clearly have some challenges ahead of us, but the fundamentals of the business are as strong as they've always been."

Trade this summer - particularly in its coastal pubs - was strong and should reflect well in next year's figures - alongside the opportunity to, at last, trade properly over the profitable Christmas period.

In 2020 pubs were forced to shut due to the pandemic, and then dramatically reduced last year due to fears over the Omicron variant of Covid.

Jonathan Neame, CEO of Shepherd Neame
Jonathan Neame, CEO of Shepherd Neame

However, he admitted soaring energy price rises - despite the Government intervention to cap business costs for six months - will present some parts of the business with a challenge.

"The brewery we have a long term energy cost price fixed, in our managed pub we have a fix which is a big increase in the costs in the year we are in of about £1.2m, but it's below the current market price.

"I think our main concern over energy is to do with our licensees - approximately half will have fixes and half will not. The prospects two or three weeks ago of those who did not facing a three or four times increase was very scary for them and us. So in that context we warmly welcome the energy intervention.

"The business now feels more confident of being able to withstand the winter energy crisis.

"I don't think it's fair to say it's job done and we're back to normal trading. There are still some very significant headwinds about but I think we need to recognise we have reached the end of the Covid juncture - which we've come out of pretty well - and now we're into a new challenge to do with the wider energy and economic issues."

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