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Shepherd Neame underlying pre-tax profits up but long-term finance agreement causes half-year losses

Britain's oldest brewer has seen a small rise in its underlying pre-tax profits in its latest half-year results.

However, Shepherd Neame dipped into the red as it made pre-tax losses of £4.1 million due to the costs of setting up a new long-term finance agreement.

The Faversham-based beer maker announced in November it had restructured its books to give it £107.5m to spend on its expansion plans.

Shepherd Neame is Britain's oldest brewer
Shepherd Neame is Britain's oldest brewer

However, this involved spending some £10.8m on re-financing the business and cancelling previous contracts, meaning it suffered pre-tax losses of £4.1m in the six months to December 29.

This was down from a profit of £5.5m over the same period in 2017.

It says the new structure will provide "certainty of funds, at a lower cost of debt and with an improved maturity profile, which allows the company to continue to invest for the long term".

The company did, however, enjoy a 1.4% rise in its underlying profit before tax, taking £5.9m compared to £5.8m this previous year.

Pubs experienced "buoyant drinks sales" earlier in the summer, particularly in coastal areas, which it attributed to the exceptionally warm weather and England's journey to the semi-finals of the World Cup.

Christmas trading was also strong, the company said, with like-for-like managed pub sales, drink sales and food sales all up on 2017.

Chief executive Jonathan Neame was pleased with the company's results
Chief executive Jonathan Neame was pleased with the company's results

Shepherd Neame operates 322 pubs across the south-east and has also secured a site to build a new venue in the centre of Ebbsfleet Garden City, which it anticipates will open in 2021.

However, it admits it has faced a tough market for cask and premium bottled ales, especially in the latter part of 2018, which has seen financial performance drop below previous years.

Chief executive Jonathan Neame said: "The new financing package gives us the platform to capitalise on the significant infrastructure and population growth that is planned in our Kent heartland over the next decade.

"In spite of the risks associated with imminent departure from the EU, we remain confident that our long-term strategy positions the company well for the future."

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