Shepherd Neame nurses pandemic losses, but demand is rising

Shepherd Neame nurses hangover in lockdown but Britain’s oldest brewer says demand is back to pre-pandemic levels

  • The brewer suffered pre-tax losses of £4.2m in the fiscal year to June 26
  • The 310 pubs were forcibly closed for 296 of the 421 days until May 17
  • But as of July, like-for-like sales are at 91% of 2019 level and up 37% from 2020

Brewer and pub owner Shepherd Neame has suffered more than £4 million in losses after Covid-19 restrictions kept it out of operation for much of the period.

Underlying operating losses before tax were £4.2m for the financial year of the company headquartered in Kent to 26 June.

Shepherd Neame’s 310 pubs were forced to close for 296 of the 421 days until May 17, when indoor venues were allowed to reopen, but demand for Shepherd Neame is returning with comparable sales 91 percent from 2019 levels and up 37 percent. percent on 2020 in the 18 weeks to October 30.

While conditions are improving for the brewer, it warned investors on Thursday that supply chain problems and inflation are likely to weigh on its performance in fiscal 2022.

The company’s 310 pubs were forced to close for 296 of the 421 days until May 17, when venues inside were allowed to reopen

The company’s net asset value per share fell to £11.40 in 2021, down from £12.47 the previous year, in response to Covid losses and regulatory changes.

But the pub brand emphasized its efforts to manage its net debt, which rose from £140.3 million to £149.1 million over the period.

From June 26 to October 30, trade was “encouraging,” the company said, with “food and accommodation demand in particular” rebounding sharply and the drinks trade improving since returning to offices in London from September.

Sales of like-for-like drinks were 76 percent from 2019 levels and 49.1 percent higher than in 2020, while food and lodging sales surpassed 2019 levels.

It also recently exchanged contracts to sell two hotels that “no longer fit in our portfolio” for £5.75 million to RedCat Pub Company, expected to be completed this month.

But CEO Jonathan Neame said that while Shepherd Neame “looks to 2022 with optimism” and “confidence” that it can recover and improve after the pandemic, the company faces “challenges ahead, particularly supply chain and inflationary.” Busy’.

He added: “Having said that, we are confident that the long-term fundamental drivers for the business remain strong, including continued investment in infrastructure in our home country, projected local population growth, changes in consumer and workplace trends.” , and our position at the center of the community.’

CEO Jonathan Neam says company faces 'challenges' in 2022 from inflationary pressures and supply chain problems

CEO Jonathan Neam says company faces ‘challenges’ in 2022 from inflationary pressures and supply chain problems

In April, some Shepherd Neame pubs posted record sales in recent weeks as they reopened beer gardens after some Covid restrictions were listed, with most venues seeing revenue at or above 2019 levels.

Like most UK pub operators, the pandemic and its associated restrictions proved costly to Shepherd Neam.

It fell to a loss of £7.2m in the six months to December 26, from a profit of £5.4m the year before, after sales fell 30 per cent to £55.3m.

CEO Neame said: ‘We have been greatly encouraged by the response from customers since the reopening and are convinced that beer and pubs will remain as important in British life as they were pre-pandemic.

“We’ve spent the past year productively building a better business, strengthening our brand presence and keeping our pubs in optimal shape for reopening.

“Our relationships with our licensees remain strong and we have few vacant vacancies. We feel in the best shape we can be given the circumstances and this has resulted in a strong and sustainable recovery.”