Shepherd Neame sees double digit profit growth

Kent brewer Shepherd Neame has recorded its 31st consecutive year of growth, seeing pre-tax profits up 13.9 per cent at £11.2m

Announcing its results for the year July 1 2006, the group said sales rose 4.4 per cent to £95.3m, versus a 1.1 per cent rise in 2005, while costs - including nearly a quarter of a million pounds spent on licensing its pubs - grew 3.9 per cent.

Managed house like-for-like sales were up 4.9 per cent, while tenanted pub sales grew 12.4 per cent.

The brewer's beer sales were up 6.1 per cent.

Chief executive Jonathan Neame said: "Pubs generally face increased costs from rates, energy, Sky TV and the minimum wage, all of which put pressure on margins. However, we believe our policy of investing in the highest quality outlets and focusing on the customer needs of the local market will continue to drive profitability in the future."

Shepherd Neame realised £1.6m through property disposals and has bought nine "outstanding freehold pubs" from sources that include Spirit Group and Mitchells & Butlers for a total cost of £13.5m.

Ninety per cent of Shepherd Neame's pubs have outdoor areas, while investment in facilities to cater for smokers in the light of the incoming ban will amount to £3m over the next two years.

It said it expected interest charges on existing borrowings in the coming year to be lower after it used funds made available following last year's refinancing exercise.

Chairman Miles Templeman said: "This has been a good performance with strong results in all parts of the business against last year and against expectations.

"I have thoroughly enjoyed my first year as chairman and have been impressed by the quality and strength of the business in what is a challenging and changing market."