Shepherd Neame banks £25m ahead of July restart

By Stuart Stone contact

- Last updated on GMT

Path to recovery: 'this is the first time in the company’s long history of over 300 years that our business has been interrupted," Jonathan Neame said
Path to recovery: 'this is the first time in the company’s long history of over 300 years that our business has been interrupted," Jonathan Neame said

Related tags: Shepherd neame, Beer, Public house, Brewing

Kent-based brewer and pub operator Shepherd Neame has agreed a £25m borrowing facility through the Government’s Coronavirus Large Business Interruption Loan Scheme (CLBILS).

Shepherd Neame’s board has revealed that lending banks Lloyds and Santander have rubber stamped the increase in the Faversham-based company’s debt facility by £25m under the Government’s CLBILS.  

The new revolving credit facility – which takes Shepherd Neame’s total debt facilities to £132.5m – comprises a committed £15m boost with a further £10m available on request. A company statement said that these new agreements are expected to secure liquidity and sufficient headroom into 2022.

As part of this, any technical defaults arising from the Covid-19 outbreak and the enforced closure of Shepherd Neame’s estate of more than 300 pubs across London and the south east have been waived.  

The statement from Shepherd Neame also revealed that its net debt figure to the end of June is expected to be in the region of £84.5m – representing a small increase from the half year ending 31 December 2019. 

This news comes after a three-month period in which Shepherd Neame ceased all non-contractual capital expenditure across its brewery and pub estate, minimsed of all expenditure to the lowest level possible, and used of Government assistance in a bit to weather the Covid-19 crisis.

On top of this, the brewer and pub operator’s board of directors took a temporary 20% pay cut while it’s also been announced that no cash bonuses will be paid this year and that there will be no pay increases across the company. 

Interruption unprecedented 

As previously reported by The Morning Advertiser (MA)​, the 322-year-old beer and pub industry stalwart announced that it expects to resume trading at least two thirds of its pubs​ before the end of July after the Government confirmed 4 July as a restart date.

The latest indication from Shepherd Neame is that at least 45 of its 69 managed pubs and 165 tenanted and leased pubs out of a total 239 will reopen by the end of July under Government Covid-secure guidance issued on 23 June​ - including a one-metre plus rule on social distancing.

“This is the first time in the company’s long history of over 300 years that our business has been interrupted,” Shepherd Neame’s CEO Jonathan Neame said. 

“As a strong independent family business with a significant local presence, we have tried to do the right thing for our team and our community. 

“We have a clear strategy, a well-balanced business and now a robust financing structure in place to see us on the path to recovery. 

“We are optimistic that we have a strong long term future as and when this pandemic subsides.

“Our whole team cannot wait to welcome our customers back to our unique and wonderful pubs over the next few weeks.”

Related topics: MA500 Business Club

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