Shepherd Neame ‘profitable and cash generative’ since lockdown

In its latest trading update, the 322-year-old operator of more than 300 pubs revealed for the thirteen weeks to 26 September, it achieved 73% of last year’s tenanted pub income – a figure that includes rental support for licensees during both lockdown and the phased reopening of its estate.

What’s more, like-for-like sales in the 64 managed pubs and hotels that were open for the same period were down 7.9%.

Additionally, own brand beer and cider volumes since the start of the new financial year on 28 June were reported to be down 1.9% year-on-year. 

However, while net debt at the year-end stood at £84.4m, with an additional £11m of tax liabilities that had been deferred in agreement with HMRC, on 26 September net debt stood at £82.4m with the tax liabilities that had been deferred reduced to £5.7m with a further £1.2m of general deferrals.

The company statement said liquidity is “sufficient for the foreseeable future”.

“We anticipate that trading during the winter months will be challenging as the new restrictions, such as the rule of six and 10pm curfew, impact business and consumer confidence, but we welcome the extension of the reduced VAT rate of 5% until March 2021,” it continued.

As reported by The Morning Advertiser (The MA) ​on 2 July, Shepherd Neame agreed a £25m borrowing facility​ through the Government’s Coronavirus Large Business Interruption Loan Scheme (CLBILS) ahead of the phased reopening of its sites.

The new revolving credit facility, which took Shepherd Neame’s total debt facilities to £132.5m, comprised a committed £15m boost with a further £10m available on request. 

A company statement said these new agreements are expected to secure sufficient headroom into 2022.