Shepherd Neame reports strong trading since reopening

It reported total revenue for the year was £86.9m (2020: £118.2m) while its statutory loss before tax was £16.4m (2020: £21m). Meanwhile the Kent and south-east operator stated much-improved statistics since 12 April this year when pubs were allowed to reopen under restrictions. For the period from 12 April to 16 May, open retail pubs achieved 62% of 2019 sales and from 17 May, when indoor trading resumed, to the year end on 26 June, those same sites achieved 97% of 2019 sales.

It added total beer volume had been resilient throughout the pandemic and claimed to have obtained new on-trade customers since reopening and new listings in other channels. Total volume in all channels was up 8.4% in May and June versus 2019. Its tenanted sites achieved 77% of same-period 2019 volume sales in the 11 weeks from 12 April to 26 June while in the four weeks to 26 June, they achieved 91% of their 2019 beer volumes.

Food and accommodation in demand

Trading since the end of its financial year has “been encouraging”. The business said demand for food and accommodation, in particular, has been strong since July, and its drinks trade is recovering since the return to offices in London from September.

It reported, for the 13 weeks to 25 September, same outlet like-for-like tenanted pub income was 93% of 2019 and up 26.2% against 2020. Additionally, for the 18 weeks to 30 October, total beer volume was 106% of 2019 and up 9.6% vs 2020. Own beer and cider volume sales was 93% of 2019 and up 1.6% vs 2020.

Shepherd Neame chief executive Jonathan Neame said: “We are greatly encouraged by the customer response since reopening and are confident beer and pubs remain every bit as core to British life as pre-pandemic.

“We have spent the past year productively: building a better business, strengthening our brand presence and maintaining our pubs to be in optimal shape for reopening. Our relationships with our licensees remain strong and we have few tenanted vacancies. We feel we are in the best shape we can be, in the circumstances, and this has resulted in a strong and sustainable recovery.”

Challenges ahead

Neame continued: “We face challenges ahead, particularly with supply chain and inflationary pressures. That said, we are confident the long-term fundamental drivers for the business remain strong, including the ongoing infrastructure investment in our heartland, anticipated local population growth, changes in consumer and workplace trends, and our position at the centre of the community.

“We have a solid platform and a clear plan to build on our recovery, assisted by our strong balance sheet. For the rest of this year, we remain focused on meticulous cost control, tight cashflow management and further reducing net debt.

“We look forward to 2022 with optimism and, with every day that passes, confidence grows that we can not only recover lost ground, but recover well, unlock growth opportunities and release the full potential of the business.

“We intend to return to prior levels of investment and restore the dividend as soon as circumstances allow.”